Two family business dynasties have come together to form a new airline in South America in a move designed to take advantage of the growing demand for air travel in the region.
The Cueto family, who own around 34% of LAN of Chile, and the Amaro family, who have a similar holding in Tam of Brazil, will together control around 38% of the new airline, called Latam Airline Group, making them the group's largest shareholders. The Cueto family will have the largest stake of the new airline, at 24%.
The two families have been in talks with each other for some time, according to press reports. But pressure on airlines to consolidate as competition intensifies, along with the opportunities to capitalise on growing regional and intra regional air traffic demand led to the two families agreeing a deal, say analysts.
Latam Airlines will have revenues of around $8.5 billion, making it the 15th largest airline in the world, but the 11th largest in terms of passenger numbers.
LAN's Enrique Cueto will be chief executive of the combined company, while Tam's Mauricio Rolim Amaro its chairman. Cueto's brother Ignacio Cueto, who is currently chief operating officer of LAN, will become chief executive of the Chilean business of the new airline.
Mauricio Rolim Amaro is the son of TAM founder Captain Rolim Amaro, who died in 2001 in a helicopter accident.
Maria Claudia Amaro, the daughter of Capital Rolim Amaro, will continue to chair Tam's operations.
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