UPDATE 1-Chile's LAN sees 10 pct passenger growth in 2009

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SANTIAGO, May 7 (Reuters) - Chile's dominant airline, LAN LAN.SN(LFL.N: Quote, Profile, Research), said on Thursday it expects its passenger traffic to grow 10 percent and cargo traffic to fall 5 percent in 2009.

"This year, we will have growth rates of 10 percent for passengers, but we will fall 5 percent in cargo," LAN CEO Enrique Cueto told a business forum, adding the cargo sector was suffering more from the global economic crisis.

Passenger traffic grew 12.3 percent in 2008, while cargo traffic increased 7.6 percent.

LAN, which has affiliates in Ecuador, Peru and Argentina, accounts for more than one-half of Chile's international passenger traffic and nearly three-quarters of its domestic traffic.

The company said last month its first quarter profit fell 35 percent from a year earlier to $65 million, citing losses due to fuel hedging. (Reporting by Monica Vargas; Editing by Andre Grenon)