The role of leases in the merger of Lan and Tam

Abstract

The objective of my dissertation is to understand the role of leasing in the merger of Lan and Tam. This merger was one of the events of the year in the industry, as it created the 3rd largest airline group by market capitalization, controlling 42% of the traffic in Latin America and 6% of the world. This case study tries to answer questions related with the merger and the influence of leasing on the decision-making process before and after the merger. Among the questions addressed by this paper are the impact of the on- and off-balance-sheet contracts on the decision to merge, the possibility of Latam being able to (re) negotiate past and future contracts with the objective of better conditions and whether this merger would be possible if the leasing policy were different. We conclude that the most appropriate leasing strategy for Latam Group is the use of Operating Leases in order to meet the objectives and shareholders expectations.

Date of Award	2013
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ricardo Reis (Supervisor)