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, 2008. "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 generally accepted accounting principles in Chile and are expressed in U.S. Dollars.
HIGHLIGHTS
- LAN reported net income of US$47.2 million for the second quarter 2008, a 10.7% increase compared to net income of US$42.6 million in the second quarter 2007.
- The Company reported operating income of US$43.8 million for the second quarter 2008 compared to operating income of US$59.3 million in the second quarter 2007, resulting in a 3.6 percentage point decrease in operating margin from 7.7% to 4.1%. This decrease was mainly the result of higher fuel prices, which resulted in US$157.4 million in additional fuel costs during the quarter.
- Total revenues for the second quarter 2008 reached US$1,072.4 million, compared to revenues of US$772.9 million in the second quarter 2007, due to a 36.2% increase in passenger revenues, a 49.0% increase in cargo revenues, while other revenues decreased 5.4%. Passenger and cargo revenues accounted for 58% and 39% of total revenues, respectively, in the second quarter 2008.
- For the first half 2008, the Company reported net income of US$138.3 million, a 7.4% increase compared to net income of US$128.7 million in the same period in 2007.
- Continuing with the expansion and renewal of the Company's fleet, LAN received two new Boeing 767-300 passenger aircraft, three new Airbus A318 passenger aircraft and one new Airbus A320 passenger aircraft during the second quarter 2008.
- LAN CARGO announced that it received authorization for the creation of a new cargo affiliate airline in Colombia. LAN CARGO estimates that the operational and technical certification process will take approximately six months to complete, which means that the new Colombian operations should be launched during the first quarter 2009.
- As of May 18, 2008, LAN exclusively operates Airbus A320 family aircraft on its different domestic and regional markets. As a consequence of the phase out of the Boeing B737-200 fleet, the average age of LAN's fleet has come down to 5.6 years.
- LAN launched service to 3 new destinations this quarter: Tumbes, Peru, served from Lima; Neuquén, Argentina, served from Buenos Aires; and Medellin, Colombia, served from the Lima hub. In addition, LAN announced it will add service to Toronto, Canada, which will be served as an extension of the Santiago-New York City direct flight. The first flight to Toronto will take place on September 2, 2008.
- During the quarter, LAN continued to receive international recognition. In May 2008, LAN CARGO was elected by Air Cargo News magazine as the "Best Company in Latin America". In addition, in June, 2008, LAN was selected the "Best Airline in Central and South America, and the Caribbean" by the Official Airline Guide (OAG), a world leader in travel intelligence.
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 14 destinations in Chile, 13 destinations in Peru, 11 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 58 additional international destinations through its various code-share agreements. Currently, the LAN Alliance operates 72 passenger aircraft and 9 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.
