(Corrects to say sales fell in second paragraph.)

Aug. 14 (Bloomberg) -- Tam SA, Brazil’s biggest airline, said second-quarter profit more than doubled as jet-fuel costs dropped and Brazilian air travel revived.

Net income attributable to equity holders rose to 539.6 million reais ($295.9 million) in the second quarter from 241.4 million reais a year earlier, the Sao Paulo-based company said today in a regulatory filing. Net sales fell to 2.27 billion reais from 2.50 billion reais. The results are according to International Financial Reporting Standards.

Air travel by Brazilian airline companies recovered in July with an increase of 14 percent from a year earlier, according to the country’s civil aviation agency, known as ANAC. Tam had a 55 percent share of domestic and international flights in Brazil last month, while Gol Linhas Aereas Inteligentes SA had 35 percent.

“The outlook is good for the future as the economy started showing signs of recovery in June,” Caio Pereira Dias, an analyst at Banco Santander SA in Sao Paulo, said in a telephone interview before the earnings release. He rates Tam shares “underperform.”

Tam said fuel costs dropped 37 percent in the quarter to 619.9 million reais, helped by a 19 percent gain in the real against the dollar.

Net income according to Brazilian Generally Accepted Accounting Principles rose to 788.9 million reais in the quarter from 337 million reais a year earlier, Tam said in the filing. The results were revised from last year because of changes in local accounting standards.

Tam rose 1.8 percent to 26.15 reais in Sao Paulo trading yesterday. The shares have risen 37 percent so far this year, less than the benchmark Bovespa index’s 52 percent gain.

To contact the reporters on this story: Flavia Bohone in Sao Paulo at fbohone@bloomberg.netLaura Price in London at lprice3@bloomberg.net

Last Updated: August 14, 2009 09:10 EDT