Somebody forgot to tell Chile's LAN Airlines (NYSE: LFL) that this is a terrible environment for the airline industry.

The South American airline juggernaut laughed in the face of high oil prices and the prospect of a recession in the U.S., churning out yet another eye-popping quarter. Net income increased nearly 8% in the fourth quarter and 45% on the year, after backing out extraordinary items.

Many U.S. airlines wouldn't mind smuggling such performance into their boardrooms. Record high oil prices have been largely responsible for losses at AMR (NYSE: AMR), UAL (Nasdaq: UAUA), and Delta (NYSE: DAL) in the most recent quarter. As fuel costs soar, the slowing economy is putting pressure on airlines to cut other expenses.

Though LAN has done a spectacular job mitigating the effects of high oil prices, its hedges won't protect it forever. Nevertheless, after hitting some turbulence last year, LAN shares look poised to get back on track. After rising tenfold from 2003 to mid-2007, the company's latest numbers suggest that it may be set to go on another tear.

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Fool contributor Tom Hutchinson holds no financial position in any companies mentioned. He appreciates your feedback. The Fool has a disclosure policy.