EL AL Israel Airlines Ltd. Corporate Social Responsibility Report 2014-2015 1 This document was composed by EL AL Israel Airlines Ltd. (“the Company”) solely for the purpose of presenting the subject of corporate social responsibility (CSR) in relation to its own operation as well as the operations of its subsidiaries. This is the third report to be published by the Company on CSR issues, and naturally does not exhaust the entirely of issues addressed by the Company. The report includes several issues that the Company chose to emphasize, but the inclusion of any specific detail in this report or the exclusion of others do not indicate whether such details are essential or inessential, and do not suffice as any kind of representation on behalf of the Company with regard to the entirety of its operations. It should be emphasized that the report is based on business data pertinent to Company operations, and this data cannot substitute any data published in financial reports by the Company and/or its subsidiaries. Accordingly, with regard to financial data or data concerning volume of operations, profitability, forecasting and so forth, only data detailed in financial reports are binding, and in any case of contradiction, data detailed in financial reports shall supersede. This document does not constitute a representation or explicit or implicit undertaking, and the accuracy, integrity or verity of the information or any opinions included herein are not to be based upon. Neither the Company nor any of its employees or representative will be held liable (whether due to negligence or any other reason) to any loss ensuing in any way from the use of this document or its content or any other manner concerning this document. Future reports of Company operations and the outcomes of Company operations are subject to risk and uncertainty, which may lead to substantial change in actual results in comparison with anticipated outcomes. Therefore, the content of this report is not to be relied upon for future projections. G4-1 Message from the President & CEO Mr. David Maimon • We ratified the largest equipping plan the Company had known since its Dear readers, establishment. In the framework of this plan, 16 new 787 Dreamliner aircraft, of the leading passenger airliners in the world, equipped with the finest We are happy to present EL AL’s Corporate Social Responsibility (CSR) Report aviation technology, will be added to our fleet; for the years 2014-2015, in line with the world’s leading airlines. This is the third report published by the Company concerning its social and environmental • We launched the “UP” brand, which operates low-cost flights to a variety of impacts and performance. We consider this to be a testimony of EL AL’s attractive destinations. continued commitment for the advancement of our corporate responsibility, for • We initiated the “Cockpit” program, an incubator for startups from Israel and the benefit of all of our stakeholders, in Israel and around the world – customers, around the world that develop aviation- and tourism-related groundbreaking employees, suppliers, investors, the community, our environment and the Israeli technologies and innovative initiatives. The Cockpit program is in keeping public. The advancement of CSR at EL AL, among other things, solidifies our with the Company’s perception of innovation, and has made us very proud strength as a business enterprise, enhances transparency, integrates new by winning the APEX Awards. management approaches, generates a more fair, considerate, productive and pleasant working environment for our employees, improves the discourse with our stakeholders and develops our activity for the benefit of the community and The advancement of socially responsible the environment. corporate conduct (CSR) solidifies our strength as a business enterprise, enhances EL AL is facing considerable challenges, and is further affected in its activity by global trends, such as the intensifying competition in the aviation sector, transparency and integrates new management fluctuations in fuel prices, growth of metropolises and commerce centers that approaches, generates a more fair, considerate, constitute new flights destinations, development of new business models in the productive and pleasant working environment for sector, the establishment of low-cost airlines and so forth. In the years 2014- our employees 2015 we have continued working to respond to these and other challenges, and constantly explored new ways of offering our passengers and customers the These all emanate first and foremost from our commitment to our passengers best product and service, as adapted to their needs as possible. During these and their safety, and to providing them with a special service experience. We will years we have delivered several significant tidings to the Israeli aviation sector: continue our effort to ensure we uphold this commitment in the coming years. Another commitment to which we attribute great importance, since EL AL was founded, is our commitment to Israeli society and the State of Israel; it embodies the sense of being Israeli and our national responsibility. We are proud of our philanthropy policy, with contributions that annually assist community and social nonprofit organizations, whose activities impact the lives of many Israelis. Additionally, we partake in a variety of social initiatives and work together with nonprofit associations and organizations on many issues: education, health, welfare, support of IDF soldiers in the framework of “Ametz Lochem – Adopt a Fighter”, Israeli public diplomacy abroad by the “EL AL Ambassadors” project and more. We consider this to be a national mission and intend to continue this conduct in the future. Our national responsibility was further expressed during Operation “Protective Edge”, when our flight schedule was enhanced to respond to the needs of Israelis locally and abroad. EL AL had defined additional objectives for itself, aiming to maintain its standing as Israel’s leading airline. We can improve further and we keep on going, not stopping for a minute. I am full of appreciation for the Company’s employees and managers, and their devotion to any task they are assigned. To the people of EL AL, you are the real engine of each and every one of our aircraft, and this is an opportunity to thank you for your dedication and your outstanding work. Together we will lead on to new destinations. David Maimon | President & CEO Message from the Director of Corporate Responsibility & Community Relations Mr. Zvika Segal We are pleased to present the third Corporate Social Responsibility Report to be collection, analysis, processing and presentation of data, in a manner that will published by EL AL. provide stakeholders with a comprehensive, balanced and reliable picture, for which we are grateful. We have no doubt that over the past six years the Company has made a quantum leap on this issue, more and more stakeholders are joining the effort and assisting We hope that this report reflects our work on the issue as well as the improvements in its advancement; however, we are aware that we have much more work to do that we are experiencing in this work from year to year. and progress to be achieved on this important subject. In this report, among other things, we have also elaborated on reporting by the group’s subsidiaries. Zvika Segal | Director of Corporate Responsibility & Community Relations We are continuing our activity on the issue of employment diversity and deepening our work for the community, as is expressed in the report presented before you. We have also incorporated links to short videos in this document, from which you can get an additional sense of company activities. As is well known, EL AL is a global company, operating in dozens of locations around the world, therefore this report is being translated to English and will be distributed abroad. We are delighted that this report was written in accordance with GRI G4 guidelines, which positions us in a respectful stance along with many leading companies in the Israeli market. Good Vision - CSR Consulting Firm, of the Fahn Kanne & Co. Grant Thornton Group, continues to accompany us on CSR issues, and had also assisted in the Message from the CEO of Maala Momo Mahadav This report by EL AL is being published in proximity to the First International CSR Conference to be held in Israel. Following two decades of activity on the issue, we invited the global arena to get an impression of the Israeli experience. Israeli corporate responsibility is characterized by creativity and innovation, alertness and dynamism, focus on social challenges and caring. In recent years we see significant growth and development of the issue in Israel, also in comparison to the global arena. EL AL, one of the companies most identified with the State of Israel, reflects in its report how these characteristics are implemented in practice. Particularly eye catching are the stories of the relief aircraft following the Nepal earthquake; the EL AL Ambassadors program – aircrew members who volunteer to represent Israel abroad; air transport of sick children and so forth. No less important are the steps taken to increase employment diversity within EL AL, in a manner that is significant to the employees being hired, but also, in a company that is “not just an airline. It’s Israel”, represents the entirety of the country’s faces and identities. Even in the context of more challenging years for the aviation sector economically and certainly during better years, EL AL is operating diligently and is highly commitment, for which we convey our congratulations. Momo Mahadav | CEO of Maala - Business for Social Responsibility 1. National Carrier – Corporate Profile 8 About EL AL 9 Material Aspects 21 Dialog with Our Stakeholders 22 2. EL AL and Beyond – EL AL for the Community 25 3. Taking off with EL AL 39 Our Passengers 40 Innovation at EL AL 55 Procurement and Supply Chain 56 4.