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ALTA: Government incentives key to TAM regional plans

Brazil's TAM is studying regional operations in the domestic market, but says any decision to launch such flights will be driven by the country's plans to incentivise regional aviation.

"Brazil is growing, but the growth is faster in the countryside than the main cities," says Marco Antonio Bologna, president of TAM's holding company.

The Brazilian government said earlier this year it plans to improve regional aviation in the country. As an initial step, it has launched tenders for 50 regional airports.

Bologna says TAM is waiting to see how Brazilian carriers will be incentivised to operate to these airports, pointing out that it has to be cost effective for airlines.

"If the government decides to offer some subsidies, this becomes more economically viable for us," he says. "The Brazilian countryside is growing. It's important for us to feed our main network."

TAM has said it could possibly order regional aircraft for these lower-density flights, but Bologna says the airline would rather operate its Airbus A319s to regional airports if the infrastructure can handle the aircraft. However, the carrier also has the flexibility to think about adding other aircraft such as Embraer E-Jets, he says.

"We are always talking to all the manufacturers," adds Bologna.

Brazilian low-cost carrier Azul has built its growth on serving smaller markets in the country with its fleet of E-jets and ATR turboprops. Asked if TAM might partner with Azul to create regional feed for its network, Bologna indicates that this would be challenging.

"Azul has provided some fierce competition. We would have to get permissions from the antitrust authorities, and it will not be easy," he says.

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