SAO PAULO, Brazil (July 30, 2008) – TAM Airlines, a company of Grupo TAM with headquarters in Asuncion, Paraguay, is going to adopt a management model based on the three pillars that support the company’s activities: Service Excellence, Technical and Operational Excellence, and Managerial Excellence. TAM Airlines has been the new name of TAM Mercosur since last March, pursuant to the guidelines for repositioning the brand that accompanied the expansion of Grupo TAM in the international market.

The management model is being adopted in all parts of the group, aligning administrative and operational processes and seeking continuous improvement of passenger and cargo air transport services.

With the administrative restructuring of the group’s Paraguayan company, 133 employees will be transferred to the personnel roster of TAM Linhas Aereas. About 120 employees are being let go. In recognition of the service of these employees, the company is offering a package of benefits superior to what is required by law, and that includes an extension of the health plan and the granting of air travel discounts for a period proportional to time of service. These employees will also receive support in the process of reentering the job market.

With the aim of optimizing resources and improving the company’s operational capacity, there will be changes in TAM’s air network, specifically in the routes flying in and out of the Paraguayan capital.

“The search for synergies is consistent with our strategy of expanding our presence in the international market, and seeks to promote process optimization,” said Captain David Barioni Neto, president of TAM Linhas Aereas and president of the Board of Directors of TAM’s Paraguayan division, who is responsible for the executive management of TAM Airlines.