Group airlines will continue to operate under their existing operating certificates and brands. They will also maintain their current headquarters and governance structure, thus satisfying foreign ownership and control requirements in the countries where they operate.

Apart from its operations in Chile, LAN has airline affiliates in Argentina, Ecuador and Peru and cargo operations in Brazil, Colombia, Mexico and the US. TAM has airlines in Brazil and Paraguay.

“This is the completion of the vision of our founder, Captain Rolim, who believed that in an open skies market, a large Latin American airline group would provide much more competitive services to our passengers and cargo customers,” said Marco Bologna, CEO of TAM.

Enrique Cueto, CEO of LAN, added: “As the industry consolidates, we cannot stand still. We have enjoyed many years of collaboration with TAM. They share our passion for service and our belief in the great potential of the Latin American market.”

The combined group will provide passenger services to more than 115 destinations in 23 countries. Cargo customers will have access to the most comprehensive cargo network in Latin America, with more capacity, frequency and destinations than any other carrier.

The combination is expected to generate annual synergies of approximately US $400 million from alignment of the passenger networks, growth of the cargo network in Brazil and internationally, and reduced costs.