Brazil's TAM Linhas Aereas is in talks to buy a stake in Chilean airline LAN, according to Reuters news agency.
TAM is interested in the 19% LAN stake held by Axxion, a company owned by Chile's president-elect Sebastian Pinera, reports say.
To finance the acquisition, TAM could use proceeds from the initial public offering (IPO) of its Multiplus SA frequent flyer programme, set to take to go on sale next week.
The IPO could raise up to 1.28bn reais ($688m).
www.tam.com.br www.lan.com