Sky Airlines is a new, budget airline that has recently entered the Chile domestic flight market. They now have two flights per day from Santiago de Chile to Osorno.
Check their website for the latest flight times and routes.
The cost of a round ticket Santiago de Chile - Osorno - Santiago de Chile is 61,800 pesos for the cheapest tickets up to 197,800 for the most expensive ones. This makes Sky a cheaper airline to fly than LAN.
I did have one problem when I booked a Sky ticket. We were scheduled to fly and the airline announced the day prior that the flight was going to be delayed 4 hours for departure which put our plans into jeopardy. We asked for a full refund and ended up going on LAN. From now on with our work flights we take only LAN even though the cost is higher but there are usually less problems.
LAN flies to Osorno twice a day via Valdivia from Santiago de Chile. From time to time LAN changes their flight times and routes so for up to the minute information on flight times look at their website. The flight takes about 2 1/2 hours to get to Osorno from Santiago because of the stopover in Valdivia. Sometimes the return flight goes from Osorno to Santiago direct making the travel time shorter.
LAN tickets start at about 90,000 pesos return for the earlybird no frills fares and can cost as much as 250,000 pesos return (Santiago de Chile - Osorno - Santiago de Chile).
We rented a car in Osorno from JB Rent a Car, for a reasonable price of 23,500 pesos per day. Many of the places we wanted to see around Osorno, such as Parque Puyuhue, had erratic public transport, so we decided hiring a car was the best plan. We were a given a Corsa, from the cheapest category, and we had no problems. I'd hire a car from these guys again. The office is on Amthauer 1189, a few blocks south of the bus station.