TAM has signed an agreement with Brazilian investment company BTG under which BTG will take control of the airline with the goal of developing the business and boosting its share price.

TAM, Brazil’s biggest airline, has about a 49% share of the domestic market, but this figures fell by 2% in the last financial year to March. Last year it made a loss of US$722m after hedging wrong on oil prices.

BTG is expected to bring financial expertise to avoid such mistakes, although the person said this was not the main motivation for the agreement.

Maria Claudia Amaro, chairman of the board of TAM Airlines, told the Financial Times that the timing was right for TAM to improve its financial position, as well as its strategic thinking.

She said: “Our intention is to clearly maintain and further promote the TAM brand and the Amaro family’s legacy in the aviation industry. We found through this arrangement with BTG, a way to bring in-house world-class financial sophistication and strategic vision, as well as managerial discipline.”

A source close to the FT said BTG could be expected to look for unrealised value in TAM operating units such as its loyalty programme and maintenance division, and possibly operate them as separate companies.

Other airlines such as Alitalia and Olympic have entered similar arrangements in the past. But this is believed to be the first time that any big Brazilian company has reached a management agreement with an outside group.

BTG was created last year by André Esteves, former head of fixed income at UBS and previously a partner at Pactual, a Brazilian investment bank.

BTG executives have worked with TAM for several years and were among the team that ran its initial public offering on the São Paulo stock exchange in 2004.

“This is an innovative model of asset management [in Brazil], through which BTG will provide TEP with financial sophistication and management and execution capabilities ... The contract represents a milestone in combining the activities of BTG in non-traditional asset management, private equity and merchant banking businesses,” said Carlos Fonseca, a partner at BTG.