This summary is based on the first quarter fiscal 2007 earnings call conducted by TAM SA (TAM: chart) on May 10, 2007.

Director and Chairman: Marco Antonio Bologna
Chief Financial Officer and Investor Relations Director: Líbano Miranda Barroso

Key Investors Issues

- Revenues was R$1.9 billion, an increase of 15%.
- EPS were R$0.39 reais in BR GAAP and 0.92 reais in US GAAP.
- There was an increase in block hours/day per aircraft from 12.4 to 13.

First Quarter Highlights

The domestic aviation market in Brazil has been growing at double-digit rate for the last three years.

In 2004, the growth was 12%, in 2005, the growth was 19 and last year the market grew 12%. This first quarter of 2007, despite the steep growth of the same period last year, the company continues to observe double-digit growth having an average of 14%.

The company reached 49% domestic market share, in April it reached the 50.7%.

In 2004 and 2005, international marketing increased 1.6% and three times Brazilian GDP when considering Brazilian carriers that fly international route. In 2006, the market increased 30% mainly due to the reduction of a body. As a result, due to the nature of the bilateral agreements international carriers represent today a higher ratio of international traffic flowing to and from Brazil.

The company obtained 63.5% international market share considering only Brazilian airlines.

In April 2007 market share obtained 69.7%.

The company increased fleet of 5 Airbus A320 1319 and as a breach for the new Boeing 777-300ER, it corporates 3 MD11. The company has to deliver 3 Focker 100 following phase out plan of the 100 seat aircraft.

The domestic market increased its destination.

The company serves through alliance with the other carriers and is transferring operation on the Northeast and south of the country. Rio de Janeiro has also strengthened with new links to northeast and south of Brazil.

Regarding operating efficiency, the company increased daily block hours, but that drafted by more than 4% from 12.4 hours in the first quarter 2006 to 13 hours in the first quarter 2007, important in order to dilute fixed costs. Average growth factor was 70.8%.

In the domestic market, the company presented 8% reduction of gross revenues due to attendance and also increases of 22% compensated by 29 yield reduction.

In the international market, revenue increased 76%, due to the increased demand of 64% and an increase of 7% in the yield compared to a 78 supply increase.

This supply increase was due mainly to the aircraft expansion combined with the increase in seat capacity per aircraft and the increasing block hours per aircraft reaching 13 hours. The company had a 52% increase in cargo revenues due to higher availability of aircraft cargos based for sale, especially in the international operation.

The growth of 25% yield in other revenues was basically due to the increase in sales of point from Loyalty Program and expired tickets compensated by the reduction of subleasing revenues. Currently, TAM does not have any aircraft subleased to other airlines.

Its part of strategy to be competitively priced maintaining a premium of up to 15% in the domestic market.