Management Report 2011
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Management Report 2011 Société anonyme with share capital of 300 219 278 euros Registered offi ces: 2, rue Robert Esnault-Pelterie, 75007 Paris Mailing address: 45, rue de Paris, 95747 Roissy CDG Cedex Paris Trade and Company Register: 552 043 002 1 Corporate governance 1 1.1 The Board of Directors 2 1.2 The Group Executive Committee 28 1.3 Share capital and shareholder structure 29 2 Activity 35 2.1 Highlights of the 2011 fi nancial year 36 2.2 Market and environment 38 2.3 Strategy 44 2.4 Passenger business 48 2.5 Cargo business 50 2.6 Maintenance business 52 2.7 Other businesses 53 2.8 Highlights of the beginning of the 2012 fi nancial year 53 2.9 Fleet 54 3 Risks and risk management 61 3.1 Risk management process 62 3.2 Risk factors and their management 63 3.3 Market risks and their management 71 4 Social and environmental data 77 4.1 Social data 78 4.2 Social indicators for the Group 88 4.3 Environmental data 96 4.4 Environmental indicators for the Group 103 5 Comments on the fi nancial statements 113 This Management Report is an unoffi cial translation of the French Rapport de Gestion and has been produced by Air France-KLM for the information and convenience of English-speaking readers. No assurances are given as to the accuracy or completeness of this translation, nor any responsibility assumed for any misstatement or omission that may be contained herein. In the event of any ambiguity or discrepancy between this unoffi cial translation and the French Rapport de Gestion, the French version shall prevail. Corporate governance 1 1.1 The Board of Directors 2 1.2 The Group Executive Committee 28 1.3 Share capital and shareholder structure 29 Management report 2011 ■ Air France-KLM 1 Corporate governance 1 The Board of Directors 1.1 The Board of Directors To comply with the governance principles as presented in the AFEP-MEDEF Corporate Governance Code and adopt the conclusions of the evaluation of the functioning of the Board of Directors, the General Shareholders’ Meeting of July 10, 2008, decided to reduce the duration of Board directors’ terms of offi ce from six to four years and to include the option of a staggered renewal process for mandates in the bylaws. The General Shareholders’ Meeting of July 8, 2010 thus fi xed the duration of new or re-appointed Board directors’ mandates at two, three or four years to ensure the smooth renewal of the Board of Directors. The General Shareholders’ Meeting of July 7, 2011 decided to appoint Mr Jaap de Hoop Scheffer as a Board director for a four-year term of offi ce, Mr Frits Bolkestein not having sought the renewal of his mandate. Ms Marie-Christine Saragosse, representing the French State, was also appointed as a Board director by order of the French Ministry of the Economy, Finance and Industry dated July 27, 2011, replacing Mr Philippe Josse. To facilitate their integration and the exercise of their mandates, the newly-appointed Board directors were able to meet with the company’s senior executives, and were offered site visits and training organized and paid for by the company. On their appointment, they were also sent a dossier including, amongst other documents, the company’s bylaws, the internal regulations of the Board, the Registration Document and the latest press releases issued by the company. Furthermore, Mr Pierre-Henri Gourgeon resigned his offi ce as Board director on October 17, 2011. 1.1.1 Composition of the Board of Directors At December 31, 2011, the Board of Directors comprised 14 members: ✦ 11 directors appointed by the Shareholders’ Meeting (including two representing the employee shareholders); ✦ 3 representatives of the French State appointed by ministerial order . Following the resignation of Mr Pierre-Henri Gourgeon, Mr Alexandre de Juniac, Chairman and Chief Executive Offi cer of Air France, was co-opted as a Board director following a decision taken by the Board of Directors on January 11, 2012*. Since that date, the Board of Directors has thus comprised 15 members. There are three women members of the Board of Directors, or a 20% proportion, in line with the AFEP-MEDEF recommendation of April 19, 2010 and the provisions of the law of January 27, 2011 relating to the balanced representation of women and men within Boards of Directors. In view of the Board director mandates expiring in 2013 and 2014, the Appointments Committee will propose candidates aimed at reinforcing the presence of women within the Board in order to comply, within the recommended time horizons and in the fi nal proportion, with the AFEP-MEDEF recommendation and the afore-mentioned legal provisions. The functions exercised by the members of the Board of Directors within the specialized committees are detailed in the Board of Directors Committees section. * This appointment will be submitted to the General Shareholders’ Meeting of May 31, 2012 for ratifi cation. 2 Management report 2011 ■ Air France-KLM Corporate governance The Board of Directors 1 ❚ Directors appointed by the Shareholders’ Meeting Jean-Cyril Spinetta Chairman and Chief Executive Offi cer of Air France-KLM* (since October 17, 2011) First appointed as a Board director: September 23, 1997. Expiration date of current term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the year ending December 31, 2013. Number of shares held in the company’s stock: 65,349 shares. Í Other directorships and offi ces Í Directorships and offi ces held in the last fi ve years French companies and having expired ✦ Chairman of the Supervisory Board of Areva* French companies and public institutions ✦ Director of Saint-Gobain* ✦ Chairman of the Board of Directors then Chairman and Chief ✦ Director of Alcatel-Lucent* Executive Offi cer of Air France until November 16, 2011 ✦ Non-French company Chairman of the Air France-KLM* Board of Directors until October 17, 2011 ✦ Director of Alitalia CAI (Italy) ✦ Director (representing the French State) of GDF-Suez* until April 2009 Others ✦ Chairman and Chief Executive Offi cer of Air France-KLM* until ✦ Member of the IATA (International Air Transport Association) Board of December 2008 Governors (Canada) ✦ Chairman and Chief Executive Offi cer of Air France until ✦ Member of the Board of Paris Europlace. December 2008 ✦ Director (representing the French State) of La Poste until April 2009 Non-French companies ✦ Director of Unilever* (United Kingdom) until July 2007 ✦ Director of Alitalia (Italy) until January 2007 Born October 4, 1943, Mr Spinetta is a graduate of the Institut des Sciences Politiques de Paris and of the École Nationale d’Administration. Leo M. van Wijk Deputy Chief Executive Offi cer (since October 17, 2011) and Vice-Chairman of the Board of Directors of Air France-KLM* First appointed as a Board director: June 24, 2004. Expiration date of current term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the year ending December 31, 2011. Number of shares held in the company’s stock: 3,565 shares. Í Other directorships and offi ces Í Directorships and offi ces held in the last fi ve years Non-French companies and having expired ✦ Member of the Supervisory Board of Aegon N.V.* (Netherlands) Non-French companies ✦ Member of the Supervisory Board of Randstad Holding N.V.* ✦ Member of the Supervisory Board of Martinair (Netherlands) until (Netherlands) March 2008 ✦ Member of the Supervisory Board of Kennemer Gasthuis (Netherlands) until December 2007 ✦ Member of the Advisory Board of ABN Amro Holding (Netherlands) until December 2007 ✦ President of the KLM Management Board (Netherlands) until July 2007 ✦ Director of Northwest Airlines (United States) until May 2007 Born October 18, 1946, Mr van Wijk, a Dutch national, holds a Masters degree in Economic Sciences. Born October 18, 1946, Mr van Wijk, a Dutch national, holds a Masters degree in Economic Sciences. * Listed company Management report 2011 ■ Air France-KLM 3 Corporate governance 1 The Board of Directors Maryse Aulagnon Chairman and Chief Executive Offi cer of Affi ne S.A.* First appointed as a Board director: July 8, 2010. Expiration date of current term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the year ending December 31, 2012. Number of shares held in the company’s stock: 1,500 shares. Í Other directorships and offi ces Í Directorships and offi ces held in the last fi ve years French companies and having expired ✦ Affi ne Group: director of Affi paris SA*, Chairman of Mab-Finances French companies SAS and of Promaffi ne SAS, Chief Executive Offi cer of ATIT (SC) and ✦ Affi ne group: Member of the Executive Committee of Business of Transaffi ne SAS, Member of the Executive Committee of Concerto Facility International SAS from 2005 to February 2010 and director Development SAS, Representative of Affi ne, Mab-Finances and of Abcd from 2006 to February 2008 Promaffi ne within the employee representative bodies of the various Non-French company Affi ne Group entities ✦ Affi ne group: Chairman of GPBeta Holding (Luxembourg) from ✦ Member of the B.P.C.E. Group (Banques Populaires Caisses February 2006 to March 2007 d’Epargne) Supervisory Board since December 2010 Other Non-French companies ✦ Director of European Asset Value Fund (Luxembourg) until 2011 ✦ Affi ne Group: Chairman of Banimmo (Belgium), Chief Executive Offi cer of Affi nvestor GmbH (Germany), and director of Holdaffi ne BV (Netherlands) Born April 19, 1949, Ms Aulagnon is a graduate of the Institut des Sciences Politiques de Paris and of the École Nationale d’Administration and holds a post-graduate degree in economic sciences.