LAN Airlines Reports First-Quarter Net Income

LAN Airlines Reports First-Quarter Net Income

LAN Airlines S.A., one of Latin America’s leading passenger and cargo airlines, announced its consolidated financial results for first quarter ended March 31, 2011. LAN 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.

LAN reported a net income of $97.2 million for first quarter 2011, an increase of 10.1 percent compared to the $88.3 million reported in first quarter 2010. This result is despite the consolidation of $11 million losses generated in the Colombian operations of AIRES, and also reflects LAN’s successful management under the current scenario of increased fuel prices.

Operating income reached $153.3 million in first quarter 2011, a 7.3 percent increase compared to $142.9 million in first quarter 2010. Operating margin reached 11.2 percent compared to 13.8 percent in first quarter 2010. Total revenues in first quarter 2011 reached $1,364.9 million compared to $1,034.9 million in first quarter 2010 due to a 32.0 percent increase in passenger revenues and a 30.2 percent increase in cargo revenues. Passenger and cargo revenues accounted for 71.6 percent and 25.4 percent of total revenues, respectively, during first quarter 2011.

During the quarter, LAN has successfully implemented measures in order to mitigate the impact of higher fuel prices on its operations. For the company, higher fuel prices during the quarter, which increased 32.2 percent compared to first quarter 2010, generated $100.3 million in increased fuel costs. Regarding the approval process for the transaction with TAM, on April 20, 2011, the TDLC announced that a public hearing will take place on May 26, 2011 in which the interested parties, including LAN and TAM, may provide their opinion regarding the business combination.

In line with the company’s expansion, during first quarter 2011, the company received a total of 3 Airbus A319 and 6 Airbus A320 passenger aircraft, destined for domestic and regional markets, and 1 Boeing 767-300F freighter, mainly destined for growth on northbound routes.