The estimation of forest biophysical attributes improves when airborne laser scanning (ALS) is integrated. Individual tree detection methods (ITD) and traditional area-based approaches (ABA) are the two main alternatives in ALS-based forest inventory. This study evaluated the performance of the enhanced area-based approach (EABA), an edge-correction method based on ALS data that combines ITD and ABA, at improving the estimation of forest biophysical attributes, while testing its efficiency when considering co-registration errors that bias remotely sensed predictor variables. The study was developed based on a stone pine forest (Pinus pinea L.) in Central Spain, in which tree spacing and scanning conditions were optimal for the ITD approach. Regression modeling was used to select the optimal predictor variables to estimate forest biophysical attributes. The accuracy of the models improved when using EABA, despite the low-density of the ALS data. The relative mean improvement of EABA in terms of root mean squared error was 15.2%, 17.3%, and 7.2% for growing stock volume, stand basal area, and dominant height, respectively. The impact of co-registration errors in the models was clear in the ABA, while the effect was minor and mitigated under EABA. The implementation of EABA can highly contribute to improve modern forest inventory applications.