Brazil's Finance Ministry antitrust unit has recommended the approval of the plan by chilean LAN Airlines to buy brazilian TAM Linhas Aereas creating one of the largest airlines in the world. According to the antitrust unit this fusion will not harm the competition in the country's market. This is the firts of three antitrust decisions in Brazil to approve the transaction. The next agencies that have to pronounce are the Justice Ministry's antitrust unit and the country's antitrust council Cade.

Meanwhile in Chile the deal has not been approved and is facing hurdles. A chilean court will study a complaint by  the local airline PAL. Anti-monopoly regulators are probing the deal after some groups cuestioned the fusion. TLDC should disclose its ruling this month according to a tribunal's e-mail.

Brazil's civil aviation authority passed on Thursday the planned combination between Brazilian airline TAM (TAMM4.SA) and Chilean rival LAN with no restrictions, giving a boost to their project to create Latin America's largest airline.

 

The authority, known as ANAC, said in the government's official gazette that the process was approved "in the same mold that it was presented." The media office of ANAC had confirmed on Wednesday the decision to award permission to TAM and its largest rival LAN.

The news comes after antitrust regulators in Chile, where LAN LAN.SN is based, halted in January the integration between the carriers, citing it could potentially harm competition. The combined airline, which would be named LATAM, would become Latin America's biggest airline.

The process still requires authorization from other regulatory entities in Brazil.

Shares of TAM (TAMM4.SA), Brazil's largest airline, rose for a second day in Sao Paulo, gaining 1.3 percent to 36.04 reais.

Shares of LAN rose 1.6 percent in Santiago.

Source: Reuters

Chile's LAN said on Tuesday it has signed a contract with Boeing to buy three 767-316ER planes for USD$510 million as part of its long-term fleet strategy.

The Chilean carrier has said it plans to invest more than USD$4 billion to renew its fleet between 2011 and 2013, increasing it to 185 planes from 131.

The planes are scheduled for delivery in July, August and September of 2012, LAN said in a statement to the local bourse regulator.

LAN, which posted a 50 percent increase in profits in the fourth-quarter, aims to become one of the world's top carriers by purchasing Brazil's TAM.

Shares of LAN have risen sharply since it announced in August the merger plans, which is pending approval from authorities in both countries. A Chilean antitrust tribunal has opened a probe into the operation that could delay or even block the merger bid.

Industry analysts say LAN is effectively buying the Brazilian airline as the Cueto family, LAN's main shareholder, is set to emerge with the controlling stake in what would be one of the world's top carriers.

Source: Reuters