Further consolidation among Brazilian airlines seems on the cards as carriers position themselves to counter the threat posed by the TAM/Varig merger.

Once merged, the country's two major airlines will hold a dominant position in the domestic market with a share of over 60%. In response, second tier carriers Gol Transportes Aéreos and Vasp are widely reported to be holding informal discussions about a similar move. Transbrasil, which suspended services two years ago but has been looking to relaunch, is also understood to be a partner in the proposed merger.

Brazil's airport administration authority Infraero has also signalled its intention to join the merger as a fourth partner by waiving the $449 million debt against the three carriers. "We helped out in the TAM/Varig merger and we are willing to do so now, although as a partner writing off their debts with Infraero in exchange for a stake in the new airline," says Infraero president Carlos Wilson.

Meanwhile, TAM is continuing to implement streamlining measures to improve its financial performance. After merging international services that overlapped Varig's network, the carrier has placed four Airbus A330-200s on lease. Two aircraft will be operated for South African Airways from this month, while two more are being placed with Abu Dhabi-based start-up Etihad Airways next month. Seven of TAM's fleet of over 40 Fokker 100s have been leased to other South American carriers; four have reportedly been placed with an unnamed Uruguayan start-up airline and the remaining three are earmarked for Colombian start-up Aerolíneas Universal. The latter plans to operate services from Bogota to Latin American and US destinations.

Source: Flight International