LAN Colombia is expected to make a profit in 2013, three years after the Bogota-based carrier was acquired by LAN in 2010.
The airline broke even in the fourth quarter of 2012, says LAN.
LAN's chief financial officer Alejandro de la Fuente said in a recent earnings call that LAN Colombia's financial performance is "improving every month", but declined to provide further details when asked.
LAN Colombia was formerly known as Aires, before it was acquired by LAN in November 2010 and rebranded as LAN Colombia in December 2011.
LAN had expected the Colombian airline to break even earlier in 2012, but had repeatedly delayed this target as the airline continued to post losses.
Before it was acquired by LAN, Aires had operated Boeing 737-700s and Bombardier Dash 8 Q200s and Q400s. LAN is steadily replacing the 737s with Airbus A320s. Flightglobal's Ascend database shows LAN Colombia operates five A320s, six 737-700s and 10 Q200s. The airline has four Q400s in storage.