Citi Annual Latin America ConferenceNew YorkMarch 24-26, 2010
This presentation may include forward-looking comments regarding the Company’s business outlook and
anticipated financial and operating results. These expectations are highly dependent on the
economy, the airline industry, commodity prices, international markets and external events.
Therefore, they are subject to change and we undertake no obligation to publicly update or revise
any forward looking statements to reflect events or circumstances that may arise after the date of
this presentation. More information on the risk factors that could affect our results are contained on
our Form 20-F for the year ended December 31, 2008.
Information, tables and logos contained in this presentation may not be used without consent from LAN
2
Contents
I. LAN’S DIVERSIFIED BUSINESS MODEL
II. GROWTH PERSPECTIVES
3
8,4%
21,8%
4,2%
Others
ADRs
Chilean Pension Funds
EBLEN Group
9,4%
10,8%
PIÑERA Group
11,3%Other Foreign Investors
CUETO Group34,1%
LAN Ownership Structure
LAN Market Cap (March 19, 2010)
US$ 5.8 Billion
33%
LAN Ownership (March 11, 2010)
4
IATA Projections for the Industry
5Note: Industry figures as published by IATA
IATA Projections
Actual
-9,4
-2,8-0,5
-20
-15
-10
-5
0
5
10
15
-6%
-3%
-4%
-1%
-2%
5%
6%
3%
4%
1%
2%
0%
2010E
1,6%
2009E
-0,1%
2008
-15,9-0,7%
2007
12,9 3,9%
2006
2,9%
2005
-4,1
1,0%
2004
-5,6
0,9%
2003
-7,6-0,5%
2002
-11,3
-1,6%
2001
-13,0
-3,8%-5%
3,7
3,3%
1999
8,5
4,0%
2000
8,2
5,4%
1997
8,6
5,6%
1998
Net
Res
ult
(US
$bn)
Operating M
argin (%)
� Several crisis have affected the industry in the last decade.
� IATA projects losses of US$9.4 bn in 2009 and US$ 2.8 bn in 2010.
� Despite industry losses, LAN has remained profitable over the years.
318 407600 694
972 1,0831,237
1,4251,4281,4541,639
2,093
2,506
3,034
3,525
4,283
3,656
0
400
800
1,200
1,600
2,000
2,400
2,800
3,200
3,600
4,000
4,400
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008IFRS
2009IFRS
US$ Million
LAN: Strong Revenue Growth
CAGR24%
CAGR1%
CAGR20%
LAN Operating Revenues 1993 – 2009
6
Note: 2008 and 2009 under IFRS; previous years under Chilean GAAP.
$11 $15 $34 $44$83 $62
$112$172
$303
$413
$620
$436
$6
$308 $336
$231
$142
$50$51$80$46
$241
$147$164
$84$31$11
$48$48$31$64
$25$0$38
050
100150200250300350400450500550600650
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008IFRS
2009IFRS
LAN Operating Income and Net Income 1993 – 2009
Operating Income Net Income
(US$ millions)
Recession
9/11 & Argentine CrisisIncreasing Fuel Prices
� LAN Airlines has been consistently profitable under the current management
Consistent Profitability Despite Multiple Market Shocks
7
Financial Crisis + Salmon Crisis +
Swine Flu
LAN Operates with High Efficiency Levels
EBITDAR Margin Industry comparison
Source: Companies Information for FY 2009, TAM, Singapore and Korean LTM September 09
1.4%3.0%
4.6% 4.8%6.0% 6.7%
10.1% 10.2% 10.3%11.5%
14.4% 14.8%
19.3% 20.0%
22.5%
25.3%26.5%
0%
5%
10%
15%
20%
25%
30%
Iber
iaAm
eric
anAF
-KLM
Briti
sh
Del
taU
nite
dU
S Ai
rway
sCo
ntin
enta
lSo
uthw
est
Kore
anSi
ngap
ore
TAM
Jetb
lue
GO
L
LAN
Copa
Ryan
air
Ebi
tdar
Mg.
(%
)
8
LAN’s Diversified Business Model: Passenger + Cargo Operations
Diversified Business Model(% Operating Revenues)
4%
24%
26%
Domestic Passenger
46%
International Passenger
Cargo
Others*
2009
9
* Other Revenues includes Aircraft Leases, Logistic and Courier, Ground Services, Storage & Customs Brokerage, Duty Free, etc.
6%
7%
8%
15%
24%
26%
30%
19%
16%
6%
26%
4%
6%
12%
85%
86%
95%
75%
79%
87%
66%
92%
78%
72%
69%
58%
11%
8%
6%
5%
3%
3%
12%
11%
11%
12%
58%
Delta
American
Copa
Iberia
Qantas
BA
Lufthansa
Gol
Air France-KLM
Singapore
LAN
Cathay
Korean Air
Cargo Others Passenger
LAN Business Model: Distinct blend enhances returns and reduces risk
Revenue Mix, Selected Companies
67%
17%
50%
BELF w/o
Cargo
Cargo
Contribution
BELF w/
Cargo
Load
Fac
tor
Note: BELF = Break-even load factor
BELF Differential for long haul passenger + cargo routes 2009 (SCL – MIA route)
Passenger and Cargo Combination– Lower break-even load factors– Increased diversification
Source: Companies – FY2009 10
LAN’s Passenger Operations are Geographically Diversified
International(Long Haul)
Regional
39%
3%
Diversified Passenger Capacity(% ASKs)
20091998
Dom. Chile
International
28%
72%
20%
18% 59%
3%
2003
Regional
International(Long Haul)
Dom. Perú
Dom. Chile
11
Growth in ASK (2009 vs. 2008): +10%International (Long Haul) + 6%Regional + 6%Chile domestic +13%Peru domestic +16%Argentina domestic +44%
46%
23%
14%Dom. Chile
9%
Dom. Perú8%
Dom. ArgentinaDom. Ecuador0.3%
LAN Ecuador Guayaquil,
2003
LAN Peru
Lima,1999
LAN Airlines
Santiago, 1929LAN
Argentina
BAires, 2005
LAN’s Regional Strategy
12
PeruInternational: 47%
Domestic: 82%
ArgentinaInternational: 17%
Domestic: 30%
ChileInternational: 52%
Domestic: 81%
EcuadorInternational: 39%
Domestic: 16%
Buenos AiresSantiago
Guayaqui l
Lima
Cargo
Latin America 37 %
Leading Presence in South American Markets
Market Size: Passengers Transported 2009*(millions)
LAN Market Share in Passenger Markets**
2,6
4,6 4,8
6,9
3,1
5,03,7
5,8
0
2
4
6
8
Ecuador Chile Peru Argentina
International Domestic
13*Sources: DGAC Chile, DGAC Peru, Undersecretary of Transportation Argentina for 2008, DGAC Ecuador for 2008, LAN Estimates.
** International market shares for Chile, Peru and Argentina as of November 2009; Domestic market shares as of November 2009.
Diversified Passenger & Cargo Network
Madrid
Easter Island
Auckland
Papeete
Sydney
FrankfurtLos Angeles
Mexico City
Caracas
Sao Paulo
Buenos AiresMontevideo
Cancun
Bariloche
Pta. Arenas
Arica
La Paz
Pto. Montt
Cuzco
Lima
Bogotá
Santiago
Rosario
Quito
Pta. Cana
Guayaquil
Ushuaia
Salta
Rio Gallegos
Com. Rivadavia
Cordoba
Iguazú
IquiqueAntofagasta
CalamaCopiapo
La Serena
Mendoza
Concepcion
Balmaceda
TemucoValdiviaOsorno
TacnaArequipa
Puerto Maldonado
Iquitos
Piura
TarapatoPucalpa
ChiclayoTrujillo
Houston
San JosePanama
Merida
Rio de Janeiro
Porto Alegre
VitoriaBelo HorizonteSalvador
Manaos
Passenger + Cargo NetworkFreighter Network
Curitiba
Asunción
Amsterdam
Miami
LAN is one of the leading passenger and cargo opera tors in Latin America
New York
Medellin
Toronto
LAN
Codeshare
700 destinationsworldwide
14
Alliances
Solid Financial Position
� December Cash Balance: US$792 million, representing 22% of 4Q09 revenues.
� 2009 Financing Initiatives:
1. Raised US$250 million in bilateral loans in the Chilean market during first half of 2009.
2. Completed EX-IM supported financing for 3 Boeing B767s and accessed capital markets with the new “EX-IM – Bond” product.
3. Arranged bank financing for PDP'srelated to 15 A320 Family aircraft.
� 2010 Financing Initiatives:
� Arranged long term ECA supported financing for 15 A320 family aircraft.
792
25
Dec 09
9%
472
Dec 08
11%
477
Mar 09
18%17%
638
Sep 09
22%
Jun 09
400
500
800
600
700
0
10%
15%
20%
5%
700
Liquidity
US$MM Cash/Revs
15
LAN remains one of the few investment grade airlines in the world
Fuel Hedging
Note: Hedging position as of February 2010 16
HEDGE LAN Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
Swaps 75.2 US$/bbl 33%
Swaps 78.9 US$/bbl 35%
Swaps 79.2 US$/bbl 10%
Swaps 81.3 US$/bbl 28%
Swaps 80.1 US$/bbl 36%
Collar 80 @ 50 10%
Collar 80 @ 55 18% 29% 10%
Collar 85 @ 55 10%
64% 62% 45% 38% 10%
10%
28%29%
10%
26%33%
35% 28%
10%10%0%
20%
40%
60%
80%
1Q10 2Q10 3Q10 4Q10 1Q11
% T
otal
Con
sum
ptio
n H
edge
d
ZCC Collar Swap
Contents
I. LAN’S DIVERSIFIED BUSINESS MODEL
II. GROWTH PERSPECTIVES
17
Operational Update after Chilean Earthquake
• LAN stopped operations out of the Santiago airport between February 27th and March 1st. LAN re-launched operations on Tuesday, March 2, 2010.
• Currently the company is able to operate approximately 80% of regular domestic and international passenger operations out of Santiago.
• Santiago Airport expected to be fully operational by the end of March
• Limited damage to LAN’s buildings, equipment and aircraft. Insurance deductibles total approximately US$3 million.
2010 Estimated Capacity Expansion
0%
5%
10%
15%
20%
25%
2006 2007 2008 2009 2010E
19.5%
11.5%11.5%
-10%
-5%
0%
5%
10%
15%
20%
2006 2007 2008 2009 2010E
7.0% 6.9%
12.3%
Passenger ASK Growth Cargo ATK Growth
10.2%
-6.0%
~10%
~16%/ ~18%
19
Note: Industry figures as published by IATA 20
2010 Passenger Growth Driven by International Traffic
Passenger Traffic Growth (%RPKs)10.7% grwth in 2009
Jan 10
21%
18%
6%
Dic 09
13%
11%
5%
Nov 09
15%
13%
2%
Oct 09
17%16%
1%
Sep 09
10%
12%
0%
Ago 09
2%
4%
-1%
Feb-10
10%10%
Lan International
Lan Total
Industry
� Enhance Lima's regional Hub and make it a Regional/Long Haul Hub generating new growth opportunities
� Connect secondary cities south of Lima connected through Lima to main cities in the US, Europe and Mexico
� Increase LAN opportunities in North America adding new gateways to US (San Francisco), as well as to Europe
� Increase frequencies within the region and in long haul routes.
6%
23%
13%
12%
20%
5%
2%
29%
2009-2010 International Passenger Capacity Growth
� 6% international ASK growth in 2009, with 1 pp increase in load factor, reaching 78%.
� 13% international ASK growth expected for 2010.
21
12%
2009 2010
8%
28%
Capacity Growth
3%
Note: Industry figures as published by IATA 22
Strong Recovery in Cargo Traffic
Jan 10
26%28%
Dic 09
24%24%
Nov 09
10%10%
Oct 09
-6%
-1%
Sep 09
-8%-5%
Aug 09
-4%
-10%
Feb 10
31%
Lan
Industry
Cargo Traffic Growth (%RTKs)9.7% decrease in 2009
� Recover high freighter utilization rates.
� Brazil continues to be an important source of growth both in the import market as well as on domestic routes
� Consolidate 4 weekly flights to Europe with the Boeing 777 freighter fleet
MANAUS
SAO PAULO
AMS
VCP
� Consolidate and continue to expanddomestic Brazil cargo operation
23
� Continue growth in European routes withthe new Boeing 777 freighter
MIA
FRA
Strong Recovery in Cargo Traffic
EUROPEAN CARGO OPERATION BRAZIL DOMESTIC OPERATION
8
15
25 5 6
40
2
4
6
8
10
12
14
2010 2011 2012 2013 2014 2015 2016
� To be delivered between 2011 and 2016 in addition to existing orders for 15 A320 family aircraft.
� For the renewal and growth of the Company’s short haul fleet
� In addition, LAN’s strategic fleet renewal plan involves the sale of five Airbus A318 aircraft in 2011.
Incorporation of 30 New Airbus A320 Family Aircraft For regional and domestic operations
24
A320 Fam Delivery Schedule
• 16 A319-100
• 29 A320-200
Incorporation of 32 B787 DreamlinerDelivery Schedule starting in 2011
25
B787 Delivery Schedule
23
54
24
6
2
2
2
0
2
4
6
2011 2012 2013 2014 2015 2016 2017 2018
Owned Leased
� LAN has ordered 22 B787-8 and 10 B787-9
53 6171 73 78
93
2728
31 3131
3110
9
9
99
11
12
3
3
3
52
32
5
55
5
5
5
2
22
0
30
60
90
120
150
180
2009 2010 2011 2012 2013 2014-2018
Boeing 777-200F Cargo
Boeing 767-300F Cargo
Airbus 340-300
Boeing 787
Boeing 767-300ER
Airbus A320 Fam
Fleet Plan
+9 +2096
105
120126
+6
26
CAPEX 2010 2011 2012 2013 2014-2018
Aircraft 412 1.028 513 877 2.503
Spare Engines/Others
113 145 167 132
Fleet Age (Dec 09) :5.6 years
+12
138
176
In Conclusion: LAN is well positioned to take advantage of growth opportunities
27Fleet plan provides for continued growth with flexibility to adjust for demand fluctuations
Regional network provides flexibility to manage capacity
Strong Balance sheet supports Investment Grade rating
27
Cargo and Passenger mix provides competitive advantage in long haul operations