The cargo unit of Chile's dominant airline LAN said on Wednesday it agreed to pay a USD$88 million fine as part of a price-fixing investigation led by the US Department of Justice.

Under the plea agreement, it would pay the fine over the course of five years, which "should therefore not significantly affect the company's cash position," LAN Cargo said in a statement.

"The company already had established a USD$75 million reserve in anticipation of a financial penalty. The reserve amounts were offset against the companys results for 2007 and for the company's third quarter 2008," the statement said.

"This investigation has exclusively focused on the air freight business and does not in any way involve LAN Airlines passenger operations," it added, saying the Department of Justice investigation into LAN Cargo related to the period between February 2003 and February 2006.

LAN Cargo said air freight company Aerolinhas Brasileiras, in which it has an ownership stake, had also reached a plea agreement for a fine of USD$21 million to be paid over a five year period.

It said it understood the investigation involved more than 30 international airlines and that eight other airlines had already agreed to pay fines worth USD$1.275 billion between them.

LAN's cargo network covers about 75 destinations worldwide. LAN Cargo has operations in Chile, Brazil and Mexico and was also given the green light to set up an affiliate in Colombia.

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