Analysis of potential TAP/TAM merger

With increasing speculation of a merger between TAM, the national airline of Brazil, and TAP the national airline of Portugal, it is clear that there would be benefits to a combined carrier of these two Portuguese speaking nations. Both are relatively new Star Alliance members so the merger is "within alliance

TAM is one of the largest operators in Latin America. It has its main base at Sao Paulo but also has a significant presence at Rio de Janeiro, Recife and Salvador.

TAM operates a large fleet of 132 aircraft the vast majority are Airbus which would provide a streamlined operation with TAP which has an all Airbus fleet. TAM does operate long haul B777 aircraft however these are expected to be phased out in time with an order of 12x A350 on order.

TAP, the national carrier of Portugal is a much smaller carrier operating 49 aircraft and significantly less destinations. However on analysis of theirs respective networks it is clear there would be clear benefits and synergies. Given the historical ties between Portugal and Brazil, TAP has a relatively small presence into the Brazil market with 47 weekly flights out of Lisbon, Porto and Funchal, interestingly TAM does not serve Portugal, with its European services concentrating on CDG, FRA, LHR, MAD and MXP hence a perfect match. A potential merger would give TAP access through the TAM gateways to 4923 weekly flights into Latin America, whilst on the reverse side, TAM would be able to connect to 1587 European flights through the TAP bases.

A merger would provide the carrier with an extensive LATAM and European network and allows passengers to connect through to a whole host of new destinations. Cross over on destinations would be limited with both carriers also operating a small number of flights into the US.

Given an all airbus fleet it is clear that the carrier would be able take to advantage of many potential synergies, whilst offering more options to its passengers in Europe and Latin America.