Exhibit
1.1




BY-LAWS


LAN
AIRLINES S.A.




SECTION
ONE: Name, Registered Office and Purpose




Article 1: A corporation is
incorporated that will be governed voluntarily by the rules applicable to open
corporations and will be called Lan Airlines S.A., although it may also
indistinctively use the fictitious names of “Lan,” “Lan Chile,” “Lan Airlines”
and/or “Lan Group.”




Article 2: The company will
have its registered offices in the city of Santiago, borough of the same name,
although it may establish agencies, branches, offices or establishments in other
places in the country or abroad.




Article 3: The duration of the
Company will be indefinite.




Article 4: The Company shall
engage in:




(a)
            the
      trade of any form of air and/or ground transportation, whether passenger,
      cargo, or mail, and of everything relating directly or indirectly to that
      activity, in the country or abroad, for its own account or
      others;




(b)
            the
      rendering of services relating to the maintenance and repair of aircraft,
      whether own or third-parties;




(c)
            the
      development and exploitation of other activities derived from the business
      purpose and/or linked, related, cooperative or complementary
      thereto;




(d)
            the
      trade and development of activities relating to travel, tourism and
      lodging; and




(e)
            holding
      interests in companies of any type or kind that facilitate the business of
      the Company.




SECTION
TWO: Capital, Shares and Shareholders




Article 5: The capital of the
Company is US$453,875,272, divided into 341,000,000 registered, common shares in
one same series, with no par value. There are no special series of shares nor
privileges. The form of share certificates, their issuance, exchange, ruin,
misplacement, replacement and other circumstances thereof as well as the
transfer of shares shall be governed by the provisions in the Companies Law and
its regulations.




Article 6: Shareholders may
stipulate agreements limiting the free transfer of shares, but those agreements
shall be deposited with the Company and be available to other shareholders and
interested third-parties, and they shall be annotated in the shareholders
registry in order to be valid.




SECTION
THREE: Management




Article 7: The Company will be
managed by the Board of Directors that will be elected at the Shareholders
Meeting.




Article 8: The Board will be
comprised of 9 members and will hold office for two years. Members may be
reelected. There will be no need to be a shareholder in order to be a director.
The Board will appoint a Chairman and a Vice Chairman from among its members.
The Vice Chairman shall substitute for the Chairman in the event of the latter’s
absence or impediment. The Board of Directors may appoint an Interim Chairman
whenever the Chairman and Vice Chairman are absent or suffer from an impediment.
The absences or impediments behind such substitution shall not have to be proven
to third-parties.




Article 9: The entire Board of
Directors shall be elected at the next Regular Shareholders Meeting to be held
by the Company whenever there is a vacancy in a Directorship. The Board may
appoint a replacement in the interim.




Article 10: Directors will be
compensated for their office. Whether they will be compensated and the amount
thereof will be determined annually by the Regular Shareholders
Meeting.




Article 11: Board meetings
shall be installed by the presence of a majority of Directors. Resolutions will
be adopted by an absolute majority of the Directors present, save resolutions
that require a higher majority according to the law or these
by-laws.





Any tie
shall be decided by the vote of the Chairman of the Meeting. The Chief Executive
Officer of the Company shall act as Secretary or the person expressly appointed
by the Board of Directors to that position.




Article 12: The Board shall
hold regular meetings on the days and at the times it determines. In any case,
it shall meet at least once a month. Special meetings may be held when they are
convened specially by the Chairman together with two directors and/or at the
request of an absolute majority of directors, in which case the meeting must
necessarily be held.




Article 13: The Board
represents the Company judicially and extrajudicially and shall be vested, in
order to fulfill the business purpose, which shall not be necessary to prove to
third-parties, with all powers of administration and disposition that the Law,
Regulations and these by-laws do not reserve for the shareholders meeting. There
will be no need to grant any special power of attorney, including for those acts
or contracts regarding which the laws require such an event, as provided in
article 40 of the Law. The foregoing is without prejudice to the judicial
representation pertaining to the Chief Executive Officer of the
Company.




The Board
of Directors may delegate part of its authority to the General Manager,
Managers, attorneys of the Company, to one director or a committee of directors,
and to other people for certain special purposes.




Article 14: The deliberations
and resolutions of the Board of Directors shall be written down in a minutes
book that will be signed on each occasion by the directors who attended the
meeting and by the Secretary.




A
director who wishes to circumvent his liability for any act or resolution of the
Board shall have his opposition recorded in the minutes and that opposition
shall be disclosed by the Chairman at the next Regular General Shareholders
Meeting.




Should a
director die or be unable for any reason to sign the corresponding minutes, a
record of that fact shall be left at the foot of the minutes.




The
minutes shall be deemed approved as from the time they have been signed by the
aforesaid persons, and from that moment the resolutions indicated therein may be
implemented.




Article 15: The Company will
have an Executive Vice President and a Manager, who will be the legal
representative of the Company. Both positions will be appointed by the Board of
Directors and may be held by one same person. The Executive Vice President shall
have the powers conferred thereupon by the Board of Directors. The Manager shall
have the powers delegated thereto by the Board of Directors, notwithstanding
those corresponding thereto by the Law and in particular:




(i)
            he
      shall represent the Company judicially with the powers listed in both
      subparagraphs of article seventh of the Code of Civil Procedure, which are
      deemed expressly set out.




(ii)
            he
      shall execute and enter into all acts and contracts, whether civil,
      commercial, administrative or otherwise, conducive to the purposes of the
      Company within the limits on amount set by the Board;
  and




(iii)
            generally,
      he shall implement resolutions of the Board and execute all acts for which
      he has been expressly delegated authority, in the form, amount and
      conditions that are determined. The Board shall appoint one or more
      persons who may individually validly represent the company in all
      notifications made thereto in absence of the Manager, which the interested
      party shall not have to evidence.




SECTION
FOUR: Shareholders Meetings




Article 16: Shareholders shall
meet in a regular meeting once a year between February 1 and April
30.




Article 17: Matters for a
regular meeting are:




1.
            the
      annual appointment of the independent external auditors to examine the
      accounting, inventory, balance sheet and other financial statements of the
      Company;




2.
            the
      examination of the situation of the Company and of the reports by the
      external auditors and approval, amendment or rejection of the annual
      report, balance sheet and financial statements and
    exhibits;




3.
            the
      approval of the distribution of fiscal year profits and the payment of
      dividends;


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4.
            the
      election or revocation of the board, liquidators and auditors of
      management;




5.
            the
      determination of the annual compensation of
  directors;




6.
            acknowledgement
      of the resolutions adopted by the Board in which there was opposition of
      one or more directors.




7.
            acknowledgement
      of the resolutions approving acts or contracts in which one or more
      directors had or have an interest personally or as the representative of
      another person; and




8.
            generally,
      any matter of corporate interest not reserved for a Special Shareholders
      Meeting.




Article 18: Matters for a
Special Shareholders Meeting are:




1.
            a
      reform to the Company’s by-laws;




2.
            the
      issuance of bonds or debentures convertible to
  shares;




3.
            the
      grant of real or personal guarantees to secure third-party obligations
      when those third parties are not subsidiaries;
  and




4.
            the
      other matters surrendered to the debate thereof by the by-laws and the
      law.




Article 19: Notices of
meetings shall be given by a prominent advertisement that will be published at
least 3 times on different days in a newspaper in the corporate domicile
determined by the meeting or, failing agreement, or when compliance therewith is
impossible, in the Official Gazette, in the time, form and conditions determined
by the Companies Regulations.




In
addition to the preceding notice, a notice should be sent by mail to each
shareholder a minimum of 15 days in advance of the date of the meeting, which
shall contain a reference to the matters to be discussed thereat.




The
notice shall mention the resolutions of the Board that the Meeting must study
according to Article 44 of the Law. Meetings attended by all issued shares may
be validly held even though the formalities required for notice have not been
completed.




Article 20: Regular and
Special Shareholders Meetings shall be validly installed by representatives of a
majority of the issued shares. If that number is not present, a new notice will
be given and the Regular or Special Shareholders Meeting will be validly
installed by the shareholders attending.




Special
Shareholders Meetings shall be held before a notary. Second notices may only be
published once the meeting has failed under a first notice or second notice, as
the case may be, and a new shareholders meeting shall be convened, regardless,
within 45 days after the date set for the meeting that was not held under a
first notice.




Notices
shall be published in the same period indicated above.




Article 21: Resolutions of
both Regular and Special Shareholders Meetings shall be adopted by the
affirmative vote of at least an absolute majority of the shares represented at
the meeting. In any case, the resolutions indicated in the second subparagraph
of article 67 of the Companies Law shall require the affirmative vote of
two-thirds of the issued and voting shares. Only shareholders registered in the
Shareholders Registry five days in advance of the date of the respective meeting
may attend meetings and exercise their right to speak and vote. Directors shall
be elected in one single voting, and the persons who earn the nine highest
majorities shall be deemed elected. Shareholders may distribute their votes
among candidates in the manner they deem convenient. In order to proceed with
voting, save unanimous resolution otherwise, the Chairman and Secretary,
together with the persons previously designated by the meeting to sign the
minutes thereof, shall record in a document the votes that are cast out loud by
the shareholders present, in the order of the attendance list. Any shareholder
shall have the right, however, to vote on a ballot signed thereby, stating
whether he signs personally or on behalf of another.




Notwithstanding
the foregoing, in order to facilitate the conduct or quickness of the voting,
the Chairman or the Superintendency, as the case may be, may order that voting
be taken alternatively and indistinctively out loud or by ballot. When counting
votes from the annotations made by the aforesaid persons, the Chairman may read
the votes out loud in order for all those present to calculate the votes
themselves or to confirm the true outcome through such annotation and
ballots.


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The
Secretary shall add up the votes and the Chairman shall proclaim the top
majorities until completing the number to be elected.




The
Secretary will put all papers in an envelope that he will close and seal by the
company seal, which will be filed with the Company for at least two
years.




Article 22: Shareholders may
be represented at meetings by other shareholders or by third-parties in the form
and conditions set down in the Regulations. The proxy granted for the meeting
not held shall be deemed valid for the new meeting held instead, provided the
first meeting was not held due to a lack of quorum.




Article 23: Attendees at
meetings shall sign an attendance sheet that will indicate, after their
signature, the number of shares held by the signatory, the number of shares
represented by the signatory and the name of the principal.




Article 24: Deliberations and
resolutions of Shareholders Meetings shall be set down in a Special Minutes Book
that will be kept by the Secretary. Minutes will be signed by the Chairman or by
his substitute, by the Secretary and by three Shareholders on behalf of
attendees, elected by the meeting.




An
abstract of the events of the meeting shall be written in minutes and the
following data necessarily recorded: the name of the shareholders present, the
number of shares owned or represented by each, a succinct account of any
observations, an account of the motions submitted to discussion and the outcome
of voting, and the list of shareholders who have voted against those motions, if
anyone has requested nominal voting.




Only
under the unanimous consent of attendees may the record of some event occurring
at the meeting be eliminated from the minutes, provided it relates to corporate
interests.




The
minutes containing the election of directors shall indicate the names of all
shareholders present and specify the number of shares voted by each, personally
or on behalf of another, and the general outcome of the voting.




A copy of
these minutes will be sent to the Superintendency of Securities and Insurance.
The Company shall notify the Superintendency of the appointment of directors who
are replaced within three business days.




SECTION
FIVE: Annual Report, Balance Sheet and Profits




Article 25: A General Balance
Sheet of the Company’s assets and liabilities shall be prepared as of December
31st of each year, which will contain the indications required by the laws and
regulations.




Article 26: At the Regular
General Shareholders Meeting, the Board of Directors shall advise shareholders
of the status of the Company’s business and present an annual report containing
explanatory and analytical information on the transactions performed in the most
recent fiscal year, accompanied by the general balance sheet, profit and loss
statement and report presented by the external auditors.




All sums
earned during the fiscal year by the Chairman and Director shall be placed in
separate lines within the profit and loss accounts in such balance
sheet.




Article 27: Dividends shall be
paid exclusively against net profits from the fiscal year or retained earnings
in balance sheets approved by the Shareholders Meeting. Should the Company have
accumulated losses, profits earned in the fiscal year shall be first allocated
to absorbing those losses. A cash dividend shall be paid annually to
shareholders in proportion to their shares, amounting to at least 30% of the net
profits from each fiscal year, save resolution otherwise adopted unanimously by
the respective meeting.




Article 28: The annual report,
balance sheet and inventory, minutes, books and other items supporting them and
the report that the external auditors must present shall be available to
shareholders for examination at the management’s offices for 15 days prior to
the date set for the Regular General Shareholders Meeting. For this purpose, the
Company shall keep printed or typed copies of those documents in that office.
The Company shall send each of the shareholders registered in the respective
Registry a copy of the balance sheet and of the annual report of the Company on
a date that is no later than the date of the first notice convening a Regular
Shareholders Meeting, including the opinion of the auditors and the respective
notes, all without prejudice to the provisions in the second and third
subparagraphs of article 75 of the law.


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Article 29: The Company shall
publish the information determined by the Superintendency of Securities and
Insurance on its duly audited general balance sheets and profit and loss
statements in a widely circulated newspaper in the corporate domicile no less
than 10 nor more than 20 days in advance of the date of the Regular Shareholders
Meeting that will decide on them. In that same period, the Company shall submit
the number of counterparts of such documents to the Superintendency of
Securities and Insurance as determined thereby. If the balance sheet and profit
and loss statements are modified by the meeting, the changes will be published
in the same regard within 15 days following the date of the meeting,
notwithstanding that they must also be sent to the Shareholders registered in
the Registry. The balance sheet shall contain the name of the Chairman,
directors, managers and indicate the share transactions performed by such
individuals during the fiscal year.




Article 30: When the condition
of corporate funds allow and the Board deems it convenient, interim dividends
may be paid to Shareholders during the fiscal year on account of profits from
that year, under the personal liability of directors approving the resolution,
provided there are no cumulative losses.




SECTION
SIX: Audit of Management




Article 31: The Regular
Shareholders Meeting shall appoint independent external auditors annually to
examine the accounting, inventories, balance sheets and other financial
statements of the Company, under the obligation to report in writing on
fulfillment of their mandate to the next Regular Shareholders
Meeting.




SECTION
SEVEN: Arbitration




Article 32: Any matter arising
among shareholders as such or among them and the company or its managers shall
be resolved without form of trial or further remedy by an arbitrator ex aequo et
bono appointed by mutual consent of the parties involved, and failing consent,
by the ordinary courts, in which case the arbitrator shall be a conciliator in
regard to procedure and an arbiter in regard to the ruling. The appointment
shall fall upon an attorney who is or has been a deputy justice of the Supreme
Court of Justice for at least one year. Notwithstanding the foregoing, the
plaintiff in any dispute may remove the hearing thereof from the venue of
arbitrators and submit to the decision of the Ordinary Courts.




TRANSITORY
ARTICLES




Transitory Article First: The
capital of the Company is US$453,875,272, divided into 341,000,000 shares in one
same series, registered, common, with no par value, which is subscribed and paid
in the following terms:




(i)
            The
      sum of US$134,303,353, representing 318,909,090 shares corresponding to
      the equity capital at December 31, 2006, according to the balance sheet
      approved by the Regular Shareholders Meeting held April 5, 2007, which has
      been fully subscribed and paid in as of this
  date.




(ii)
            The
      sum of US$319,571,919, corresponding to the capital increase approved by
      the Special Shareholders Meeting held April 5, 2007, which will be paid
      through the issuance of 22,090,910 cash shares to be issued and placed all
      at once or in parts by the Board of Directors on the dates determined
      thereby. The Board of Directors of the Company was authorized to proceed
      with and agree, with the most ample attributions, on the terms of the
      issuance and placement of the cash shares necessary to consummate the
      approved capital increase and subscription and payment thereof and to
      proceed with the final determination of the cash share placement price in
      the period of 120 days as from the Special Shareholders Meeting held April
      5, 2007.
              
              The
      Special Shareholders Meeting held April 5, 2007 approved registering,
      issuing and offering part of the approved capital increase on the
      securities market of the United States of America, specifically the New
      York Stock Exchange of that country, through any of the forms of the ADR
      mechanism, as such term is defined in Circular No. 1375 of the
      Superintendency of Securities and Insurance.
              
              The
      shares shall be issued and placed in the following
  way:




(a)
            The
      sum of 2,209,091 cash shares will be allocated to compensation plans that
      the Board will elaborate for employees of the company and of its
      subsidiaries through a Company stock option program, for which the Board
      was amply empowered. The subscription price of these shares will be the
      price set by the Board, but it may never be less than the price that is
      set for the remaining shares in this capital increase. For this part of
      the increase, shareholders shall not enjoy a preemptive option right, as
      provided in the third subparagraph of article 24 of Law 18,046. The term
      to subscribe and pay for these shares will run for 5 years as from the
      date of the Special Shareholders meeting held April 5, 2007, and the Board
      is empowered to issue those shares in one or several stages according to
      the compensation plans it prepares. These shares shall be paid at once, in
      the act of subscription, in cash, by bank check, wire transfer or any
      other instrument or effect representing money payable upon
      demand.


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(b)
            The
      sum of 19,881,819 cash shares will be offered preferentially to
      shareholders according to the law. Shares not subscribed by shareholders
      in exercise of their preemptive option or those whose preemptive option
      rights are waived in whole or in part, or those corresponding to fractions
      occurring in the proration among shareholders may be offered freely to
      shareholders or to third-parties in Chile or abroad on the dates and in
      the amounts deemed pertinent by the Board of Directors, which is amply
      empowered to determine the procedures for the same. These shares shall be
      paid at once, in the act of subscription, in cash, by bank check, wire
      transfer or any other instrument or effect representing money payable upon
      demand. These shares shall be fully subscribed and paid in a period of
      three years as from the date of the Special Shareholders Meeting held
      April 5, 2007.


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