The Tam Varig union will generate the biggest company in the Latin American aero commercial history. They add up to 218 aircraft, only 19 less than Air France, the fourth largest airline in the world.

Still apart the two Brazilian companies transported 29.1 million passengers during last year, about four million more than Iberia and nearly six million more than Alitalia. Their sold seat volume quadrupled the ones sold by Mexicana de Aviación.

It will be a monster. A monster that had it been born on January 1^st 2002 would have already invoiced approximately 4.500 million dollars during that year, the same figures obtained by companies the size of Korean Airlines and Singapore Airlines.

Integrated, TAM and Varig will control 78 of the flights within Brazil, and would be the only Brazilian flag line with overseas frequencies.

But cuts will have to be made undoubtedly. The new name sprung from the fusion of the two Brazilian companies will hardly maintain the 26.017 employees they total today. Varig and TAM admit that number will have to be cut down. In fact they informed through an official communiqué that a "socially responsible solution" would be sought for the workforce.

Varig has an 18.293 man staff (an average of 157 employees per aircraft) and TAM has another 7.724 (75 per machine). Different analysts sustain Varig has an excessive number of workers, what, according to them, is typical of companies run by an employees association, as is the case of the Ruben Berta Foundation, Varig main shareholder.

The Foundation was created in 1945 through the then Varig president, Ruben Martín Berta, with the objective of providing benefits for the workers and their families, mainly with resources originated from the company's profits, for which Berta convinced the shareholders to cede 50% of the company shares in favour of the new entity plus an amount of cash similar to the value of the shares, to enable the Foundation to start operations immediately. Along the years that share participation increased up to the actual 87% of the Varig capital.

At the beginning, all the airline employees were affiliated to the Foundation. At present the workers of the fourteen companies of the FRB-Par, the holding created by the Ruben Berta Foundation to protect the group's investments, are affiliated.

Today, Varig owes some 900 million dollars, of which 250 million are due this year.

Founded in 1927, it controls 40% of the Brazilian domestic market and 70% of the international destinations.

TAM, created in the '60 decade, owes 250 million dollars and last year it registered losses for 187 million up to the third trimester. The company embarked nearly three years ago already in a fleet remodelling plan, for which it started replacing its old Fokkers for new Airbus 330, 320 and 319.

There should be news on this part too. Maybe not in the purchase cancellation to the European constructor, but yes in the suspension of operations of other planes. Between Varig and TAM they sum 44 aircraft more than Alitalia and 75 more than Iberia.

Undoubtedly, fierce competition the two biggest Brazilian companies were going through during the last years made them add more machines, but with a forthcoming agreement many of their 218 airplanes will remain grounded.