LAN Airlines

LAN Airlines

September 09, 2005 15:36 ET

As a result of record petroleum prices: LAN Airlines Implements Fuel Surcharge

MIAMI--(CCNMatthews - Sep 9, 2005) -

LAN Airlines (NYSE:LFL) announces that due to the unprecedented levels of petroleum prices and following the airline industry trend, the company finds it necessary to apply a fuel surcharge, separate from the fare, that will vary according to the international price of petroleum.

Starting September 20, 2005, and given that the price of petroleum is approximately US$67 per WTI barrel as of today, a surcharge of US$20 will be applied on regional routes (within South America and Easter Island, as well as between North America and Colombia, Dominican Republic, Ecuador and Venezuela) and US$60 on long-haul international routes (to and from South America), one way. On domestic routes, the surcharge will be US$10, which will be applied according to the terms established by valid legislation.

On the same date, will publish the procedure by which the surcharge will be adjusted according to the fluctuations of the international price of fuel.

LAN Airlines appreciates its clients' understanding, and hopes to be able to eliminate this surcharge as soon as possible.

Additional information on fuel impact:

In the case of LAN, fuel costs represented between 21 and 22 percent of the total annual expenses for 2004. During the first semester of 2005, this item increased to 25 percent and the total fuel expense for the period increased to approximately US$279 million. During the first semester of 2005, the additional fuel expense -- compared to the same period of the previous year -- was US$84 million, solely as a result of the increased fuel prices.

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