TAM Airlines

TAM Airlines (TAM Linhas Aéreas (BM&F Bovespa: TAMM3, TAMM4 / NYSE: TAM), is Brazil's and Latin America's largest airline. Its headquarters are in São Paulo, operating scheduled services to destinations within Brazil, as well as international flights to Europe and other parts of North and South America. Shares in the company are traded on the São Paulo Exchange (BM&F Bovespa) and New York Stock Exchange as "TAM S.A.".

According to the National Civil Aviation Agency of Brazil (ANAC) in December 2011 TAM had 40.45% of the domestic and 88.94% of the international market shares in terms of passengers per kilometre flown. Starting September 2010 statistics refer to the totality of TAM Group, which comprises TAM Airlines and Pantanal Linhas Aéreas.

TAM – Táxi Aéreo Marília
TAM – Táxi Aéreo Marília and TAM – Transportes Aéreos Regionais were two different entities, although both belonged to the TAM Group. TAM – Marília, an air taxi company founded in 1961, provided the start-up infrastructure for TAM – Regionais.

TAM – Transportes Aéreos Regionais (KK)
On November 11, 1975, the Government of Brazil created the Brazilian Integrated System of Regional Air Transportation and divided the country in five different regions, for which five newly-created regional airlines received a concession to operate air services. Founded by Rolim Adolfo Amaro TAM – Transportes Aéreos Regionais S/A was the third of those regional airlines to be made operational. Its services started on July 12, 1976, and its operational area comprised parts of the Southeast and Central West regions of Brazil, specifically the states of Mato Grosso do Sul, and parts of Mato Grosso, and São Paulo plus the possibility of serving the cities of Cuiabá, Rio de Janeiro, Londrina, Maringá and Brasília when linking them to its area of concession.

TAM – Linhas Aéreas Regionais was formed as a joint-venture between TAM – Táxi Aéreo Marília and VASP, the latter of which was then a state-owned airline. The airline received the IATA code KK on October 13, 1999. The new airline flew Embraer EMB 110 Bandeirantes at first, but these proved grossly inadequate for the task at hand, and even at full capacity needed to be subsidized by the government in order to be profitable.

TAM went on to purchase three used Fokker F27 turboprops, which were subsequently refurbished by Fokker in the Netherlands. In order to obtain the import authorization for the aircraft, a deal was struck with the government in which TAM was forced to maintain 3 Bandeirantes for every F27, as well as removing 5 seats from each one, bringing the F27's capacity down to 40 passengers. A fourth F27, previously owned by Air New Zealand, was added to the TAM fleet in 1981. By 1983, TAM had acquired 10 F27s. By 1981, TAM had flown one million passengers, and two million by 1984.

TAM (KK) joint operations with TAM (JJ)
In August 1986, the company, under financial stress, went public and began floating stock in the market. The same year, TAM – Transportes Aéreos Regionais (KK) acquired another regional airline, VOTEC, which operated in areas of northern and central Brazil. VOTEC was then renamed Brasil Central Linhas Aéreas. TAM and Brasil Central were both regional airlines and operated in different designated areas. They however operated as a consortium with integrated networks and fleet, with the most notable differences being the flight number IATA codes (whereas TAM had the IATA code KK, Brasil Central operated with the code JJ inherited from VOTEC), the different color schemes of the aircraft, and their designated areas of operation. In 1988, TAM flew its 3 millionth passenger.

On May 15, 1990, the Brazilian Government lifted restrictions on operational areas of regional airlines allowing them to fly anywhere in Brazil. As a consequence, Brasil Central was renamed TAM – Transportes Aéreos Meridionais, acquired the same color scheme of TAM (KK) but maintained the IATA code JJ. In 2000, TAM (KK) was merged into TAM (JJ) and TAM (JJ) was renamed TAM Transportes Aéreos. TAM released the code KK back to IATA and now it is now used by Atlasjet.

Despite TAM's success in the market, it was evident the airline would not last long when competing against airlines such as Varig and VASP, both of which already possessed Boeing 737s in their fleet. Amaro then tried to buy VASP, which was about to be privatized, and called the project "Revolution". Having lost the bid, he opted for slower growth with a gradual addition of new aircraft, re-dubbed "Evolution".

On September 15, 1989, TAM arranged for the acquisition of two Fokker 100 jets, which had originally been ordered by the now-bankrupt Pan American World Airways. Like the F27s before them, TAM did not actually purchase these aircraft, but used Amaro's credibility to arrange for a third-party asset management company, Guinness Peat Aviation to purchase them and subsequently lease them back to TAM. Two more were added in 1991. In 1992, TAM carried its eight millionth passenger. By 1993, through the use of the Fokker 100 fleet, which now numbered at 14, TAM was serving 56 cities in Brazil.

In 1996, TAM bought another air company, Helisul, which used the trade name of TAM. In 1997, TAM ordered its first large jets; the airline ordered 45 planes from Airbus, including 10 A330s, 4 A319s, and 34 A320s. In 1997, the Airbuses began to be delivered and the airline flew its first international service, from São Paulo to Miami International Airport.

Two years later, in 1999, services to Europe were inaugurated through a code share service with Air France, to Paris-Charles de Gaulle Airport. In 2000, the airline was renamed TAM Linhas Aéreas in Portuguese. Long running discussions to merge with Varig ended in 2004. In 2008, TAM transported 30,144,000 passengers, with an average load factor of 71%. As of 2010, the airline is owned by the Amaro family (46.25%), Amaro Aviation Part (3.52%), treasury stocks (0.27%) and minority shareholders (49.96%). It employs 24,000 staff. On May 13, 2010, TAM became the 27th member of Star Alliance.

In 2011 the research consultancy firm Skytrax awarded TAM three out of five stars in its Product and Service Quality ranking.

Subsidiaries
In 1994 TAM Airlines established a small subsidiary airline in Paraguay called ARPA - Aerolíneas Paraguayas with a fleet consisting mostly of Cessna 208 Caravan aircraft, formerly operated by TAM. On September 1, 1996, TAM via ARPA, purchased 80% of the shares of the former state-owned LAP – Líneas Aéreas Paraguayas and merged it with ARPA. The new airline was named TAM – Transportes Aéreos del Mercosur and maintained the IATA code of LAP, PZ. Today TAM owns 94.98% and the Paraguayan government 5.02% of the shares.

In 2008, following a branding strategy, the name TAM Mercosur was dropped and the airline adopted an identical corporate identity of TAM Airlines. However, its corporate structure remains the same. This airline is today informally known as TAM Paraguay, and uses the IATA code PZ.

On December 21, 2009, TAM Airlines purchased Pantanal Linhas Aéreas. TAM, however, decided to maintain Pantanal as a different airline within the TAM Group and integrated into its network of TAM. Presently Pantanal operates flights on behalf of TAM, all with origin and destination at São-Paulo-Congonhas Airport. The previous IATA code of Pantanal P8 was at the same time changed to GP.



Agreement with LAN to create LATAM
On August 13, 2010, TAM signed a non-binding agreement with Chilean airline LAN Airlines to merge and create LATAM Airlines Group. This was changed into a binding agreement on January 19, 2011. Latam agreement was approved with 11 restrictions by Chilean authorities on September 21, 2011. These include transferring 4 slots at São Paulo-Guarulhos to competitors interested in operating flights to Santiago de Chile, renouncing membership to either Oneworld or Star Alliance, restricting increase capacity on flights between Brazil and Chile, and opening code-share possibilities and fidelity program membership to interested competitors. On December 14, 2011, Brazilian authorities approved the agreement imposing similar restrictions as Chilean authorities: LATAM will have to choose an alliance by August 2012 and frequencies between São Paulo and Santiago de Chile will have to be reduced. Presently TAM has two pairs of slots while LAN has four. LAN will have to cease two pairs to competitors interested in using them.

In relation to other countries served by both airlines, Germany and the United States have approved the agreement, and Spain and Argentina are still analyzing the agreement.

Possible purchase of TRIP (T4)
On March 30, 2011, TAM signed a letter of intentions to purchase up to 31% of the shares of TRIP Linhas Aéreas, a regional airline which code-shares with TAM since 2004. However, a final decision has been postponed indefinitely.

Destinations
The network of TAM Group (composed of TAM Airlines, Pantanal Linhas Aéreas and TAM Paraguay) covers Brazil, Paraguay, Europe, North and South America.

Furthermore, TAM Airlines maintains code-share agreements for international destinations with Star Alliance partners, LAN Airlines, and PLUNA. In relation to Brazilian domestic destinations TAM has agreements with NHT Linhas Aéreas and TRIP Linhas Aéreas, and in relation to German domestic destinations TAM has an agreement with Deutsche Bahn.

Fleet
On June 16, 2005, TAM announced the purchase of 20 additional Airbus A320 aircraft (including the models A319, A320 and A321), plus an additional 20 options. These are expected to be delivered between late 2007 and 2010, adding to the already scheduled delivery of 6 A320s between 2006 and 2008. At the same time, the company signed a memorandum of understanding with Airbus stating its intent to buy 10 of the new Airbus A350-900 (plus 5 options), with deliveries due to commence at the end of 2012. These are expected to replace the A330 on the Paris and Miami routes as they become available.

TAM has signed a firm contract with Airbus to acquire 37 additional aircraft. The order comprises twelve A319s, 16 A320s, three A321s and three A330s and includes twelve unspecified extra options. This would bring the number of aircraft in TAM's fleet acquired directly from Airbus to 115 aircraft. The commitments are separate from deals in earlier years for 29 firm-ordered A320s and 20 options. The deliveries are to be concluded by 2010.

Fleet maintenance is partially conducted at the technology center at São Carlos Airport.

As of December 2011 the fleet of TAM Airlines included the following aircraft:

Airline affinity program
TAM Fidelidade is the frequent flyer program of TAM Airlines. Program points can be redeemed for tickets on TAM, Star Alliance airlines and other selected partners. It is divided into the following categories and percentages of mileage accrual:

The points accrual may vary in all classes according to the fare basis of the ticket.

To achieve BLACK status are taken into account only points flown with TAM Airlines and its subsidiaries (JJ and PZ flights).

The BLUE status offer the benefits of Star Alliance Silver status. Both RED and BLACK status offer the benefits of Star Alliance Gold status.

Accidents and incidents



 * 8 February 1979: an Embraer EMB 110 Bandeirante registration PT-SBB operating a flight from Bauru to São Paulo-Congonhas, while on initial climb from Bauru, struck trees and crashed into flames. All 2 crew and 16 passengers died.
 * 28 June 1984: an Embraer EMB 110C Bandeirante registration PP-SBC operating a chartered flight by Petrobras from Rio de Janeiro-Santos Dumont to Macaé flew into a hill while descending through rain and clouds over the Municipality of São Pedro da Aldeia. All 18 passengers and crew died.
 * 7 October 1986: an Embraer EMB 110C Bandeirante registration PP-SBH flying from Campo Grande to Araçatuba struck the ground just short of the runway threshold after missing the approach at Araçatuba Airport twice. Seven crew and passengers died.
 * 12 February 1990: a Fokker F27 registration PT-LCG operating a flight from São Paulo-Congonhas to Bauru, due to faulty approach procedures touched down at Bauru 775 m past the runway threshold. The pilot was unable to initiate a go-around procedure and went past the end of the runway, hitting a car that was passing on a road nearby. One crew member and two occupants of the car died.
 * 31 October 1996: a Fokker 100 registration PT-MRK and operating as Flight 402 from São Paulo-Congonhas to Rio de Janeiro-Santos Dumont crashed on urban area during take-off procedures and after engine no.2 suffering an uncommanded reverse thrust and thus losing power, stalled, yawed to the right and struck a building. All 95 passengers and crew on board and 4 people on the ground died.
 * 9 July 1997: a Fokker 100 registration PT-WHK operating flight 283 en route from São José dos Campos to São Paulo-Congonhas. The aircraft was climbing after take-off from São José dos Campos when a bomb exploded in the rear part of the passenger cabin. The uncontrolled decompression blew one passenger out of the aircraft. The aircraft made a successful emergency landing in São Paulo, despite the hole in the fuselage.
 * 15 September 2001: a Fokker 100 registration PT-MRN operating the charter flight 9755, flying from Recife to São Paulo-Congonhas via Campinas-Viracopos, following an uncontrolled engine failure en route to Campinas had 3 cabin windows shattered by fragments of the engine and made an emergency landing at Belo Horizonte-Confins. One passenger was sucked out partly and held by another passenger until the aircraft landed. The passenger did not survive though.
 * 17 July 2007: an Airbus A320 registration PR-MBK operating flight 3054 from Porto Alegre to São Paulo-Congonhas overran the runway while landing at Congonhas, crossed a major thoroughfare and impacted against a TAM Express warehouse. All 186 passengers and crew perished. 199 bodies were recovered from the crash site, including passengers, crew and people that were working at the warehouse.

Sister companies

 * TAM Cargo provides cargo services.
 * Multiplus Fidelidade is the customer loyalty network. On November 8, 2011, Multiplus and the Canadian Aimia, administrator of Aeroplan]], the loyalty program of Air Canada, established a joint-venture to create in Brazil a third company that would administrate loyalty schemes of other companies.
 * TAM Aviação Executiva provides air services for business executives.
 * TAM Viagens provides vacation package services for Brazilians, while TAM Vacations provides vacation package services for Americans.
 * Cine TAM: a cinema in São Paulo owned by the airline.
 * TAM Museum: a museum of vintage aircraft located in São Carlos and maintained by TAM Group.

Partnerships
In 2009 TAM decided to replace its Passenger Service System provided by Sabre, known as Sabresonic, with the Altéa platform from Amadeus. The migration to Altéa was completed in the first quarter of 2010.