LAN Airlines Reports Net Income of US$78.8 Million for the Third Quarter of 2007 :

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LAN Airlines Reports Net Income of US$78.8 Million for the Third Quarter of 2007
Communiqué publié le 24/10/2007 à 23h17

LAN Airlines S.A. (NYSE: LFL), one of Latin America's leading passenger and cargo airlines, announced today its consolidated financial results for the third quarter ended September 30, 2007. "LAN" or "the Company" makes reference to the consolidated entity, which includes several passenger and cargo airlines in Latin America. All figures were prepared in accordance with generally accepted accounting principles in Chile and are expressed in U.S. Dollars.

HIGHLIGHTS

-- LAN reported net income of US$78.8 million for the third quarter of 2007, a 52.9% increase compared to net income of US$51.5 million in the third quarter of 2006.

-- The Company reported operating income of US$102.0 million for the third quarter of 2007 compared to operating income of US$70.5 million in the third quarter of 2006, increasing its operating margin from 9.3% to 11.6%. This increase was the result of a 15.2% increase in revenue, which offset a 12.2% increase in operating costs.

-- Total revenues for the third quarter of 2007 reached US$878.0 million compared to revenues of US$762.3 million in the third quarter of 2006, due mainly to a 17.4% increase in passenger revenues, while cargo revenues increased 10.1% and other revenues increased 20.4%. Passenger and cargo revenues accounted for 64% and 31% of total revenues, respectively, during the third quarter of 2007. Revenue growth during the quarter is largely attributed to the expansion of LAN's international cargo and passenger operations, both regional and long-haul.

-- During the third quarter, LAN continued to see the excellent results from the launch of its new business model for short-haul operations on domestic routes within Chile and Peru. Domestic traffic in Chile grew 30.8% during the quarter while domestic load factors increased from 62.7% to 73.8%, largely driven by fare reductions of up to 35% on the lowest fare classes. At the same time, CASK in the domestic business continues to decline due to a larger Airbus fleet, increased fleet utilization rates, longer flight legs, and lower distribution costs.

-- Continuing the expansion of its fleet, LAN received its second Airbus A318 as well as its fifth Airbus A340-300 during the quarter.

-- In September, LAN completed the implementation of a new revenue management system, "Real Origin and Destination Solution." This system seeks to maximize passenger revenues taking into account actual demand by origin-destination, as well as the Company's strong growth during the past years and the continued development of its multi-hub model. With this, LAN expects to be among the world's top five companies in terms of best revenue management practices. The system's second phase of implementation is a Low Fare Module with state-of-the-art technology to optimize revenues in markets with LCC competition and is expected to be completed early in 2008.

-- On August 16, LAN completed a ratio change in the Company's American Depositary Receipt (ADR) program, changing the ratio from one American Depositary Share (ADS) representing five common shares, to one ADS representing one common share. This change did not affect the Company's underlying common shares.

For a full version of this release, please visit www.lan.com

About LAN

LAN Airlines is one of the leading airlines in Latin America. "LAN" makes reference to the consolidated entity that includes LAN Airlines, LAN Express, LAN Peru, LAN Ecuador, and LAN Argentina, as well as LAN Cargo and its affiliates. The LAN Alliance serves 15 destinations in Chile, 12 destinations in Peru, ten destinations in Argentina, two destinations in Ecuador, 15 destinations in other Latin American countries and the Caribbean, three destinations in the United States, two destinations in Europe and four destinations in the South Pacific, as well as 52 additional international destinations through its various code-share agreements. Currently, the LAN Alliance operates 70 passenger aircraft and 10 dedicated freighters.

LAN Airlines is a member of oneworld (TM), the world's leading global airline alliance. It has bilateral commercial agreements with oneworld partners American Airlines, British Airways, Iberia and Qantas, as well as with Alaska Airlines, AeroMexico, Mexicana, TAM, Korean Air and JAL. For more information 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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