* Hires local banking shop BTG Pactual to handle IPO

* TAM shares jump 6.1 percent

SAO PAULO, Dec 16 - TAM Linhas Aereas (TAMM4.SA) (TAM.N), Brazil's largest airline, said on Wednesday it plans to spin off its Multiples SA unit in an initial public offering, hoping to capitalize on a boom in share sales.

The unit, TAM's milleage program, signs accords with retailers that allow clients to collect and use air miles.

TAM launched Multiples in June after expanding its frequent-flier program to include retailers, hotels and other types of services. The airline said it will unveil details of the IPO at a later date.

The company hired BTG Pactual, the investment bank founded by billionaire Andre Esteves, as lead underwriter for the offering. Credit Suisse (CSGN.VX) will also help manage the IPO, TAM said in a securities filing.

The IPO comes as the Sao Paulo-based airline recovers from a slump in travel demand amid the worst crisis in civil aviation since 2001. Analysts have said the third quarter marked a turning point for Brazilian airlines, which will benefit from future demand for passenger and cargo transport as well as growing tourism in and out of Brazil.

TAM shares jumped 6.1 percent to 38.2 reais in early-afternoon trading in Sao Paulo, compared with a 0.1 percent gain in the benchmark Bovespa index .BVSP. (Reporting by Elzio Barreto; editing by John Wallace)

Credit Suisse