Santiago, Chile, 4th March, 2010.
LAN Airlines S.A. and its subsidiaries (“LAN” or “the Company”) (NYSE: LFL / IPSA: LAN), one of the leading airlines in Latin America, today announced an operational update after an earthquake struck Chile on Saturday, February 27, 2010. LAN Airlines’ passenger and cargo operations outside of Chile, as well as those of its subsidiaries including Lan Cargo, Lan Peru, Lan Ecuador and Lan Argentina, are operating under normal conditions, with the exception of operations to and from Santiago de Chile.
The terminal building at the Santiago International Airport has been damaged by the recent earthquake, which has affected all air travel in the country. As there is no alternative airport in the Santiago Metropolitan Region, commercial passenger operations were suspended between February 27, 2010 and March 1, 2010. During that time, the only flights that landed at the Santiago International Airport were LAN Airlines’ 17 international flights that were in route to Santiago and had to be rerouted to airports outside of Chile when the earthquake struck.
LAN has undertaken great effort to coordinate with various authorities and parties involved in the operations at the Santiago International Airport to install a tent to serve as a passenger terminal, which allowed LAN to re-launch operations on Tuesday, March 2, 2010.
With this, LAN is currently able to operate approximately 45% of regular domestic and international passenger operations out of Santiago.
In addition, as of today, the airport’s domestic passenger terminal became operational for international passenger operations, which will allow for an increase in passenger capacity. Accordingly, LAN estimates that the Company could recover approximately 60% of regular passenger operations out of
Santiago by March 7, 2010.
Domestic and international passengers are being informed via various channels, including LAN’s website (www.lan.com), call centers and sales offices. Passenger itineraries will be gradually increased until they return to normal. The Company does not currently have an estimate of when operations from Santiago will be fully restored; this will depend on the capacity of the Santiago Airport to resume normal operations.
With regards to LAN Cargo, operations were not materially affected by the earthquake. LAN Cargo is currently fully able to provide cargo transport services. Key in restoring cargo operations has been the flexibility of the freighter fleet’s utilization, including the redesign of itineraries to offset the decreased
operation of the passenger fleet to and from Chile.
LAN suffered limited damage to certain Company buildings located in and around the Santiago International Airport. In addition, the earthquake caused minor damage to five aircraft and certain spare parts and equipment, which are in the process of being repaired. None of this damage will have a
material impact on the Company’s operations.
All of LAN’s buildings, equipment and aircraft are insured, including fire and earthquake damage. The total amount of the insurance deductibles with regards to the affected equipment totals approximately US$3 million.