“Brazil 2007”8th Annual CEO Conference

Libano Barroso

March 06th, 2007

2

TAM is a low cost company with better service at competitive prices

Low OperatingCosts

Low OperatingCosts

UndisputableBetter ServiceUndisputableBetter Service

CompetitivePrices

CompetitivePrices

Sustainable Strategyto Maintain Market

Leadershipand Profitability

3

TAM

Varig

Gol

Vasp BRAJ F MAM J J A S OND J F MAM J J A S OND J F MAM J J A S OND J

0

20

40

60%

Market Share - Domestic

TAM is the leader in the domestic market since 2003 ...

44,7%

26,8%

19,9%

6,2%

2004 2005 2006

47,2%

38,4%

4,5%

4,1%

Source: ANAC

4

TAM

GOLVARIGBRA

J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J0

20

40

60

80

100%

Market Share - International

...and has also reached leadership in the international market in July 2006

Source: ANAC

58,7%

16,6%

2004 2005 2006

13,5%

10,9%

22,1%

3,6%

72,1%

5

12Non-stop city links3

44264342Daily Roundtrips3

109129

124848+262Destinations3

7805.3767.299ASKs 4Q061

TAM VarigGOL

TAM has the most extensive domestic network...

1 In million ASKs

2 26 destinations served through operational agreements with OceanAir, Pantanal, Passaredo, Total, Trip

3 Based on December, 2006 reported routes (HOTRANs)

6

...and is the leading Brazilian international carrier

Longhaul marketParis

3x per day

London

1x per day

NY

2x per day

Miami

3x per day

Latin American marketBuenos Aires

7x per day

Santiago

2x per day

Assuncion

8x per day

Lima

1x per day

Montevideo

1x per day

Ciudad del Este

3x per day

Sta Cruz dl Sierra

1x per day

Cochabamba

1x per day

Note: Based on Jan 2007 network

7

On the top of the fleet and network superiority, TAM is recognized as the most “friendly” service...

In the company’s “7

commandments” and

Mission Statement

“Humility is fundamental”

Front line training focused

on efficient “throughput”

while providing service

Pilots and flight attendants

greeting passengers at the

gate

8

...providing more comfort at the airports...

Fast check-in services

Web check in

Self check in totems at main airports

Exclusive check-in for charter flights

VIP lounges in 12 domestic airports as well as all international airports serviced

Special Customer Care personnel for passengers requiring dedicated attention

9

...and in the airplanes – both domestic...

Most comfortable in cabin configuration

31” pitch

Widest “middle seat”

On board services

Meals adequated for the time of day and flight duration Breakfast, cold sanduiches and snacks

In flight entertainment Only domestic carrier with audio/visual In flight reading

“In the clouds” package, with crosswords, curiosities, TAM Kids and TAM Magazine

Main newspapers

10

...and international

Flat beds on Business and First Class

On board services

On board meals planned with local chef and somellier

On board entertainment with individual videos on demand (AVOD), video games, in flight magazines, periodicals, etc

11

TAM is innovating in the way the product is offered, servicing the client better at a lower cost

TAM has specific products designed for every part of the client

spectrum (from leisure to business)

TAM has specific products designed for every part of the client

spectrum (from leisure to business)

13

TAM maintained a 10-15% price differential due to product features

GOL

TAM

2001 2002 2003 2004 2005 200615

20

25

30

35

Yield scheduled domesticR$ Cents

GAP 60% 30% 18% 13% 15% 15%

Note: GOL Yield Grossed up 1.05X in order to include taxes

14

Total RASK increased 2.5% in 2006 compared to 2005

RASK Total1

RASK Scheduled Domestic2

LF Scheduled Domestic

Yield Scheduled Domestic3

RASK Scheduled International2

LF Scheduled International

Yield Scheduled International3 (em R$)

Yield Scheduled International3 (em USD)

20052005

20.16

20.31

67.8

31.42

14.70

73.2

20.10

8.59

20062006

20.65

19.88

72.0

29.05

16.22

76.3

21.28

9.95

2005 vs 20062005 vs 2006

2.5%

-2.1%

4.2 p.p.

-7.5%

10.3%

3.1 p.p.

5.9%

15.9%

1 Includes charter, cargo and Other revenues, net of taxes2 Net of taxes3 Gross of taxes

15

Continuous cost reduction remains a strategic goal for TAM

2005 2006

18.6317.84

10

15

20

25

Total CASK (BR GAAP - R$ cents)

- 4.3%

16

With all these efforts, TAM has already proven it can significantly improve margins...

RASK

CASK

2002 2003 2004 2005 200615

20

25

RASK/CASK (R$ Centavos)BR GAAP

EBITMargem

Spread

-7.1%

-0.3

-0.9%

0.8

6.5%

1.4

7.5%

1.5

n.a.

2.8

17

TAM has delivered a strong 2006...

Average market share

Average load factor

Aircraft utilization per

day (block hour)

CASK reduction yoy

New international

flights

Guidance 2006Guidance 2006 2006 2006

Market demand

growth (in RPK terms)12.3%12%-15%

47.8%45%

73.1%69.5%

12.7above 12

4.3%(ex-fuel 5.9%)

5%

• Daily to NY• Flight to London

• Since May• Since October

TAMTAM

MarketMarket

18

…and believes in a positive 2007

Average domestic market share above 50%

Average domestic load factor at approximately 70%

Aircraft utilization per day (block hour) higher than 13 hours

Reduction of 7% in total CASK ex-fuel in BR GAAP yoyOpportunity in the international market

Third frequency to Paris

Inauguration of two new international long haul frequencies

Market demand growth from 10% to 15% (in RPK terms)

TAMTAM

Guidance 2007Guidance 2007

MarketMarket

19

TAM will be expanding both frequencies and destinations...

Domestic Market 2007Domestic Market 2007 International Market 2007International Market 2007

~30% increase in ASKs

At least an additional 3 destinations

Strengthening of international gateways for domestic market

Guarulhos

Galeão

Increasing of frequency on main domestic markets

Brasília

Congonhas

Confins

Implementing overhub flights: new city-pairs

~60-70% increase in ASKs

Additional daily frequency to Paris beginning in January

New flight to Milan in 1S07

Additional longhaul frequency or destination to be disclosed

Strengthening of Latin American presence, both frequencies and destinations

20

...expanding the fleet and maintaining one of the youngest fleets in the world

TAM will be monofleet in the domestic market by 1S08

10

64

22

3

12

88

6

4

14

103

4

16

106

4

16

112

2006 2007 2008 2009 2010

96

109121

126132

0

50

100

150

Total Fleet

F100A319/320A330MD11B777

AverageFleet Age 7 6 5 6 7

21

In order to take advantage of the opportunity in the international, we have closed a deal with Boeing

Firm contract for 4 B777-300ER + 4 options

Delivery for mid 2008

“Interim” contract for 3 MD-11s

Delivery within the next 6 months

Same cost per seat as B777-300ERs

Choice for B777-300ER based on:

More attractive cost per seat

Higher technological lifespan

Creation of a “mix” of aircraft size, allowing for more gradual capacity increase per destination

New credit line (EXIM)

22

Cost targets are aggressive, but the roadmap is already laid out

Fleet and networkFleet and network Distribution costsDistribution costs OverheadOverhead

Increase of block hours to over 13 hours per day per aircraft in 2007

6 extra seats in the A319/320 fleet

Increase in direct sales through:

Site improvement

Fare bundles

Call center outsourcing

New means of payment

Insourcing of representatives

Adjusting indirect sales commissions to higher % on offpeak flights

Outsourcing of non-core activities

Redefinition of service standards

Review of spans&layers in the hierarquy

Implementation of new automated processes

Improved sourcing capabilities

23

TAM is one of the most lucrative airlines in the world

TAM, GOL and Virgin Blue with 2006 annualized; LTM September 30, 2006 for other airlines; USGAAP1 Assumes average period exchange rates.

TAM

GOL

Ryanair

Southwest

Virgin

West Jet

Jet Blue

Avg (ex-TAM)

EBITDAR (1)

(US$ MM)EBITDAR (1)

(US$ MM)

801

510

819

1.587

389

343

267

652

OperatingIncome (1)

(US$ MM)

OperatingIncome (1)

(US$ MM)

522

357

593

924

177

178

(9)

370

NetIncome (1)

(US$ MM)

NetIncome (1)

(US$ MM)

389

289

495

528

113

79

(60)

241

EBITDARMargin (%)EBITDAR

Margin (%)

24,5

30,2

33,0

18,0

20,9

23,4

12,3

23,0

OperatingMargin (%)OperatingMargin (%)

16,0

21,1

23,9

10,5

9,5

12,1

(4,0)

12,2

NetIncome

Margin (%)

NetIncome

Margin (%)

11,9

17,1

19,9

6,0

6,1

5,4

(2,7)

8,6