Press Release: 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 quarterended June 30, 2009. "LAN" or "the Company" makes reference to theconsolidated entity, which includes passenger and cargo airlines in LatinAmerica. All figures were prepared in accordance with International FinancialReporting Standards (IFRS) and are expressed in U.S. dollars.
-- 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 inthe second quarter 2008. These results were impacted by a US$52.6 million fuelhedging loss recognized during the quarter, while results for the secondquarter of 2008 included a fuel hedge gain of US$29.2 million.
-- Excluding the impact of fuel hedging, operating income reachedUS$87.6 million in the second quarter 2009, a 56.2% increase compared toUS$56.1 million in the second quarter 2008. Furthermore, the operating marginexcluding hedging losses reached 11.2% in the second quarter 2009 as comparedto 5.6% in the second quarter 2008, which represents a significant increase inLAN\'s operating efficiency, especially considering that the second quarter isseasonally the weakest of the year.
-- Continuing with the expansion and renewal of its fleet, during thesecond quarter 2009, LAN received two new Boeing 777 freighters. LAN Cargo isthe first carrier in the region to operate this aircraft, the most modern andefficient freighter of its type.
-- During the quarter LAN completed a round of financing initiated inMarch 2009, raising an additional US$210 million through bank loans in theChilean market, reaching a total of US$250 million in bilateral loans withfive local banks. These loans have a three year tenor and attractive interestrates, and will be used to increase the Company\'s liquidity position. At theend of the second quarter, LAN had a total of US$700 million in cash and cashequivalents, representing 18.0% of last twelve month revenues. Furthermore,LAN is in the final stage of securing long-term financing for three Boeing 767aircraft to be delivered between 2009 and 2010. This financing is expected tobe supported by the US EX-IM Bank.
-- In line with LAN\'s continued commitment to expand its route network andimprove connectivity for passengers traveling within the region, during thesecond quarter LAN launched service from its Lima hub to Cartagena de Indias,Colombia two times per week. In addition, on July 10, LAN initiated dailyservice from Santiago to Lima via Iquique. On August 15, the Company willoperate Lima - Cali via Quito three times per week. As for its domesticoperations, LAN Argentina incorporated a new route from Buenos Aires toTucuman with 13 weekly frequencies. In addition, LAN Ecuador continueddeveloping its domestic routes in that market, currently operating 46 weeklyfrequencies between Quito and Guayaquil as well as daily service betweenGuayaquil and Cuenca.
-- LAN continues to receive international recognition. In July 2009, theCompany was ranked in sixth place in the annual ranking of Top PerformingAirlines by the specialized industry publication Aviation Week, which focusedon companies that have best managed the current crisis environment. Theranking included the 32 major carriers globally, with LAN appearing as theleader in Latin America. In addition, LAN was recognized as the most respectedcompany in Chile in the annual ranking by local newspaper La Segunda andAdimark GFK, based on the opinion of respected Chilean business executives.
For a full version of this release, please visit the Company\'s webpage at:[www.lan.com]
LAN Airlines is one of the leading passenger and cargo airlines in LatinAmerica. The company and its affiliates serve over 65 destinations around theworld through an extensive network that offers full connectivity within LatinAmerica, while also linking the region with North America, Europe and theSouth Pacific, as well as 63 additional international destinations through itsvarious alliances. LAN Airlines and its affiliates have a leading position intheir respective domestic markets of Chile and Peru as well as an importantpresence in the Argentinean domestic market and has begun operations in thedomestic market of Ecuador.
Currently, LAN Airlines and its affiliates operate one of the most modernfleets in the world, with 84 passenger aircraft, and its cargo subsidiary, LANCARGO and its respective cargo affiliates, have a fleet of 11 freighters. Thecompany recently completed its short haul fleet renovation process byacquiring new aircraft from the Airbus A320 family, enabling LAN to improveits efficiency and to reduce significantly its CO2 emissions. The fleetrenovation is part of the company\'s commitment to the protection of theenvironment.
LAN is one of the few Investment Grade airlines in the world (BBB). Thecompany\'s world class quality standards enabled its membership inoneworld(TM), the global alliance that encompasses the best airlines in theworld. For more information please visit www.lan.com orwww.oneworldalliance.com
Note on Forward-Looking Statements
This report contains forward-looking statements. Such statements mayinclude words such as "anticipate," "estimate," "expect," "project," "intend,""plan," "believe" or other similar expressions. Forward-looking statementsare statements that are not historical facts, including statements about ourbeliefs and expectations. These statements are based on current plans,estimates and projections, and, therefore, you should not place undue relianceon them. Forward-looking statements involve inherent risks and uncertainties.We caution you that a number of important factors could cause actual resultsto differ materially from those contained in any forward-looking statement.These factors and uncertainties include in particular those described in thedocuments we have filed with the U.S. Securities and Exchange Commission.Forward-looking statements speak only as of the date they are made, and weundertake no obligation to update publicly any of them, whether in light ofnew information, future events or otherwise.
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