September 2009

NAVIGATING CHALLENGING OPERATING CONDITIONS

Andres del Valle, LAN Airlines

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

I. CURRENT ENVIRONMENT: WEATHERING

THE STORM

II. BUSINESS INITIATIVES

III. FLEET PLANNING: LOW COST &

FLEXIBILITY

Contents

Passenger Traffic Growth (%RPKs)

-3%

12%

9%

Aug 08

1%

16%

5%

Jul 08

2%

11%

4%

Jun 08 Sep 08

6%

8%

-10%

Jan 09

3%

11%

-6%

Dec 08

3%

11%

-5%

Nov 08

3%

10%

-5%

Oct 08

3%

11%

-1%

Jul-09

-3%

7%

2%

Jun-09

4%

9%

12%

-9%

-7%

May 09

5%

Apr 09

13%

20%

-3%

Mar 09

2%

8%

-11%

Feb 09

0%

10%

4%

May 08

9%

14%

6%

Apr 08

5%

8%

3%

Mar 08

11%

14%

6%

Feb 08

11%

16%

9%

Jan 08

10%

15%

4%

Lan International

Lan Total

Industry

Note: Industry figures as published by IATA

3

Passenger Traffic Statistics LAN showed 11% traffic growth in the first half 2009

-1%

May 08

12%

1%

Apr 08

11%

4%

Mar 08

10%

3%

Feb 08

12%

6%

Jan 08

9%

5%

Jul-09

-11%-10%

Jun-09

-16%-17%

May 09

-17%-17%

Apr 09

-25%

-22%

Mar 09

-24%

-21%

Feb 09

-20%

-22%

Jan 09

-16%

-23%

Dec 08

-16%

-23%

Nov 08

-2%

-14%

Oct 08

9%

-8%

Sep 08

9%

-8%

Aug 08

14%

-3%

Jul 08

16%

-2%

Jun 08

14%

Lan

Industry Cargo Traffic Growth (%RTKs)

4

Cargo Traffic StatisticsLAN Cargo traffic declines in line with the industry

Note: Industry figures as published by IATA

7%

12%

19%

34%

41%

21%

16%

7%

8%

11%

6%

88%

90%

73%

79%

86%

80%

70%

60%

59%

53%

3%

4%

6%

6%

22%

29%

9%

6%

19%

12%

3% 64%

Delta

American

Iberia

Qantas

BA

Air France-KLM

Singapore

Cathay

Korean Air

LAN

EVA

Cargo Others Passenger

LAN Business Model: Distinct blend enhances returns and reduces risk

Revenue Mix, Selected Companies

79%

14%

65%

BELF w/o

Cargo

Cargo

Contribution

BELF w/

CargoL

oa

d F

acto

r

Note: BELF = Break-even load factor

BELF Differential for passenger + cargo routes

(LTM Jun09)

Passenger and Cargo Combination

– Lower Break-Even Load Factors

– Increased diversification

Source: Companies - Last Full Year reported / LAN as of Dec08.5

BELF w/o

Cargo

Cargo

Contribution

BELF w/

Cargo

6

LAN's Regional Strategy

LAN Airlines

Santiago, 1929

LAN Peru

Lima, 1999

LAN Ecuador

Guayaquil, 2003

LAN Argentina

Buenos Aires, 2005

Mexico, 1997

Santiago 1995/

Miami, 2001

Colombia, 2009

Brazil, 2000

•Sources: DGAC Chile, DGAC Peru, Undersecretary of Transportation Argentina, DAC Ecuador, LAN Estimates.

• International market shares for December 2008; Domestic market shares for July 2009.

Leading Presence in South American Markets

Peru

International: 39%

Domestic: 89%

Argentina

International: 17%

Domestic: 26%

Chile

International: 50%

Domestic: 80%

Ecuador

International: 27%

Domestic: 14%

Buenos AiresSantiago

Guayaquil

Lima

Cargo

Latin America 40%

LAN’s Passenger Operations are Geographically Diversified

International

(Long Haul)

Regional

Dom. Chile

Dom. Perú

Dom. Argentina

Diversified Passenger Capacity(% ASKs)

1H091998

Dom. Chile

International

2003

Regional

International

(Long Haul)

Dom. Perú

Dom. Chile

8

Dom. Ecuador

0.2%

Growth in ASK (1H09 vs. 1H08): +11%International (Long Haul) +2%Regional +8%Chile domestic +11%Peru domestic +33%Argentina domestic +89%

28%

72%

3%

18%59%

20% 9%

8%

24%

46%13%

LAN Operates with High Efficiency Levels

EBITDAR Margin Industry comparison

Source: LAN, COPA, Singapore, US & European Companies LTM June 09; TAM & GOL LTM March 09

1.5%4.7% 4.9% 6.1% 7.5% 8.2%

13.1% 14.8% 16.4% 17.5%

22.7%26.3%

0%

5%

10%

15%

20%

25%

30%

Amer

ican

Unite

d

Iber

ia

AirF

ranc

e

British

Cont

inen

tal

GOL

TAM

Sing

apor

e

Ryan

air

LAN

COPA

Eb

itd

ar

Mg

. (%

)

9

I. CURRENT ENVIRONMENT: WEATHERING

THE STORM

II. BUSINESS INITIATIVES

III. FLEET PLANNING: LOW COST &

FLEXIBILITY

Contents

1. Promotions

2. Network /

Itineraries

3. Efficiency

Passenger Business Initiatives

Growth in markets less impacted or poorly served (Europe-Peru, Lima-Cartagena and Peru)

Shift capacity according to demand patterns (domestic vs. international; leisure vs. business)

Change in schedules to access new markets

Postponement of new routes.

Redefine mix of sales channels

12

New Premium Business cabin and modern on boardentertainment system

100% of Boeing 767 and Airbus A340 fleet reconfiguredby 2008 (total of 30 aircraft)

Investment of US$120 million

International recognition

Passenger Initiatives: Service

New Long Haul Cabins

13

Short haul fleet (A320 family) 100% renovated as of May 2008

New leather seats, with greater recline as well as comfort

New Premium Economy class for regional flights, launched in September 2008

Passenger Initiatives: Service

Renovation of Short Haul Fleet

Cargo Business Initiatives

1. Fleet

Utilization

3. Customer

Relations

Decrease of wet lease capacity (from 18% of total freighter capacity in 2008 to 7% in 2009)

Evaluating charter operation

Domestic operation in Brazil

Launch of new cargo subsidiary in Colombia

2. Operational

EfficienciesRenegotiate contracts, handling efficiencies

Focus on customer service

Redefine sales channel and call center process

1. Operating Costs

3. General Savings

Improvement of operating processes/ increase efficiencies

Freezing of new recruitment

Delay of non-core business projects

2. Renegotiations

with suppliers

Contracts renegotiations with third party suppliers

Reducing external services, business trips, employees transportations, etc

Reducing marketing costs.

Cost Savings Initiatives

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

CATK CATK ex-Fuel

CATK

US

$ c

en

ts/A

TK

16

Winglets will be installed on all of LAN's B767 fleet (9 freighters and 28 passenger aircrafts)

Project to be completed in August 2010

Represents an investment of US$ 70 million.

On average, 5% more fuel efficiency on long haul flights, as well as 320 miles additional autonomy

Winglets Project

Other Initiatives: Fleet Efficiency

Regional Expansion:New Domestic Operation LAN Ecuador

New operation started in April 2009 operating

with 2 A318 aircraft.

LAN will provide the best connectivity between

domestic and international markets.

Authorization granted to operate the following

routes:

Guayaquil-Quito-Guayaquil

Guayaquil-Cuenca-Guayaquil

Quito-Cuenca-Quito

Quito/Guayaquil-Galapagos-

Guayaquil/Quito

Lan Ecuador Destinations Highlights

Cuenca

Quito

Guayaquil

Galápagos

17

18

New Colombian affiliate started

operations in March 2009

Colombia is the largest air cargo

market in Latin America in terms of

exports to USA (Estimated volume of 200

thousand tons annually)

This new operation will increase

connectivity between Colombia and the

rest of the region, USA and Europe

Regional Expansion:New Cargo Subsidiary in Colombia

BogotáMedellín

Miami

During March 2009, ABSA began

domestic operations in Brazil

Sao Paulo – Manaus is the first

domestic route operated by ABSA

Domestic operations in Brazil will

consolidate LAN Cargo's network in the

region

Regional Expansion:New Domestic Cargo Operation in Brazil

MANAUS

SAO PAULO

Arrived during April and May

2009

Most modern freighter in the

region

Competitive advantage in

CATK v/s competitors

New B777 Freighter to Strengthen European Cargo Operation

MIA

AMS

FRA

VCP

EZESCL

UIO

BOG

LIM

CCS

1H09

1H08Pax Yield (US$ cents)

8,410,2

-17,6%

Pax Capacity (mill ASK)

18.78416.834

11,6%

Pax Load Factor

75,9%76,3%

-0,4 pp.

Passenger Business Revenue Decreases 8.5% Traffic growth of 11.0% offset by 17.6% decrease in yields.

Pax Revenue (MM of US$)

1.198,51.310,1

-8,5%

1H09

1H08Cargo Yield (US$ cents)

34,244,4

-23,0%

Cargo Capacity

(mill ATK)

1.7742.015

-11,9%

Cargo Load Factor

65,5%72,1%

-6,6 pp.

Cargo Business Revenue Decreases 38.4%Traffic decrease of 20.0% compounded with a 23.0% decrease in yields.

Cargo Revenue

(MM of US$)

397,4

645,3

-38,4%

0

50

100

150

200

250

300

350

400

0%

5%

10%

15%

20%

25%

30%

1H09 Highlights

* EBITDAR = Op income + depreciation & amortization + aircraft rentals23

US$ 110.6 million realized fuel hedging losses in 1H09

US$ 30.7 million realized fuel hedging gain in 1H08

Op./EBITDAR Margin

Op./EBITDAR Margin ex Fuel Hedge

9.2%10.0%

15.8%

19.4%20.1%

17.9%

26.8%

US

$ M

illi

on

s

Operating Income &Operating Margin

EBITDAR &EBITDAR Margin

1H08

11.5%

1H09 1H08 1H09

% M

g235

153

336396

19% 20%

10%

10%

10% 10% 10%

28%

2%

0%

10%

20%

30%

40%

50%

60%

% T

ota

l C

on

su

mp

tio

n H

ed

ge

d

20%

19%

10%

Fuel Hedging

Fuel Hedging Program 2009-2010

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

ZCC US$ 140-93/Bbl 19% 20% 10% - - -

Call Option US$ 70/Bbl 19% - - - - -

Collar US$ 70-55/Bbl - 28% - - - -

Collar US$ 80-50/Bbl - - 10% - - -

Swap US$ 64/Bbl 2% - - - - -

Swap US$ 79/Bbl - - 10% 10% 10% 10%

Total Hedge 40% 48% 30% 10% 10% 10%

I. CURRENT ENVIRONMENT: WEATHERING

THE STORM

II. BUSINESS INITIATIVES

III. FLEET PLANNING: LOW COST &

FLEXIBILITY

Contents

Increasing Liquidity to 18% of Revenues

2Q09 Cash Balance: US$700 million, representing 18% of LTM revenues.

The Company raised US$250 million in bilateral loans in the Chilean market during first half of 2009.

LAN is one of the few investment grade airlines in the world. Fitch has recently affirmed the company's rating at “BBB”.

Capex 2009 already committed at attractive interest rates, with EX-IM guarantees.

Liquidity

26

350

400

450

500

550

600

650

700

8

6

4

2

18

16

14

12

10%

0Jun 09

700

18%

Mar 09

477

11%

Dec 08

472

9%

Cash/Sales

US$MM

50 53 59 68 68 68

26 2728

30 33 345 5

5

99

9

10 10

10

2 3

3

32

5

5

0

30

60

90

120

150

2008 2009 2010 2011 2012 2013-2019

Boeing 777-200FCargo

Boeing 767-300FCargo

Airbus 340-300

Boeing 787

Boeing 767-300ER

AirbusA320/A319/A318

Fleet Plan

Average Fleet Age (Jun 09): 5.4 years

CAPEX 2009 2010 2011 2012 2013-19

Aircraft 351 408 705 433 3.380

Non Aircraft 165 124 109 84

+7

+7+12

9096

103

115119

+4

147

Cargo

Passenger

Long Haul

Passenger

Short Haul

27

Fleet Flexibility

Total

Aircraft

Arrivals Expirations (*) Financial

Leasing

end

Flexibility

per year

(%)

Acumulated

Flexibility

(%)

2009 32 2 1 0 3%

2010 33 1 3 4 21% 24%

2011 35 2 3 1 11% 34%

2012 38 3 3 1 11% 42%

(*) Expirations include JOL Options

Passenger Long Haul Fleet Flexibility (Includes B767 and A340)

28

6 B767 orders for 2011 and 2012 may be converted into freighters at LAN's option

In Conclusion: LAN has the flexibility to adjust to a challenging environment

29

Fleet Staggered lease expirations and unencumbered assets as of 2010

Operating Costs Initiatives to improve operating processes/ increase efficiencies

Network / Itineraries

Ability to redeploy capacity according to demand patterns, based on geographical diversification in cargo and passenger ops

FinancingLAN has a strong Balance Sheet and Investment Grade rating, keeping access to multiple financing options

September 2009

NAVIGATING CHALLENGING OPERATING CONDITIONS

Andres del Valle, LAN Airlines