Update on the merger between TAM and LAN

São Paulo, Ocotber 28th, 2011 – (BM&FBOVESPA: TAMM4/NYSE: TAM)- TAM and LAN have started the technical works preparing for the integration, via international consulting companies, with the purpose of preparing the future merger between the companies. The expectation is for the LATAM Airlines Group to be created until the end of the first quarter of 2012, subject to final approvals from relevant authorities and to agreement from non-controlling shareholders from TAM and LAN.

In the new group’s structure, Maurício Rolim Amaro will be the chairman of the Board of Directors of LATAM and Enrique Cueto will be the CEO (Chief Executive Officer) of LATAM. Maria Cláudia Amaro will remain as chairman of the Board of Directors of TAM S/A, and will be a member of the Board of Directors of LATAM. Marco Antonio Bologna will remain as CEO of TAM S/A, and Ignacio Cueto will be CEO of LAN. Líbano Barroso, who currently is TAM Linhas Aéreas’ CEO, will be the CFO (Chief Financial Officer) of LATAM; the structure currently reporting to him will start reporting to Bologna after the group is created. This new structure will be implemented as of the effective creation of LATAM, and the existing structures will remain unchanged until then.

The merger will result in one of the top 10 airline groups in the world – one of the top 3 in terms of market value – offering passenger and cargo transportation services to more than 115 destinations in 23 countries, with a fleet of over 280 aircraft and nearly 50,000 employees.