LAN Airlines S.A. (LAN) (NYSE: LFL/IPSA: LAN), today announced an agreement to acquire 98.942% of the outstanding shares of Colombian airline AIRES, through the purchase of its parent entities. The acquisition is subject to a due diligence process and compliance with all corresponding regulatory requirements and authorizations, as well as the incorporation of Colombian shareholders into the company.

The acquisition price is US$32.5 million, to be adjusted according to variations in AIRES’ debt between the value at closing of the transaction and the value as stated in the company’s financial statements as of August 31, 2010.

The estimated time frame in order to conclude the due diligence process and finalize the acquisition is between 30 and 60 days from the signing of this agreement.

AIRES is a Colombian airline founded in 1980 and is currently the second largest operator in the Colombian domestic market with a 22% market share. AIRES provides scheduled service to 27 domestic destinations within Colombia, as well as 3 international destinations. The company’s fleet consists of 9 B737-700s, 11 Q200 and 4 Q400.

Once the acquisition occurs, AIRES would become an affiliate of LAN Airlines and each Company would comply with the foreign ownership and control regulations in each country where they operate. If the combination with Brazilian airline TAM is successful, AIRES would become part of the new Latin American airline group, LATAM Airlines Group S.A.

This purchase agreement has no impact on the technical support and service consultancy provided by LAN to Colombian airline AEROASIS S.A. in the process of obtaining its operating permit issued by the Colombian Civil Aviation Authority ( Unidad Administrativa Especial de Aeronáutica Civil).

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 and Ecuadorian domestic markets.

Currently, LAN Airlines and its affiliates operate one of the most modern fleets in the world, with 91 passenger aircraft. LAN Cargo and its respective affiliates have a fleet of 11 dedicated freighters. The Company has one the youngest fleets in the world which has meant greater efficiency and a significant reduction in CO2 emissions, reflecting its strong commitment to environmental protections.

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™, an alliance of leading global airlines of which LAN has been a member for over 10 years. For information please visit www.lan.com or www.oneworldalliance.com.

Copyright Business Wire 2010