CHILE's LAN Airlines moved closer to acquiring Brazil's TAM, following an announcement by Brazil's finance ministry that the deal satisfied the country's foreign-ownership rules.

    Under the terms of the proposed merger, TAM's controlling shareholders will retain 80 per cent of TAM's voting stock, while LAN shareholders will be given about 70 per cent of the combined airline, that is to be named LATAM Airlines.

    The deal, which still has to receive approval from civil aviation and antitrust regulators in both Brazil and Chile, would create the largest airline in Latin America, and the third largest in the world.

    The report said the TAM acquisition would give LAN access to the 200-million-strong Brazilian market, in addition to expanding its network offering to 102 destinations across South America, up from 72 at present.

    The international market now accounts for 70 per cent of LAN's passenger traffic. In January, the airline's international demand rose by 9.5 per cent on a capacity hike of 8.5 per cent since January 2010. LAN's overall load factor grew to 82.7 per cent, an increase of 0.5 percentage points from January 2010.

    LAN's air freight business also accounts for about a quarter of the company's revenue.

(Source:http://www.schednet.com)