Sustainability Report| 2010

60 LAN

Working for the environment GRI > 4.12 - EC2

“LAN ensures that the environment is cared for in all its pro-

cesses. It manages and minimizes its impact and encourages

responsible action inside the company and with whomever it

relates”.

A ccording to the UN Intergovernmental Expert Panel on Climate Change, the aviation sector is re-

sponsible for 2% of CO2 emissions generated by the combustion of fossil fuels. So, the aviation

industry has designed a program in line with the guidelines of IATA to mitigate the impact caused by air

emissions from its operations as much as possible.

Today, planes are 80% more efficient in consuming fuel as compared to 1960, mainly because

aircraft are lighter, there is less aerodynamic resistance and engines are more efficient. Nonetheless, the

aviation industry has adopted an ambitious emission reduction strategy with the following objectives:

• A 1.5% improvement annually in the use of fuel from 2009 to 2020.

• No CO2 growth by 2020 in comparison to 2005.

• A 50% reduction in total emissions by the sector by 2050 in comparison to 2005.

LAN’s Sustainability Strategy 

1 Winglet is an aerodynamic device located on the ends of an aircraft’s wings that reduces forward resistance.

kg of CO2 per 100 RTK

77Gigajoules was the reduction in Chile

from energy efficiency and fuel consumption

initatives in 2010

423.932is the reduction

in fuel consumption by adding Winglets1

on aircraft

4%years is the

average age of the fleet

6,9

61 LAN

This is a part of LAN’s reality, so it has assumed a firm commitment to care for the environment. It has

taken different courses of action to ensure this: implementing efficient and responsible management

that reduces the environmental impacts of its operations by investing in new technologies, optimizing

the use of resources and promoting the importance of environmental protection among the different

stakeholders with which it relates.

The measures that LAN has specifically adopted to confront climate change are: adhering to

the 2008 Santiago Declaration, joining the European Union’s emissions trading system, creating an

environmental division within its corporate structure, modernizing its fleet, being efficient in the use of

fuels and its operations and adding new technologies

In order to attain these objectives, the aviation industry has proposed working on the following

points:

20102005

CO2

Emisions

(charted)

2020 2030 2040 2050

NGC by 2020

-50%by2050

TecOpsInfra

Biofuel+ Add. Tech

No action

Business with usual emissions

Biofuels and additional technologies

Measures using known technology,operations and infrastructure.

No carbon growth by 2020

Gross emissions path

Economic measures

SOURCE: IATA

62 LAN

LAN and the Carbon Emissions Trading System of the European Union

GRI > EC2

In 2009, the European Union decided to include commercial aviation in its emissions trading system

(ETS). This system, which will enter into effect in 2012, will include airlines with flights from, to and

inside the European Union, even airlines from other countries. The European Union’s ETS is based

mainly on:

• Establishing a system that sets maximum CO2 emissions.

• Companies in the relevant sectors participating and being obliged to comply.

• A sound regulatory compliance framework on the EU market.

• Opportunities to reduce emissions by purchasing emission rights available under mechanisms such

as Clean Development Mechanism (CDM) projects and Joint Implementation (JI) projects.

From the beginning, LAN has complied well with the different stages in European regulations.

It has delivered its monitoring plans, which are currently in the process of being verified.

Santiago Declaration

LAN is an agent of change (Green Aviation Partner)Since 2008, LAN has been a part of this initiative, the product of the “Wings of Change”

Conference organized by IATA in April of that year in the city of Santiago, Chile.

This Declaration is a commitment signed by members of the aviation industry to pre-

serve the environment in Latin America. 10 “Green Aviation Principles” were established:

1. Include the environmental component in daily decision-making.

2. Act conscientiously and evaluate environmental impacts.

3. Promote environmental responsibility and care with our closest stakeholders.

4. Optimize the use of resources with available technology and push for environmental man-

agement systems and ecoefficiency programs.

5. Foster the creation of new initiatives of multisectorial cooperation to minimize the envi-

ronmental impact.

6. Monitor and take action in situations that endanger the environment.

7. Promote research and development of innovative solutions to reduce the environmental

impact of the aviation industry’s activities and of travel.

8. Educate groups and people surrounding us about the urgency of preserving the environ-

ment.

9. Transparently communicate the social benefit of actions that minimize environmental

impacts.

10. Adopt, promote and recruit 3 new ”Green Aviation Partners.”

63 LAN

Environmental Division

2010 ended the process to create the Environmental Division. It will manage all environmental matters

of the company globally.

The main objective of this division is to implement an environmental management system and pro-

grams that meet the increasingly more demanding world requirements. Simultaneously, it must endeavor

to position the company as a world environmental leader in the industry.

One of the functions of the Environmental Division is to work on programs for continuing improve-

ment of the internal processes in the diverse areas of the Company that generate environmental benefits, in

addition to those already under way.

Modern Fleet

In line with its commitment to operate the most modern and efficient aircraft in the world, in 2010 LAN

continued forward with its fleet renovation and growth plan. The company added 11 new aircraft to its fleet:

eight Airbus A320, one Boeing 767-300ER passenger aircraft and two Boeing 767-300F cargo aircraft.

As of December 2010, LAN had a fleet of 131 aircraft, both its own and leased, at an average age

of 6.9 years. This means that it has one of the most modern fleets in the industry (according to IATA1,

the average age of aircraft fleets around the world is 11 years).

The 2011 fleet plan involves the delivery of 18 Airbus A320 aircraft that will efficiently cover the

domestic and regional routes of LAN thanks to their long range and power. The company expects to

receive three Boeing 767-300ER passenger aircraft and one Boeing 767-300F cargo aircraft for its long-

range operations. In the second half of 2012, two Boeing 777-F cargo aircraft will be delivered, added to

the two Boeing 777-F aircraft that are already part of its fleet.

The company is also working on starting up 32 Boeing 787 Dreamliners, the latest in aircraft,

that will be delivered over the coming years. LAN will increase its fuel efficiency as a result, with the

consequent environmental benefits.

At the close of 2010, LAN’s fleet was comprised as follows:

1 http://www.iata.org/whatwedo/environment/Pages/sustainability.aspx(* )Aires Aircraft. Aires was acquired by LAN at the end of 2010

2009 2010Passenger Fleet Nro. of aricraftAirbus A318-100 15 15Airbus A319-100 20 20Airbus A320-200 18 26Boeing 767-300 27 28Airbus A340-300 5 5Dash 8-200* 0 11Dash 8-Q400* 0 4Boeing 737-700* 0 9Cargo Fleet Boeing 767-300F 9 11Boeing 777-200F 2 2Total 96 131

64 LAN

LAN Fleet

Length: 63.7 meters (209 feet, 1 inch)Wingspan: 64.8 meters (212 feet, 7 inches)Cargo Volume: 652.7 cubic metersCruising Speed: 896 km/hMaximum Takeoff Weight: 347,450 kg

Length: 63.7 meters (208 feet, 11 inches)Wingspan: 60.3 meters (197 feet, 10 inches)Seats: 260Cruising Speed: 976 km/hMaximum Takeoff Weight: 275,000 kg

Length: 54.2 meters (178 feet)Wingspan: 47.6 meters (156 feet, 1 inch)Cargo Volume: 438.1 cubic metersCruising Speed: 869 km/hMaximum Takeoff Weight: 186,880 kg

Length: 54.2 meters (178 feet)Wingspan: 47.6 meters (156 feet, 1 inch)Seats: 221/238Cruising Speed: 869 km/hMaximum Takeoff Weight: 184,611 kg

Length: 37.6 meters (123 ft., 3 inches)Wingspan: 34.1 meters (111 feet, 10 inches)Seats: 168Cruising Speed: 928 km/hMaximum Takeoff Weight: 77,000 kg

Length: 33.8 meters (110 ft., 11 inches)Wingspan: 34.1 meters (111 feet, 10 inches)Seats: 144Cruising Speed: 850 km/hMaximum Takeoff Weight: 70,000 kg

Length: 31.8 meters (104 ft., 3 inches)Wingspan: 34.1 meters (111 feet, 10 inches)Seats: 126Cruising Speed: 850 km/hMaximum Takeoff Weight: 63,000 kg

AIRBUS A340-300

BOEING 777-200F

BOEING 767-300F

BOEING 767-300

AIRBUS A320-200

AIRBUS A319-100

AIRBUS A318-100

65 LAN

Fuel Consumption

GRI > EN1- EN3 - EN5

LAN consumes jet fuel in its flight operations and diesel fuel and gasoline in its ground operations.

Fuel consumption on the ground

(Measured only at the Commodore Arturo Merino Benítez Airport in Santiago)

Ground operations consumed a total of 48,745 Gigajoules in Chile, primarily gasoline and diesel fuel.

The chart below shows the energy consumption on the ground by type of fuel and year:

Fuel Consumption on the Ground (Gigajoules)

Fuel consumption during flightAt the close of the year, more than 85 million Gigajoules had been consumed corporate-wide in all of

LAN’s flight operations in the countries where it does business, including its subsidiaries. This fuel

consumption breaks down as follows:

FUEL CONSUMED GIGAjOULES GIGAjOULES

Subsidiary 2009 2010

Chile 32.845.630 34.672.771

Peru 15.978.687 18.022.761

Ecuador 5.686.403 6.947.369

Argentina 7.530.129 7.614.300

Cargo 15.270.592 18.317.892

Total LAN 77.311.441 85.575.093

53.129

gasoline

45.80742.186 44.753

7.3224.663 3.992

46.849 48.745

20092008 2010

diesel oil total

66 LAN

Fuel Management

GRI > EN5 - EN6 - EN18 - EN26

At the end of 2009, a novel initiative was launched with the objective of optimizing the use of fuel and,

therefore, substantially reducing the Greenhouse Gas Emissions by LAN as a whole.

The project, developed under the LEAN philosophy, addresses initiatives across the company,

gathering ideas proposed by employees from different areas, such as on-board service, operations, main-

Specific fuel consumption during flight (liters/100RTK)LAN expresses fuel consumption in liters consumed per 100 kilometers of tons carried, i.e., liters/100RTK.

This indicator includes the weight of passengers, baggage and cargo carried by the company. LAN improved

its efficiency 5.3% compared to 2009, thanks to the fuel management initiatives it implemented.

Specific consumption indicator 2008 2009 2010

(liters/100RTK) 30,34 30,79 29,16

The specific consumption for the cargo business is expressed in liters consumed per 100 kms of cargo

carried (liters/100RTK).

Since cargo is also carried during passenger flights, the specific fuel indicator for the passenger

business is calculated by equating the weight of cargo to the number of passengers carried, resulting in the

liters consumed per 100 kms per passenger carried (liters/100RPK).

Specific fuel consumption during flight by business (liters/100 RPK)

Fuel consumption increased 11% compared to 2009 due to the growth in the company’s operations.

3,41

22,42

3,46

21,24

3,34

19,87

Passenger Business

20092008 2010

Cargo Business

67 LAN

tenance, dispatching and airport. The objective is to continue fostering the efficient use of resources and

care for the environment inside the company.

418,716 Gigajoules of energy were saved by this project, representing a reduction of more than

23,000 tons of CO2e period.

Some examples of the actions that LAN took in 2010 to use fuel more efficiently and simultane-

ously reduce greenhouse gas emissions are:

• Long lines in the take-off roll-out were avoided to the extent possible.

• Aircraft taxied with only one engine.

• Efficiency was improved in the scheduling and dispatching of flights in terms of the flight level,

weather and route to fly.

• The continuous descent was increased in the arrival approach to keep aircraft from descending and

approaching in phases.

• The use of cargo space on aircraft was optimized..

New Technologies and Infrastructure

GRI > EN6 - EN18

RNP Project: at the vanguard in the worldOn August 5, 2009, LAN and the Chilean Civil Aviation Board (DGAC) implemented a new approach

system at the La Florida airport in La Serena called Required Navigation Performance (RNP).

This project meets the highest standards of safety in the company. The process prior to landing

at airports located in zones where there is little visibility and constant fog is now more environmentally

friendly because landings are guaranteed and the fuel consumption is reduced as no diversions are re-

quired to alternative airports. Noise pollution caused by airplanes landing is also reduced.

During 2010, RNP was implemented at the Cuzco airport in Peru. This will be mirrored in other

airports where LAN operates in 2011.

The installation of WingletsDuring the first quarter of 2009, the company began to install “winglets” on all Boeing 767-300

cargo and passenger aircraft. These devices are located on the wings of aircraft and increase fuel effi-

ciency. During 2010, close to 9.5 million gallons of fuel were saved, which represents approximately 4%

of the demand by Boeing 767-300 cargo and passenger aircraft, equal to 92,756 tons of CO2.

How a Winglet works

Winglets are aerodynamic, state-of-the-art devices that are installed on the ends of aircraft

wings in order to reduce the resistance caused by the difference in pressure between the upper

and lower surfaces.

68 LAN

Emissions during Flight

GRI > EN16

Exhaustive measurements are always being taken to determine clearly and accurately how much carbon

dioxide is emitted during flight. LAN has an emissions indicator of 75.08 Kg CO2e per 100 RTK (ton

kilometer).

Energy Efficiency on the Ground (Measured only at the Commodore Arturo Merino Benítez Airport in Santiago)

GRI > EN3 - EN5

Intermediate energy acquired and consumed by the company consists mainly of electricity and heat

obtained from burning natural gas. Below is a breakdown of the respective consumption:

Kg CO2 /100RTK (tonelada Kilómetro)

2008

2009

2010

75,88

77,01

75,08

140117

62.305 57.089

201020092009 2010

GAS Electricity

In Gigajoules In Gigajoules

Emissions during flight (Kg CO2e/100 RTK)

69 LAN

Waste (Measured only at the Commodore Arturo Merino Benítez Airport in Santiago)

GRI > EN22

In 2010, the company continued with recycling initiatives specifically in Chile. The “I recycle in APV”

project of the on-board procurement division helped reuse onboard waste of domestic and international

flights arriving in Santiago.

More than 1,000 tons were recycled in 2010, representing approximately 50% of non-hazardous

waste generated in Santiago.

In 2010, most of the non-hazardous solid waste consisted of the following:

NON-HAzARDOUS SOLID WASTE IN SANTIAGO (TONS)

2009 2010

Household Waste 991 940

Newspaper 748 645

Paper 157 169

Glass 53 33

Cardboard 50 54

PET Plastic 10 19

Other Plastics 7 7

Aluminum 2 1

TOTAL 2.017 1.868

In 2010, LAN developed several strategies to reduce energy demand. The most notable are:

• An energy efficiency project at the maintenance base and in the corporate building of the Santiago

HUB. A reduction of 5,216 Gigajoules was achieved.

• Planning, maintenance and weight reduction, which reduced the equivalent to 418,716 Gigajoules

across LAN’s fleet.

Noise

GRI > EN26

Noise standards are set by the International Civil Aviation Organization (ICAO). Chapter III and Chap-

ter IV levels are the strictest levels of tolerable noise.

Excluding the Aires aircraft, LAN has a high-tech fleet that is in full compliance with Chapter III

and with more than 30% of Chapter IV.

70 LAN

TYPE OF WASTE FINAL DESTINATION

Lead-acid batteries Authorized Disposer

Empty cans, filters and fuels Industrial landfill

Fluorescent tubes Industrial landfill

Used batteries Industrial landfill

Cloth contaminated with solvents Industrial landfill

Kerosene Authorized disposer

Contaminated aircraft fuel Authorized disposer

LAN identified the following solid hazardous waste generation:

• Used solvents and detergents

• Lead-acid batteries

• Empty cans, oil filters

• Fluorescent tubes

• Used batteries

• Cloths contaminated with solvent and grease

• Used kerosene

• Contaminated aircraft fuel

• Electrolyte mud

Final waste disposal

In Chile, solid household waste must be disposed of by companies authorized according to law.

Paper, cardboard, plastic, glass, metal and similar waste are recycled in all of the company’s

operations according to its recycling plan. The waste is collected and delivered directly to specialized

companies for reconversion.

Lastly, the table below shows the final disposal of hazardous waste:

71 LAN

Other Environmental Practices

GRI > EN8 - EN26

WaterLAN uses the public water supply in the countries where it does business. Water consumption totaled

147,144 cubic meters in Santiago, Chile, which is the most significant of all consumption.

In its concern for using resources efficiently, the company implemented new engine-washing

technology in 2010. It optimizes the use of water and the time it takes to wash the engines. A regular

wash plan can be followed as a result that reduces the company’s consumption of fuel.

Environmental sensitivity campaigns LAN has taken diverse actions to sensitize users to environmental care, such as:

• On-board videos on all LAN-operated flights.

• Media advertisements (LAN Argentina).

• The magazines IN, INC (INCompany, in-house communication) and the LANTOURS catalog are printed

on paper that was manufactured from sustainably managed forests and by certified and