SANTIAGO, May 11 (Reuters) - Chile's LAN Airlines said on Friday its first quarter net profit plunged 21.8 percent on the year to $76.07 million, citing rising fuel prices, costs related to development of its business in Colombia and a more challenging cargo scenario. First-quarter earnings came in slightly above the median forecasts of analysts polled by Reuters, who expected a 22.3 percent fall from a year earlier to $75.5 million. The Chilean carrier is poised to complete its takeover of Brazil's TAM by the end of the first half of 2012, creating one of the world's biggest airlines. Regulators in Chile and Brazil have approved the deal. LAN launched a share swap offer on Thursday that would complete its takeover of TAM to create LATAM Airlines Group, the largest carrier in Latin America and one of the world's biggest airlines. "This quarter's results were affected by a 14.7 percent increase in fuel prices, a more challenging scenario for the cargo business, as well as the development of LAN Colombia's operations," LAN said in its earnings statement. Earnings before interest, tax, depreciation and amortization (EBITDA) fell 13.1 percent in the first quarter to $217.7 million. Revenue from ordinary activities rose 13.7 percent in the quarter to $1.506 billion. LAN, one of the few investment grade airlines in the world, has seen its operational income rise in tandem with an aggressive expansion. The Chilean carrier's full-year net profit fell nearly 24 percent in 2011 to $320 million, and fourth-quarter profit plunged 31.6 percent to $112.5 million on flight disruptions due to an ash cloud spewed by an erupting volcano in Chile, restructuring costs in Colombia and higher fuel prices. LAN, headquartered in Santiago, has domestic passenger operations in Argentina, Colombia, Chile, Ecuador and Peru and cargo operations in those same countries plus Brazil and Mexico.