Zacks_Analysts' Blog : TAM & Turkish Airlines Share Code - Analyst Blog

TAM S.A (TAM) and Turkish Airlines recently entered into a codeshare (flight sharing) agreement which increases the options of destination for their customers willing to fly between South America and Europe. With this bilateral agreement, both members of Star Alliance are now in a position to commercialize seats in certain flights operated by the partnership.

Once effective, the partnership will allow the TAM customer to travel directly between São Paulo and Istanbul in a Turkish Airlines flight. In addition, boarders will now be able to travel via London from and to Istanbul, the biggest city of Turkey; as well as from São Paulo or Rio de Janeiro. Another route network between the Paulista capital and Istanbul via Madrid appears as a candid option for flight operation for both the companies.

Initially, the TAM customer used to buy air tickets for Istanbul, directly from the Brazilian company. With this flight sharing accord, TAM will allow the Turkish passengers to buy air tickets for flights operated by TAM with a destination option ranging from São Paulo, Rio de Janeiro, Brasília, Porto Alegre and Foz do Iguaçu (in Brazil), in addition to Buenos Aires (in Argentina) and Istanbul. After receiving approval from the aeronautical authorities of both countries, reservation and purchase facility of tickets to destinations of choice will be available to customers on the companies’ website.

TAM S.A., operating through its subsidiaries TAM Linhas Aéreas and TAM Mercosur, is a renowned air transportation services provider, both in the domestic and international markets. Currently, TAM offers 43 destinations in Brazil and 19 in Latin America, apart from cities in the United States and Europe – in addition to another 92 international destinations by means of codeshare agreements. TAM competes directly with its peers, such as AMR Corporation (AMR) and GOL Linhas A (GOL).

We currently hold a Neutral recommendation on the stock. Tam S.A. has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).