tam international corporation 20081110 eng

TAM International Corporation...with a strong local footprint

David Barioni Neto

2

Despite the adversities of 2008, TAM succeeded to establish as an International Corporation

TAM Financial100%

TAM Financial100%

TAM Capital100%

TAM Capital100%

TAM Viagens99,99%

TAM Viagens99,99%

TAM Mercosur94,98%

TAM Mercosur94,98%

TAM Linhas Aéreas100%

TAM Linhas Aéreas100%

TAM Financial 2100%

TAM Financial 2100%

TP Participações99,99%

TP Participações99,99%

SPC – Special Purpose Companies

3

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Market Capitalization* - USD Billion

Our market capitalization places us among the top 20 airlines in the world

Americas

Europe

Other

*October 31, 2008

TAM Financial 100%

TAM Financial 100%TAM Capi tal

100%

TAM Capi tal 100%TAM Viagens

99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%

TAM Mer cosur 94,98%TAM Linhas Aéreas

100%

TAM Linhas Aéreas 100%

TAM Financial 2 100%


TP Par ti cipações 99,99%


4

TAM Linhas Aéreas, our major business, thrived both in the domestic…

Maintaining leadershipMaintaining leadership

14

20

42

21

9

14

40

31

14

39

12

35

12

34

19

33

9

31

22

36

25

26

41

10

34

48

40

49

37

50

2000 2001 2002 2003 2004 2005 2006 2007 2008²0

20

40

60

80

100%

Domestic Market Share (RPKs¹)

TAMGOLVARIGVASPTRANSBRASILBRAOther

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q0820

22

24

26

28

30

32

Yield scheduled domesticR$ cents

Recovering yieldsRecovering yields

Standardizing fleetStandardizing fleet

Our narrow-body fleet operating domestic and South American routes is composed only by aircraft from the A320-family

A319 – 144 seats

A320 – 156/174 seats

A321 – 220 seats

Improving operating performanceImproving operating performance

Jan Feb Mar Apr May Jun Jul Aug Sep Oct

16%

14%

17%

15%

16%16%14%

14%

11%10%

TAM's Delayed flights2008

Source: ANAC¹ RPK – Revenue passenger kilometer² Accumulated January to September

TAM Financial 100%


100%


99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%


100%






5

7

75

7

82

14

87

12

88

12

85

14

77

18

50

7

37

13

14

67

17

10

72

2000 2001 2002 2003 2004 2005 2006 2007 2008²0

20

40

60

80

100%

International Market Share (RPKs¹)

TAMGOLVARIGVASPTRANSBRASILOther

…and international market

October 7, we announced our entry into the Star Alliance

We expect to start operations in 18 months, after achieving several minimum requirements

B777 MD11 A340 A330 B767

365

289267

212 205

0

100

200

300

400

Number of seats per aircraft typeIncorporated in 2008

We signed new code share agreements and memorandums of understanding:

Air Canada

Swiss International Air Lines

TAM Financial 100%


100%


99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%


100%






Consolidating leadershipConsolidating leadership Increasing our agreementsIncreasing our agreements

Entering in Star AllianceEntering in Star AllianceAdding flexibility to aircraft gaugeAdding flexibility to aircraft gauge

6

Within TAM Linhas Aéreas, we continue to focus on other value generation initiatives

TAM Linhas AéreasTAM Linhas Aéreas

MRO(São Carlos)

MRO(São Carlos) Loyalty ProgramLoyalty ProgramCargoCargo

Isolated business unit

Focus in maximizing assets profitability

Forming sales team

Direct benefits in cost reduction to the airline

To be structured as business unit

More fidelity from customer impacting passenger business

TAM Financial 100%


100%


99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%


100%






7

TAM Airlines, our subsidiary in Paraguay is capturing synergies from the Brazilian operations

FleetIn 2008, we substituted the F100 fleet per modern Airbus A320, with lower maintenance costs and more comfort to the passenger

TAM Financial 100%


100%


99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%


100%






Buenos Aires

Santiago

Montevidéu

Assunção

Sta Cruz de La Sierra

CochambabaRio de Janeiro

São Paulo

Ciudad delEste

Operational and administrative structureUnification of the management’s structure with TAM Linhas Aéreas

New network

Reduction in the headcount

Cost reduction projectsStreet stores closing

Revision of commercial costs

Negotiation of commercial contracts to global ones

8

TAM Viagens, our tour operator, is one of the biggest Brazilian tour operators

launched in Brazil in 1998. Based in São Paulo, with offices in Rio de Janeiro, Buenos Aires, and representatives in 49 additional Brazilian cities

relies on qualified agents network, innovative packages and high quality services

portfolio includes more than 250 products developed and managed according to the requirements and needs of our clients

TAM Financial 100%


100%


99,99%

TAM Viagens 99,99%

TAM Mercosur 94,98%


100%






9

Regardless of the position we achieved, the future remains challenging…

Sector growth in the domestic market will continue with the correlation of 2 to 3 times GDP growth

GOL + Varig (back to core

business)

São Paulo region continues to pose a question mark

Third airport project

Improvements in ViracoposAirport (Campinas) – new runway and new terminal

Fast connection to Guarulhos Airport

Potential concession model for Viracopos and Galeão airports?

Public hearing until December 1st, 2008 proposing changes in the slots distribution rule

Dem

and Regulator

Infrastructure Compe

tition

Consensus that GDP growth next year will be shy

Webjet (aircraft order)

Trip (capitalized by Skywest)

Azul (new entrant)

Testing possibility to allow longer flights from Santos Dumont (RJ) and

Pampulha (MG) – airports currently limited to intraregional (state)

10

… but we continue alert and resilient

Maintaining our growth plan… ...conscious about capital discipline

44

16

101

44

18

104

44

20

110

44

22

113

84

22

115

84

22

117

2008 2009 2010 2011 2012 2013

125 130138 143 149 151

Total fleet

B767 Airbus wide-body

Airbus narrow-bodyB777

No change in our fleet plan

Maintaining technical and cabin crew

Reviewing CAPEX and postponing

non core investments

Implementing initiatives to reduce

costs non-related to the operation

Centralization of back office in Europe

potential shared services in Brazil

11

To be the preferred airline company

Excellence in Technical-

Operational

Excellence in Service

Excellence in

Management

We signed a commitment

PASSION FOR AVIATIONPASSION FOR AVIATION

12

TAM is prepared to face the challenges being people’s favorite with joy, creativity, respect and responsibility TAM is prepared to face the challenges being people’s favorite with joy, creativity, respect and responsibility

tam international corporation 20081110 eng

Economy & Finance

tam airlines

tam international corporation

air canada50

swiss international

aircraft gaugeentering

seats a320

world market capitalization

market capitalization