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, 2010. “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$60.6 million for the second quarter 2010 compared to US$4.2 million in the same period 2009, marked by a strong recovery in both the cargo and passenger businesses.
  • Operating income reached US$112.6 million in the second quarter 2010, which represents an important increase compared to US$34.9 million in the second quarter 2009. Operating margin reached 10.9%, an increase of 6.4 points compared to 4.4% in the same period of 2009. Operating income in the second quarter 2009 included a US$52.6 million realized fuel hedging loss, while the realized fuel hedging gain for the second quarter 2010 totaled US$1.3 million.
  • Total revenues for the second quarter 2010 reached US$1,033.6 million compared to US$785.1 million in the second quarter 2009 due to a 24.5% increase in passenger revenues and a 60.3% increase in cargo revenues. Passenger and cargo revenues accounted for 66% and 31% of total revenues, respectively, during the second quarter 2010.
  • In July 2010, the Company signed a memorandum of understanding for the purchase of 50 modern Airbus A320 family aircraft to be delivered between 2012 and 2016. The new aircraft will operate regional and domestic flights within Latin America. Regarding LAN’s long haul fleet, the Company signed an agreement in July with Boeing to adjust the delivery of 2 Boeing 787-8 Dreamliner aircraft to 2012. This modification to LAN’s fleet plan will allow the Company to receive a total of 5 Boeing 787-8 Dreamliner aircraft in 2012. This is in addition to the anticipated delivery of 10 Boeing 787-8 Dreamliner already announced in March 2010. As a result, LAN will be the first airline in the western hemisphere to take delivery of this new and modern aircraft.
  • In May 2010, the Company signed an agreement with Colombian airline Aeroasis S.A. (“Aeroasis”) to provide it with technical support and service consultancy in the process of obtaining an operating permit from the Colombian Civil Aviation Authority (Unidad Administrativa Especial de Aeronáutica Civil), within the established deadlines.
  • In line with the expansion of LAN’s passenger operations, during the second quarter 2010, the Company announced various new passenger destinations. For short-haul operations, in August 2010, LAN Peru will launch 3 weekly frequencies between Lima and Brasilia, which starting October 15, 2010, will increase to 5 weekly frequencies. In addition, in June 2010, the Company launched 2 daily flights between Sao Paulo and Aeroparque Metropolitano Airport in central Buenos Aires. Also, starting in January 2011, the Company will begin service from Lima to Easter Island and from Lima to Iguazú, subject to required regulatory approvals.
  • Regarding LAN’s cargo operations, the Company continued to expand operations in the Brazilian domestic market. In June 2010, LAN Cargo’s Brazilian affiliate ABSA launched 5 weekly frequencies from Sao Paulo to Recife and Fortaleza, which are in addition to the 9 weekly frequencies already operated between Sao Paulo and Manaus.
  • In June 2010, Fitch confirmed LAN’s international Investment Grade credit rating at BBB with a ‘Stable’ outlook.

For a complete version of LAN’s 2Q10 results, please visit www.lan.com.

About LAN

LAN Airlines is one of the leading passenger and cargo airlines in Latin America. The company and its affiliates serve over 70 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 70 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 markets and having completed one year in the Ecuadorian domestic market.

Currently, LAN Airlines and its affiliates operate one of the most modern fleets in the world, with 87 passenger aircraft, and its cargo subsidiary, LAN CARGO and its respective cargo affiliates, have a fleet of 11 dedicated freighters. The Company has one of the youngest fleets in the world, which has meant greater efficiency and a significant reduction in CO2 emissions, reflecting its strong commitment to environmental protection.

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™, the global alliance which LAN has been a member of for over 10 years 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.

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