Global Airport News

Global Airport News

TAM, Brazil's largest airline, said it was reducing its planned fleet by four planes to control costs as demand grows more slowly than expected in Brazil's air travel market.

TAM will not renew four aircraft leases as originally planned next year, generating USD$50 million in annual savings and leaving the fleet at 159 planes at the end of 2012 instead of the previously forecast 163, the company said in a statement on Tuesday.

"We find an adjustment in our fleet plan necessary to assure profitability in the context of a more modest market," chief executive Libano Barroso said in the statement, citing a forecast of 15 percent to 18 percent demand growth in 2012.

The airline also said it would cut back international flights to Europe, swap some Airbus A340s for A330s to increase fuel efficiency, and add flights to Mexico and Orlando — moves aimed at saving USD$50 million annually.

Last year TAM announced plans for a takeover by Chile's LAN, controlled by the Cueto family, which grew their airline into a regional powerhouse with ruthless cost-cutting.

The deal would create Latin America's largest airline, if approved by Chile's antitrust tribunal.

TAM executives said this month that they expect final approval for the merger by the first quarter of 2012.