The paper "LAN -TAM Merger" is a great example of a research paper on macro and microeconomics. This research study presents an overview of the reasons why the proposed LATAM merger which was announced on 13th August has not taken place. The merger which is supposed to take place between TAM Brazilian airline and LAN Chilean airline has received ré sistance and controversies from various groups despite the deal being of great benefit to both the airlines as well as the two countries. For years now, Chile’ s LAN airlines, as well as Brazil’ s TAM airlines, have been considered the largest and most important foreign airlines which in recent times have been affected tremendously by global airline crises resulting in a decline among air travelers, especially in North America.
The recession, therefore, has forced many of the airlines to seek alternatives especially in poor performing regions which has forced LAN and TAM to look for a solution to the problem by proposing plans to merge into one company known as LATAM. Airline consolidation today is one of the major solutions many airline companies are resulting in as a way of curbing the global airline crisis. With an overview of the argument, the question which the study addressed was “ why have the two airlines merged yet despite announcing their plans to merge into one consolidated company” .
To find out the reasons behind the delays in the implementation of the proposed merger the study analyzed the advantages and disadvantages associated with the study. In relation to the argument, the study discussed in depth the reasons as to why the two largest Latin American Airlines have not merged yet.
The findings indicated that the proposed merger had a clear set of motivators for the two airlines and they comprised of opportunity to create synergies, improve operational efficiency, improve economies of scale and break barriers related to foreign entry in both countries. The research findings concluded that the proposed LATAM merger is an opportunity which will create value for the two airlines and the only option for the two airlines to deal with the global airline crises at hand hence need to resolve the current factors hindering the plans to take advantage of the opportunity at hand.
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Latin America monitor: Southern cone, Volume 22.Publisher: Business Monitor International
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Michelle, Grant. AN Airlines and TAM Airlines Announce Merger, vol.2, 2010:45-67
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