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Local Area Augmentation System (LAAS) is an augmentation to GPS, for providing aircraft precision approach and landing. LAAS relies on Hatch filter for code smoothing but its filtered range is affected by code-carrier divergence occurring during ionospheric storms. Substituting traditional Hatch filter by optimized filter reduces this effect to a considerable extent. The objective of this paper is to estimate code-carrier divergence and mitigate it using the optimized filter. The performance of both Hatch and optimized filters is analyzed for different ionosphere conditions such as the geomagnetic storm of October 2003 over a low latitude station. Investigations showed that the optimized filter outperforms Hatch Filter for disturbed day data, whereas for quiet day data, it does not provide any additional advantage. The results obtained are agreeing with the results published elsewhere and are encouraging. [ABSTRACT FROM AUTHOR]