1. 6 th Annual FAA International Aviation Safety Forum 6 th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Enrique Rosende Director of Safety, LAN Airlines September 10, 2009

2. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

3. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

4. The pillars of Chilean economic policy: I. Economy open to international trade & commerce…

5. …Focused on becoming a goods and services distribution center & gateway for Asian imports into the region The pillars of Chilean economic policy:

6. II. Commercial agreements with main economies worldwide These nations represent 87% of the world total GDP USA Canada Bolivia Panama Mexico Colombia Cuba Ecuador Venezuela EU Norway Switzerland India Brunei Singapore Australia New Zealand China South Korea Japan The pillars of Chilean economic policy:

7. Source: Banco Central de Chile The pillars of Chilean economic policy: III. Export oriented economy +11% Compound Annual Growth Rate

8. Aviation Policy in Chile OBJECTIVE: To achieve the largest number of aviation services, with the best quality and efficiency, and at the lowest cost THIS IS ACHIEVED THROUGH: Non regulated fares Limited intervention of the authorities Free access to markets

9. No legal barriers to entry. No limits regarding property or control of the airline. No subsidies. Bilateral agreements with 45 countries. Of these, 35 are open to 3rd and 4th freedoms for Chile and 7 are open skies including cabotage. Chile has an Open Skies Policy

10. Airport Concessions Investment of US$ 2.000 million

11. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

12. Accident Rate is Higher in Regions Without a Common Norm Source: IATA Safety Report - 2008

13. Total Fatalities - Last 10 Years 95% of accidents occur in passenger aircraft

14. Administrative and Regulation Issues in Europe and North America Security Efficiency Europe 50 Countries 30% of world traffic SINGLE REGULATION North America 3 Countries 45% of world traffic SINGLE REGULATION

15. Administrative and Regulation Issues in Latin America 22 Countries 7% of world traffic SEVERAL REGULATIONS

16. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

17. Safety Efficiency SAFETY: AN ESSENTIAL AND NON NEGOTIABLE VALUE Improvement Warmth

18. 18 LAN's Regional Strategy – Passenger Hubs Santiago 1929 Lima 1999 Guayaquil 2003 Buenos Aires 2005

19. LAN Business Strategy Passenger Operations – Low cost model for domestic markets Lower Fares -20% Lower Costs -30% More Capacity +20% More seats: 126 - 168 More direct flights: 70% Higher aircraft utilization: 12 hrs More Passengers +40% New fare structure Discounts of up to 35% Demand stimulation Load factor: 75% Fuel: Modern & fuel efficient fleet Maintenance: Longer flight leg Sales costs: Internet penetration >50% Self check in, OBS, others

20. 20 LAN's Regional Strategy – Cargo Hubs

21. LAN Business Strategy Cargo Operations Source: Boeing World Air Cargo 2008 - 2009 Northbound Fish, flowers and vegetables dominate Northbound Flows Consumer electronics, machinery, spare parts and automotive parts dominate Southbound Flows Operational efficiencies must be obtained by managing unbalanced flows and seasonal fluctuations Southbound 21

22. Sources: DGAC Chile, DGAC Peru, Undersecretary of Transportation Argentina, DAC Ecuador, LAN Estimates. * International market shares for December 2008; Domestic market shares for June 2009. Leading Presence in South American Markets Peru International: 39% Domestic: 90% Argentina International: 17% Domestic: 28% Chile International: 50% Domestic: 81% Ecuador International: 27% Domestic: 13% Buenos Aires Santiago Guayaquil Lima 22 Cargo Latin America 40%

23. Solid Revenue Growth CAGR 24% CAGR 1% CAGR 20% Operating Revenues 1993 – LTM Jun 09

24. Consistent Profitability Despite Industry Crises Operating Income and Net Income 1993 – LTM Jun 09 Operating Income Net Income (US$ millions) Recession 9/11 & Argentine Crisis Increasing Fuel Prices LAN Airlines has been consistently profitable under the current management

25. LAN Consistently Receives International Recognition Best South American Airline - 2009 Best Latin American Airline - 2008 Best Latin American Airline - 2004 Best Airline in South America, Central America and Caribbean - 2006 Best South American Airline - 2005 Airline Business Strategy Awards – Executive Leadership 2009

26. LAN's Fleet – September 2009 Average fleet age of 5.4 years Boeing 767 26 Airbus 319 20 Airbus 318 15 Airbus 340 5 Airbus 320 18 Boeing 767-F 9 Boeing 777-F 2 PASSENGER CARGO

27. LAN Continues to Invest in Fleet Expansion and Renewal Total Projected Investment of US$5.3 Billion (2009-2019 ) 90 96 103 115 119 147 Cargo Aircraft Passenger Aircraft CAPEX 2009 2010 2011 2012 2013-2019 (US$ millions) 351 408 705 433 3,380

28. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

29. Strong Impact in Cargo and Passenger Traffic Source: IATA Passenger Traffic Growth (%RPKs) Jun 09 9% Aug 08 -3% 12% 6% Sep 08 -1% 11% 3% Oct 08 -5% 10% 3% Nov 08 -5% 11% 3% Dec 08 -6% May 09 Industry Lan Total Lan International 11% 4% 15% Jan 08 9% 16% 11% Feb 08 6% 14% 11% 10% 4% 9% Mar 08 3% 8% 5% Apr 08 6% 14% 9% May 08 4% 10% 4% Jun 08 2% 11% 5% Jul 08 1% 16% -7% 3% Jan 09 -10% 8% 0% Feb 09 -11% 8% 2% Mar 09 -3% 20% 13% Apr 09 -9% 12% 5%

30. Source: IATA -16% -17% 5% 9% Jan 08 6% 12% Feb 08 3% 10% Mar 08 4% 11% Apr 08 1% 12% May 08 -1% 14% Jun 08 -2% 16% Jul 08 -3% 14% Aug 08 -8% 9% Sep 08 -8% 9% Oct 08 -14% -2% Nov 08 -23% -16% Dec 08 -23% -16% Jan 09Jun 09 -20% Feb 09 -21% -24% Mar 09 -22% Apr 09 -17% May 09 Industry Lan -25% Cargo Traffic Growth (%RTKs) Strong Impact in Cargo and Passenger Traffic

31. IATA Projections Actual 8,6 1997 5,4% 8,2 1998 4,0% 8,5 1999 3,3% 3,7 2000 -3,8% -13,0 2001 -1,6% -11,3 2002 -0,5% -7,6 2003 0,9% -5,6 2004 1,0% -4,1 2005 2,9% 2006 3,9% 12,9 2007 0,3% -10,4 2008 -0,4% 2009E 5,6% -6% -4% -3% -5% 2% 3% 4% 5% 6% -1% -2% 1% 0% Source: IATA Net Result (US$bn) Operating Margin (%) The Industry Worldwide is Facing Significant Losses

32. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

33. Safety Efficiency SAFETY: AN ESSENTIAL AND NON NEGOTIABLE VALUE Improvement Warmth

34. LANs Operational Safety, Quality and Environment Policy Motivates and requires compliance with safety standards. Safety is everyones responsibility, and starts with the CEO. Encourages safety reports. Mistakes are an opportunity for improvement. Safety goals and objectives are well defined, measured and rewarded.

35. Industry and Internal Analysis Risk and Change management analysis LOSA (Line Operations Safety Audit) Operational Security audit A & D AVSIS (Aviation Safety Information System) Operational Security Investigations FAST (Fatigue Avoidance Scheduling Tool) FDM (Flight Data Management) LAN's Safety Management System process Proactive Predictive Reactive

36. Flight Data Management: Investment in Technology to monitor all flights since 2003

37. 6th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Economic and aviation policy in Chile Role of the authorities in the region LANs business strategy Economic crisis and its consequences Existing safety programs Future challenges

38. Future Challenges Cooperation between Operators and Authorities Operators' Creativity and Innovation Authorities' Flexibility and Stringency

39. Efficiency Service Safety Aeronautical Regulation Lan Businnes Estrategic

40. 6 th Annual FAA International Aviation Safety Forum 6 th Annual FAA International Aviation Safety Forum Safety in times of crisis, a permanent challenge Enrique Rosende Director of Safety, LAN Airlines September 10, 2009