TAM

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Star Alliance takes shine to TAM, Latin America

Star Alliance returned to Latin America yesterday, formally inviting Brazil's TAM to be its 24th member, and said it will look to increase its presence further in the region next year.

Without a member south of the US since Varig was expelled in 2006 (ATWOnline, April 2), Star believes TAM's inclusion will turn Latin America from a "white spot" into a "hot spot" on its map, according to CEO Jaan Albrecht. The carrier currently flies to 42 domestic and 16 international destinations with a fleet of 116 aircraft. It will add 36 destinations to Star's network and has codeshare agreements in place with TAP Portugal, Lufthansa and its mentor United Airlines, plus a new partnership announced yesterday with Air Canada.

"We are talking about a country and a region of the world which cannot be ignored," Albrecht said, claiming that Brazil accounts for 30% of commercial aviation revenue in South America. TAM holds a 20% market share on the continent, a massive 73.9% share of Brazil's international traffic (in August) and 54.2% of its domestic market.

TAM CEO David Barioni said Star membership will help it grow even stronger. "Eight years ago we were Brazil's fourth-biggest carrier. Now we are . . . number one," he said. "This is a very important step forward for TAM, as through our alliance membership we will gain further international brand recognition." He said the airline will become a full Star member within 12-18 months and should realize an additional $60 million in revenue during its first year of membership. It intends to work with the alliance and Sao Paulo Guarulhos to establish a dedicated Star terminal next year.

TAM will end its cooperation with SkyTeam's Air France by Oct. 31 but will continue working with oneworld member LAN for the time being. "But after a certain time we will have to rethink that situation," Barioni said.

If Albrecht has his way, TAM should not lack regional partners for long. "The alliance system has been proven, especially in difficult times. We see a lot of interest to join us," he told ATWOnline in Sao Paulo. "TAM, which mainly covers the southern part of the continent, is just one step. We are looking at Avianca, Copa [Airlines] and TACA. Don't be surprised when we make an announcement in 2009."

Star is active in Europe as well. It is in talks with Russia's S7 Airlines and Rossiya about possible membership (AiRUnion had been considered Star's Russian target until its collapse last month) and may find itself in Italy. "It is no surprise that our member Lufthansa is a serious bidder for Alitalia," Albrecht said (ATWOnline, Sept. 30). "If LH buys AZ, then of course we would have to hold talks for AZ to join Star Alliance."