TAM plans to begin a codeshare with Passaredo from August, though it continues to deny reports that it is in negotiations to acquire the Brazilian regional carrier.
The two carriers will codeshare on flights from Passaredo's Riberao Preto home base from 1 August. The airline serves 21 destinations in south-eastern Brazil from the city.
On reports of a potential acquisition of Passaredo, a source at TAM says: "The only contract we have at this time with Passaredo is the code share agreement. We cannot confirm any other negotiations or intentions."
TAM acquired regional carrier Pantanal to gain access to its Sao Paulo Congonhas slots in 2009. The integration was completed in 2013 with the discontinuation of its regional operations.
The Brazilian Oneworld alliance carrier eventual interest in Passaredo could be related to the LATAM Airlines Group-owned carrier's rekindled interest in Brazil's regional aviation market, for which the country's government is developing a multi-billion dollar financial support package.
Passaredo has operated under bankruptcy protection since 2012 and is in the midst of a major fleet renewal process with the incorporation of 14 ATR 72-600 turboprops.
TAM itself was founded as a regional airline but stopped operating regional aircraft with the withdrawal of its Fokker 100s in 2008 and Fokker 50 turboprops in 2001.