LAN Airlines to Shake Up Accounting Policy

Chile-based carrier LAN Airlines SA said Friday it will change its accounting policy to eliminate provisions related to aircraft maintenance expenses.

The new policy is effective retroactively to January 1 and is expected to generate a $40.3 million one-time, pretax benefit during the first quarter of 2006. LAN also expects the change to boost 2006 operating results by $2 million.

The move, which was approved by the company´s board after a recommendation from its management and auditors, was driven by the company´s growth in recent years, LAN said.

The accounting change puts the company´s aircraft maintenance accounting policy in line with that of other major international carriers, the company added.