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TAM SA, Brazil's biggest domestic airline, placed a firm order for 37 Airbus aircraft worth as much as $3 billion, expanding its fleet to meet rising demand while seeking to curb fuel costs.
The Sao Paulo-based carrier placed orders for 15 A319, 16 A320 and 6 A330-200 planes, with deliveries to take place between now and 2010. The order value is based on the top list price of each model, the company said in a statement.
Brazilian airlines TAM and Gol Linhas Aereas Inteligentes SA are adding to their fleets as faster economic growth and the collapse of Varig, Latin America's biggest airline until last year, boosts demand for their domestic and international service. The planes will replace TAM's Fokker-100 aircraft, Eduardo Puzziello, an airline analyst at Fator Corretora in Sao Paulo said.
``The increase in traffic density calls for us to use bigger aircraft that will help us cut costs per each seat/kilometer,'' TAM's Chief Executive Officer Marco Bologna said in the statement.
The order, announced after the market's close, is a blow for Empresa Brasileira de Aeronautica SA, the world's fourth biggest aircraft maker, which was trying to sell TAM its smaller EMBRAER 190 aircraft, Puzziello said.
``The decision is good for TAM because it will operate aircraft from just one manufacturer but is very negative for Embraer since they lost an order,'' Puzziello said in a telephone interview from Sao Paulo.
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