Santiago, April 28, 2005
LAN reported net income of US$46.3 million for the first quarter of 2005 compared to US$48.1 million in 2004. This is a significant accomplishment considering that during the first quarter of 2005 higher fuel prices led to US$37.3 million in additional costs.
Operating income for the first quarter was US$56.6 million while the operating margin amounted to 9.3%. Operating income and margin decreased, despite strong revenue growth and active cost controls, due to the sharp impact of high fuel prices.
Operating revenues for the quarter amounted to US$607.7 million, a 23.5% increase compared to the same period of 2004. Revenue growth was driven by strong performance in both the passenger and cargo businesses. Passenger and cargo revenues accounted for 61% and 35% of total revenues, respectively.
LAN continues to have a strong liquidity position with over US$303 million in cash and other liquid assets.
In March, Fitch Ratings improved the outlook on the Company's investment grade rating from "Stable" to "Positive", confirming LAN as one of the few airlines in the world with an investment grade rating.
In March, LAN and Korean Airlines signed a memorandum of understanding aimed at developing a cargo alliance between both companies. This agreement will complement a similar one signed by both companies to cooperate in the passenger business.
In April, together with local partners, LAN acquired a new Argentine carrier named Aero2000. LAN has a 49% stake in this venture, which will engage in passenger and cargo transport on both domestic and international routes. This new airline is expected to initiate domestic operations in June 2005.