Brazil's TAM Airline Signs Contract to Buy 46 Airbus Jets

SAO PAULO, Brazil_Brazil's TAM airline announced Monday that it has signed a contract to buy 46 Airbus jets, including 22 extra wide-body A350s.

The European-made A350 is a competitor to the Boeing 787 Dreamliner.

TAM Linhas Aereas SA said in a statement that the list price of the jets is US$6.9 billion (€4.7 billion), although most airlines obtain deep discounts from plane makers.

The largest airline in Latin America's biggest nation, TAM has been moving to expand its overseas routes.

The addition of the A350s to TAM's fleet marks the first time that the plane will be used in South America, and will allow the carrier "to continue the successful expansion we have already had" with smaller Airbus jets, said TAM chief executive David Barioni Neto.

Airbus said in a statement that the TAM agreement raises the number of orders for A350s to 314 aircraft worldwide.

TAM will also add 4 Airbus A330-200 planes and 20 A320s to its fleet under the order, the companies said.

While the purchase of the A350s and A330-200s was announced last year under a memorandum of understanding, Monday marked the first time they had been listed as firm orders.

The order for the A320s was new, marking a significant increase in the number of TAM orders from Airbus. Using list prices, the order for the A320s alone amounts to about US$1.5 billion (€1 billion).

TAM became Brazil's top airline with the collapse of Varig several years ago.

TAM said the contract does not alter its forecast for its fleet size. The airline has 109 planes, expects to have 123 by the end of this year and 136 by the end of 2013.

TAM's shares plunged 8.3 percent Monday in trading on Sao Paulo's Bovespa exchange, falling in line with most Brazilian stocks, as international markets recoiled on concerns of a U.S. recession.