LATAM Airlines Paraguay, formerly known as TAM Paraguay or Transportes Aéreos del Mercosur S.A., and previously as LAP (Líneas Aéreas Paraguayas), is the flag carrier and the national airline of Paraguay with its headquarters in Asunción, Paraguay. Its flights operate from Silvio Pettirossi International Airport in Asunción. Its parent company is LATAM Airlines Group.

The airline was established in 1962 and started operations in 1963 as Líneas Aéreas Paraguayas. After a brief period (1994–1996) as a subsidiary of the Ecuadorian airline SAETA when its name was LAPSA, in 1996 the majority of the stakes of LAP were sold to the Brazilian airline TAM Airlines and the current acronym was adopted. This is not to be confused with a Bolivia military-run passenger service, Transporte Aéreo Militar, TAM, operating mainly DC-3 and CASA 212 aircraft to domestic underserved destinations and not related to the civilian airline.

In 1994 TAM Airlines established a small subsidiary airline in Paraguay, called ARPA - Aerolíneas Paraguayas, with a fleet consisting mostly of Cessna 208 Caravan aircraft, formerly operated by TAM. On 1 September 1996, ARPA purchased 80% of the shares of the former state-owned LAP - Líneas Aéreas Paraguayas and both airlines were merged under the name TAM - Transportes Aéreos del Mercosur. Today LATAM owns 94.98% and the Paraguayan government 5.02% of the shares.

In 2008, following a branding strategy, the name TAM Mercosur was dropped and the airline adopted a corporate identity identical to its Brazilian owner, becoming TAM Airlines. However, its corporate structure remained the same. The airline was rebranded as LATAM Paraguay following the merger and creation of the LATAM Airlines Group and the subsequent rebranding of its member airlines.

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