TAM opts to make a regional push with or without Brazilian government subsidies

Brazilian airline TAM has opted to solidify its regional aviation strategy ahead of a decision by the country's government of a proposed programme to subsidise routes to certain regional airports. It plans to make its own push from Brasilia and has lined up a partnership with Brazilian regional airline Passaredo to access passengers in smaller markets.

TAM is also in advanced discussions with airframers over a regional aircraft order including Brazil's Embraer. TAM cited those discussions after rival Gol also stated it was also evaluating an order for Embraer jets.

The timing of TAM's regional push is interesting given that Brazil's economy remains tenuous. But TAM may be setting the stage to regain some market share it has lost during the last couple of years as it worked to turnaround its domestic operations in Brazil. Whatever TAM's motivations are, it appears to be positioning itself to capture more traffic within Brazil's smaller markets, creating new competitive dynamics in the country.