![LAN and TAM are to merge. (Rob Finlayson)](http://thewofa.com/wp-content/uploads/2010/08/AIRBUS-A319-LAN-GRU-JUN10-RF-IMG_5006-300x181.jpg)
Two of South America’s largest airlines, TAM and LAN, have agreed signed a non-binding memorandum of understanding (MoU) to combine their operations under a single parent company.
Under the proposed merger, the two airlines and their affiliates would retain their separate branding but come under a new parent company called LATAM Airlines Group through an all-stock transaction. Each airline would retain its headquarters and management structure, yet it is expected that the merger would still produce at least US$400m (A$448m) in synergies.
Star Alliance carrier TAM is the largest carrier in Brazil and operates a mixed fleet of Airbus A320s, A330s and A340s as well as Boeing 767s and 777-300ERs. LAN is headquartered in Chile, and also has affiliates in Argentina and Ecuador and is a member of the oneworld alliance.