Brazil’s TAM Airline Gets 47% Domestic Market Share and 71% International

Brazil's Tam Airline According to data for October disclosed by ANAC, Brazil's National Civil Aviation Agency, Brazilian Airline TAM registered 5.7% growth in domestic demand compared to the same period last year and an 8.5% increase in domestic supply. In October, market demand increased 15.7% and market supply increased 17.8%.

TAM registered a domestic market share (RPK) of 46.6%, a 4.4 p.p. decrease compared to the same period in 2006. TAM's domestic load factor was 69.9%, 0.5 p.p. higher than the market average 69.4%.

In the international market, TAM registered 80.5% growth in demand and 86.2% in supply, compared to October 2006. The company attained market share of 71.2%, representing 13.1 p.p. growth year on year. TAM attained 72.6% load factor, 4.7 p.p. higher than the market average of 67.9%.

The domestic scheduled yield for October 2007 remained stable with third quarter 2007.

These were the operating data for October:

Operating data              Oct 2007    Oct 2006       Var. %
Domestic Market
ASK (millions) – Supply       2,626       2,420         8.5%
RPK (millions) – Demand       1,835       1,737         5.7%
Load Factor                    69.9%       71.8%   -1.9 p.p.
Market share                   46.6%       51.0%   -4.4 p.p.

International Market
ASK (millions) – Supply       1,439         773        86.2%
RPK (millions) – Demand       1,045         579        80.5%
Load Factor                    72.6%       74.9%    -2.3 p.p.
Market share                   71.2%       58.1%    13.1 p.p.

Third Airbus

Earlier this week, TAM received a new Airbus A321 directly from the Airbus factory in Hamburg (Germany). This is the third A321 incorporated by the company into its operating fleet. The A321 has capacity to transport up to 220 passengers and will be used by TAM on domestic and South American routes.

With this new aircraft, TAM will have 95 Airbus models (15 A319, 66 A320, 3 A321, 10 A330 and 1 A340), consolidating its position as the largest Latin American customer of the European aircraft manufacturer. The A321 is the largest in the A320 family and adequate for high-demand markets for mid-size airplanes. TAM is the first company in South America to operate flights using the A321.

TAM already has received 22 aircraft this year – 18 from the A320 family (including the three A321s), 1 A340 and three MD-11s. With the new A321, the company's operating fleet increased to 111 aircraft – 95 Airbus models, 13 F- 100s and 3 MD-11s.

The airline company plans to end 2007 with 111 airplanes and has plans to expand the fleet to 136 airplanes by the end of 2011.

More to Rio

TAM will increase the number of flights originating from Tom Jobim International Airport (Galeão) in Rio de Janeiro.  The new services seek to satisfy demand and make it easier for passengers who need to travel between Rio de Janeiro and the cities of Belém, Brasí­lia, Campinas, Curitiba, Manaus, Porto Velho and Vitória.

On November 5, the company began operation of a daily flight between Galeão and Viracopos in Campinas, São Paulo. A new flight connecting the cities of Rio de Janeiro, Brasí­lia and Porto Velho also that same day.

As of November 12, the company will begin operating a second daily flight between Rio de Janeiro and Curitiba.

One of the main new offers will be the start of a nonstop flight between Rio de Janeiro and Manaus, beginning November 12. With this operation, TAM will be the only company to offer regular flights between the two cities without stops or connections.

Beginning November 13, the company also will operate one more flight connecting Rio de Janeiro with Belém. On October 29, TAM initiated a new service connecting the cities of Curitiba, Rio de Janeiro and Vitória.

TAM

TAM has been the leader in the Brazilian domestic market for more than four years, and held a 46.6% domestic market share and 71.2% international market share at the end of October 2007.

The airline company operates regular flights to 47 destinations throughout Brazil. It serves 81 different cities in the domestic market through regional alliances.

Additionally, it maintains code-share agreements with international airline companies that allow passengers to travel to a large number of destinations throughout the world.

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