Is TAM Merger Best For Consumers?

Recently, I took a trip to Rio de Janeiro and was surprised by something that has been apparently four years in the making. As a market research analyst and business intelligence professional, you would think that I would be aware of everything going on in the market. Sometimes things simply slip through the cracks.

Four years ago, Brazil's largest airline, TAM, signed a joint-venture with Chilean airline, LAN. This business agreement effectively made the group the largest airline in Latin America. In April of this year, the integration of these companies took full effect by the roll-out of LATAM airlines.

Major questions remain following the full integration of the two airline powerhouses.

Will consumers see lower prices and fees as a result of economies of scale?

Will the airline's wide reach provide more domestic and international routes?

Will the consolidation of power result in consumers being forced to buy at inflated prices or be charged extra fees?

The last question is particularly important considering that Brazil's second largest airline, GOL, recently ceased 40% of its operations in the country's Northeast region causing more and more travelers to inconveniently go through hubs in Brasilia, Rio de Janeiro or Sao Paulo.

Read more at Globo (in Portuguese) Major Airline Merger Leaves Some Questions Unanswered