SÃO CARLOS—Brazilian carrier TAM Airlines expects to decide this summer whether to keep its maintenance, repair and overhaul unit as an internal part of the airline or spin it off as a separate company, creating an opportunity for a new shareholder to acquire a portion of it.

“We have prepared the unit for two years to be a separate company,” says Ruy Amparo, VP operations and MRO. The maintenance unit has been operating as if it were an indepedent company, quantifying every aspect of its operations and even producing profit and loss statements each quarter.

“We do not send invoices to TAM, but it has helped develop information for our outside customers,” he notes. TAM also has studied the legal and tax implications, customs and other changes that a spin-off would entail.

Amparo says if TAM spins off the unit, it would be free to partner with an external shareholder, such as Lufthansa Technik or Aeroman. TAM has identified up to 10 top MROs, and all have visited TAM’s expansive MRO facilities. An advantage of such a partnership to TAM would be the companies’ commercial and marketing capabilities, Amparo says.

But even if MRO stays as a business unit within TAM, it could set up “micro” joint ventures. As an example, its landing gear business—the only Airbus A319/320 landing gear shop in Brazil—could team with another, he notes.

Selling the MRO unit entirely is not being considered because of its strategic importance to TAM, Amparo says. “We need to have maintenance in Brazil,” he notes, something that could be eliminated at some point if it “sells everything” to an outside buyer.

TAM has spent more than $100 million on its São Carlos Technological Center, located 155 miles northwest of São Paulo, since acquiring the site in 2001. It plans to spend $35 million more over the next year on a new hangar to accommodate work on its own growing fleet of widebodies and potential third-party work. TAM’s current fleet of 148 aircraft includes 18 Airbus A330-300s and four Boeing 777s; it will be adding two more A330s and six more 777s over the next few years.

Currently certificated for heavy airframe work on Airbus A320 and A330 aircraft, Boeing 767s and Fokker 100s, as well as thousands of Airbus and Boeing components, TAM expects certification for Boeing 777s in mid-2011, allowing it to do heavy checks on its aircraft, which begin coming up for heavy checks about then. It also would provide 777 MRO for other customers.

“We need to have a new hangar by August 2011, which means we need to start building by the middle of the second [half] of this year,” Amparo says.

Because it already needs additional hangar space, TAM in the interim intends to extend its largest hangar by pushing out a wall.