TAM
Brazilian Airlines




Líbano Miranda Barroso
        CFO
TAM is a low cost company with better service at
competitive prices



                    Undisputable
                  ...
Undisputed domestic market leader ...

                                         Domestic Market Share (RPK’s)

           ...
...and increasing share in the international market

                                          International Market Share ...
Sustainable competitive positioning in the main
       airports in Brazil…
% TAM slots        % Total Domestic Passengers ...
..increasing productivity and holding the youngest fleet in
             Brazil
                          Modern Fleet
   ...
Focus on cost reduction maintaining price differential…

CASK total (BR GAAP - R$ centavos)


          22
               ...
...improving our profitability




                                 8
TAM: among the top airlines in the world




Source: Companies Publics Filling and Reports as of December 31, 2005
       ...
After the follow-on, the company now has ~45% of
free float




                                                   10
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Conferência de Transporte do Bear Stearn – 10 de maio

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Conferência de Transporte do Bear Stearn – 10 de maio

  1. 1. TAM Brazilian Airlines Líbano Miranda Barroso CFO
  2. 2. TAM is a low cost company with better service at competitive prices Undisputable Better Service Sustainable Strategy to Keep Market Leadership and Profitability Low Operating Competitive Costs Prices 2
  3. 3. Undisputed domestic market leader ... Domestic Market Share (RPK’s) 43.8% 43.5% 35.8% 34.9% 33.0% 30.7% 27.2% 21.8% 19.2% 1998 1999 2000 2001 2002 2003 2004 2005 1Q06 Domestic Market Share (RPK’s) – 1Q06 Domestic Market Share (RPK’s) - Apr/06 Varig Varig 19.5% 16.5% TAM 43.8% TAM 44.3% GOL GOL Others 28.8% 33.4% Others 7.9% 5.8% 3 Source: DAC Source: DAC
  4. 4. ...and increasing share in the international market International Market Share (RPK’s) 22.3% 18.8% 14.3% 13.9% 12.5% 12.0% 7.9% 3.8% 0.1% 1998 1999 2000 2001 2002 2003 2004 2005 1Q06 International Market Share (RPK’s) – 1Q06 International Market Share (RPK’s) - Apr/06 TAM GOL TAM 22.3% 4.2% 25.3% Others 3.8% GOL 4.4% Varig 66.4% Varig 71.2% 4 Source: DAC Source: DAC
  5. 5. Sustainable competitive positioning in the main airports in Brazil… % TAM slots % Total Domestic Passengers Boarded 44% Congonhas 45% Brasília Important barrier to entry for 32% Guarulhos newcomers Santos 35% Limited ability for other Dumont competitors to grow 27% Galeão 10 main airports in Brazil carry 41% Salvador 70% of all passenger traffic 44% Confins TAM has, in aggregate, 39% of Porto 27% all slots available in these Alegre airports 33% Curitiba 41% Recife 0 2 4 6 8 10 12 14 16 18 20 Source: DAC 5
  6. 6. ..increasing productivity and holding the youngest fleet in Brazil Modern Fleet Projected Fleet (Average Age in 2005: 7.5 years) 100 83 96 76 74 94 90 70 18 18 30 20 18 21 18 21 13 13 13 13 62 66 68 72 36 31 31 31 10 10 9 9 10 10 7 5 2002 2003 2004 2005 2006 2007 2008 2009 A-330 A-320 A-319 F-100 A-330 A-319/320 100 seat planes Increasing Productivity Higher Fuel Efficiency 72.6% 41.9 12,40 39.5 70.6% 39.1 66.0% 38.3 11.36 38.0 60.6% 54.8% 8.98 9.48 7.62 1Q06 2003 2004 2005 2002 2002 2003 2004 1Q06 2005 Liters of Fuel / Million ASKs Average Load Factor Block hours per plane per day 6
  7. 7. Focus on cost reduction maintaining price differential… CASK total (BR GAAP - R$ centavos) 22 21.3 21.2 21.2 * * 21.0 5% 5% 20.1 12% 12% 20 14% 14% 22% 22% 19.1 18.6 20% 20% 18 17.4 14% 14% 24% 24% 16.7 16.3 13% 13% 16 15.4 15.4 14 GOL TAM VARIG 12 2003 2004 2005 1T06 1Q06 *CASK published Jan-Sep 2005 (CVM) 7
  8. 8. ...improving our profitability 8
  9. 9. TAM: among the top airlines in the world Source: Companies Publics Filling and Reports as of December 31, 2005 9 Note:EasyJet numbers is based in the last published numbers
  10. 10. After the follow-on, the company now has ~45% of free float 10
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