LAN Airlines Reports Net Income of US$4.2 Million for the Second Quarter of 2009

SANTIAGO, Chile, July 28 /PRNewswire-FirstCall/ -- LAN Airlines S.A. (NYSE: LFL), one of Latin America's leading passenger and cargo airlines, announced today its consolidated financial results for the second quarter ended June 30, 2009. "LAN" or "the Company" makes reference to the consolidated entity, which includes passenger and cargo airlines in Latin America. All figures were prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in U.S. dollars.

HIGHLIGHTS

-- LAN reported net income of US$4.2 million for the second quarter 2009. This represents a 93.0% decrease compared to net income of US$60.5 million in the second quarter 2008. These results were impacted by a US$52.6 million fuel hedging loss recognized during the quarter, while results for the second quarter of 2008 included a fuel hedge gain of US$29.2 million.

-- Excluding the impact of fuel hedging, operating income reached US$87.6 million in the second quarter 2009, a 56.2% increase compared to US$56.1 million in the second quarter 2008. Furthermore, the operating margin excluding hedging losses reached 11.2% in the second quarter 2009 as compared to 5.6% in the second quarter 2008, which represents a significant increase in LAN's operating efficiency, especially considering that the second quarter is seasonally the weakest of the year.

-- Continuing with the expansion and renewal of its fleet, during the second quarter 2009, LAN received two new Boeing 777 freighters. LAN Cargo is the first carrier in the region to operate this aircraft, the most modern and efficient freighter of its type.

-- During the quarter LAN completed a round of financing initiated in March 2009, raising an additional US$210 million through bank loans in the Chilean market, reaching a total of US$250 million in bilateral loans with five local banks. These loans have a three year tenor and attractive interest rates, and will be used to increase the Company's liquidity position. At the end of the second quarter, LAN had a total of US$700 million in cash and cash equivalents, representing 18.0% of last twelve month revenues. Furthermore, LAN is in the final stage of securing long-term financing for three Boeing 767 aircraft to be delivered between 2009 and 2010. This financing is expected to be supported by the US EX-IM Bank.

-- In line with LAN's continued commitment to expand its route network and improve connectivity for passengers traveling within the region, during the second quarter LAN launched service from its Lima hub to Cartagena de Indias, Colombia two times per week. In addition, on July 10, LAN initiated daily service from Santiago to Lima via Iquique. On August 15, the Company will operate Lima - Cali via Quito three times per week. As for its domestic operations, LAN Argentina incorporated a new route from Buenos Aires to Tucuman with 13 weekly frequencies. In addition, LAN Ecuador continued developing its domestic routes in that market, currently operating 46 weekly frequencies between Quito and Guayaquil as well as daily service between Guayaquil and Cuenca.

-- LAN continues to receive international recognition. In July 2009, the Company was ranked in sixth place in the annual ranking of Top Performing Airlines by the specialized industry publication Aviation Week, which focused on companies that have best managed the current crisis environment. The ranking included the 32 major carriers globally, with LAN appearing as the leader in Latin America. In addition, LAN was recognized as the most respected company in Chile in the annual ranking by local newspaper La Segunda and Adimark GFK, based on the opinion of respected Chilean business executives.

For a full version of this release, please visit the Company's webpage at: http://www.lan.com/about_us/info_inversionistas/investor-en-us.html

About LAN

LAN Airlines is one of the leading passenger and cargo airlines in Latin America. The company and its affiliates serve over 65 destinations around the world through an extensive network that offers full connectivity within Latin America, while also linking the region with North America, Europe and the South Pacific, as well as 63 additional international destinations through its various alliances. LAN Airlines and its affiliates have a leading position in their respective domestic markets of Chile and Peru as well as an important presence in the Argentinean domestic market and has begun operations in the domestic market of Ecuador.

Currently, LAN Airlines and its affiliates operate one of the most modern fleets in the world, with 84 passenger aircraft, and its cargo subsidiary, LAN CARGO and its respective cargo affiliates, have a fleet of 11 freighters. The company recently completed its short haul fleet renovation process by acquiring new aircraft from the Airbus A320 family, enabling LAN to improve its efficiency and to reduce significantly its CO2 emissions. The fleet renovation is part of the company's commitment to the protection of the environment.

LAN is one of the few Investment Grade airlines in the world (BBB). The company's world class quality standards enabled its membership in oneworld(TM), the global alliance that encompasses the best airlines in the world. For more information please visit www.lan.com or www.oneworldalliance.com

Note on Forward-Looking Statements

This report contains forward-looking statements. Such statements may include words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" or other similar expressions. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors and uncertainties include in particular those described in the documents we have filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them, whether in light of new information, future events or otherwise.

    CONTACTS IN CHILE
    Investor Relations
    gisela.escobar@lan.com
    rodrigo.petric@lan.com
    bernardita.sepulveda@lan.com
    Tel: (56-2) 565-8785

    CONTACTS IN NEW YORK
    Maria Barona/Pete Majeski
    lan@i-advize.com
    i-advize Corporate Communications, Inc.
    Tel: (212) 406-3690