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. Home in the World – The People of EL AL 60

5. Our Environmental Responsibility 81

6. Our Chosen Route 90 Corporate Governance 91 Ethics 97

7. Our Subsidiaries 99 Tamam 100 Sun d'or 105 Katit 107

8. About This Report and Content Index 108 National Carrier 1 Corporate Profile

8 passengers, EL AL is more than an airline transporting passengers from one About EL AL point on the globe to another – EL AL is home. EL AL Israel Airlines Ltd. was incorporated in November 1948, initially named EL G4-5 G4-3 AL Israel National Airlines Ltd., and in May 1951 was renamed to its current name. Company Locations G4 EL AL was established as Israel’s national airline, and became a prestigious The Company’s headquarters are located at Ben Gurion (BGN) Airport in Lod. DMA and unique international airline, serving a variety of customers – both private The head office houses the Company’s main functions, including financial G4 and business, from all around the world. The main activity of the Company management, human resources, acquisitions, legal department, computing, EC4 is air transport of passengers and cargo (including mail and baggage) to 34 security, maintenance and engineering, sales, customer service, marketing and direct destinations, by means of passenger aircraft and cargo aircraft. EL AL’s advertising, air operations and land and housing. passenger aircraft mainly operate scheduled flights as well as charter flights. The Israel branch offices are located in the city of Or Yehuda, and the sales Additionally, together with and via the operation of other companies in the Group, offices are in Jerusalem, Tel Aviv and Be’er Sheva. EL AL provides services related to its air transport activities, such as: the sale of duty-free products, production and supply of food for flights, provision of security EL AL Activities Abroad G4-6 services, provision of ongoing maintenance services and overall maintenance to EL AL has 28 representation offices around the world. The largest are in New other airlines’ aircraft at Ben Gurion (BGN) Airport and the management of travel York, Paris, London and Moscow. Additionally, there are countries to which EL agencies abroad. AL does not fly directly, but the Company maintains offices of representations in The guidelines directing our activity are them (such as Brazil and Argentina). productivity, efficiency, accuracy and professionalism, and thus we ensure response to the demands of our passengers at any time and place. As an Israeli airline, we consider ourselves committed to the development of the local economy, including by our continuous growth and yielding of greater economic value; to assisting the citizens and residents of the State of Israel wherever possible; and to raising the national flag with pride wherever we go. By means of an extensive global coverage, supported by an international network of dozens of sales offices, and through the unique warm service provided to our

9 G4-4 Services Provided by EL AL Passenger Transport G4-8 The main services we provide in this activity include the transport of passengers and cargo to different destinations by means of passenger aircraft. Company revenues in this segment constituted approximately 90.8% of total revenues in 2015. EL AL operates flights on passenger aircraft to 34 direct destinations in Europe, North America, the Far East and Central Asia and other destinations. In 2014 we had operated 257 weekly flights in each direction on average, and in 2015 an average of 268 weekly flights in each direction. EL AL markets passenger flights also in the framework of Interline Agreements. These agreements with other airlines enable passengers of scheduled flights (subject to certain restrictions), to use flight tickets issued by one airline for another airline’s flights. Furthermore, EL AL operates codeshare flights in cooperation with airlines around the world. Code-sharing allows an air carrier to market flights by another carrier as if they were its own, so that a passenger books a flight through one carrier, notwithstanding the fact that the passenger in fact travels with another air carrier. Code sharing enables us to increase flight television series, broadcast and print magazines as well as a sales service of frequencies offered to our customers and access additional destinations as well duty-free items. as providing marketing advantages, including enhancing the attractiveness of Starting from the 2014 Spring/Summer Season schedule, we have also been joining the Company’s “Matmid” Frequent Flyer Club. operating low-cost flights under the new “UP” brand to a number of European On our passenger aircraft on scheduled passenger flights, we operate up to five destinations. These flights offer two travel service classes: Economy Class and travel service classes – First Class, Enhanced Business Class, Business Class, Economy Class Plus. Economy Class Plus and Economy Class. Classes are distinguished from each In addition to scheduled flights, EL AL markets charter flights through its subsidiary other by type of seat, the space between seats, the food and beverage menus, Sun D’Or. manner of serving, supply of comfort and leisure products and the ratio between the number of flight attendants to the number of passengers. On scheduled The vast majority of the Company’s flight tickets are sold through travel agents flights we offer our customers a set of in-flight voice programs, movies, popular and vacation package dealers, as well as through the Company’s sales offices

10 and through telephone and internet online direct sales, to institutions and Cargo Transport individuals. EL AL has three sales offices in Israel (Tel Aviv, Jerusalem and Be’er- In terms of commercial activity, we offer cargo transport services using a Sheva) and about 29 sales offices in 21 representations abroad. Additionally, we designated cargo aircraft as well as the passenger aircraft, in the routes between sell flight tickets via 58 General Sales Agents (GSA) abroad (including direct and Israel and North America, Europe, the Far East and Central Asia. indirect destinations). Furthermore, our cargo aircraft also transports cargo from one country to another, The Company’s flights are supported by an alignment of ground services without passing via Israel, and operates cargo charter flights. that manages the process of boarding passengers and their luggage, their disembarking at the airport of destination and unloading luggage as well as The majority of Company sales in the segment of transport by cargo carrying handling cargo. Ground services are provided at BGN Airport and in each of the aircraft are made to cargo agents. In 2015, sales to cargo agents were 89% destinations in which our aircraft land. At the same time, the Company operates, of sales in the segment, and the remaining sales were made directly to final under the guidance of government security agencies, a deployment of ground customers who are not cargo agents. Revenues from this segment of activity security in all overseas airports in which aircraft of Israeli airlines land, and an constituted about 3.5% of total Company revenues in 2015. aerial security system that operates during passenger flights operated by Israeli Aircraft Traffic in the Company’s Cargo Aircraft, by Region (Ton) airlines (the BGN Airport ground security system is operated by the Israel Airports for Year Ending December 31 Authority – IAA). In this sector of our operations we use 43 passenger aircraft, all of which were To and from destination 2013 2014 2015 manufactured by Boeing1. Israel / Europe 32,749 32,071 33,389 The extensive and diverse range of our flights, alongside a wide distribution system in Israel and around the world, attractive customer clubs, high level Israel / USA 5,120 6,305 7,126 of safety and security, schedule stability and adaptation of services to market needs and the range of cooperation agreements with other airlines – all these Israel / Far East and Central Asia 32 79 71 support us in addressing the competition in the aviation market and make us Israel’s leading airline. Total 37,901 38,455 40,586

We occasionally consider the possibility of operating flights to new destinations as well as reinforcing the frequency to existing destinations, in accordance with market demands.

1 Of which 14 are leased, and 29 are owned by the Company.

11 Athens Munich 2 Hrs 20 mins 4 Hrs 5 mins Paris Bangkok Sofia Warsaw 5 Hrs 10 Hrs 35 mins 2 Hrs 45 mins 4 Hrs 5 mins Geneva Amsterdam Hong Kong Bucharest Moscow 4 Hrs 25 mins 5 Hrs 10 Hrs 45 mins 2 Hrs 55 mins 4 Hrs 10 mins Marseille Madrid New York Kiev Prague 4 Hrs 35 mins 5 Hrs 20 mins 11 Hrs 45 mins 3 Hrs 35 mins 4 Hrs 10 mins Zurich London Newark Budapest Venice 4 Hrs 35 mins 5 Hrs 25 mins 11 Hrs 45 mins Our 3 Hrs 35 mins 4 Hrs 10 mins Barcelona Mumbai Boston Destinations Vienna Berlin 4 Hrs 40 mins 7 Hrs 40 mins 12 Hrs 15 mins 3 Hrs 40 mins 4 Hrs 10 mins and Flight Brussels Johannesburg Toronto Rome Milan 4 Hrs 45 mins 9 Hrs 12 Hrs 40 mins Duration 3 Hrs 40 mins 4 Hrs 25 mins Frankfurt Beijing Los Angeles 4 Hrs 45 mins 9 Hrs 30 mins 15 Hrs 30 mins An external survey by the “Passport” Group - Israeli tourism and aviation magazine, conducted among 1,100 participants, determined that EL AL is the best airline on routes between Israel and North America, Western and Eastern Europe. In second place, our “UP” brand was chosen as the leading low-cost airline flying to and from Israel. The Company operates scheduled cargo flights to Europe (Liège) and N. America (New York)

12 G4-7 Ownership and Legal Structure During most years of its operation, EL AL had served as Israel’s National Airline and was under State ownership. In the beginning of the previous decade (2000s), the government of Israel took steps to privatize the Company, and its shares were offered to the public. At the time of publication of this report, the main shareholders are Knafaim Holdings Ltd., the public, Ginsburg Group, Delek Group and Altshuler Shaham Group2. The State of Israel holds 1.1% of the share capital issued, therefore the Company is considered to be a “Mixed Company”3. Furthermore, the State holds a Special State Share4.

Distribution of Holdings of Company Shares as of December 31, 2015

36.3% Knafaim 9.98% Ginsburg Group

43.57% Public 5.04% Delek Group

5.11% Altshuler Shaham Group

EL AL’s Organizational Structure G4-9 The Company’s day to day management is steered by the CEO and assisted by the management team, who together constitute the Company’s headquarters. 2 In January 2016, Altshuler Shaham Group became an interested party of the Company, by power of its holdings. In accordance The team is comprised of the Chief Finance Officer, Chief Maintenance and with the Articles of Association of the Company, a holding of 5% or more of the issued share capital of the Company is subject to the approval of the State in its capacity as holder of the Special State Share. As of the date of this report, the State approval Engineering Officer, Chief Trade and Aviation Relations Officer, Chief Human for Altshuler Shaham Group’s holdings of the Company’s shares as aforementioned has not yet been received 3 Article 1 of the Governmental Companies Law states that a mixed company is “A company which is not a governmental Resources and Administration Officer, Chief Customers and Service Officer, company and which half or less of the voting power in its general meetings or the right to appoint half or less of its directors are Chief Operations Officer, Chief Computing Officer, Legal Counsel and the in the hands of the State” 4 The rights granted to the holder of the Special State Share are detailed in the Company’s Articles of Association, which further Company’s Auditor. details the State’s essential interests in the Company that must be protected by means of the Special State Share. For details regarding these issues, see the Company’s 2013 periodic report.

13 Board of Directors

Organizational Structure as of December 31, 2015 President & CEO Chieft Audit Executive General Counsel Corporate Secretary

Customers Commerce & Maintenance Operation & Service HR & Admin. Finance Industry Affairs & Engineering I.T

Strategy Planning *Safety & Operations Israel Human Revenue Information & Business Controller's A/C Overhaul Quality Control Station Development Resources Management Systems Business Training & Flight In-Flight Economics & Workshops IT Infrastructure *Security Development & Organizational Pax Marketing Operations Services Fleet Strategy Development Budget & Logistics & Comm.

Cargo Customers Planning & Procurement International A/C Service & Sales Organization & Supply Affairs Maintenance

Company Commercial UP Planning & Engineering Treasurer Distribution Sys

Dreamliner Branches, Quality Project Asia & Oceania Control

Frequent Israel Program Flier Club Branch Management

* Head of Security Department and Head of Safety and Quality Department are subject to the CEO and coordinated by the Chief Operations Officer.

14 G4-9 Company Performance The data below, taken from our Annual Reports, reflects the Company’s economic G4 EC1 performance in the years 2014-2015 (in thousands of US Dollars):

Revenues by Geographical Segments (in thousands of US Dollars): 2014 2015 North East and Rest of )Operating revenues (sales 2,081,303 2,054,041 America Europe Central Asia the World Total 2015 Operating expenses )1,802,661( )1,592,844( Revenues attributed to regions 693,542 942,390 337,368 31,474 2,004,774 Payroll and benefits 348,220 351,397 Revenues not attributed to regions 49,267 Total revenues in the Gross profit 278,642 461,197 consolidated report 2,054,041

Dividends paid - )24,740( 2014 Revenues attributed to regions 680,399 973,994 342,539 33,536 2,030,468 Net profit for the year )28,060( 106,534 Revenues not attributed to regions 50,835 Total assets 1,581,620 1,664,149 Total revenues in the consolidated report 2,081,303

Total liabilities 1,470,185 1,469,367

Equity 111,435 194,782 Arrival of a 737-900 Total profit (loss) for the year )72,064( 108,087

One of our new 737-900 aircraft lands at BGN Airport | Sivan Farag

15 G4 EC4 State Funding EL AL’s strict security arrangements are determined for the Company, as they are for all Israeli airlines, by State authorities, which also bear most of the expenditure burden. The following table details direct costs related to the security of Company passengers, aircraft and employees, while distinguishing between the share of the costs financed by the Company and the share financed by the State (in thousands of US Dollars): The Dreamliner is considered to be one of the most advanced passenger State financing Company financing Total airliners in the world, and has broken the speed and distance records for aircraft of its size. In doing so, the Dreamliner proves it has the ability to transform the 2014 127,470 3,486 130,956 world of aviation. The new 787 aircraft offers many advantages, not merely for the operating airlines that benefit from its fuel efficiency, but also for passengers 2015 129,216 3,208 132,424 who enjoy its unique internal design, better air quality and great comfort.

Other than this exception ,the Company receives no special tax breaks or State benefits ,albeit it does have accumulated losses accounted for tax purposes.

The EL AL Dreamliner Geopolitical Impacts EL AL and the aviation sector in Israel in general are influenced by Israel’s and incoming tourism, as well as a slowdown in reservations by Israelis. This geopolitical situation, which significantly impacts our ability to operate indirect tendency continued in the first half of 2015 as well, with a backdrop of security flights passing via Israel (flights from one country to another, with a layover in events in Israel. Additionally, during Operation “Protective Edge” a number Israel), while other airlines tend to enhance such flights. Political or defense- of foreign airlines had suspended their flights to Israel, while EL AL strove to related events that generate security uncertainty influence passenger traffic. reinforce its flight offerings, aiming to compensate for the resulting shortage of Thus, for instance, during Operation “Protective Edge” (“Tzuk Eitan”) in the flights to some destinations. summer of 2014, there was a significant decline in the number of bookings

16 G4-13 Primary Changes During Reported Years “Open Skies” Agreement The “Open Skies” Agreement, signed in 2012 between the State of Israel and countries of the European Union and additional countries, encourages and enhances the movement of tourism to and from Israel by means of enhancing competition between the airlines. Consumers can now choose between a greater variety of destinations, flights and airlines at very affordable prices. As a result of the agreement, foreign airlines have increased their activities on lines to and from Israel. In light of the development tendency in the low-cost sector and impacts of PLACE NEW IMAGE??? “Open Skies” on competition in the sector, we have established the “UP” brand. Procurement Plan In 2015 we finalized the largest aircraft procurement transaction in the history of the Company, for the purchase and leasing of 787 (“Dreamliner”) Boeing aircraft. Following the completion of the program, our wide-body aircraft fleet will be supplemented by 16 “Dreamliner” aircraft – 7 owned by the Company and 9 leased. These aircraft would replace, over the duration of the next five years, our fleet of 747-400 and 767 aircraft, and they are intended to fly to medium and long haul destinations (New York, Boston, Toronto, Bangkok, Beijing, Mumbai, Johannesburg and more). Receipt of 737-900 aircraft Significant Role Changes in the Company During 2015 we continued the process of receiving new Boeing 737-900ER During the first quarter of 2014, former President and CEO of the Company, Mr. aircraft, whereas the fifth of eight aircraft purchased by the Company joined Eliezer Shkedi, ended his tenure, and Mr. David Maimon began his term as the our fleet in March 2015. In early 2016 the additional three aircraft of this model Company’s President and CEO. Prior to his appointment Mr. Maimon served as were delivered. These advanced aircraft have a 16 seat Business Class, and Vice President Commercial and Aviation Affairs. the Economy Class was installed with thinner seats manufactured by novel technology. On these aircraft, electrical outlets for laptops as well as USB connections are installed.

17 The structure of holdings 100% in the EL AL Group as of Sun d’or December 31, 2015. 100% Tamam 100% Katit 100% Superstar Holidays (UK) 100% EL AL Holding Companies Borenstein Caterers G4-17 (USA) EL AL holds, by varying holding degrees, a number of companies providing 50% services and products supplementary to its aerial transportation operations. Air Consolidators These companies provide services supporting our own activities as well as catering to other airlines. With these additional amenities we are able to provide 50% our customers with an extensive and diverse package of services. Tour Air 20% Holiday Lines 15% Maman

18 Summary of Main Subsidiaries’ Business Activities The EL AL Group includes a number of subsidiaries that support our activity and provide us with complementary services – including the production and supply of food, ongoing maintenance and comprehensive maintenance and the management of travel agencies abroad. Our subsidiaries also provide services to foreign airlines. The following companies are in full ownership of EL AL: Sun D’Or International Airlines Ltd. Borenstein Caterers Inc. (USA) EL AL Group’s charter operations are conducted through Sun D’Or. Sun D’Or The main business of Borenstein Caterers, a company registered in the USA functions as a tour operator for wholesalers and individuals, and markets charter and operating at JFK airport in New York, is the production and supply of kosher and scheduled flights, both by leasing full aircraft capacity to third parties, ready meals to airlines and other institutions. EL AL is Borenstein Caterer’s or the capacity of partial aircraft to a number of partners for pre-negotiated principal customer. As of December 31, 2015, the Company had 100 employees. prices, or by direct sales. Since 2011, Sun D’Or functions as a tour operator, Superstar Holidays Limited (England) while maintaining the “Sun D’Or” brand for scheduled and charter flights that it markets and are operated by EL AL (on weekdays) and by other airlines (on Superstar Holidays is a tour wholesaler, marketing tourist package deals to travel weekend and holiday flights). agents and passengers and selling flight tickets on EL AL routes at discounted prices. Superstar Holidays, with its offices located in London, has become in Tamam – Aircraft Food Industries (Ben Gurion Airport) Ltd. recent years one of the largest tour operators in the UK and France for tourism Tamam operates primarily to produce and supply kosher ready meals to airline to Israel. Superstar also operates in several other countries. As of December 31, companies. Recently, Tamam expanded its non-aviation activities to include 2015, Superstar had 10 employees. catering services to institutions. EL AL is Tamam’s principal customer. Katit Ltd. Katit’s main practice is the production and supply of meals for Company employees.

Additional information about the companies Sun D’Or, Tamam and Katit can be found in a later chapter in this report.

19 Summary of Business Activities of Main Held Membership in International Organizations G4-16 Companies, Which are Not Subsidiaries EL AL is a member of international organizations in the aviation world, and its Cargo Consolidation: Air Consolidators Israel Ltd. (ACI) representatives partake in these organizations’ committee activities: ACI’s main business is the consolidation of air cargo at BGN Airport, enabling · International Air Transport Association – IATA cost reduction for aerial delivery. Cargo transportation is carried out by EL AL at And its Operational Safety Audit program – IOSA special rates, as well as through foreign airlines. The company has 20 employees · International Civil Aviation Organization – ICAO and is located at the Maman terminal at BGN Airport. · Flight Safety Foundation – FSF Flight Marketing: Airtour (Israel) Ltd. (or “Tour Air”) Currently Airtour mainly deals with the marketing of EL AL flights and special offers to all our flight destinations. EL AL pays Airtour for the services it provides, and also participates in some of its operating expenses. Airtour has 65 employees and its offices are located in Tel Aviv-Yafo. Touring and Hotels: Holiday Lines Ltd. (“Holiday Lines”) Holiday Lines deals with marketing and sales of tourist services, including as wholesaler and organizer of charter flights to and from Israel. Holiday Lines marketing operations are conducted through travel agents, as well as by the allocation of seats and tourist packages to end consumers. Maman - Cargo Terminals and Handling Ltd. (“Maman”) Maman’s main activity is the management and operation of a cargo terminal authorized to handle all import and export cargo at Ben Gurion International Airport, pursuant to authorization granted by the IAA. Additionally, Maman operates logistical services and real estate rentals, and provides aviation services. Maman operates in Israel, the Czech Republic and India. Maman is a public Company, traded at the Tel Aviv Stock Exchange. Maman has approximately 2,440 employees.

20 G4-18 Material Aspects We have identified Material Aspects for this report through a process that included: Material Aspects Identified and Selected for Reporting G4-19 .. Identifying potential material aspects: At this stage a meeting was held with Reported Aspect Aspect Boundary (Chapter) G4-20 the organization’s internal communication forum and department managers, Pages as well as meetings with other relevant factors within the Company. In these G4-21 meetings the participants raised topics that they consider to be core for the Economic performance The Company and its subsidiaries: (1) 9, 15 Company. Additionally, topics addressed by our previous reports were taken Tamam, San D'or and Katit (7) 100, 105, into account. 107 .. Identifying material aspects for our stakeholders: Based on interviews Contribution to the The Company and its subsidiaries: (2) 26 -38 and conversations, surveys, questionnaires and feedback forms that we community Tamam, San D'or and Katit (7) 103, 107 circulated in the process of composing this report, as well such that we send Developing the human The Company and its subsidiaries: (4) 69-73 to our stakeholders regularly. resource - Training Tamam, San D'or and Katit (7) 101, 105, .. Examining Material Aspects in G4-Standard CSR reports by leading and empowerment of 107 international airlines, as well as the list of Material Sustainability Topics listed employees and managers in the Sustainability Accounting Standard (SASB Standard) for Airlines, Employee health & safety The Company (4) 77-78, 80 which aims to assist investors who are interested to invest in companies, in Employment diversity The Company and its subsidiaries: (4) 61, 63-64 their examination of social responsibility policies. and equal opportunities Tamam, San D'or and Katit (6) 91 .. Review of media clippings about EL AL during 2014-2015. (7) 101, 105-107 Ultimately, the list of material aspects addressed by this report was formulated. Employment The Company (4) 61, 64-65, The list was presented in the Corporate Governance Committee meeting of the and work environment 77-78 Company’s Directorate. Employee rights & welfare The Company (4) 73-77 Service and customer The Company and its subsidiaries: (3) 40-41 satisfaction Tamam, San D'or and Katit (7) 41, 100 On-Time Performance The Company (3) 43

21 Passenger health & safety The Company and its subsidiaries: (3) 44 Tamam and San D'or (7) 102 Reduction of greenhouse The Company and its subsidiaries: (5) 82, gas emissions Tamam, San D'or and Katit 83-85 Stakeholder Manner of Conducting Dialog Energy consumption – The Company and its subsidiaries: (5) 82, 86 electricity and fuel Tamam, San D'or and Katit Customer Surveys more than 10,000 customer survey Water and sewage The Company and its subsidiaries: (5) 82, 86 questionnaires are received monthly, addressing 15 difference Tamam, San D'or and Katit topics concerning services provided to customers. According Waste management The Company and its subsidiaries: (5) 82, to need, we also conduct additional ad-hoc surveys. San D'or and Katit 87-88 Proactive interaction with customers we initiate interactions Corporate governance The Company (6) 91-96 with our customers as part of our own service assessments Business ethics The Company (6) 97-98 and continuous strive for improvement, and also in response to specific cases that require the Company’s attention.

Initiated meetings with customers fortnightly meetings are held with luxury customers at the airport, as well as quarterly G4-24 Dialog with Our Stakeholders Customers customer meetings, attended by hundreds of our customers. G4-25 Our activity impacts many people in Israel and around the world: we employ Focus groups to identify needs from time to time and thousands of people locally and in other countries, engage with many suppliers according to need we hold meetings with customers to G4-26 in Israel and globally, and our flights serve customers from all corners of the identify needs and adapt the services offered by EL AL to earth. We therefore attribute great importance to maintaining continuous and its customers. This way, for instance, activities to define G4-27 constant dialog and discourse with the factors which we identify to be our and characterize the future Dreamliner aircraft included stakeholders, who are impacted by the activities of the Company, and naturally the participation of our luxury customers in the process of also have impact on it. examining seats for the new airliners.

The dialog with our stakeholders improves us as a company, and helps us to Initiated inquiries Company customers also approach us of adapt our services and our conduct with our stakeholders in accordance with their own volition in different ways, including via our website needs arising from the field. or social media.

22 Stakeholder Manner of Conducting Dialog Stakeholder Manner of Conducting Dialog

A company-wide employee service survey is conducted We maintain constant communication with our suppliers. once a year and a service survey is undertaken quarterly by The Company’s Procurement and Supply Department the Human Resources and Administration Division. maintains contact with supplier through various media.

Regular conversations are held with employees in different We conduct unique service workshops for taxi drivers Company units. Suppliers servicing our aircrews.

Employee conferences take place at least once annually. From time to time we circulate supplier surveys. A survey as mentioned was undertaken at the end of 2015, Ongoing CEO meetings are held with representatives of responded to by 17 suppliers, in varying extents and means the different units. of communication. Employee inquiries are send using the “Tafnit” The Company’s Director of Corporate Responsibility & computerized system and the Company’s internal portal. Community Relations is responsible for the ongoing contact Internal communication with employees are conducted via with different nonprofits and social community organizations. Employees the internal portal, through information screens positioned As will be expanded in section “EL AL for the Community”, we throughout the company campus, by a periodic messages conduct extensive activities with many social organizations, Community from the CEO and the monthly organizational newsletter and we are proud to take part in common and joint activities and Social sent to all Company employees in Israel and abroad. for the benefit of Israeli society. Organizations An Employee Ombudsman is available, and employees From time to time and according to need we circulate can address management via an anonymous email questionnaires and feedback forms to nonprofits and account. Additionally, inquiries can be directed to the organizations in which our employees volunteer. These Company’s internal auditor according to need. questionnaires and forms are intended to better understand the needs of these organizations. Annual feedback meetings are held with Company managers and employees.

23 Stakeholder Manner of Conducting Dialog

As a public Company, the relationship with our investors and their representatives is very important to us. We pay heed to maintain constant discourse with them, and from time to time hold conferences and investor meetings. We held one such conference in September 2015 at the Investors Tel Aviv Stock Exchange. The conference addressed the Company’s strategic direction as well as the subject of the big Dreamliner aircraft procurement plan. The conference was a great success and we were happy to meet representatives of financial bodies, leaders in the Israeli capital market, investors, analysts and investment managers. One of the conditions for the success of EL AL group is maintaining constant and continuous business Investors’ conference at the Tel Aviv Stock Exchange discourse with our subsidiaries. Employees of our subsidiaries partake in various Company Subsidiaries activities, including training workshops and seminars, events and activities in the community.

In the framework of writing this report we held meetings with the managements of subsidiaries Tamam, Katit and San D’Or. On issues directly pertinent and affecting our business activity, Dialoging with customers: Customers evening as part of Company dialog Governmental seat selection for Dreamliner luxury classes. EL AL also maintains discourse with regulatory factors, Authorities governmental authorities and their representatives.

24 EL AL and Beyond 2 EL AL for the Community

25 EL AL for the Community

G4 DMA The Management Approach Social Investment Policy

G4 As a leading Israeli Company with genuine and unique affinity to the State of EL AL focuses its social investments on initiatives addressing education, EC7 Israel and its values, we have been working for many years for the benefit of the entrepreneurship and innovation, fighting poverty, inclusion of people with

G4 community, Israeli society and Jewish communities around the world. disabilities and support of the IDF. Our social investment policy constitutes EC8 a basis for a work plan that defines the fields and subjects of EL AL's social Our motto in Hebrew is to be "most at home in the world" and such is our G4 investment; the resources dedicated to the topic and policies to define them; SO1 commitment; we consider it an obligation led by our morals and values to be an the affinity between the Company's social investments and its business activity; Israeli company that benefits the community within which it operates and Israeli social partners for the realization of the policy; objectives and measures for society as a whole. For many years now we have been privileged to initiate as well success; and the procedures of rigor ensuring recipients of donations uphold as support and partner with social initiatives that aim to minimize social disparities, legal provisions. fight poverty and promote and nurture vulnerable populations. Additionally, our Israeli-ness is also expressed by our activity for the benefit of IDF soldiers and in promoting Israeli public diplomacy in destinations reached by our flights. Encouraging Employee Volunteerism We encourage our managers and employees to volunteer and thus implement Gestures made by EL AL strengthen our perception of the Company's narrative personal and organizational values of partnership and cohesion. EL AL expects as a national airline that is a partner in the advancement of Israeli society and its managers and employees to volunteer, and encourages them to do so by creates long term relationships with the community. assisting them in locating a volunteering framework, making connections with Our commitment to these was defined in the Company’s Community Policy volunteer institutions, facilitating training etc. The Company considers the creation and is expressed by a number of foci and initiatives, in which we aspire to of dynamics that continuously broaden the circle of volunteers to be of importance, make the most of our abilities and relative advantages, through our employees and expects its managers to exhibit personal examples in this regard. volunteering and by financial or in-kind contributions – all these while basing long As part of generating and encouraging an atmosphere of volunteerism in term partnerships with community partners. the Company, excelling volunteers among employees are recognized in the Company's Annual Excellence Ceremony and appreciated for their activities. Volunteering activity also constitutes one of the criteria in employees' achievements weighted for receiving an Excelling Employee Award.

26 During the years 2014-2015, there was an increase of about 121,934 points to fly young Jews from abroad to Israel for their initial introduction 55% in the number of Company people volunteering in one of to Israel, in cooperation with "Taglit – Birthright Israel". the varied projects the Company is involved with. 124,850 points to fly lone soldiers to visit their families abroad, in cooperation with "Ha'aguda Lema'an Hachayal – The Association for the Wellbeing of Israel's Soldiers (AWIS)".

25,735 points as part of the CEO Community Fund. As of 2015, the percentage of volunteers – on a permanent and G4 EC7 one-time basis – was 7.36% of Company employees, some 420 The donation of flight points is at the expense of EL AL only, and is granted quarterly. employees who contributed more than 10,000 volunteer hours! G4 Projects for IDF Soldiers EC8 The average scope of permanent volunteer hours per employee in 2015 was 29 hours, and the Adopting Battalion 202 (Tzefa) average scope of average one-time volunteering Since 2011, we have been adopting battalion 202 "Tzefa" of the paratrooper regiment, in the framework of the "Adopt a Fighter" project by ""Ha'aguda Lema'an per employee was 5 hours. Hachayal - The Association for the Wellbeing of Israel's Soldiers (AWIS)". The During 2016 we intend to increase the percentage of volunteers among our project links companies and army battalions to be adopted, supported and employees, as well as the scope of average volunteering hours per employee. assisted in different ways. As an airline proudly displaying the national flag on its fleet, we are proud of our partnership battalion 202, which participates daily in G4 EC7 GlobaLY the defense of the State of Israel, and we consider its soldiers to be part of our As part of our efforts to strengthen relationships with Jewish communities around EL AL family. the world, we have been managing for several years a program dubbed GlobaLY – In addition to our fiscal donation, adoption of the battalion is expressed by: a unique club membership card issued to Israel supporters in the diaspora. As part • Preparation workshops for soldiers about to be discharged from the army of this program, EL AL donates flight points in support of four meaningful goals. held 3 times during the year, and include an employment fair presenting During 2015 we have donated in this framework – different positions at EL AL, in which discharged soldiers could be integrated. 121,934 points to fulfill the wishes of children with life endangering illnesses, in • Inviting families of officers and NCOs to events held by the Company for cooperation with "Mishelet Lev - Make a Wish Israel". families its employees.

27 • During 2015, we have temporarily employed 35 soldiers in economic hardship, who were entitled to army leave due to special circumstance, during which they are permitted to work. • Joint events for Company employees and managers with soldiers and officers of the battalion – mutual hosting, shared meals etc. • Special meals in the field for battalion soldiers during training and battalion activities – another opportunity for a warm hug. • Together with our subsidiary "Katit", in 2015 we arrived at the battalion's final evening of training before it leaves for deployment by the Gaza Strip boarder. During the evening, Katit personnel and members of the flight attendants' Steering Committee treated the soldiers and officers to an affluent dinner, Wounded Soldiers and Disabled Veterans - A Moving Post-Army-Discharge Trip which included an appreciation ceremony for excelling soldiers and a summary of their training period by the Paratrooper Brigade Commander In 2015 we partnered for the first time with the touching flagship project of the and the Battalion Commander. Friends of the IDF Disabled Veterans Association – "Discharge Trip", aiming to provide wounded IDF soldiers with a unique opportunity to complete the Israeli • In the Company's Annual Excellence Award Ceremonies, in addition to experience that has become a tradition for soldiers finishing their army service. employees, excelling soldiers of the battalion and its units are also recognized Twenty wounded soldiers, injured during Operation "Protective Edge" and by the CEO. previous Israeli army operations (Cast Led, Defensive Shield etc.) departed on Our cooperation with the battalion has deepened over the years. The people the "army discharge trip" and headed toward magical India. For 14 days, the of EL AL, both managers and employees, are attentive to the needs of Tzefa injured veterans dealt with complex physical and mental challenges, which will battalion's combatants and are available for their every request. help them in the future through their personal rehabilitation journeys. The joint process with EL AL employees included a long preparation; construction of a joint communication plan; a touching meeting of our team of flight attendants and pilots at Beit Halochem in Tel Aviv; and peaked at the "Discharge Party" event at the King David Lounge at BGN Airport, with the participation of injured soldiers and their families, the Company's management headed by the CEO, Chair of the Friends' Association, CEO of the IDF Disabled Veterans Association and personnel and crew of the trip.

28 The "Discharge Trip" project is an additional layer of the strong bond between EL AL and IDF soldiers. We are happy to be part of this special project and to enable the wounded to find closure, go on their post-army-discharge trip and open themselves up to new experiences and opportunities. We intend to continue this project into 2016 as well. EL AL aid flight returning home from Nepal

IDF wounded soldiers and veterans with disabilities in a moving meeting with the EL AL aircrew flying them to India

G4 EC7 A Flight that is a Mission – to Nepal and Back The landing in Israel of 250 Israelis who had experienced the horror of the tragic earthquake that shook Nepal in April 2015, concluded a flash operation by EL AL that will be remembered as one of the most moving flights piloted by the Company in years. The 747 that delivered the delegation of Israel's Homefront Command to Kathmandu, departed back to Israel carrying special cargo: two- week old babies and their young parents and grandparents, who were extracted from the disaster-stricken country. Returning home – landing of the flight from Nepal at BGN Airport | Sivan Farag The earthquake that hit Nepal had devastatingly damaged hospital infrastructure For EL AL's crew members, who have been active for 82 straight hours, this and caused harsh sanitary conditions for the newborns, who arrived following was an unusual experience. Our crew made extraordinary efforts to ease the a complex surrogacy process, some of them prematurely born. An immediate passengers' journey home, and the feedback received from them upon landing need arose to bring them to Israel and to continue their medical treatment, and was especially touching. naturally EL AL volunteered for the mission.

29 G4 EC8 "Small Change Makes a Big Difference" Project ALEH As part of this fundraising operation, in collaboration with Bank Hapoalim, EL AL EL AL flight attendants occasionally conduct volunteering activities at Nahalat Eran passengers receive envelopes in which they are invited to donate "small change" – ALEH's Negev rehabilitation village for children and adults with severe disabilities in Israeli or foreign currency. The money contributed is transferred on behalf of the passengers to "ALEH – Care for Children with Disabilities" and "ALUT – Israeli Society for Autistic Children". Additionally, a number of young adults with autism are employed in the process of sorting the change, thus receiving an employment framework and monetary income. EL AL employees work on this project with much love, benevolence, care and sense of mission. Beyond the desire to operate the project in a smooth and professional manner, many of them also offer additional ways to improve it… It is exciting to meet so many people from our national airline whose touch in this project is a The bicycle ride continues – bike ride to Nahalat Eran 2015 | Sharon Ohad touch of love." Rachel Rosenman, ALUT Resource Development Manager A group of Company employees participates every year in a bicycle ride to Eilat. On our flight attendants course we hold a meeting with a parent of an ALUT or ALEH In 2015 the trip was dedicated to ALEH. The cyclists group was comprised of child, in order to make a connection between our flight attendants and this project. 35 riders, men and women, from all Company divisions. On the second day of the ride, the group arrived at Nahalat Eran. Our bicyclists met with the village During 2015, total donations collected in this project amounted to manager and conducted a tour and a ride with a few of the village children. Members of the flight attendants' Steering Committee also joined the visit. ILS "EL AL Ambassadors" The "EL AL Ambassadors" program has been active for 5 years in collaboration with the Before Passover Eve this year, we distributed Haggadot as a gift to passengers Jewish Agency, Israel's Foreign Ministry and on flights departing from Tel Aviv and New York. It was a unique Haggadah, the public education nonprofit StandWithUs. As illustrated by ALUT children with autism, dedicated as a holiday gift for EL part of this program, our aircrew personnel – AL passengers, in appreciation of their contribution during the many years of pilots and flight attendants – meet with students partnership in the "Small Change Makes a Big Difference" project. in universities, local Jewish communities and

30 various organizations to talk about their lives in Israel, their families, their choice to live in Israel and their personal visions for the future of Israeli society. In doing so, our employees take an active part in representation, information, marketing and the improvement of Israel's image in the world. For this project, flight attendants and pilots with language and rhetoric skills were selected, who wish to present Israel's beautiful and positive facets. The participants underwent an intensive training program by the project's partner organizations. All activity in this framework is conducted entirely voluntarily by the pilots and attendants, at the expense of their free time while abroad. Since it was launched, about 250 aircrew personnel have been trained as part of this project, speakers of English, French, Russian, Amharic, Spanish, Chinese, Turkish and even Yiddish. During 2015, project participants held more than 90 public information events, and in total since the project had started until the end of 2015 – more than 350 events were conducted to audiences totaling tens of thousands of people in the USA, London, Paris, Hong Kong, India, China and other locations. To mark 350 information events held around the world, toward the end of 2015 an event was held at the home of Israel's General Consul in New York, Mr. Ido Aharoni, during which the managements of the Company and the Ambassadors program were presented with a special token of recognition from leaders of Jewish and pro-Israel organizations in New York. EL AL Ambassadors receiving tribute by Israel's Consul General in New York, Mr. Ido Aharoni | EL AL New York At EL AL we take pride in this pioneering Israeli initiative, and in our people who volunteer continuously. We congratulate all of our ambassadors for their activity, presenting the beautiful side of Israeli society in general and EL AL in particular, and their devotion to reinforcing the deployment of Israeli public diplomacy.

31 Proud to Be Israeli - Israel's 66th Independence Day Aerial Demonstration In 2015 we participated for the first time in the aerial demonstration on the occasion of Israel's 66th Independence Day, together with the Israeli air force. Our pilots were excited to fly over Israel's beaches, above Jerusalem, and to land back safely at BGN Airport.

Our aircraft in the sky above 66-year independent Israel | EL AL PR

EL AL Independence Day Aerial Demonstration

32 "Young Entrepreneurs" Project display stands and presentations by competitors of their products to a panel of judges and answering their questions. Our employees visit the stands and select The collaboration between EL AL and the "Young Entrepreneurs" Project, which their favorite team. In 2015, the Kiryat Hayim Comprehensive Municipal High encourages teenagers to develop independent thinking and economic action, School won first prize for the application they had developed, intended to prevent intends to nurture business entrepreneurship among them. Since its foundation the use of mobile phones while driving. in 2006, the project has become a tradition for both organizations. As part of this collaboration, representatives from dozens of "young entrepreneurs" groups G4 "Larger than Life" EC7 visit our campus, the workshops, the training center and control center and learn about company activity. For close to a decade, we have been assisting the "Larger than Life" nonprofit organization to take groups of children on their dream trip. The project supports children coping with cancer and their families who fly with them, as they take time off their treatments and associated hardships, and provides them with an opportunity to enjoy themselves as only children can. Additionally, EL AL employees help the children through the check-in and baggage drop process and escort them on their flights and during their stays in the USA. We also partake in operating the organization's "Smile Train" on Purim – a festive happening intended for the children and their families, as well as additional events and projects.

G4 Students from the local school in Kiryat Haim receiving the trophy from the Company's CEO | Uri Yaloz "Orr Shalom" EC7 In both organizations' perception, the collaboration enables young entrepreneurs The cooperation with "Orr Shalom", an organization treating children to examine closely how a large business operates in the Israeli market, how to at risk from across the Israeli social spectrum according to a well- identify business opportunities, what is responsibility, what constitutes good service established treatment philosophy, was planned back in 2010. Once a week, a and the importance of contribution to the community. The feedback received from group of EL AL flight attendants arrive at an Orr Shalom family house and conduct students, instructors and teams of young entrepreneurs indicates a significant, enriching, recreational, playful and fun activities for the children. It can certainly enjoyable and contributive experience, and they all express appreciation for the be stated today that this connection has become a real asset for parents, staff extraordinary dedication demonstrated by the people of EL AL. and, of course, the children, for whom the volunteers constitute true role models. Every year, ten select groups participate in the "Young Entrepreneurs Fly EL AL" Every Purim holiday, EL AL volunteers help the organization by sales of competition, which is held in the Company campus. The event includes colorful Mishloach Manot (traditional Purim food gift package) with all revenues intended

33 to benefit children's houses and activities. The volunteers operate sale stands at Employing "Nehalim" Students G4 the Company campus, resulting in the collection of tens of thousands of Shekels EC8 that contributed greatly to the success and continuity of the project. For over two decades, every year we have been employing students from the "Nehalim" Religious-Technological Center, which aims to build a better future In the last two years we have been working together with the organization on a for youth at risk by providing them with professional training. As part of the new volunteering project at the Goldschmidt Home for Girls at Mevaseret Zion, employment project, "Nehalim" students are given a paid work placement for led by the flight attendants' Steering Committee. This year the committee held a two days a week in EL AL's transport and ground equipment garage. The work Bat Mitva event for the girls, in cooperation with aircrew volunteers and soldiers placement usually also continues during summer vacations and even after their from our adopted 202 battalion. high-school graduation until their army recruitment. EL AL employees tutor and mentor the students and provide them with professional skills and values as well "Teaching Together" as a sense of independence. In 2015 we employed 22 students via this project. As part of the "Teaching Together" project, EL AL employees volunteer as G4 teaching auxiliaries, who spend time with teachers in classrooms, assist them Adopting "Kadima" Youth Houses and Clubs SO1 in their work, contribute from their own experiences, provide additional tools for students and present an additional role model in the classroom. At the same time, EL AL employees and retirees also volunteer in the community nearby, in the volunteers are exposed to teaching and education from the teacher's perspective, "Kadima" youth houses in Ramla, Or Yehuda and Kfar Saba. These youth gain recognition of the complexity of the position, become ambassadors on the houses support and help children and youth at risk and distress. teachers' behalf and might even assist in relieving tensions that sometimes arise "Thanks and appreciation to the management and between parents and teachers. employees of EL AL for this blessed, long-lasting "It is a great pleasure to see the children learning partnership, which expresses EL AL's way and and evolving from one meeting to the next, and Israeli solidarity at its best. We are proud that EL especially to see them working meticulously AL chose us too as a framework for support and on a long term project with enthusiasm that volunteering by its employees for the community accompanies them throughout the meetings". in general and those in need in particular". Tania Lanziner, Flight Service Manager, volunteers at HaNisui School in Jerusalem, 2nd & 3rd grades. Gilad Harish, "Lasova" (Kadima parent organization) Founder and Chair. Over the last two years, many volunteers among our employees have joined this In this volunteering framework, our people arrive at the youth houses to do project and presently dozens of employees participate in it. homework with the trainees and, among other activities, help trainees prepare for their matriculation exams.

34 Activities during Operation Protective Edge During the hard fighting days in the summer of 2014, we could not but take part in the national effort. Our employees, with a sense of national partnership, joined many diverse activities for the benefit of residents of the South and IDF soldiers - both those in military service and on reserves duty - among whom were also our employees and their families. The myriad of activities included preparation of thousands of care packages and Activity at the Youth House in Ramla gift boxes for families and children from the South and for soldiers, including On the occasion of Women's Day, EL AL employee Galit Birenboim-Navon our adopted battalion 202. We sent packages of "good things" accompanied by lectured about women's empowerment, with a talk titled "Every Girl Can – Running heartwarming greetings to the families of our own people who were recruited, to Toward Your Next Dream". Galit told the girls at the youth house how, starting sweeten, even slightly, these complex days they were going through. from running only 1 km, she came to run a 61 km ultra-marathon and fulfilled a During the fighting days, we hosted groups of children from Ashqelon and other dream. The empowering evening ended by awarding every girl with a gift. southern localities. The children were given hearty EL AL breakfasts, watched a movie, toured Company facilities and the BGN Airport, had lunch at the Katit restaurant and enjoyed every minute. They were accompanied by volunteer flight attendants throughout the day. As part of our activities for the benefit of residents of the South, we also hosted, on Company grounds, a special fair of businesses from the South, which were financially hit by the war. The people of EL AL opened their hearts and wallets and made the fair a great success. Finally, at the end of the war, we led Operation Protective Hug, and flew in to Israel parents of lone soldiers, so that they could celebrate Rosh Hashana with their children. In cooperation with the municipalities of Ashqelon and Beer Sheva, after the warring days we flew groups of children from both cities to Paris and Johannesburg. We donated the flights, while the stay abroad was contributed by Rosh HaShana "Protective Hug" event that we held for lone soldiers and their families the hosting Jewish communities.

35 The Company hosted the organization "Friends for Health" for traditional lightning of the candles of Hanukkah

It is important to mention that a multitude of additional activities were undertaken by people from all parts of the Company that could not all be detailed in this limited capacity.

G4 G4 EC7 Activities by the Cargo Division Additional Activities EC7

G4 Our cargo division also partakes in extensive activity for the community: • During 2014-2015, Maintenance and Engineering Division personnel G4 EC8 have enlisted once again to assist the robotics team of the Atid Lod High SO1 • As part of a touching project conducted with a lot of love, we subsidized the School for Sciences, in preparation for the International FIRST Robotics flights of more than 100 dogs from municipal kennels across the country to Competition. The body of the robot that represented the Atid team in the a new pension in Canada. The project was accompanied by the municipal national competition was constructed in Company workshops by the high kennels and by volunteers, who escorted the dogs throughout the process school students, under guidance of EL AL professionals. up to the boarding of the aircraft. • Additionally, our workshop staff occasionally fix up wheelchairs for the • Following the earthquake that took place in Nepal in April 2015, EL AL different rehabilitation departments at Tel HaShomer Hospital, and construct and the cargo division responded to the request made by the Ministry of special accessories for the Israel Guide Dog Center for the Blind at Beit Defense to launch a special aid flight to the disaster stricken country. The Oved, in effort to improve the dogs' conditions as well as the guidance of special aid flight departed on a 747 aircraft, carrying 85 tons of equipment, the blind. which included tents, medicine and a field hospital. From the moment the appeal was received, arrangements were made in a very short period of • EL AL employees volunteer in Ramla also in a joint afterschool club for time, and solutions were found for our cargo customers, while maintaining Jewish and Arab children operated by "Yad Rachel". At the end of the the qualitative regular service we usually provide them. Mobilized to this volunteering year, the children came for a special experiential tour of the complex effort, in close cooperation, were the Ministry of Foreign Affairs, the Company campus. Homefront Command, the Ministry of Defense, EL AL representative offices • As part of a cooperation with the ARTMARKET Gallery, the King David in the Far East and Israel's embassies in India and Nepal. Lounge hosts a changing exhibit of promising young Israeli artists. This way we provide a platform for Israeli artists taking their first steps and encourage the consumption of Israeli art and culture. • Additional activities are undertaken during holidays and vacations and in response to various initiatives of Company employees etc.

36 G4 EL AL Volunteering Pensioners Donations EC8 One of the ways to maintain our relationship with Company pensioners, who Our community contribution is regulated by a defined procedure. The Chief served the Company for decades and gained abundant professional knowledge, Human Resources and Administration Officer is responsible for its execution. is by creating a framework for them to volunteer in cooperation with the Company. 2014 2015 Thus, for instance, EL AL pensioners volunteer at the "Kadima" youth houses, "Yad Sarah" and "Milbat", aiming to improve the quality of life and integration into society of children, adults and disabled elderly people; they also take part in the 302,265 335,572 "Asif Ha-ir (Second Harvest)" project by "Lasova". Financial contribution Financial contribution During 2015, EL AL pensioners contributed approximately 2,380,000 2,590,928 2,000 volunteer hours! Money equivalents Money equivalents

In this context, we should also point out that as part of tax-free sales on EL AL flights, we offer key chains designed voluntarily by Michal Negrin. The income from sale of these key chains is transferred as a donation to the Israel Cancer Association. During 2014-2015, about NIS 730 thousand were collected thanks to this activity!

37 G4 Concessions Committee EC8 The concession committee is qualified to authorize discounts on plane ticket sales on medical and humanitarian grounds. During 2014, discounts in the amount of USD 22,947 were approved, and in 2015 the committee approved Volunteering EL AL employees Appreciation event for EL AL volunteers USD 18,608 of discounts.

Volunteering activities of Company employees

38 Taking off with EL AL Passengers | Innovation 3 Procurement

39 Our customer service approach relies on four pillars: Our Passengers 1. Excellent Service Awareness G4 DMA The Management Approach Creating excellent service awareness among all employees who have daily EL AL provides its services to passengers both from households and the business contact with customers. For this end we maintain strict selection processes for sector, including occasional customers, luxury customers, frequent tourists to our flight and ground attendants, for EL AL posts around the world and for our Israel, groups from the Haredi sector and groups of assisted customers. Our call centers. We seek candidates with service awareness, a high personal level flight tickets are sold mainly through travel agents and marketers of tourist and very high tolerance and forbearance capabilities. packages, and also directly by the Company to institutions and individuals. In In addition to emphasizing service awareness on basic personnel training terms of cargo, as abovementioned, most Company sales are made to cargo courses, we conduct trainings, workshops and seminars for the purpose of agents, and other sales are conducted directly with final customers. assimilating such awareness. Qualitative service to our customers, who are major company stakeholders, has 2. Dialog and Continuous Communication with Customers G4-26 been and remains one of our key assets. We devote great effort to providing a In addition to providing our customers with comprehensive information, it is professional and qualitative service that meets the very highest standards and important for us to maintain constant communication with them and to also G4-27 differentiates us from other airlines. In order to uphold these standards, to adapt hear what they have to say. EL AL collects more than 10,000 customer surveys ourselves to varying market demands and the expectations of our customers G4 monthly, addressing 15 different issues in the service received by the customer. PR5 and to improve where possible, we do our best to be attentive to the public and Whereas research indicates that surveys of this kind are usually responded by maintain open dialog with our customers. an average of 3% only, at EL AL we rate at 14% responders! Survey results are Beyond the service experience on board, we emphasize the provision of received monthly, and we set targets and evaluate ourselves accordingly. assistance, information and additional services to the customer also before liftoff We further conduct additional designated surveys according to need. and after landing. With all novelties and changes, decency and transparency have been and still remain primary values in our conduct with our customers. In addition to surveys, we meet with our customers in person: At EL AL we devote effort to intensive activity all year long, on the ground and • Once a fortnight we conduct luxury client meetings at the airport. in the air, in Israel and abroad, with dedication and care, aiming to provide our • We conduct quarterly customer meetings headed by the CEO. Hundreds passengers with the best possible flight experience and striving to position EL AL of customers participate in these meetings, more than 80% off whom are in the forefront of leading global airlines. Economy Class passengers.

40 G4 2014-2015 Survey Figures PR5 Number of Survey Responses Received Annual Quantities of Complaints/Praises on Service Quality Issues 2014-15 Percentage of Inquiries Responded Proactively 2014-15 138000 138000 3.0 137000 2.94 37% 136000 2.5 2.65

135000 2.0 134000

133000 1.5

132000 1.0 17% 131000 132000 0.85 0.79 130000 0.5

129000 Normalized Normalized Normalized Normalized praises complaints praises complaints 2014 2015 2014 2015 2014 2015 * The number of inquiries is normalized to 1,000 passengers, in keeping with the customary presentation of this data by airlines. ** Complaints and praises refer to service of ground attendants in stations in Israel and abroad, aircrews, call center and our offices. Thousands of complaints and commendations are received every month, and we Whereas research indicates that surveys of this are not indifferent to the constructive criticism and feedback from our customers. kind are usually responded by an average of 3% Customers are also invited to approach us on their own initiative, through the only, at EL AL we rate at 14% responders! Company's website or Facebook page. The Customer Relations Sub-Department 3. Constant Learning and Improvement is responsible for addressing customer inquiries, among other things. Every fortnight a discussion headed by the manager of the Customer Service The prominent topics arising from the various surveys held among EL AL Division is held, and once a month a discussion is headed by the CEO. These customers are, among others, the passengers' sense of security and safely and sessions include evaluation of meeting our targets in the area of customer service, the issue of on-time performance. Additional issues in which our customers have and examination of issues for preservation and further improvement on this matter. shown interest in recent years include: new destinations, flight schedule updates, new aircraft used, how we address customer feedback, as well as additional service related matters relevant to Company customers.

41 4. Proactive Treatment In addition to the abovementioned, we also approach our customers in a proactive manner. A quarter of received inquiries from customers are assigned proactive treatment. We train our employees to identify situations in which such treatment is required and report them, so that customers would indeed receive appropriate treatment. Additionally, flight service managers are equipped by a unique tablet-computer- based system – iMashab. It is a great auxiliary tool that helps manage the service in the passenger cabin and the provision of qualitative customer service. The system provides full information about the flight and passengers, and allows us to deliver effective service, adapted to customer preferences and needs, in a personal manner. Online reports can be received and transmitted via this system, for ongoing customer treatment. Ground crews and office personnel iMashab system screenshot Our Service Convention receive constant updates, so they can respond immediately to arising issues. Thanks to this system, our customers are not "anonymous" and receive unique personalized service. The information in the system is, of course, secured, and erased from the tablet immediately following the flight. This system was awarded a special excellence award in the Mobility 2014 competition by media outlet "People and Computers", for "intelligent use of mobile infrastructure that generates an innovative service perception, accompanying the passenger from the moment of booking the flight". The judges' panel also mentioned that "EL AL is a pioneer of implementing applications in the world of business mobility". Investment in Customer Relationship Management

(CRM) Systems serves about 500 users in the organization, manages over a million club To manage our customers, we have assimilated the use of an advanced CRM members, tens of thousands of occasional customers, hundreds of businesses, system, which has grown and evolved with time. Presently the system already travel agencies, cargo agencies and tour operators.

42 G4 On Time Performance Safety and Security on Our Flights DMA

At EL AL we consider on-time performance to be a strategic goal and do our Safety and security on our flights are naturally material aspects for us, as an G4 best in order to achieve the upmost punctuality in takeoff times, and to head the airline. Our management's outlook on the topic is expressed by the Company's PR1 world's leading companies in this issue. Safety Convention. On-time performance has always been an important aspect of our service perception. EL AL is considered to be one of the safest companies in the world, and not in Keeping departure and arrival times immediately, directly and significantly influences vain. We attribute upmost importance to the safety and security of our flights, the Company's reputation and the satisfaction of our customers. and spare no resources in doing so. With regard to security issues, we operate under instructions from national security authorities and we work in full and close On-time performance is measured by our Control Department. Like most leading cooperation with them. airlines around the world, EL AL measures on-time performance based on flight departure times: Our commitment to flight safety, which has direct impact on human life, is first and foremost. At EL AL we do not suffice with adherence to legal requirements 2014 2015 and aviation regulations; our actions expand beyond compliance. Thus, for example, our aircraft are equipped with the finest safety aids and accessories, including measures superfluous to those required by law and regulations, and the food that we serve undergoes very strict safety testing.

7of 4flights left% on-time 76%of flights left on-time EL AL is subject to international and national regulations and protocols, which, With the understanding that on-time performance is of central importance to EL considering the importance of the topic of safety and security in aviation, are AL and its customers, we have emphasized the issue and concentrated special extremely strict. Periodic reviews are held to examine the Company's compliance efforts by all pertinent Company divisions, in order to generate improvement in with these regulations and protocols. on-time performance data. Since 2012, we use the Aviation Quality Database (AQD) system to manage As part of this process, the Operational Control Forum convenes once a week, safety and risks, and it serves us to report, assess risks, analyze incidents and headed by the manager of the Operations Division, to discuss the issue, debrief follow-up on correctional actions taken. Additionally, the system serves us to incidents and examine means for improvement. assemble data, identify trends and transfer information to relevant responsible factors. An additional system we use is the Safety Management System (SMS) as required by the Civil Aviation Authority of the State of Israel and the International Civil Aviation Organization (ICAO).

43 We conduct periodic exercises to examine the implementation of our safety and Training Emergency Teams security protocols and perform debriefings in order to instill our safety perception and Company procedures. As part of our crisis response program, we established a Care Team to assist families of passengers at a time of crisis. During a crisis, this team will constitute the linkage between those involved in the incident and families of passengers, and EL AL and the entirety of pertinent factors. Team members will directly assist families to cope with the event, accompany them, lend a listening ear and supportive arm and convey reliable information in real time. Thus far about 200 EL AL employees and pensioners have completed the initial training course. Continuing to Renew and Improve During 2014 and 2015, we continued to renew and improve the products and services that we offer to our customers and to offer special deals and campaigns. The Procurement Plan During the years 2014-2015, the reception of 737-900 aircraft continued. Additionally, by the end of 2015, a transaction for the purchase and leasing of 787-800 and 787-900 Dreamliner aircraft went underway, enabling us to offer our customers the most advanced product presently available in the aviation market. The new Dreamliner aircraft, expected to arrive between the second half of 2017 through to 2020, alongside the 737-900 aircraft, the most efficient and economical of their kind, are considered to be the most advanced passenger airliners in the world. As part of activities undertaken to define and characterize the future Dreamliner EL AL Safety Convention aircraft, we hosted 35 of our luxury customers on EL AL campus, in order to include then in the process of selecting seats for the luxury class. Customers In March 2014, the popular American news outlet "Business Insider" praised EL were happy to arrive and expressed their involvement as well as much content AL in an article titled "Israel Has The World's Safest Airline". The website quoted for being included in the process. the prestigious investigative program "60 minutes" by CBS: "What's the safest airline in the world? There's no question. It's El Al", particularly noting protection from terrorism.

44 Inauguration of the new line to Boston Celebrating UP's birthday An UP aircraft is born

UP was recently awarded "Best Developing Airline" for increasing traffic on the Tel Aviv-Budapest line. The award was received by EL AL Hungary Manager, Yanush Vardi, Revenue Management Director Dina Ben Tal, and ‎Route Manager, Michal Wegsmann, together with the airport management team.

A New Line to Boston In June 2015 we launched a new line to Boston. The Taking Off and UP In 2015 we celebrated a one year anniversary to the UP Company started operating 2 weekly direct flights on this route by a 767-300 brand, which was launched in March 2014, in response to the increasing Boeing aircraft, in a 218 seat formation, of which 22 are sleeper seats in the competition from Low Cost airlines. In the framework of the UP brand, low Business Class and 28 seats are in the Economy Plus Class. During the flight, cost flights are operated to five European destination – Berlin, Budapest, Kiev, passengers can enjoy a streaming technology entertainment system, which Prague and Larnaca, and two types of tickets are offered to passengers – basic enables viewing of a rich variety of contents in maximum comfort and directly and upgraded. The "Matmid" frequent flyer club members can also collect points from their personal appliances. on UP flights, in reduced quantity compared to normal scheduled flights.

45 In-flight Communication System (streaming) During 2015 we continued the process of installing an inflight entertainment system that includes an inflight communication system, on some of the lines between Israel and Europe, North America, the Far East and South Africa, as part of our improvements to the flight entertainment experience. The system broadcasts Audio & Video on Demand (AVOD) entertainment contents to the passengers' personal devices via the Dream Stream by EL AL application. The service is provided to our customers free of charge, and enables passengers to enjoy a variety of films, TV programs, songs, games, children's contents, passenger information and so forth. Additionally, there is an option of renting iPads on some of the flights, as EL AL 2 Door With regard to cargo, in July 2015 we launched a new service, "EL part of the inflight entertainment choices. AL 2 Door", enabling deliveries from BGN Airport directly to the customer's door, as well as provision of accompanying services, including handling of paperwork In the future, we intend to integrate WIFI web connection options on some of and clearing cargo through customs. This service is provided for deliveries our aircraft, starting in May 2016. EL AL is expected to be the first airline in weighing 45 kg to 7 tons, as well as deliveries of unusual sizes that are only Europe to launch a technology that would allow passengers to work inflight on suitable for flying on a designated cargo aircraft. high bandwidth, thus significantly improving web surfing and inflight experience. Families Choose to Fly "ELALCHIK" Surprises in the Sky As part of our efforts to improve the passenger experience, we have surprised passengers on our flights with a variety of charming surprises: During summer vacations we operate the the fly&buy duty free personnel surprised frequent flyers on EL AL and UP flights "ELALCHIK" flights – approximately 80 who flew on their birthdays; EL AL tourism crews gave away tickets for concerts particularly surprising flights that include abroad to happy passengers; and ISSTA Sport awarded tickets for football activities for children. Children flying to matches to passengers flying to London – in collaboration and coordination with and from New York, Amsterdam, Paris "EL AL Facebook" and the aircrews. and London enjoy varied experiences and activation by EL AL attendants, Pre-Flight Service at Home As part of our cooperation with "Premium Check-In", who receive them onboard the aircraft, in August 2015 we launched a new paid service, enabling our passengers on welcoming them to a journey full of flights departing from Israel to execute the security check procedure and deliver surprises, including activities throughout the flight: toys, workbooks, drawings their luggage from home, within a range of 8-27 hours before their flights. etc. "Flights attendantchiks" are selected from among the children on board, and they receive special apparel and join the aircrew in handing out drawing pages, coloring kits and other surprises.

46 The "Self-Service" Approach In recent years we have been adapting ourselves to an increasing tendency of enabling "self-service" to airline customers. Self-service is in line with making An Hindu meal on board? That is also bookable on our website customer services as accessible as possible, and making it easy to book plane tickets and additional accompanying products. Self-service shortens processes, saving time and unnecessary waiting.

Direct Marketing of Plane Tickets The growing trend of direct marketing of plane Airport Kiosks Starting in June 2015, changes were made to the security check tickets online is intended to reduce airline costs on marketing and distribution. procedure at BGN airport terminal 3. For the purpose of making the process EL AL continues to adapt its activity to this tendency, whereas during 2015 the more efficient for our customers, 20 new-generation self-service kiosks were extent of sales through our website grew by 18% (including sale of packages, positioned in the check area, enabling self-check-in for flights and the issuing of accompanying services and upgrades), and the number of tickets sold online in luggage tags and boarding passes. This process allows passengers to execute 2015 was 37% higher than in 2014. We anticipate that in upcoming years, growth the entire check-in process, including baggage drop, in an independent, fast and in revenues from online ticket sales will continue, and we therefore continuously convenient manner. improve and update our website.

Varied Independent Activities on the Company Website EL AL enables its customers, in particular its frequent flyer club members, to independently execute a variety of activities on the Company website, such as: purchasing bonus tickets, utilizing bonus points for upgrades, restoring passwords etc.

47 Additionally, we have also performed physical adaptations, and positioned special service counters at the terminal, equipped by all necessary means for the provision of accessible service. These counters feature unique security check queues and seats for waiting prior to check-in. We also use different instruments, such as: electric vehicles to transport passengers across the terminal ("buggy"), "Elalit" – a new and indulging vehicle for the transport of up to 12 passengers EL AL's accessibility unit at the "Access Israel" Conference 2015 | Israel Station Department (incoming flights), optimal use of the airport's accessibility facilities and a narrow Adapting Service to Assisted Passengers wheelchair adapted to aircraft structure with its narrow passages. EL AL operates in accordance with Israeli legislation regarding accessibility, "It is fascinating to see the level of accessible and took initiative to voluntarily adopt the even stricter U.S. Department service and constant improvement the company is of Transportation guidelines with regard to adapting its service to assisted making, thrilling to see the impressive outcomes, customers. From the understanding that often a flight might not be a very when a company truly and thoroughly internalizes pleasant and convenient situation for assisted passengers, we strictly ensure that the service to such passengers will be particularly sensitive and considerate; the importance of the business-social importance be respectful of their private personal spaces; provide comprehensive and of an essential target audience of people with complete information; and be available for any question and inquiry, extending a disabilities and the elderly". sense of security and ease. Yuval Wagner, Founder and President, "Access Israel". For the purpose of providing an adapted service to assisted passengers, we have Our accessibility provisions are published on the Company's website, which is established a specially qualified unit at EL AL. The team of this unit includes 12 also designed in accordance with accessibility regulations. check-in attendants and about 80 passenger accompaniers. The staff undergo a Company employees who provide service to our customers, have undergone special selection process intended to identify specific characteristics for this role. training in cooperation with relevant social organizations, such as the "Nalaga'at" After being selected for the position, employees undergo a designated 2-week Center and nonprofit "Access Israel", with regard to providing accessible service. course that includes contents on accessibility issues and service for the assisted, assistance to passengers with severe disabilities, service to passengers with mobility limitations, an adapted first aid course and additional relevant contents. At the end of the course, employees undergo two weeks of practical training.

48 The Company's renewed website UP's website

via the Company's website or the reservations call center. Using this new service, Digital EL AL customers feed in their details online and the invoice is sent to them directly. This The Company's Website is another phase of improved efficiency and service for our customers, who thus far had to phone our call center in order to issue invoices. During 2014-2015 we continued renewing our website in order to improve our online service experience, making it easier and more efficient. Presently, For the UP brand, a designated website was launched, through which customers alongside the possibility of booking and managing reservations, whether by can book their flights and save on services that they might not be interested seat selection or ordering meals suited to different and varied diets, through the in, such as checked baggage. Furthermore, passengers can choose where website our customers can also receive abundant information and useful tips they would sit, check-in early, print boarding passes and perform a variety of for their selected destination, explore offers for holiday packages, rent a car, activities, all in comfort, ease and without leaving their homes. In the spirit of purchase travel insurance and book accommodations and tickets for a range of brand values, the website was designed in a simple accessible manner that attractions with one click. The "Matmid" frequent flyer club homepage was not facilitates the modular purchase process of the service. neglected and has also been also upgraded, so that club members are able to Our website, which is also translated into English, constitutes an additional check important details regarding their accounts and receive news, updates and means of communicating with our clientele in Israel and globally. The website an offering of special deals adapted especially for them. details all the ways in which we can be approached – via email, telephone, We have recently launched a new service on our website, developed by our company offices, Facebook and postal address. Via the website our customer computing division, of issuing invoices for plane tickets purchased either online can also easily follow their inquiries' treatment status.

49 Our Facebook Page An additional way of communicating with our customers in Israel and around the world is via our Facebook page. In fact, the page currently constitutes an additional focal point for public inquiries, and both setups – social media and the customer service system – operate in coordination, in order to provide the best, fastest and most effective response. In addition to addressing complaints, the Facebook page allows us to respond to passengers who encounter problems while abroad and even in cases of emergency and distress. The Facebook page also serves our customers for the purpose of receiving information regarding their destinations, as responses from other users and Our English facebook page. Don't forget to Like us (-: the discourse developed with them, closely supported and accompanied by our employees, ensure that the information is correct and up-to-date. Occasionally In addition to our Hebrew Facebook page, EL AL has an English language page we upload useful links and hold award-carrying "tip competitions" among users. for the convenience of our non-Hebrew speaking customers in Israel and around the world. 2014 2015 Special Activities for Our Facebook Page Followers

Number of responders 9,458 23,008 From time to time we hold unique activities, events and meeting for our Facebook page friends and followers. It is an additional way for us to maintain dialog with Number of new page our customers and enhance communication with them. Among the activities we 83,000 54,110 followers that year hold, we conduct occasional tours and experiential fun days for our Facebook Number of page friends at the Company campus and our various facilities. followers (by the end of 369,401 386,843 December that year)

* in 2015 Facebook executed a "cleanup" of inactive accounts, which meant that out of 54,000 new followers that year, post factum 17,542 were added.

50 EL AL Application Our Service Receives Awards and Recognition Our mobile app complements the Company's service strategy • In 2015 we were ranked in the top 20 international airlines by "Condé Nast and expresses our "self-service" approach. The app delivers our Traveler" magazine, for our quality of service. The magazine staff particularly services directly to our customers' palm via a simple and friendly pointed out the following reasons as a choice to fly EL AL: fine kosher meals, interface. Much like the Company's website, the app enables customers in Israel a wine menu that includes qualitative Israeli wines, iPad rental option and the and abroad to perform a variety of advanced actions in a user-friendly, easy streaming app for inflight entertainment experience. Furthermore, favorably to operate manner. Additionally, via the app passengers can receive tips about mentioned were our technological innovation and the "Cockpit" initiative destinations, rent a car, book hotels and other complementary products. in the aspect of product development, which, as mentions, was recently In 2015, we upgraded the app as part of a comprehensive plan to construct awarded first prize in the APEX competition. added value for Company customers throughout the "customer journey" in the • "Brand of brands" of the international Superbrands organization – in the e-trade environment. The upgrade enables a much broader use of appliance years 2014 and 2015, the Israeli public chose us again as a Superbrand in capabilities and additional improvements that include better visibility, new the leisure, recreation and culture category. Our choice attests to the trust, contents and a registration mechanism to the app for the purpose of presenting satisfaction and loyalty of our customers. personal contents and receiving push messages. For the benefit of our customers we operate an additional app for tour guiding and travel maps.

In 2015 we launched an app for our cargo division, as an additional expression of EL AL Cargo's motto of innovation. The new mobile app enables cargo customers to follow their deliveries with ease, comfort and speed. EL AL's CEO at the 2015 Israel Superbrands Ceremony | Superbrands Israel

51 Greatest Leg Space The "Mamon" supplement of "Yediot Ahronot" checked and found that the leg space on EL AL flights is the largest of companies and aircraft types • In 2015 we have once again been awarded first place in the customer examined by the international website "SeatGuru", satisfaction survey by newspaper "Yediot Ahronot", which examined the including Lufthansa and British Airways. level of satisfaction from the quality of service of airlines flying out of Israel.

Recognition for Service Excellence In September of 2015 we held a festive event of recognition, to summarize our personnel service excellence pilot project. Participants in the event were employees of the service division, who were selected by EL AL's top Platinum customers as providers of service above and beyond expectation. During the meeting, those excelling in service, as selected by our prestige customers, were awarded certificates of recognition and rewards.

52 "Matmid" Frequent Flyer Club As part of our marketing measures and efforts to increase the customer loyalty to the Company, we offer special benefits to passengers who are members of our "Matmid" Frequent Flyer Club, subject to club regulations. Passengers receive point credits for their journeys on all international flights executed by the Company. These points entitle passengers to varied benefits, including discounted or free-of-charge plane tickets, upgrades to higher service classes and admission to lounges serving the Company around the world. The Company has agreements enabling the collection and execution of club points on flights by other airlines, exchange of points collected by use of credit Similarly to 2014, the traffic of frequent flyers club members in 2015 constituted cards and in other businesses with "Matmid" points, cooperation agreements approximately 29% of all passenger traffic in the Company. enabling the collection of club points and additional benefits resulting from From time to time we hold special events for our club member customers. For purchases and agreements allowing use of club points in different businesses. instance, in April 2015 we held a "Feminine Monday" event for leading "Matmid" Furthermore, agreements were made with nonprofits working for social, value- women members. The event was moderated by media persona and journalist based and humanitarian causes, for the contribution of club points to these Dana Weiss, who hosted scientist and hi-tech entrepreneur Dr. Kira Radinsky, nonprofits by club members. who lit an Independence Day Torch in Israel's national ceremony, and Tzameret Fuerst, social entrepreneur and founder of the Israeli startup "PrePex", dedicated In February 2015, a series of commercial changes made to the price lists of point to reducing the spread of the HIV virus. collection and execution came into effect, with special emphasis on benefits given to our newly launched credit card holders - Fly Card. The "Matmid" Frequent Flyer Club was Also Awarded Prestigious Prizes In 2015 we conducted technological improvements, now enabling club members In 2014-15, the "Matmid" frequent flyer club was awarded three prestigious prizes: to preform activities in their accounts via the website, tablet or smartphone. 1. The Freddie Awards, "Oscars" of global airlines' frequent flyer clubs, awarded Additionally, a designated website for members was launched, providing detailed the Matmid with Up and Coming Program of the Year and Best Promotion. information regarding the collection of points and special deals, and enabling actions and providing information with regard to future flights of club members. 2. The launch of the Fly Card credit card received the Winning Launch award for 2014 by the Israel Marketing Association. The number of club members as of December 2015 was approximately 1.61 million, of which about 337,000 are members of GlobaLY (a unique club membership card 3. In the Yediot Ahronot survey, the Matmid won Best Customer Club among issued to Israel supporters in the diaspora). airlines in 2015.

53 The Fly Card Credit Card

In 2015, we continued operating a program intended to nurture and preserve "Fly Card" credit card launch campaign our customers, while expanding our clientele. One of the measures activated by this program was the issuing of branded credit cards "Fly Card" and "Fly Card Premium" for Israeli account holders, as part of cooperation agreements between EL AL and financial institutes. The branded credit cards provide their holders with unique benefits according to card type and extent of use. Benefits include collection of frequent flyer points due to transactions executed by the branded credit cards.

54 Innovation at EL AL Airlines around the world, including EL AL, found themselves in the past decade facing the innovation challenge. At EL AL we are trying to envision tomorrow, suggest the most novel solutions and provide our customers with added value. The steps we take, through all divisions of the Company, stem from the belief that the future of the aviation sector and the tourism industry is in innovation, technology and creativity. Groundbreaking Innovation Incubator In response to the need created and aiming to be exposed to groundbreaking innovation and assimilate it into EL AL's operations, in 2015 we launched the "Cockpit" initiative – a unique inventive program for the acceleration and support of startups addressing aviation, tourism and related issues. The incubator is intended for companies in different stages, from early stage prototype through to growth stage companies. Presenting the Cockpit initiative at the APEX Competition

In the framework of this initiative, we meet with hundreds of entrepreneurs and are The project was awarded the international Airline Passenger Experience exposed to numerous inventive technologies from Israel and around the world. Association (APEX) competition in the prestigious category of "Best Achievement Any initiative accepted into the program interfaces with leading professionals by an Airline for 2015". Competition judges and the event's large audience in the aviation and tourism sectors, both from within the Company and external were particularly impressed by the establishment of such a unique program experts, along with mentoring, generating business connections and "door by an airline, the initiatives under it auspices, and the array of groundbreaking opening" in the field, both in the local and international markets. Startups benefit innovations for the benefit of customer experience that the program generates from access to EL AL systems for purposes of development and integration, and will be generating, for EL AL in particular and the international tourism and initial funding, commercial, technological and legal consultation, as well as the aviation industry in general. possibility that EL AL would be their first significant customer.

55 G4-12 Procurement and Supply Chain Operational Procurement Aircraft Jet Fuel Aircraft and Engines The main resource we use is jet fuel, or aviation turbine fuel (ATF), for our Another major operational procurement we make is of aircraft, all produced by aircraft. ATF is one of our primary expenditure components, as it is for any "Boeing", and engines by "Rolls Royce", "Pratt and Whitney" and "CFM". airline. In 2015 the Company's ATF expenses were approximately 30.2% of the operational expenditures of the Company, compared with about 39% in 2014. The Passenger Aircraft Fleet Owned by the Company Aircraft Average age Average number Max. flight Cargo carriage We purchase ATF both in Israel and abroad. In 2015 we acquired ATF in Israel Total type (in years) of seats range (NM) capacity from three suppliers selected via a tender process, whereas about 70% of ATF purchase in Israel were bought from Paz. In December 2015, our contracts with fuel 747-400 6 20.5 408 6,400 18.7 supplying companies "Paz", "Sonol" and "Dor Alon" were approved for the supply of 60%, 30% and 10% respectively, of the Company’s annual fuel consumption for 737-900ER 8 1.2 172 2,500 2.5 2016-2017. Furthermore, we have decided to contract with companies performing fueling services (franchisees of the IAA) "Paz Aviation Services" and "Mercury" in 737-700 1 16.5 110 2,500 2 agreements, according to which each of them would supply 50% of the Company's fueling services at BGN Airport during 2016. The accumulative annual extent of 737-800 6 11.9 154 2,400 2 these agreements is estimated at approximately USD 186 million. As mentioned, we also purchase ATF from a number of suppliers abroad, 777-200ER 6 12.8 279 7,300 22.4 including fuel companies that supply ATF in a large number of airports, following a tender process and commercial negotiations. We occasionally examine the 767-300ER 2 24.5 216 5,300 8 economic viability of importing ATF independently, compared to purchasing from local suppliers, and conduct such actions according to market conditions. Since Total 29 12 240 2015 there was no AFT import. Data accurate as of December 31, 2015 In addition to fuel suppliers, the Company received fueling services in Israel from other suppliers.

56 Passenger Aircraft Leased by the Company

Aircraft Total Average age (in years) Average number of seats type

737-800 9 12.4 172

767-300ER 5 18.8 217

Total 14 14.6 188

Data accurate as of December 31, 2015 Keeping Our Contractors' Employee Rights Training our Suppliers: We are committed to act responsibly toward our suppliers and the service Special Workshops for Taxi Drivers providers we work with as well. In accordance with legal requirements and in the As part of our interaction with our suppliers, we have developed unique service framework of Company procedures, we meet with our contractors' employees workshops for taxi drivers from the taxicab company that chauffeurs our aircrews. randomly, examine their wage data and hold periodic cross-section sample tests, Annually about 120 drivers undergo these workshops that include lectures and in order to learn about their employment conditions. Cases of employee rights contents about service providing, safe driving and references to the Company's violations and/or failure to meet appropriate standards are addressed and might relevant safety procedures. In addition to improving the service received by EL AL result in ending communications with the culpable supplier and or contractor. employees, these workshops contribute to the improvement of service provided by these drivers to all of their other passengers, including tourists arriving in Israel.

57 Our Passenger Aircraft Fleet Boeing 747-400 Boeing 767-300ER Total in service: 7 (including a freighter) Total in service: 7 Range: 6400 NM (11,860 km) Range: 5980 NM (11,090 km) Engines: 4 Pratt & Whitney Engines: 2 Pratt & Whitney Cruising speed: 575mph/ Mach 0.85 (927kmh) Cruising speed: 530mph/ Mach 0.80 (851kmh) Length: 231ft 11in (70.7m) Length:159ft 2in (54.9m) Wingspan: 213ft (64.9m) Wingspan: 156ft (47.6m) Seats: 381-455 Seats: 218/228 Main destinations: NYC, Newark, Bangkok, London, Main destinations: Toronto, Beijing, Mumbai, Paris and selection of destinations in Europe Johannesburg, Bangkok, Boston and selection of destinations in Europe

Boeing 777-200ER Boeing 737-900ER Boeing 737-800 Total in service: 6 Total in service: 8 Total in service: 15 Range: 7300 NM (13,520 km) Range: 2500 NM (4,630 km) Range: 2400 NM (4,445 km) Engines: 2 Rolls Royce Engines: 2 C.F.M Engines: 2 C.F.M Cruising speed: 559mph/ Mach 0.84 (901kmh) Cruising speed: 553mph/ Mach 0.82 (890kmh) Cruising speed: 516mph/ Mach 0.78 (830kmh) Length: 209ft 1in (63.7m) Length:138ft 2in (42.1m) Length:129ft (39.5m) Wingspan: 199ft 11in (61m) Wingspan: 117ft 5in (35.7m) Wingspan: 112ft 7in (35.8m) Seats: 279 Seats: 172 Seats: 154-185 Main destinations: NYC, Newark, Los Angeles, Main destinations: ELAL destinations in Europe Main destinations: ELAL and Sund'or destinations Hong-Kong, London,Paris and Moscow to Europe **Including aircraft used ny UP & Sund'or

58 G4-26 Dialog with Suppliers Our Procurement and Supply Department interacts with our suppliers by a variety G4-27 of means, such as an orderly process of lodging complaints by suppliers and their investigation; a possibility to inquire about tenders, joint and mutual development of products and services, as well as the transfer of knowledge and resources. As part of the continuous dialog with suppliers, we occasionally circulate questionnaires intended to assess their level of satisfaction from working with EL AL and to identify processes that could be improved and made more efficient, alongside successes that should be preserved and intensified. In response to the questionnaire conducted at the end of 2015, 17 of our suppliers (of different manners and extents of transactions) participated: • 94% indicated that the transaction process with EL AL was fair, that negotiations with them were conducted in a respectful and appropriate manner, and that as a rule - EL AL acts fairly with its suppliers. • 94% of suppliers noted that EL AL keeps its promises, 82% mentioned that our payment ethic is high and 76.5% indicated that the process of payment to suppliers is clear and transparent. • 94% mentioned that they have an address and know who to contact if they need to raise issues for improvement and treatment. • 100% noted that they would be interested in working with EL AL in the future as

59 Home in the World 4 The People of EL AL

60 The People of EL AL Our Workforce G4-9 G4 In 2015 EL AL employed, both in Israel and abroad, a total of 6,554 employees, G4-10 DMA The Management Approach compared to 6,365 employed in 2014: EL AL's mottos, both in English – "It's not just an airline. It's Israel" - and in Hebrew, G4 2014 2015 LA1 which translates as "At home anywhere in the world", are applicable to describe G4 the Company's policies concerning its employees and work environment. We Company representation Company representation LA12 aspire and make every effort for each and every one of our employees to feel that Israel offices overseas (including Israel offices overseas (including they are members of the EL AL family throughout the generations. Our perception 24 Israelis posted abroad) 24 Israelis posted abroad) is that the Company's human capital is the most important resource in the quest to 5,915 450 6,106 448 achieve our goals and our successes. Stemming from this belief, we provide our employees with varied welfare benefits, 2014 2015 opportunities for training, development and promotion, and, of no lesser importance, an open door policy for them to inquire, consult, speak and express what's on their minds, including any criticism. All these are made possible in a safe, suitable and Permanent Temporary Permanent Temporary employees employees employees employees respectful working environment that offers equal opportunities for all.

As part of the momentum of improving intra-organizational processes, in 2014 3,788 2,577 3,808 2,746 we launched a SAP-based system for human resources that serves different departments within the Company with regard to aspects of managing HR in Israel The data above refers to number of people, whereas data in the Company's financial reports refers to number of jobs. and abroad.

58 470 553 1457 2188 703 42 586 49 Engineers Workshops Aircrew Flight Administration Maintenance Senior Management Technical Personnel Attendants and Services Management Management

61 The strong seasonality of the tourism sector compels us to adjust our personnel Total Numbers of Employees in Israel in Different Company Divisions (as of 2015) inventory according to demand, by means of a fluctuating number of temporary Division Permanent Temporary Total employees. EL AL's security deployment includes workers employed by the State, with the Company paying part of their salaries (in accordance with the division of Aircrew personnel 553 - 2,746 security expenses between the Company and the State).

Flight attendants 378 1079 2,746 Together with the digital marketing department, we recently launched a new and upgraded employment website featuring available positions in the company, Administration & 973 1245 2188 suited to EL AL's language. The new jobs website includes more information for services applicants and candidates seeking to join the EL AL family, easing the process of Workshops 356 114 470 application and screening.

Maintenance 579 124 703 More the 98% of EL AL employees in Israel are contracted by collective employment G4-11 agreements, and the remainder are employed by personal contracts. EL AL does Management 536 50 586 not employ workers in professional positions via contractors or employment agencies. Engineers 52 6 58 G4-6 Technical EL AL Representations Abroad 49 - 49 management As mentioned, EL AL has 28 representative offices around the world. Each EL Senior 30 12 42 AL office abroad is led by a Head of Representation, who is responsible for the management entirety of Company activities in the country or geographical region over which Total in Israel 3,476 2,630 6,106 they preside. Additionally, a Station Manager is responsible for Company activities

Israelis posted in the overseas airport. Each representation has an accounting department, HR 24 - 24 abroad department and sales and reservations department. The larger offices also have call centers that handle sales and reservations. Locals abroad 308 116 424 The Company employs approximately 400 employees in its representation offices Total abroad 332 116 448 abroad, of which 24 are Israelis sent to fill managerial roles abroad (Israelis stationed overseas or "posted employees"). Most Company employees abroad, Total in Company 3,808 2,746 6,554 with the exception of posted employees, are employed by collective work agreements between the Company and the relevant trade union in the particular

62 The Faces behind the Data EL AL's Facebook page features a special video series presenting Company employees working in different roles, who talk about their work and take viewers on a short visit "behind the scenes".

EL AL Pilot Yuval Cohen Aircraft Maintenance Control Center Flight Attendants

country, or according to employment agreements with employee representatives. Age Diversity G4-10 The working conditions of Company employees in some countries are not anchored by collective agreements, but are determined by the Company in accordance with G4 2014 2015 LA1 customary terms in the aviation sector or of the national airlines of these countries. G4 In some of the representation offices, employees are employed by personal LA12 End of All End of All contract or via a handling agent. Hired Hired employment personnel employment personnel In order to improve the interaction between our employees abroad and the Company in Israel, the Company's intranet portal was translated into English, Under 30 618 290 1573 478 311 1586 and now all employees, both in Israel and abroad, can be kept updated about occurrences in the Company and other relevant contents. The translated portal 30-50 265 204 2976 248 125 3199 enables our employees abroad, among other things, to directly contact different factors within the Company in Israel. Furthermore, our monthly newsletter is Over 50 22 99 1816 13 132 1769 translated to English and sent to employees around the world. We take additional steps intended to improve the attention for our employees overseas and strengthen Total 905 593 6365 739 568 6554 their sense of belonging to the Company.

63 G4-10 Gender Diversity

G4 Women account for about 42.8% of our employees: we employ 2,806 women LA1 and 3,748 men. Out of all permanent Company employees, about 30% are G4 women, whereas the percentage of women among temporary employees is 57%. LA12 Women are 19% of employees in the top ten income earners in the Company, and 57.2 42.8 constitute 14.3% of our senior management. In accordance with the collective agreements that apply to Company employees, there are no differences between the basic salaries of men and women doing the same job and holding the same rank.

2014 2015 Spreading Their Wings EL AL takes pride of the five female pilots Hired End of employment Hired End of employment in its ranks, one of whom is a captain. % % % % % % % % Captain Smadar Shechter and First Officer Women Men Women Men Women Men Women Men Meirav Schwartz made history when they 543 363 355 238 368 371 323 245 were assigned together on a flight from (60%) (40%) (60%) (40%) (50%) (50%) (57%) (43%) BGN Airport to Larnaca, and (wo)manned Employees Employees an all-female cockpit.

532 349 344 214 361 361 313 191

Managers Managers

10 14 11 24 7 10 10 54

64 Education Diversity As part of our recruiting efforts for the expansion of the EL AL family, we have decided to open courses intended specifically for students, for roles of flight The Distribution of Academic Education of Permanent Employees in Israel (by attendants, ground attendants and call-center service representatives. The Academic Major): courses begin during the summer vacation and take place in July-August.

Field Undergraduate degree Graduate degree In order to recruit the very best students, the Company's intake and employment department participated in several conferences held in universities and colleges, Social Sciences 222 44 where a flight attendant, ground attendant and service representative each presented their respective roles, answered questions and provided additional Natural sciences 90 13 information and explanations to participants interested in applying.

G4 Humanities 101 10 Seniority in the Company LA1 The seniority average at EL AL is 13.1 years in the Company. 726 of our employees Engineering 79 11 have been with the Company for more than 30 years.

Up to 5 Over 30 Industry and management 50 5 Seniority 5-10 years 10-20 years 20-30 years years years Economics / Business 309 169 Permanent 290 550 1681 598 689 Administration

Law 33 5 Temporary 2295 267 133 14 37

Tourism / Aviation Management 22 1 Total 2585 817 1814 612 726

Other 20 6

Total 926 264

Excluding posted employees and flight attendants; data is based on updates made by employees in the HR system.

65 Captain Amos Faran lands the 777 aircraft for the last time, after 23 years of flying EL AL | EL AL News

Last Landing Commemorating our Fallen Employees Killed in Following decisions by the International Civil Aviation Organization (ICAO) Battle and Victims of Terrorism and the Israel Civil Aviation Authority, as of November 2014, pilots over the In 2014 EL AL inaugurated a new monument in the Company campus, in age of 65 are no longer permitted to pilot aircraft on commercial flights. In commemoration of fallen soldiers of Israel and victims of terrorism among Company light of these news, within a short time span we have had to bid farewell employees and their families. A memorialization website was also launched. to some of our best people – experienced, excellent aviators, including Operation Entebbe veterans, air force squadron commanders, highly experienced Mirage and Phantom combat pilots, flight trainers, examiners and instructors – genuine salt of the earth, with notable extensive and grand careers, both at EL AL and elsewhere. Our air operations department ensures that every pilot celebrating 65 will have a pointedly moving event – as they land in Israel for the last time as pilots. In these events, the pilot is welcomed by friends and family together with the department management, and a touching ceremony is held in the aircraft to express appreciation for years of flying. Remembrance Day ceremony for the fallen by the company campus monument We are grateful to our aviators who have brought hundreds of thousands of passengers home safely and carried Israel's flag as high as possible.

66 G4 Employment Diversity and Equal Opportunities • The management of EL AL is committed to the promotion and incorporation of DMA this policy in all levels and fields of operation, while monitoring its execution. We consider a diverse working environment to be of great value that we can and should promote. We therefore act for the inclusion of different populations In order to promote the assimilation of this policy, EL AL takes the following measures: among our employees, including populations that are underrepresented in the • Analyzing and mapping employee recruitment, screening, hiring and promotion employment market. The Company's view is that the inclusion of people from processes. varied sectors and cultures is essential for the growth of Israeli economy, improves • Collaborations with skilled factors regarding multi-cultural employment, such our own economic performance and contributes to the cohesion of Israeli society. as social organizations. We are therefore pleased to note that during the years addressed by this report, no cases of discrimination in the screening of candidates for the Company were In order to recruit and support the hiring of employees from populations revealed. The inclusion of such populations accordingly was also undertaken by characterized by underrepresentation in the employment market, EL AL has taken EL AL's subsidiaries - Tamam and Katit. several steps, including the naming of a Diversity Officer in its human resources department, making adaptations to screening processes for potential employees, As part of our perception of corporate responsibility, EL AL defined a policy of developing connections with organizations that specialize in the recruitment and promoting equal opportunities in employment, and it operates in accordance inclusion of employees from these populations and more. with this policy. Integrating Employees with Special Needs EL AL's Policy of Promoting Equal Opportunities in Employment EL AL continues the operation of its program enabling the inclusion of employees • EL AL respects the principle of equal opportunities in employment, and considers with special needs in the team responsible for seating passengers in aircraft itself committed to enabling such equality to all candidates and employees. luxury classes, a role thus far undertaken by ground attendants. For this end, the • EL AL makes decisions with regard to employee screening, recruitment, Company attends to all workplace adaptations required – both physical and non- hiring and promotion within the Company strictly based on matter-of-fact physical (such as adjusting role requirements, working hours, pre-employment and according to Company needs only, without discrimination on the basis of screening etc.). The project went underway with the assistance and support of gender, religion, race, ethnicity, nationality, physical disability or age. the Ministry for Economy and JDC-Israel. As well as assisting people with special • EL AL recognizes the advantages of providing equal opportunities in the needs, the Company is rewarded by having responsible employees, who are workplace, from a business aspect – while affording employees the opportunity committed to providing qualitative and professional service, offering maturity and to apply their personal potentials and talents to the fullest – as well as from life experience. moral and social perspectives.

67 G4-26 Dialog with Employees The Company management attributes great importance to ongoing dialog with G4-27 employees, which holds the potential for improving work processes and efficiency, as well as promoting a pleasant and respectful working environment. The discourse with our employees takes place on varied occasions and by diverse means, including: • Ongoing conversations in Company units. • Information screens are positioned throughout the Company campus, presenting information on professional subjects, welfare issues, benefits for • A company-wide service survey is conducted once a year among employees, Company employees and social matters. In 2014 such screens were also to gather feedback on the activity and effectiveness of internal mechanisms placed in EL AL representation offices in New York, London and Paris. and different units that serve employees. Additionally, a service satisfaction survey by the human resources and administration division is held quarterly. • A letter from the CEO is sent as needed, in order to update Company In 2016 the Company intends, for the first time, to publish the results of the personnel about occurrences, special events and financial reports. The letter survey conducted in 2015, and to announce the steps it is taking in light of is translated to English and delivered to employees around the world. the outcomes. • As part of the intra-organizational communication at EL AL, an organizational • In employee conferences held at least once a year, the management presents newsletter it sent monthly to all Company employees, in Israel and the world, major organizational and business developments. in Hebrew and English, including a message from the CEO as well as updates about events and activities that took place during that month. Additionally, as • CEO meetings are held regularly with unit representatives, for them to voice of 2015, we are issuing the "ELAL Newscast", which reviews occurrences and their opinions and positions on different organizational issues. significant events in the life of the Company. • "Tafnit" is a computerized system enabling employees to anonymously The information sent to employees covers the entirety of Company activities in report or ask questions regarding any organizational issue. The distribution its different fields of operation, with emphasis on employee involvement in these by subject of received inquiries is presently unavailable through the system, processes and a desire to share and update employees about Company affairs. however during 2016-2017 we intend to assimilate a new system featuring the presentation of such information. The employee ombudswoman is available to our employees, and there is also an anonymous email account which employees can use to address management. • An intra-organizational portal containing up-to-date information on a great Additionally, appeals can be made to the Company's internal auditor according variety of issues is used for constant updating of employees. to need.

68 In December 2015 a first meeting of its Feedback, Evaluation and Appreciation kind - "A Circle of Growth" - was held in EL AL's headquarters, initiated by An evaluation and feedback process is held annually for all EL AL employees, Maagalim Fund and Globes, a business because we understand it has substantial importance for the professional news outlet. The meeting, hosted by the development of employees. The feedback process addresses, among other things, Company, addressed current affairs in professional conduct, meeting targets, levels of commitment and responsibility, employment and hiring. The discussion cooperation and teamwork, as well as issues such as creativity, personal initiative was moderated by Globes Editor in Chief, and potential. Furthermore, the feedback also refers to additional values included Tamar Matsafi | Globes and participants included EL AL CEO, in the ethics code, such as integrity and trust.

Chair of Maagalim Fund, Chair of the Manufacturers' Association of Israel, Chair of In 2015, 92.45% of Company employees have undergone a feedback and G4 the Histadrut –Israel's organization of trade unions, EL AL Chief Human Resources evaluation process, compared with 90.20% in 2014. LA11 and Administration Officer and Chair of the representation of Company employees. It is also important for us at EL AL to cherish employees who have made special Company employees were invited to the event, and a dialog transpired between contributions to the success of the Company during the year and who represent employees and panelists. role models for imitation and appreciation. Once a year, in keeping with Company tradition, employees and managers nominate their peers and subordinates as candidates for the Outstanding Employee Award. Their suggestions are examined by a special committee that selects the exceptional employees from among them, and they receive certificates of appreciation and an award. Out of these excelling employees, ten are selected to receive the CEO Excel Awards, and from these, the most outstanding is selected for special recognition and appreciation awarded at an event held at the Residence of the President of Israel.

During 2015

of our employees underwent a feedback and evaluation process Opening of "EL AL Newscast" 92.45%

69 G4 DMA Employee Training and Instruction The following data includes the average6 training hours per trainee, excluding G4 EL AL conducts training courses in accordance to requirements defined by the LA9 applicable regulations, and holds additional training for employees from different basic training courses, according to training subject7: professions and departments, while emphasizing the development of both professional and personal capabilities of employees. Training programs are Training Subject 2014 2015 planned to correspond to the needs of the employee's division, and additional Air operations – aircrew personnel 13 23 courses are intended for all Company personnel. In order to train and instruct our employees, we operate a training center that Operations (safety + control center) 11.5 6.5 educates and qualifies our employees for many of the professions required at EL Cargo 5 19 AL, including civil aviation courses and the transition of aviators from one fleet to another; aircraft mechanics and maintenance; customer service courses for call- Inflight service 21 16 center employees; and flight and ground attendant courses. We further train our employees for sales, administration, safety and other general issues. Ground service 5.5 8 EL AL training hours are measured by training subjects, distinguishing between Service (call center) 9 8 basic and non-basic courses, and between instruction required by regulation and training conducted for professional and personal development. Commercial (Israel branch) 7 11

Maintenance 11 14

Administration (building, transportation & firefighting) 4 4

General (computing and seminars) for all 16 7 Company employees Management courses - intended for all 30 44 Company employees

Expressing recognition for outstanding employees from the service division and the HR & Administration Division Total 12 13.5

6 Training and development including those required by regulation. 7 Total training hours divided by number of trainees.

70 It should be noted that in addition to the abovementioned, thousands of employees technological tools of monitoring and control that facilitate the requirements for civil in Israel and hundreds in the representation offices overseas undertake e-learning aviation authority licensing, accreditation or intake of employees, which necessitate on a variety of subjects, in lieu of frontal training courses. In 2015, the training regulatory tutorials. department taught 26,201 hours by computerized tutorials, compared to 26,926 The extent of e-learning site users is expanding from day to day, according to hours in 2014. The primary reason for the decrease is explained by regulatory different needs that emerge from company divisions, regarding the preservation of maintenance tutorials undertaken in 2014, which are required once every two years. knowledge and frequently evolving new contents.

Get to Know EL AL G4 Development and Empowerment of Employees LA10 Recently EL AL's training and organizational development department launched an and Managers orientation day for new Company employees dubbed "Know EL AL". On this day, In 2015 we have made notable investments in cultivating our human capital and employees are introduced to the organization and its various operations, and get developing the Company's managerial core. In addition to training and instructions an experiential tour of the Company campus. At the end of the day, new employees intended to provide our employees with tools for personal and professional emerge with more extensive knowledge about the Company as well as their rights development, we focused efforts on the progression and empowerment of and duties as employees. Orientation days are held monthly. Company employees and managers; on generating opportunities for advancement Additionally, as part of orientation day, new employees undergo safety training and transition between roles; and on growing a robust and committed managerial and instruction regarding the Company's ethics code and the prevention of core in the Company. We believe that investing in our employees and managers sexual harassment. nurtures qualitative personnel who are committed to the Company, and in turn we are committed to continue working this way in the future as well. EL AL Online Learning Site In general, professional and personal development courses and seminars in 2015 We take pride in our renewed e-learning site, which was recently launched with were intended for senior and mid-level managers. In 2016 we plan to extend training a new contemporary design, under the leadership of the department for learning to junior levels, including temporary employees. technologies. The website's new line features an advanced graphic and visual design, in response to various needs that have emerged in recent years. Thus Internal Job Tenders the site was adapted for tablet-computers, and an archive of tutorials was formed, One of the ways to retaining our human capital is by creating tracks for advancement enabling search of e-learning courses taken by year, including the date in which within the Company. Therefore, when a position becomes available in one of the the tutorial was taken and the grade given. This development delivers a user- units in the Company, an internal job tender is published and distributed to company friendly experience, elevating the quality of service provided to employees by employees via the intranet portal and notice boards. The names of employees having transparent and available information; and at the same time, it provides selected for these positions are announced in the organizational portal and on

71 the screens. In 2014, 177 internal job tenders and 42 positions to be staffed from emphasizing EL AL's advantages compared to its competitors. The workshops among employees needless of a tender were published, and in 2015, 153 tenders contributed to strengthening the sense of belonging, unity and interchange and 24 positions as mentioned were published. among department managers, and received sweeping enthusiastic responses. Workshops and Courses for Managers • "Shhakim – Skies" EL AL Campus for management professions was launched in 2015. The program, which is managed by the Company's training and In 2015, we have invested enhanced resources in the development of managers in organizational development department, includes a large number of courses different levels within the Company, by means of various workshops and courses addressing expansive and comprehensive contents. The array of courses is that enrich our managers with knowledge of advanced techniques and management planned so as to enable a large number of Company employees to participate tools and assist them in developing personal skills and systematic vision, while in them, and gain exposure to the variety of new perceptions and contemporary developing interactions and the exchange of knowledge. trends in management. • A company-wide middle-management course is an affluent and challenging • "Movilim - Leaders" Course is the most prestigious and high-level management course in terms of its taught contents and the interfaces it generates between course, and the first of its kind to be conducted by EL AL. The unique course personnel from different divisions. The course includes ten weekly meetings program integrates management and professional training, while accomplishing and addresses an array of management skills. assignments in the work environment. On this course, participants acquire • The course designated for maintenance and engineering division middle- managerial skills, lead strategic projects for the organization and partake in management ended with presentations to the management of the division significant processes. by course graduates, of their final projects on issues related to savings and efficiency. These projects will be further explored for future implementation. • Acting workshops for managers ranked as deputy heads of department went underway during the second half of 2015. Through acting the managers express higher awareness to the management skills required of them, and are invited to practice self-reflection – all in a challenging and fun way. The workshops were deemed a success by participants and are planned to be held in the future as well. • Boeing workshops to customer department managers were held in May 2015. The workshops focused on a number of issues related to the world of aviation, such as ways of increasing sales, understanding customer needs and 2015 Movilim-Leaders Senior Management Course Graduates

72 • A number of seminars for inflight service managers were held early in 2015. committee that represents employees, respective to the different sectors to which The meetings were held at Kfar Maccabia and included a conversation with the they belong, before the management of the Company. director of the service division, an external lecture addressing sales skills and In July 2015, a special interim agreement was signed, provisional until a new interactions in the cabin, as well as instructions regarding EL AL's relicensing. collective agreement is reached for the years 2015-2018, providing employees with This type of meeting that had become a tradition in the past few years, is an a sense of security. In addition to a pay rise, it also stipulates higher remuneration excellent opportunity for an unmediated meeting between field managers when the Company is more profitable. and head office personnel and a chance to conduct a fascinating and prolific professional dialog. In this context it should be mentioned that during 2015, negotiations were conducted between management and representatives of the pilots in the Company, with regard We intend to continue offering these courses to our managers in the future, in order to updating of directives in the collective agreement pertinent to the aviators sector, to adapt ourselves to new business realities and to the many dynamic challenges however the parties are yet to reach understandings. they present to our management. During 2014-2015 no verdicts were given to either acquit or convict EL AL on work International Women's Day at EL AL relations issues. On International Women's Day, a gift was given to each female employee, and G4 Employee Welfare LA2 various lectures were held: a lecture about women's empowerment by EL AL employee and ultra-runner Galit Birenboim-Navon; a lecture by Prof. Lior Heller Our perception of home at EL AL includes our commitment to sustaining a supportive about the history of beauty and updates in facial design in the 21st century; and working environment, caring for employee welfare and enabling integration and finally a lecture by Galia Toren Hen, the host of TV show "The Beauty Dictionary", balance between work and family life and recreation, in order to retain employees who gave makeup, grooming and perfuming tips. in the Company with a sense of belonging and contentment. In order to ensure this, in addition to the social benefits employees are entitled to by law, we offer our Maintaining the Rights and Welfare of Employees employees an additional benefits package, which is also anchored in the collective agreements, and includes: EL AL spares no effort in imparting an appropriate and rewarding working environment for its employees and has no tolerance for discrimination or any form • A possibility for accumulating vacation days of infringements of their rights. • Parents to children under 12 may finish the work day one hour earlier during Employee Rights and Freedom of Association July and August (school summer vacation), subject to their manager's approval. • Marriage leave and family leave for family events, such as the wedding of an At EL AL we endorse complete freedom of association, and the workers union employee's child, the birth of an employee's child, the day of the circumcision (Brit). has been active since the Company's early days. EL AL has an active workers'

73 • Organized vacations, either paid or unpaid, at the same time as school and kindergarten vacations (for instance during August), in order to ease circumstances for employees who parent children in these ages. • Possibility for a "parent job" - shortened working hours for mothers (beyond legal requirements) subsidized by the Company. • Coordinating annual vacations in advance, as much as possible, in accordance with the employees' needs. • Option of taking up to a year of unpaid leave, subject to the approval of superiors. • Commuting transportation arrangements, including special transportation for mothers, taking their flexible working hours into consideration. • A range of events for employee families during holidays and school vacations every year.

• Subsidizing camps for children of employees during kindergarten and school breakfast, lunch, dinner and late night meals. Showers are available for the use holidays. Additionally, in the past two years we have been holding a 10 day of shift workers and vending machines are located throughout and around the summer camp on Company campus, for children of employees starting 1st-4th offices, stocked with sandwiches and hot and cold beverages. grade. The camp includes varied contents, plays and activities. By holding the • Arrangements are set for discounts on plane tickets for employees and their camp on campus, our employees can carry on with their usual work during families. this time, and the children connect to their parents' workplace. The camp is conducted by an external Company with the assistance of older children of • Children of employees starting first grade are equipped with gift sets for their employees, under the supervision of the HR department. first day of school. Additionally, once a year a large event is held for children of employees about to join the army. • Extensive support and assistance by varying means extended to employees who encounter distress, with the aid of the Company's social worker, including • Social events and departmental team building activities are held. by means of loans and advances on salary. During 2016 we will be exploring an option for a telecommuting pilot, enabling • The Company campus accommodates a gym available for the use of customer service call-center employees to work remotely from home. employees, and break rooms to be used by employees working in shifts. Dining rooms are open 24 hours a day and cater to employees (as entitled) offering

74 G4 LA3 Parental Leave The return of employees from parental leave to resume their normal work routines often involves difficulties and complexities. At EL AL we understand these situations, and enable parents who are interested to ease the process by a gradual return from their parental leave. During the first year following the birth of an employee's child, the parent is sanctioned a shortened work day, which is partially subsidized be the Company. During 2014-2015, this was the distribution of employees on parental leave:

2014 2015 We participated in tuition expenses We participated in tuition expenses for undergraduate degrees of for undergraduate degrees of Female Male Female Male 21 employees 27 employees employees employees employees employees and graduate degrees of and graduate degrees of 8 employees 5 employees Ground 86 1 113 0

Air 47 1 44 4

2014 2015 The vast majority of employees who took parental leave have returned to work. 29 32

G4 Care for Retiring Employees Encouraging Higher Education LA2 Prior to their retirement, we conduct a five-day workshop for employees and Since we recognize the importance of acquiring higher education as a condition their spouses, to prepare them for retirement. Additionally, the EL AL veterans' for inclusion, development and excellence in today's job market, we support organization cares for retirees, helps them with their needs and is supported by the employees and managers who are interested in completing their studies for Company. In the past year a retirement department was established under the HR undergraduate and graduate degrees, by Company funded either partial or full administration, which supports and advises employees regularly on the way to their tuition subsidies. Decisions regarding whether to fund the tuition of an employee retirement. Our retiring employees are granted various benefits from the company or manager, as well as the level of subsidy given, are made according to uniform as well as adjustment grants. and transparent criteria.

75 Fun Days and Sporting Events The company holds Spring Olympics once a year, featuring a variety of sporting events. Teams of employees from the different divisions compete with each other, and three teams reach the finals. The event is launched by the CEO in a goal kick, and employees from different company divisions come to the games to cheer their teams on. The sporting event is held during working hours and integrates work with a healthy lifestyle. The people of EL AL at the 2015 Spring Olympics | Sharon Ohad In addition to events organized by the Company, EL AL employees also participate in national sporting events. Thus, for instance, in the 35th "Sportiada" held in Eilat, in which thousands of employees from workplaces throughout the country participated, EL AL had an impressive representation of 100 athletes from various EL AL teams. Our athletes accomplished respectable achievements. We are proud of our representatives for their sportsmanship and their determination to win, and we will continue to encourage athletic activities that contribute to the health of body and mind of our employees, as well as their sense of belonging to the EL AL family. We would further like to mention Galit Birenboim-Navon of our running team, who has won the first stadium marathon in Israel. Events for Employees and their Families Once a year we conduct a festive event for Company employees and their families, and in keeping with tradition we meticulously note Israel's holidays by holding special events in the Company.

76 Prevention of Sexual Harassment All of us at EL AL are committed to the creation of a working environment free from any kind of aggravation, maltreatment or harassment, including sexual harassment. The officer in charge of the issue in the Company is the Director of Employee Relations, and employees are invited to approach her with reports, questions or complaints. • The head of the safety and quality department, who is responsible for A protocol for sexual harassment prevention is distributed to all Company employees coordinating the issue and reports directly to the CEO. and is published throughout the Company, in accordance with instructions defined by the Prevention of Sexual Harassment Law. Additionally, a designated tutorial • Flight and ground safety managers. regarding the instructions of the protocol was developed for employee training, • Head of the department for safety inspections. which employees are required to undertake from time to time. • The supreme safety committee, which convenes monthly, headed by the CEO. In 2014, 1,175 employees have taken the sexual harassment prevention tutorial, and in 2015 – 799 employees. • Operations safety committee, with half of its members are members of- or appointed by the employees' committee. During 2015 a number of complaints were reported with regard to sexual harassment. Each of these reports was investigated with the plaintiff, the accused • Divisional safety committees, addressing issues relevant to each division. and any witnesses, such as there were. In accordance with the findings of these G4 • Safety officers in the different units. LA5 investigations, it was decided to conclude treatment of the complaints without As abovementioned, since 2012 we have been using the Aviation Quality Database taking any additional measures. (AQD) system and the Safety Management System (SMS), and they also facilitate the management of employee safety, work accidents and "near miss" events. G4 DMA Employee Health and Safety We recognize a direct link between the involvement of employees in safety issues Every year we set ourselves objectives in the issue of safety. Every work procedure at and the culture of safety in the Company, as demonstrated by working in accordance EL AL has safety guidelines, documented either in the Company's safety instructions with regulations and instructions. We therefore dedicate many hours to training (The Safety Book) or in professional literature. The rigor in upholding employee and instructions on safety issues in the Company. Additionally, every year EL AL safety is expressed in various ways, including: constant safety checks, safety patrols, traditionally holds a Safety Day, with presentations on the issue and experiential reviews and surveys, mapping of disparities, external expert reports and inspections events intended to emphasize its significance. The day concludes with a ceremony and so forth. These are conducted by a number of responsible factors: for outstanding safety achievements.

77 Main Safety Achievements in 2015

G4 • We have assimilated a risk management process in the professional LA6 departments and a superior risk management committee was established, headed by the Chief Operations Officer. • Some 50 reviewers have been qualified and eight safety reviews were conducted in the Company. • We have improved safety measures for working in heights. • We have improved the procedures of upholding safety when hiring contractors. Although we spare no effort in their prevention, work accidents occasionally occur.

Ground sector Air sector (attendants only) At EL AL we also emphasize the issue of road safety, which falls under the responsibility of the Company's Transport Safety Officer. We continuously curtail Year 2014 2015 2014 2015 the use of hazardous substances to a necessary minimum, seek alternative engineering solutions that would reduce safety risks, and at the same time provide Total number of work 86 86 16 26 our employees with the best protective gear for working safely. Employees in accidents roles that expose them to potential harm and risks, including maintenance division employees, Israel station department employees and cargo officers, are referred Total loss of 1,719 1,973 312 272 work days to periodical designated medical examinations.

Data in the table relates to accidents resulting in the absence of more than one working day, and which occurred on Company campus only, excluding car accidents on the commute to or from work.

78 Healthy Nutrition in the Dining Rooms In 2015, a "health food track" opened in our dining rooms, enabling employees to choose a healthy meal option for their lunch, in addition to the ongoing activities conducted by the chef to provide healthy, low-fat and low-sodium option. Additionally, every Monday, as part of the Meatless Monday initiative, a vegetarian alternative is offered to those interested. "EL AL was one of the first companies in Israel to wisely adopt the Meatless Monday Initiative. We congratulate the company's commitment to care for the health of its employees and to the environmental sustainability." Miki Haimovich, Founder of Meatless Monday Israel EL AL Health Month Every year we hold a Health Month at EL AL, during which we conduct a variety of lectures and enrichment activities to promote our employees' health: child nutrition, work-life balance, bone building exercises, ergonomics and nutrition according to one's biological clock, sports injuries and so forth. The diversity of subjects enables employees to selects the ones that are of interest to them and relevant for them and their lifestyles.

79 Running Hula Hoop

730 kcal/hr 290 kcal/hr

680 kcal/hr 370 kcal/hr

Promoting Awareness for a Healthy Lifestyle We routinely offer our employees health workshops to maintain a healthy lifestyle Weight Lifting Swimming and prevent serious illness. Thus, for example, we conduct smoking prevention workshops, Weight Watcher groups accompanied by professional instruction, offer 800 kcal/hr

participation in the workplace sports leagues, the "Spring Olympics" for Company 710 kcal/hr employees and so forth. 370 kcal/hr We provide a fully accessorized gym on Company campus for the use of employees, 300 kcal/hr as well as break rooms for employees working in shifts. We encourage our employees to get tested regularly, and fund periodic medical Bicycling Yoga examinations once a year for every employee over the age of 35. 615 kcal/hr 150 kcal/hr G4 Sick Leave Taken in the Company During 2014-2015 (Days) LA6 470 kcal/hr 190 kcal/hr Flight Sector Ground crew Aircrew Total attendants

2014 77,042 15,977 11,033 104,052 Tennis Jump Rope 2015 76,242 17,434 12,121 105,797 480 kcal/hr 851 kcal/hr

630 kcal/hr 720 kcal/hr

kcal/hr = kilo calories per hour. Values presented are averages and will alter by exerciser, terrain and environmental conditions. Before any physical activity it is recommended to consult with professionals and in some cases it is advisable to obtain a medical certificate.

80 Our Environmental Responsibility 5 EL AL for the Environment

81 Environmental Responsibility

G4 DMA The Management Approach Humanity contends with a series of environmental challenges that affect us all – This management approach is expressed by monitoring the entirety of emissions climate change, pollution of water sources, depletion of natural resources and so to the environment resulting from our activity, and measuring the amount of non- forth. This effort has led and continues to lead the international community and renewable resources required for this activity, in order to mitigate their extent. countries of the word to take substantial steps, including the adoption of principles Additionally, steps are taken to prevent environmental hazards, while adhering and rules by means of international treaties and local-national legislation. Such to Israeli and international environmental regulations, as well as taking action steps do not disregard the aviation sector, considering its operations have beyond regulatory compliance requirements. significant environmental impacts. Therefore, as stated in our sustainability policy: "We operate in cooperation with other At EL AL we are aware of the direct and indirect impacts that our business entities to ensure sustainable aviation in Israel, from the understanding that Earth's and operational activities have on the environment, especially considering the natural resources are commons and should be preserved for future generations". constantly increasing demand for flights. We consider environmental protection, mitigation of our environmental impacts and the improvement of our environmental performances to be our long term objectives.

82 G4-14 Environmental Management Reducing Greenhouse Gas Emissions G4 DMA We devote much effort to minimizing the environmental impacts of our ground Most of the Company's greenhouse gas (GHG) emissions result from its aerial operations. As part of these efforts, inspections are conducted regularly to operations. The source of other emissions is from ground operations at the BGN identify major processes and analyze their environmental aspects. During 2015, Airport Company campus. Most ground based emissions result from vehicular an extensive survey was conducted to examine Company operations vis-à-vis fuel consumption and electricity consumption. the environmental legal requirements at the hydraulic facility. The survey was The following table details total emissions by the Company. The consequent conducted as part of the Business Licensing Law requirements. In the facility, graph features the distribution by percentages of emission sources, whereas hydroelectric equipment and different machinery parts are treated and washed. aerial operations are divided between flights to and from Europe and those to The survey covered aspects including focal emission sources (chimneys) and the rest of the world, due to the EU-ETS reporting mechanism as will be further non-focal ones (sewage tanks and cleaning facilities) and the types of pollutants explained hereinafter. emitted from these sources. G4 Greenhouse Gas Emissions: Air and Ground Operations 2013-2015 (ton CO2e) EN15 Additionally, in 2015 a "chimney survey" of the workshops was conducted. The survey aimed to examine disparities and the efficacy of the filters. The corrections G4 2013 2014 2015 EN16 of the faults discovered (heightening of existing chimneys or installing new ones) is planned for 2016. By the end of the year, sampling of air pollutants emitted from Scope 1: Direct emissions resulting from the the chimneys and the monitoring of emissions will become possible. 2,150,878 2,184,693 2,289,213 consumption of jet fuel on all EL AL During excavation works required as part of operations for the replacement of gates flights (including to and from Europe) in hangar 2, soil pollution was discovered, resulting from spill events. According Scope 1: to the instructions of the Ministry of Environmental Protection, contaminated soil Fuel consumption for transportation 4,307 4,551 4,521 was removed to Ramat Hovav. In 2016 we are planning a process of composing and heating in ground activity environmental protocols that will include master-procedures defining allocation Scope 2: 15,281 13,252 312 Electricity consumption of responsibilities. Total carbon footprint 2,170,466 2,202,496 2,307,930

The noticeable increase in GHG emissions results primarily from an increase in jet fuel consumption, emanating from the growth in the number of flights conducted between 2015 and 2013.

83 G4 Reducing Jet Fuel Use and GHG Emissions DMA

As an airline, most of our GHG emissions result from aerial operations. Therefore, G4 we have taken diverse actions in recent years to minimize our consumption of EN15 jet fuels. Our fuel consumption would have been higher had we not taken these steps, and consequently, so would our total GHG emissions.

16000 When selecting measures to improve the efficiency of our use of jet fuels, our approach is to administer steps that would be acceptable and possible for 14000 14196 Greenhouse Gas Emissions from implementation by all parties concerned in general and pilots in particular, while Ground Activity 2015 (CO2e) raising the awareness of the entire system and staff involved with flights about 12000 objective circumstances that might generate increased fuel consumption. 10000 The targets set for each of the measures intended for jet fuel consumption saving, are calculated a year ahead of the start of execution of the process, compared to 8000 the previous year's status. Targets are determined by estimates and a theoretical

6000 analysis of any changes to aircraft operation procedures and to the ground operations and aircraft loading procedures. 4000 2948 For 2015, the execution of the following and additional measures was decided upon: 2000 850 • Changing the criteria for reaching cruising altitude for 737 aircraft. 723 • Changing post-landing aircraft operating procedures for 747 aircraft. Electricity Fuel for Diesel for Mazut & diesel transportation transportation for Heating • Changing procedures for taxiing for 747 aircraft.

It is clearly noticeable that the primary source of GHG emissions in our ground • Closer secondary airports for the 777 aircraft fleet. operations results from electricity consumption. These and additional measures generated a reduction of 8,615 GHG tons (CO2e).

84 surpassing the GHG emissions cap resulting from flights to and from Europe, the G4-15 EU-ETS GHG Emissions Reporting Mechanism EU parliament had decided that airlines operating in Europe will receive GHG EL AL considers climate change to be a human and business challenge of emission allowances only for their internal flights in EU countries, as of 2014 and the highest degree. Out of this outlook and our commitment to the laws and still applicable today. An additional possibility being considered by the Europeans regulations of the European Union with regard to GHG emissions in the civil is that GHG emissions of aircraft will be measured from the minute they enter EU aviation sector, we have joined the European Union Emissions Trading System – member countries' airspace until they depart it. EU-ETS in 2010, its pilot year of operation. This EU mechanism was established to determine economic indemnification for deviation or mitigation of GHG emissions Since a decision has not yet been made regarding the methodology of measurement, resulting from aerial activity, in a cap and trade system. In this framework, EL AL charge and exceeding allowances, we are preparing for all contingencies. and all airlines flying to and from Europe receive an emission allowance, covering G4 GHG Emissions from European Flights Reported to EU-ETS (2013-2015) EN15 a share of their total flights, within which they can trade. If actual emissions of GHG Emissions (Ton CO2e) an airline are lower than its determined cap, it can sell off the surplus in the Year EU-ETS Related Actions Reported to EU-ETS emissions trading system, or hold on to the remainder to cover future emissions; an airline that anticipates its emissions to exceed the cap, can take measures Payment for exceeding the cap was 2013 838,074 postponed while waiting for the European to minimize emissions, or buy additional emission allowances in the European Parliament's decision. emissions trading system. In accordance with the decision by European authorities capping internal flights only, EL AL In 2012, the International Civil Aviation Organization (ICAO) decided to construct 2014 804,482 paid a fine for exceeding its allowances only a global plan for the mitigation and monitoring of greenhouse gas emissions in the for the intra-European flights it executed. civil aviation sector. According to this decision, all members of the organization were EL AL paid a fine for exceeding its allowances 2015 869,806 called to submit suggestions on the subject by the end of 2015, to be implemented only for the intra-European flights it executed. by 2020. Following this decision, EU-ETS authorities took a "Stop the Clock" approach, which postpones the original mechanism that measures total emissions 2015 by airlines flying to and from Europe, and only measuring the emissions generated 2013 by intra-European flights (which depart and arrive in European airports), considering 869,806 such flights are clearly under the jurisdiction of the EU and are undisputed. 838,074 2014 In 2013, EL AL submitted two reports to the EU-ETS; one abridged report, 804,482 referring only to internal flights between European airports by Company aircraft, and another full report of all EL AL flight from BGN Airport to Europe and from Europe to BGN. Following international opposition to the payments for

85 G4 DMA Reducing Electricity and Fuel Consumption in

G4 Ground Operations EN3 In 2015 there was a 5.89% growth in our electricity consumption compared to 2014. This growth resulted from an increased use of the air-conditioning systems due to higher environmental temperatures (approximately 1oc higher than 2014). A second reason is the addition of built-up and air conditioned work spaces in The increase in fuel oil consumption can be explained by water penetration to 2 the EL AL campus at BGN Airport, in conjunction with a decline in equipment underground water tanks, which required the removal of about 35,000 liters of efficiency due to aging. polluted fuel oil. Additionally, the burner's heating system and a decayed steam In 2015 we continued to execute energy efficiency projects in the Company conductor pipe at the Tamam facility have been replaced. campus, such as bettering the cooling systems, which included replacement of condensers and carburetors and system enhancement, including the purchase Water and Sewage of a new chiller and the specification of a protocol for turning off inactive systems Sanitary sewage from EL AL campus is diverted to the Airport Authority's central on Saturdays at the TAMAM site; however ground operations increases at the wastewater treatment plant at BGN Airport. Industrial wastewater are diverted for same time. responsible treatment. Electricity Consumption (kWh) and Fuels (Liter) in Ground Operations 2013-15 Water and Waste Data (cubic meter) 2013-15

Light mazut Diesel Diesel Gasoline Year Electricity GJ Year Water consumption Sanitary wastewater Industrial wastewater (fuel oil) fuel transportation transportation

2013 173,667 3,520* 1,065,591 359,695 19,516,240 130,541 2013 141,696 76,747 Not measured

2014 184,523 10,006 1,029,273 347,308 19,267,920 128,602 2014 124,480 84,426 215.71

2015 235,489 0 1,073,560 363,725 20,402,800 136,748 2015 130,000 79,648 117.4

* Water consumption data only includes water G4-22 * Our previous CSR report mentions that in 2013 the diesel fuel consumption from the national system. was 600 liters. The erroneous data resulted from a different measurement for 2013. The data in the table above is the correct data.

86 Paper Saving Using iPads Instead of Paper: In 2016, the Airport Authority intends to place recycling bins in aircraft hangars, which would enable distribution of waste to 4 types: oils and rags (to be emptied As mentioned in "Our Passengers" section of this report, our computing by EL AL); screws and metals; solid waste; absorbing sand scattered in case of division has developed an application serving flight service managers oils pill incidents. that collects and presents all relevant information about passengers, the aircraft and the flight itself, in an accessible and convenient Hazardous Waste 2013-15

manner. This information was previously available to flight managers as Measuring Type 2013 2014 2015 paperwork, and the use of the app results in substantial paper saving. Unit

Our aviators also make increasingly more use of iPads, which enables the Oil filters Kg 2,160 1,480 1,920 elimination of printed aircraft literature (flight handbooks, navigation maps, flight briefings etc.), and thus to also contribute to aircraft weight reduction, saving on Contaminated packages Kg 91,090 84,990 42,760 fuel consumption. DTMS System Paint Liter 10,200 8,250 6,108 The Duty Travel Management System (DTMS) replaces the manual duty travel Organic substances Liter 4,050 7,880 3,673 system, which was based on printed documents. Since the system went online, it was fed by some 1,200 travel commands. Each uploaded command in manual Paint sludge Liter 4,920 3,300 2,440 form covered about 5 pages, amounting to a total of 6,000 pages saved.

G4 Liquid acid Liter 8,200 18,771 18,775 DMA Waste

G4 In recent years we have taken a number of major steps to reduce waste quantities: EN23 Medication to be destroyed Liter 400 1,160 160 • Placing orange bins for oil cans and oily rags in all aircraft parking areas. G4 EN25 Emulsion (water+oil) Liter 12,700 241,200 233,400 • Byproducts from the different workshops (copper, iron and aluminum) are sent to recycling. Fluorescent (bulbs) Liter 3,900 1,200 2,330 • By the initiative of our subsidiary Tamam, reusable dishes were also introduced to Economy Class meals on EL AL flights, to reduce the extent of Paint-contaminated rags Liter 1,400 8,700 1,200 waste on flights.

87 * Types of waste include hazardous waste, electronic waste and solid waste for burial and for recycling, plastic. * In order to maintain continuity of reporting on major types of hazardous waste, some types of waste resulting from EL AL activity are not reported, because they are not produced consistently, such as: paint powder, cyanide, glue saturated cloth, chromatic rinse water, paint filters, oil filters, sprays, oxygen generators and batteries. In accordance with the Electronic Waste Law, an agreement was signed with the MAI Electronics Recycling Corp., and its executing contractor, AllTrade Co., vacates electronic and other types of waste, as follows: Weight of Waste Types in 2015 (Kg) Weight of Waste 2014-2015 (Ton)

Type 2015 Type 2015 Type of waste 2014 2015

Wood and plastic waste 27,303 Second rate copper 35 Solid waste 1,809 2,040

Electronic waste 8,449 CRT monitor 968 Yard waste, wooden pallets and crates 80 82

Iron 48,642 Engine 13 Plastic bottles 3.4 4.4

Clean aluminum 6,132 Lights 26

Dirty aluminum 15,116 PSU (Power supply unit) 36

Clean copper 125 Tires 13,600

Measuring these types of waste only began in 2015.

88 G4 SO2 Noise Prevention EL AL's general flight protocols respond to and comply with all requirements addressing noise in airports around the world in which it operates. Additionally, there are specific noise protocols intending to respond to noise limitations at airports in which the general protocols do not suffice. The protocols include clear guidelines for performance of the horizontal and vertical profiles of the flight, as well as the heights of transition from ascending power to elevation power and the manner of folding the tow. As they approach landing, we guide our pilots to lower tow (wheels and landing gear) as late as possible in order to alleviate the noise hazard for residents who live in close proximity to the final approach path, and to operate the Auxiliary Power Unit (APU) as late as possible before the flight.

Airplane Pictures © 4X6zk Employee Training As part of the correction of faults identified by the environmental disparities report, • Hazardous materials definition of a hazardous material, location and treatment in 2015 we began a practice of environmental training for all Company employees, of hazardous materials, familiarity with MSDS safety data sheets, hazardous by means of a tutorial encompassing the following environmental issues: waste and types of treatment, • Energy understanding the Company's sources of energy consumption, ways • Waste and recycling understanding waste sorting at the EL AL campus, ways of saving and efficiency in the use of air conditioning, electrical appliances of reducing office waste, options and means of recycling waste on campus. and the consuming of transportation fuels. • Wastewater understanding sources of wastewater and means treatment at • Soil contamination understanding sources of soil pollution, the significance of BGN Airport by the Airport Authority. soil contamination, work instructions for the prevention of soil contamination, treatment of oils pills.

89 Our Chosen Route 6 Corporate Governance | Ethics

90 Corporate Governance

G4-34 Board of Directors The Board of Directors is responsible for determining Company policy and As of 2015, on EL AL's Board of Directors there are: supervises the performance and actions of the CEO. In order to ensure that the Company conforms to any applicable legal requirements, we have developed mechanisms and controls that aim to ensure compliance and the fulfillment of our legal obligations, and to ensure that our conduct is directed by ethical codes and independent female 3Board Members 3Board Members standards as are customary in Israel and around the world. (two of them external) The rules addressing the roles and authorities of the Board of Directors are detailed in the statutes of its operation as well as in the enforcement protocol and the "Conflict of interests for Board members" protocol, which intend to enable Board Members Board members to perform their roles in an appropriate and effective manner, with with accounting The average age no bias and in congruence with the public interest and the benefit of the Company. & financial expertise of board members54 (two of them external) In 2014 the Board held 21 meetings, and in 2015 – 18 meetings. 4 The Board can be approached in accordance with mechanisms determined by • Mr. Pinchas Ginsburg – with accounting and financial expertise the Companies Law as well as internal Company procedures. • Mr. Shlomo Hanael G4 Composition of the Board LA12 • Ms. Sofia Kimerling Following are the names of Board members who served on the board as of • Ms. Ruth Dahan (Portnoy) – Independent Director, with accounting and December 31, 2015: financial expertise • Mr. Amikam Cohen – Chair • Mr. Eyal Chaimovsky – External Director, with accounting and financial • Ms. Tamar Moses Borovitz – Deputy Chair expertise • Adv. Yehuda (Yudi) Levy – Deputy Chair • Mr. Eli Defes • Prof. Yehoshua (Shuki) Shemer – External Director, with accounting and * During 2014, Mr Nadav Palti and Mr. Yair Rabinowitz (External Director) stopped financial expertise serving as Members of the Board of Directors.

91 The role of a Board Member entails much responsibility, and for the purpose of • The Security Committee was established as instructed by the Articles of properly fulfilling the role, it is important that Board Members should have adequate Association of the Company and discusses security issues. time, knowledge, experience, skills and expertise. Therefore, Board Members are • The Corporate Governance Committee was established in accordance with required to declare each time their appointments are renewed, that they have the the instructions of the Company's internal enforcement plan regarding the skills and time required to properly fulfill their roles. Furthermore, Board Members Securities Law and Companies Law. The committee is the responsible factor declare that they are committed to report to the Chairman of the Board or the on the Board level to oversee the implementation of the enforcement plan CEO with regard to any matter, issue or incident, which do or might impair their on the subject of the Securities Law and Companies Law, as well as the competence to continue serving as Members of the Company's Board of Directors. implantation plan with regard to the Restrictive Trade Practice Law. Additionally, Board Members participate, from time to time, in trainings on professional and this committee also addresses corporate responsibility issues. regulatory issues, by both internal and external factors to the Company. • The Personnel Committee discusses issues related to personnel in the Company. The Company occasionally conducts training for new and existing Board Members, • The Finance and Budgets Committee discusses and approves the Company’s on topics such as the Law of Securities, corporate governance, restrictive trade budget, and also discusses ad hoc issues of economic consequence. practice, as well as on different subject that are relevant to their tenures as Company Board Members. During 2015, a training day was held for Board Members, which • The Management of Market Risk Committee is responsible for defining and included lectures on pertinent issues to the roles of Board Members. updating Company policies on fuel hedging, foreign currencies and interest; monitoring the implementation of these policies; and instructing or authorizing Committees of the Board of Directors G4-34 the management of the Company to deviate from implementing the defined Nine committees operate under the Company's Board of Directors, serving as the policies according to need. long arm of the Board. The Board of Directors determines the responsibilities and • The Government Relations and Regulations Committee discusses substantial mandate of committees, and is entitled to delegate its own authorities to these issues via-a-vis the Company's main regulators, significant legislation committees, with the exception of issues on which it is required to discuss and amendments and substantial legal proceedings. decide, by law, in the presence of all Board Members. Committees are mandated to determine and decide on issues that fall under their jurisdictions, except for • The Executive Committee discusses various issues pertaining to the ongoing issues defined by the Companies Law or by the Company's Articles of Association management of the Company. or by the statute of the Board of Directors that their role is only to discuss and In addition to these, the Balance-Sheet Committee and the Audit and Remunerations make recommendations to the Board. Committee are defined in composition and authorities by the Companies Law.

92 Audit and Finance and Corporate Government Balance-Sheet Security Personnel Managing Market Executive Remunerations Budgets Governance Relations and Committee Committee Committee Risks Committee Committee Committee Committee Committee Regulations Prof. Yehoshua Prof. Yehoshua Ruth Dahan Amikam Amikam Amikam Pinchas Amikam Amikam (Shuki) Shemer (Shuki) Shemer (Portnoy) Cohen Cohen Cohen Ginsburg Cohen Cohen (Chair) (Chair) (Chair) (Chair) (Chair) (Chair) (Chair) (Chair) (Chair) Ruth Dahan Pinchas Prof. Yehoshua Yehuda (Yudi) Tamar Moses Tamar Moses Tamar Moses Tamar Moses Sofia Kimerling (Portnoy) Ginsburg (Shuki) Shemer Levy Borovitz Borovitz Borovitz Borovitz Eyal Eyal Pinchas Prof. Yehoshua Yehuda (Yudi) Yehuda (Yudi) Yehuda (Yudi) Yehuda (Yudi) Yehuda (Yudi) Chaimovsky Chaimovsky Ginsburg (Shuki) Shemer Levy Levy Levy Levy Levy

Eyal Prof. Yehoshua Shlomo Hanael Shlomo Hanael Shlomo Hanael Pinchas Ginsburg Chaimovsky (Shuki) Shemer

Eyal Shlomo Hanael Eyal Chaimovsky Chaimovsky

Ruth Dahan Eli Defes (Portnoy)

G4 General Meetings Good Governance and Corruption Prevention DMA

During 2014, 3 shareholder meetings were held – one annual and special, and 2 Internal Enforcement and Compliance G4 special meetings. During 2015, 3 shareholder meetings were held – one annual SO4 EL AL's internal enforcement plan on issues of the Securities Law and Corporate and 2 special meetings. The following issues, among others, were discussed in the Law expresses the Company's recognition of the importance of compliance by meetings: discussion of the Board of Directors Report and the Company's Financial Company employees, managers, members of its Board of Directors and relevant Reports, re-appointment of the Company's accountant auditor, appointment of service providers. The goal of the plan is to assimilate and enforce norms of abiding Board Members, approval of the remunerations policy for Company officers and to law, ethics and other rules of conduct in the Company, among its officers and Board Members, approval of terms of tenure of the Company's CEO and approval employees, and thus to ensure the compliance of the Company and individuals of transactions in which a holder of controlling interest has personal interest. within the Company to the instructions of the Securities Law.

93 The enforcement plan includes measures for internal detection of violations and In accordance with the instructions of the enforcement plan, the Corporate potential failures, such as leaking of internal information to external factors, or Governance Committee convenes at least twice a year and discusses the report forbidden influence on the trade of Company shares. In the framework of the plan, of the Enforcement Officer, which includes, among other things, a description of an outline was determined for the operation of the Company's internal enforcement actions taken during the period covered by the report from the aspect of Securities system, and primary procedures and protocols were defined, including: procedure Law and Corporate Law, a review of enforcement incidents and the measures for the work of the Board of Directors; procedure for defining the roles and authority taken to address such incidents and prevent similar incidents in the future, as well of the Audit Committee; protocol for transactions with related parties; conflict of as a file of legislation updates, Securities Authority instructions and any substantial interests protocol for Board Members; officers' remuneration protocol; procedure decisions made in the context of legal proceeding from the aspect of the Securities for (non-financial) reporting; internal information protocol; procedure for transfer Law and Corporate Law. of information to the media and the capital market; procedure for considering Preventing Conflict of Interests enforcement issues in the promotion of employees and managers; and a procedure for enforcement considerations in the remunerations of employees and managers. In the context of the Company's internal enforcement plan with regard to the Securities Law and Corporate Law, a protocol was approved addressing conflict The Board of Directors had approved and adopted the internal enforcement plan of interests for Board members and senior officers. This procedure determines and its key procedures, and by the CEO's recommendation, appointed the Legal guidelines for cases in which the affairs of a person and/or entity connected to that Counsel to head Company's internal enforcement. person might place him in a personal conflict of interests with regard to an issue, During 2014-2015, the Enforcement Officer took different actions to assimilate decision, action or transaction that are on the agenda of the Board of Directors or the enforcement plan among employees and managers in the Company. Such its committees. The protocol also determines instructions concerning situations in actions included training on the issue, surveys held to evaluate the effectiveness which a personal matter or conflict of interests might arise for a Board member. of the internal enforcement plan, and initiated reviews were conducted to examine In accordance with the enforcement protocol addressing transactions with related the implementation of enforcement regulations. Additionally, the intranet portal parties, Company officers are required at the time of their appointment and at least publishes distant learning courses in Hebrew and English, intended for Board once annually, to respond to a questionnaire in which they are requested to submit members, managers and employees of the Company and its subsidiaries, in Israel information concerning related parties. The Company Secretary is responsible for and abroad, that include a description of the principles of the Company's internal forming and updating, from time to time, a list of related bodies to the Company enforcement plan and key enforcement procedures. according to the information received from senior officers by this questionnaire. To the best of our knowledge, no substantial changes occurred to the risks of Officers are obligated to report to the Company with regard to any changes that compliance that the Company is exposed to with regard to the Securities Law and might have occurred in the information they had reported to the Company in the Corporate Law, from the time the survey was conducted to identify compliance related parties' questionnaire. The list is distributed to various factors in the Company risks in these issues in 2013. as soon as it is updated and is published on the Company's organizational portal.

94 Internal Audit Maintaining Integrity In keeping with the Law, an Internal Auditor operates in the Company, constituting During 2014-2015, we continued taking different actions at EL AL to minimize a separate measure of monitoring in the Company. The Auditor has free, constant and prevent embezzlement and fraud. Among these actions the following might and direct access to any document and information in possession of the Company be mentioned: risk assessments, exposure assessments, process analysis, or any of its employees, as well as any regular or computerized database and trainings and treating suspicions for deviation from proper management and all automated data processing systems in the Company, including financial data. more. Furthermore, as part of the protocol regarding suspicion for infringement Furthermore, the auditor is a member of the senior management team of the of law or integrity violations or the mismanagement of Company business, a G4 DMA Company and is present in all management meetings. mechanism was defined for integrity violations, and it is communicated toall employees accompanied by definitions and examples. These are also featured in G4 The Company audit team is comprised of 9 auditors from different sectors: SO4 the Company Auditor's websafe and the organizational portal. accounting, law, economics, engineering, IT, commerce, business administration and organizational consulting. Team members hold leading international Lawsuits and Legal Proceedings qualifications such as CIA, CISA, SRISC, accounting and lawyer licenses, IT As of the end of 2015, a number of legal proceedings are conducted against auditors and risk managers. the Company, and due to some of them, the Company has made appropriate Audit assignments are varied and include planned audits, ad-hoc reviews, risk provisions as described in its financial reports, based on the evaluation of the assessments, addressing complaints regarding irregularities by managers and management, which in turn are based on opinions of its legal counselors. Details suspicions for wrongdoings, formulating and leading a plan the prevention for regarding substantial legal proceedings can be found in explanation 16 to the embezzlement and fraud and so forth. Company's 2015 Financial Reports. A page of the organizational intranet portal was dedicated to the Company Auditor, During the years of reporting 2014-2015, no significant fines were received by the serving as one of the means at this disposal to transmit information and updates to Company. However, a number of cases against the company are still outstanding, all Company personnel. Via this page, reports can be made to the Auditor regarding with a final decisions is yet to be received. suspicion for infringements of the law, integrity violations or mismanagement of business affairs. After receiving the report, the Auditor reviews the matter and decides whether to examine the issue further and in what way. During 2015 the Auditor submitted reports addressing a wide variety of issues, including safety, security, finance, service, commerce, information systems, human resources, operations and more.

95 Managing Corporate Responsibility The issues of corporate responsibility and community relations are concentrated under one roof at EL AL, due to the recognition of the subject's importance and its contribution to the organization. Mr. Zvika Segal was appointed to the position of Director of Corporate Responsibility & Community Relations. Among his duties, Mr. Segal is responsible for the presentation of the corporate responsibility work plan to the Corporate Governance Committee, which was appointed to address and direct the issue on behalf of the Board of Directors.

אל על בקהילה Senior Officers Remunerations New Logo for EL AL Community Responsibility In accordance with the Companies Law, the Company formed a remuneration policy At the end of 2015 we launched the new logo for our social responsibility and for its officers via the Audit and Remunerations Committee. The remunerations community relations section. This branding is an essential and precise stage for us policy was approved in January of 2014 by the Company's shareholders meeting. in terms of the continual development of our social activity for the community. The logo presents our perception of values in an optimal way – a connection between The Company's remunerations policy is based on principles that would enable people, closeness of hearts and doing things for others. an appropriate and adequate balance between the desire to compensate senior management and Board members for their achievements, and the need to ensure that the compensation structure is in keeping with the benefit of the Company.

G4-15 אל על בקהילה Maala" Index" Since 2011 we have been proud to partake in the Maala Index, which rates Israeli companies according to their corporate responsibility performance. In 2015 we were awarded the "Platinum" rating for the first time, for our social and environmental conduct during 2014. We have maintained this rating in 2016 as well, referring to our performance in 2015. We consider this to be a testament and recognition in our continuous investment in corporate responsibility.

96

לוגו אחריות חברתית ˇ אל על תצורה מאוזנת LY151001 | ELAL CSR logo | March 2016

C100M100Y0K70 C0M10Y27K50 C28M100Y83K17 1/2 G4-56 Ethics At home anywhere in the world. We seek to exceed our customers' expectations of service, and continually improve the customer experience. Provide a home to The Ethics Code all of our customers and personnel by attending to their needs and treating them At EL AL we operate in accordance with the Company's Ethics Code, which was with respect and appreciation. formulated and written in collaboration with employees and managers and with the Excellence and creativity. We strive for initiative, fast response, excellence, assistance of an external consultant. The behavioral norms and values defined by creativity and perpetual innovation, always placing the customer at the top of our the code guide us – employees and officials alike – in our activities and our work, priorities and the commitment to high performance in order to generate substantial and also applies to our subsidiaries: value for all of our stakeholders. 1 6 The people of EL AL. True partnership between all people of EL AL, collaboration Leadership - The National Carrier Professionalism and friendship, in the daily routine and in crisis situations. Making the most of our 2 7 capabilities while respecting and caring for others and embracing diversity. Fairness and Transparency Team work and Sharing Professionalism. We endeavor to be a learning organization which continually 3 8 enhances the knowhow and professionalism of its people. At Home in the World Safety and Security Teamwork and sharing. Teamwork both within and outside of the Company, mutually assisting one another and attempting to see the broader picture, in order 4 9 to accomplish the tasks and challenges ahead. Excellence and Creativity Environmental & Community Responsibility Safety and security. We work to implement these key values in every realm of action, 5 10 to provide the upmost safety and security for our customers, personnel and suppliers. The People of EL AL Management & Executive Accountability Environmental & community responsibility. We act from a sense of environmental Leadership. Striving to economic soundness and moral excellence to yield a and social responsibility, and incorporate these considerations into our operations. return for all stakeholders. The interactions with our subsidiaries are based on a Additionally, we are engaged in our community and appreciate our personnel's relationship of trust, mutual collaboration and openness. involvement and volunteerism for the community. Fairness and transparency. We act in fairness and transparency, not impacted Management & executive accountability. Acting professionally and using discretion, by foreign considerations in our decision-making. We refrain from any conflict while being accountable for any activity in the unit. The Company's Management of interests and interact reliably and fairly with all of our stakeholders. We act is a full partner to the assimilation of the Code and provides a personal example transparently and openly and assume personal accountability for our actions. in its actions.

97 The Company's Ethics Code is featured on our website and is accessible to all of our stakeholders. Deployment of the Ethics Code Upon completion of the phrasing of our Ethics Code, the Company began a process of The measurements we use to examine the extent and manner of assimilation of forming an assimilation and training program, aiming to ensure all of our employees, the Ethics Code are: in Israel and abroad, are acquainted with the values expressed by the code, and 1. The rate of employees who have undergone training by the tutorial; internalize them. The assimilation program included the following components: 2. The number of inquiries made to the Company Ethics Officer; 1. Deploying the Ethics Code to Company employees (via email and later also in printed format), uploading it to the organizational portal, positioning posters 3. The number of inquiries on ethics issues via the "Tafnit" system; in conspicuous positions throughout the campus, as well as in the offices and 4. And number of inquiries that have led to disciplinary measures. external branches; The EL AL Ethics Officer is responsible for the execution of this plan in cooperation 2. Translating the code to English for the purpose of its distribution and presentation with the training department. in Company representations abroad; 3. Developing a tutorial that integrates information, videos and interactive activities, Training and examines how ethical dilemmas are handled, and its deployment to employees Towards the end of 2015 and the beginning of 2016, we have started developing and managers. a renewed software for the assimilation of the issue of ethics and acquaintance 4. Starting in 2012 lectures and discussions on the issue are integrated into all with the Ethics Code among Company employees and managers. The tutorial is Company basic and training courses, and the execution of the tutorial was defined expected to go online during the second half of 2016. as part of their requirements. During 2014, 1,328 employees underwent Ethics Code training, and during 2015, 5. The "Tafnit" system enables anonymous inquiries and reports of ethics code 750 employees. violations, as well as raising questions and ethical dilemmas from the field.

98 Our Subsidiaries 7 Tamam | Sun d'or | Katit

99 We Want You to Know More About Our Subsidiaries… Tamam - Aircraft Food Industries (Ben Gurion Airport) Ltd. Aircraft Food Industries (Ben Gurion Airport) Ltd. ("Tamam"), which is fully owned by EL AL, was founded in 1949, and since then has been providing a broad variety of qualitative food services in aviation sector and external to it, in Israel and abroad. other airlines and additional customers. Tamam's customers include the following Tamam's facility is located on IAA grounds, outside of BGN Airport, and its companies: Arkia, Sun d'or, Israir, KAL, Royal Jordanian, Uzbekistan Airways and operations are primarily the production and supply of kosher ready meals for many other charter airlines. airlines. Over the years Tamam has become a leading company in its field.

Additionally, Tamam also provides catering services to institutions and large Tamam considers its clientele to be part of its success, and regularly measures their G4 events and provides food solutions to accommodate its customers' demands, satisfaction levels. In this way, Tamam improves the quality of service provided to PR5 such as: gluten free, vegan, vegetarian, dietetic, glatt kosher etc. its customers. The measuring and control are conducted in different ways:

G4 According to EL AL's Consolidated Financial Report, Tamam's revenues in 2014 • Digital surveys conveyed to company customers via EL AL's feedback system, EC1 were approximately UDS 32.3 million, and in 2015 – USD 31.2 million. refer, among other things, to passenger satisfaction regarding meals on flights. Additionally, flight service managers communicate ongoing feedback to Tamam. Tamam's Customers • Questionnaires initiated once a year, circulated to non-airline institutional Tamam manufactures approximately 6 million meals annually for airlines and customers. institutional customers. Tamam is attentive to its clientele and adapts itself to their demands, in order to attain maximal satisfaction from the service provided • Focus groups of customers and designated populations of non-avition meal by the company. consumers. Tamam's primary customer is EL AL; it purchases meals for its flights departing • Call center for customers of the company. Tamam works tirelessly to improve Israel as well as for some of the returning flights from nearby destinations. the call center's service and efficiency. During 2014, about 81% of Tamam sales were to EL AL, and the remainder to

100 G4 Tamam Employees and Work Environment LA12 In 2015, Tamam employed 394 personnel, and during busy summer months approximately 100 additional employees were employed through a contractor.

Men Women

Employees195 - 171 Permanent - 107 Employees1 -99 189 Permanent - 116 Managers - 24 Temporary - 88 Managers - 10 Temporary - 83

Tamam ensures it creates a pleasant and welcoming working environment Additionally, Tamam encourages academic education and provides assistance to for employees from the day they are recruited and inducted. It also conducts its employees who are studying towards an academic degree, subject to approval ongoing dialog with its employees, and designates one day a week for CEO by the company CEO, at 75% gross of the cost of an academic school year. G4 meetings with any employee interested. Moreover, the company holds periodic LA11 Employment Diversity and Gender Equality G4 review talks with all levels of employees and managers, including temps. LA12 Tamam promotes the diverse employment of varied populations, such as: Israeli Tamam cares for the welfare of its employees by means of social events, fun days, Ethiopians and emigrants from the former USSR, India, South Africa and North common vacations, social activities, cultural events, ethnic holidays and so forth. Africa. Additionally, the company insists on gender diversity in the management G4 Personal and Professional Development LA10 level as well – approximately 50% of Tamam's senior management (3 women) Tamam is devoted to nurturing its personnel and training them for different roles and 25% of the managerial level (10 women) are women. in the company. For this end, it offers its managers and employees training for Tamam attributes great importance to the employment of people with disabilities personal and professional development. Training courses are held according for the creation of egalitarian and respectful employment in Israeli society. Tamam to the company's training program on a variety of issues, such as: work safety, employs more than 20 employees with different disabilities and integrates them food safety and food quality, work procedure refreshers, first aid, workshop for into the work cycle. managers, professional education and so forth.

101 Animal HACCP products (USDA, EEC) export Ministry of permit Agriculture Veterinary Services Tamam respects and appreciates the work of its employees, and enables

employees who are so interested to continue working after retirement age. ISO:9000-2008 Chief Institute of Ministry of Health Rabinnate Quality & Control Producer of Israel License

Special Good permit to Manufacturing produce Practice (GMP) gluten free Ministry of The average seniority of Tamam employees is 10 years. 10 of our employees are meals Health older than the official retirement age. G4 G4 PR1 Food Quality and Safety Healthy Food Adapted for a Variety of Customers PR1 Tamam invests in the development of products accurately suited to customer As a company that supplies food to a broad customer base, Tamam has the needs, while strictly maintaining the quality and safety of products. This policy is responsibility of supplying fresh meals that were produced from qualitative executed by means of: ingredients, while minimizing the use of preservatives. All this stems from a perception for the improvement of quality of life through "healthier food". Tamam is • Compliance to legal requirements and regulations, under supervision by the meticulous about the quality of its products, both in aviation and in catering. Ministry of Health Regarding its aviation customers, Tamam manufactures and markets special • Meeting strict international quality standards in terms of food safety system meals according to health requirements (low sugar, salt, gluten, lactose, and so management. Tamam constantly improves the quality management system forth), religious or cultural practice (glatt kosher, Indian, Asian meals etc.) and by means of consistent reviews of quality targets and meeting them, to ensure ideological "way of life" approaches (vegetarian, vegan, fruitarian meals etc). food safety and the prevention of quality malfunctions. In terms of its catering customers, Tamam responds to unique dietary needs in • Meticulousness in the production of meals in proximity to flight departure educational institutions and the IDF by marketing gluten free, soy free, lactose free, times, in order to maintain the highest levels of taste, freshness and quality for sesame free and egg white free meals. Additionally, Tamam is meticulous about its clientele. choosing pure ingredients with no readymade mixes, sauces, dressing, powders • Encouraging participation and accountability among its employees, by means and the like. Tamam is resolute about involving its customers in the development of instruction, training and supervision. of meals with special requirements by conducting consumer focus groups and the use of social networks.

102 EL AL and "Salt of the Earth" have recently launched a health initiative, in which sodium reduced "Salt of the Earth" salt packs will be served in hundreds of thousands of meals served on EL AL flights. This is conducted as part of the trend to reduce consumption quantities of sodium. Sodium reduced salt contains about 50% less sodium than regular table salt.

G4 Tamam's Community Involvement EC7

G4 Tamam is committed to the community in which it operates, and invests in Employment. Tamam helps approximately 20 lone soldiers from a paratrooper EC8 strengthening and developing it in through a variety of issues. Activities include battalion, by hiring them to work during special economic army leave, during which G4 donations, assistance to non-profit organizations, maintaining an ongoing they may work and earn money in addition to their military salaries, due to their SO1 relationship with the Celiac Rights Forum, as well as employing soldiers who are own or their families' economic status. on "economic leave". Tamam also partakes in EL AL's community activities. Energy Efficiency at Tamam Donations and contributions (fiscal and in-kind). As part of its activity for the Tamam devotes efforts to improving its energy efficiency, from the understanding community, Tamam has made a donation to the Beni’s Home for Lone Soldiers; that it should minimize its negative environmental impacts, and has been acting a contribution of ingredients for a Bat Mitzvah event for the Goldschmidt Home to improve a number of issues, such as electricity efficiency, water efficiency, fuel for Girls; a contribution of hot meals; a donation of food and ingredients to needy consumption efficiency etc. families on holiday eve dinners via "Hand to Hand"; a contribution to children with cancer on a trip abroad; a donation of meals for holocaust survivors (Passover Energy efficiency. The company acts to save lighting electricity by replacing Seder meal); and a contribution to Kesher – home for the special families. hundreds of light bulbs to economic T5 bulbs; formulating a protocol to shut down inactive system on Saturdays to save energy; improving and bettering cooling Ongoing connection with nonprofit associations. Tamam is involved with "Shikum systems (such as the purchase of a new chiller, for example). Acher – Different Rehabilitation", which operates and assists people with mental disabilities to integrate into the employment market, and "Olim together" that Water consumption efficiency. In recognition of the importance of the water assists Ethiopian-Israeli academics to integrate into employment according to their resource and mitigating its consumption, Tamam had recently purchased new fields of study. Tamam has an ongoing relationship with the Celiac Rights Forum dishwashers, replaced worn pipes, improved the recovery ratio of the osmosis (conducting meetings of parents, children and dieticians) aiming to improve and system, and improved the facility's water system by appropriate maintenance. diversify its gluten-free dishes.

103 Reducing fuel consumption and air pollution. Tamam recognizes the importance of minimizing the use of fuel oil to the mitigation of pollutant and GHG emissions. During 2015, infrastructure works were conducted in the heating and steam conducting systems, aiming to reduce fuel oil consumption. Additional actions are taken for purposes of energy efficiency – replacing old dishwashers, bettering systems and installing new monitors.

A First Class meal

104 Sun d'or International Airlines Ltd. Sun d'or was established on 1 October 1977 as In 2015 Sun d'or had 27 employees: G4 LA12 a subsidiary of EL AL, named "EL AL Charter Services Ltd". Four years later the company Men Women name changed to "Sun d'or", and consequently to "Sun d'or International Airlines". Sun d'or is located at the BGN Airport EL AL campus, is under full ownership of EL AL, and it organizes and markets the group's charter operations. The company markets scheduled, seasonal and occasional flights. Sun d'or's relationship with Employees9 - 4 18Employees - 14 EL AL is also expressed by the maintenance of aircraft and the service both on the Managers - 5 Managers - 4 ground and in the air, which are conducted by EL AL personnel. EL AL's Matmid frequent flyer club is another link between the companies. Over the years, Sun d'or grew to become a significant player in the Israeli charter Sun d'or intends to continue its development and growth trend in future years as flight market, and currently also operates flights for incoming tourists visiting Israel. well, and to launch new holiday destinations. During 2015, Sun d'or marketed scheduled flights to new destinations (Naples and According to our professionalization plan, all Sun d'or personnel undergo training G4 LA10 Nice) and substantially grew its operations to existing destinations such as Lisbon. and instruction to perform their duties, partake in EL AL's internal training courses, Additionally, Sun d'or marketed flights to new charter destinations, such as Ibiza as well as have study and enrichment seminars out of the company. and Karpathos, and marketed flights to exotic destinations in Africa – Seychelles, Sun d'or invests a lot of thought and resources into the creation of a pleasant, Kilimanjaro and Zanzibar. In total, during 2015 Sun d'or marketed 1,141 flights to comfortable and welcoming working environment for its employees. The about 50 destinations in Europe, Africa and the Mediterranean Basin, compared to company works to improve the welfare of its employees and holds annual social 856 flights in 2014, data indicating 33% growth. days and company events – Children's Day for children of employees, holiday G4 According to EL AL's Consolidated Financial Report, Sund'or's revenues in 2014 events for employees and their families, Women's Day, annual festive shared EC1 were approximately UDS 46,076 thousand, and in 2015 – USD 57,486 thousand. dinner and so forth.

The company regularly operates two 185 seat 737-800 Boeing aircraft. Additionally, Sun d'or emphasizes the direct and unmediated relationship between employees G4 any EL AL aircraft is entitled to operate Sun d'or flights. and managers. Company employees regularly receive periodic feedback from LA11 company managers.

105 Sun d'or also works to instill a perception of ethical conduct, and has begun a process of writing the company's policy document, which would include the company's vision and ethics code. In addition to business operations, Sun d'or employees also partake in volunteer activities for the community. Thus, for example, in 2015 employees participated in a cleanup operation of the Ben Shemen Forest supported by JNF.

G4 Sun d'or's customer satisfaction is assessed as part of EL AL's customer PR5 satisfaction surveys. Additionally, Sun d'or operates a Facebook page, through which it strengthens the relationship with its customers and offers a variety of deals. Sun d'or's fuel consumption data is included in the environmental chapter of this report.

Did you know? The Name Sun d'or combines the English word "sun" and the French "d'or" which means "golden". This sums the meaning of the company's name to be "Golden Sun".

Distribution of company employees to age groups:

At the end of 2014, Miki Strassburger replaced Uri Danor as CEO of the company. Strassburger was selected by the Globes business newspaper as one of 40 promising young businessmen in Israel.

106 Katit Ltd. Katit Ltd. is fully owned by EL AL and its main operations are the production and supply of meals for company employees. The company operates a number of restaurants for EL AL employees, canteens in EL AL's office buildings as well as the King David Lounge at BGN Airport. Company offices are located at the EL AL campus. According to EL AL's Consolidated Financial Report, Katit's revenues in 2014 were G4 approximately USD 4,348 thousand, and in 2015 – USD 4,179 thousand. EC1 Katit employed 107 personnel in 2015: G4 LA12 Men Women

• Training and qualification of employees. Katit employees undergo training to be qualified for work in the kitchen, as well as periodic safety training, adapted Employees2 - 22 4 Permanent - 2 Employees83 - 81 Permanent - 19 to this work environment. Managers - 2 Temporary - 22 Managers - 2 Temporary - 64 Healthy Catering at EL AL As mentioned, as part of our concern for the health of EL AL personnel, in Katit conducts employee gatherings to note holidays as well as special occasions September Katit started offering a "Healthy Meal" alternative – a self-constructed from time to time for the welfare of its employees. Katit's management maintains salad, which has become a very popular meal option. Additionally, every Monday, an open door policy and employees are comfortable to approach management on as part of the "Meatless Monday" initiative, an additional vegetarian alternative is any matter. offered to interested diners. We further ensure to add more and more vegetarian

G4 components in the food menu. LA12 • Employment diversity. Katit employs staff from different societal sectors, including many new immigrants. In fact, all employees hired by Katit in recent Community Responsibility G4 EC7 years have immigrated to Israel recently, Katit being their first workplace. As an EL AL subsidiary, Katit supplies about 100 dishes daily to the "Kadima" • Food surveys. Katit occasionally conducts surveys to collect feedback on the home for youths in Or Yehuda, and contributes meals to events of Battalion 202 meals served to EL AL employees. adopted by EL AL.

107 About This Report 8 & Content Index

108 The calculation of GHG emissions resulting from ground operations was About this report calculated according to leading methodology GHG Protocol. This methodology requires reporting by 2 scopes (Scope 1 - emissions under direct responsibility of G4-28 This report, referring to the years 2014-2015, is the third corporate social responsibility report published by EL AL. We intend to uphold our commitment and the reporting company; and Scope 2 - emissions to which the reporting company to continue publishing CSR reports in upcoming years, presenting our progress and is indirectly responsible, such as the consumption of electricity). Reporting improvement in them. We consider these to be an expression of our commitment to in Scope 3 (additional indirect emissions in the supply chain) are considered advancing the issue of sustainability and corporate responsibility in the Company. optional and excluded from this report. The report was written with the assistance of Good Vision – CSR Consulting Firm, G4-33 The report was written in accordance with the G4 "Core" option of the Global Reporting Initiative (GRI) guidelines, without an external verification process. of the Fahn Kanne & Co. Grant Thornton Group. Good Vision is highly experienced Its goal is to expose, in a transparent and orderly manner, EL AL's activities on in CSR services and is a GRI Organizational Stakeholder (OS). the issues detailed within, and is intended primarily for Company employees, our customers, our business and community partners and our shareholders. In the process of writing this report, we have identified and addressed material aspects in Company operations, while cooperating with stakeholders, as is detailed in the We wish to thank all people and entities involved in the collection of data, writing section titled "Material Aspects". Much like preceding reports, this document and the and production of this report, in particular maitai design studio and Peter Goss, material aspects detailed in it, are focused on Company operations in Israel, unless Sivan Farag from Photo Farag, the Atmosphere Magazine editorial staff and otherwise stated. Furthermore, some of the chapters also include some reference to Yuval Sigler Communications Ltd. the operations of our fully owned subsidiaries – Tamam, Katit and Sun d'Or. Finally, we thank all stakeholders with whom we have held interviews in the process In some cases, numerical data from 2013 was presented as a basis for comparison. of writing this report, and who have assisted us throughout the process. The point of reference to the data presented for each year is December 31. The following people can be contacted with any question or issue concerning this The reporting of environmental impacts and performance and the steps toward G4-31 report and its contents: improvement in this topic, in addition to our aerial operations, also covers the major environmental issues emanating from ground operations in EL AL's campus. EL Mr. Zvika Segal, AL has Additional storage and operational areas excluded from this report. The Director of Corporate Responsibility & Community Relations at EL AL, [email protected] calculation of greenhouse gas (GHG) emissions resulting from the use of jet fuel Ivri Verbin, CEO of Good Vision - CSR Consulting Firm, [email protected] was based on fuel quantities uplifted by EL AL aircraft. Naturally, all aircraft depart with excess fuel quantities in case of a longer stay than anticipated. In practice, fuel Adv. Igal Avrahami, consumption is lower. Accounts Manager at Good Vision - CSR Consulting Firm, [email protected]

109 G4-32 Content Index

General Standard Disclosures

Indicator Description Page Comments / Omissions Statement from the most senior decision-maker of the organization (such as CEO, chair, or G4-1 equivalent senior position) about the relevance of sustainability to the organization and the 3-4 organization’s strategy for addressing sustainability. G4-3 Name of the organization. 9

G4-4 Description of primary brands, products, and services. 10-11

G4-5 Location of the organization’s headquarters. 9 Countries where the organization operates, and names of countries where either the G4-6 organization has significant operations or that are specifically relevant to the sustainability 9, 62-63 topics covered in the report. G4-7 Nature of ownership and legal form. 13

G4-8 Markets served. 10-11 13-15, Scale and information about the organization. G4-9 61-62 61-62, Total number of employees by type of contract, gender and region. G4-10 64-65 G4-11 Percentage of total employees covered by collective bargaining agreements. 62

G4-12 Description of the organization’s supply chain. 56-57 Significant changes during the reporting period regarding the organization’s size, structure, 17 G4-13 ownership, or to its supply chain.

110 Indicator Description Page Comments / Omissions

G4-14 How the precautionary approach or principle of The Rio Declaration is addressed by the organization. 83 Externally developed economic, environmental and social charters, principles, or other 85, 96 G4-15 initiatives to which the organization subscribes or which it endorses. Memberships in associations (such as industry associations) and national or international 18 G4-16 advocacy organizations. All entities included in the organization’s consolidated financial statements or equivalent 18-20 G4-17 documents, and whether they are covered in the report. The process for defining the report content and the Aspect Boundaries and how the 21 G4-18 organization has implemented the Reporting Principles for Defining Report Content. G4-19 The material Aspects identified in the process for defining report content. 21

G4-20 The material Aspect and their Aspect Boundary within the organization. 21

G4-21 The material Aspect and their Aspect Boundary outside of the organization. 21

G4-22 Any restatements of information provided in previous reports, and the reasons for such restatements. 86

G4-23 Significant changes from previous reporting periods in the Scope andAspect Boundaries. - No significant changes during reporting period

G4-24 List of stakeholder groups engaged by the organization. 22-24

G4-25 The basis for identification and selection of stakeholders with whom to engage. 22-24 the organization’s approach to stakeholder engagement, including frequency of stakeholder 22-24, 40, group, and an indication of whether any of the engagement was undertaken specifically as G4-26 59, 68 part of the report preparation process.

111 Indicator Description Page Comments / Omissions Key topics and concerns that have been raised through stakeholder engagement, and how the 22-24, 40, G4-27 organization has responded to those key topics and concerns, including through its reporting. 59, 68 G4-28 Reporting period 109 The last report was published in 2014 and G4-29 Date of most recent previous report - covered FY 2012-2013. Prior to that a report was published in 2012 which covered FY 2010-2011 G4-30 Reporting cycle (such as annual, biennial). - Reporting is biennial

G4-31 Contact point for questions regarding the report or its contents. 109

G4-32 GRI Content Index 110-115 The organization’s policy and current practice with regard to seeking external assurance for 109 G4-33 the report and the relationship between the organization and the assurance providers G4-34 The governance structure of the organization, including committees of the highest governance body. 91-93 The organization’s values, principles, standards and norms of behavior such as codes of 97-98 G4-56 conduct and codes of ethics.

112 Specific Standard Disclosures Material Indicator Description Page Comments / Omissions Aspect G4-DMA Management Approach 9 16, 100, Economic G4-EC1 Direct economic value generated by the organization performance 105, 107 The total monetary value of financial assistance received by the organization from 9, 16 G4-EC4 governments during the reporting period. G4-DMA Management Approach 26 26-29, Indirect Extent of development of significant infrastructure investments and services supported, and 33-36, economic G4-EC7 whether these investments and services are commercial, in-kind, or pro bono engagements. impacts 103, 107 26-29, Significant identified indirect economic impacts the organization has, and their scope G4-EC8 34-38, 103 G4-DMA Management Approach 82, 86 Energy G4-EN3 Total energy consumption in the orginazation 86

G4-DMA Management Approach 82 Water G4-EN8 Total water withdrawl by source 86

G4-DMA Management Approach 82, 84

Emissions G4-EN15 Direct Greenhouse gas (GHG) emissions 83-85

G4-EN16 Indirect Greenhouse gas (GHG) emissions 83-84

113 Material Indicator Description Page Comments / Omissions Aspect G4-DMA Management Approach 82, 87

G4-EN22 Total water discharge by quality and destination 82 Effluenys and waste G4-EN23 Total weight of waste by type and disposal method 87-88 Weight of transported, imported, exported, or treated waste deemed hazardous under G4-EN25 the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported 87-88 waste shipped internationally G4-DMA Management Approach 61 Total number and rates of new employee hires and employee turnover by age group, 61-65 G4-LA1 gender and region Employment Benefits provided to full-time employees that are not provided to temporary or part-time 73-75 G4-LA2 employees, by significant locations of operation G4-LA3 Return to work and retention rates after parental leave, by gender 75

G4-DMA Management Approach 77 Occupational Percentage of total workforce represented in formal joint management-worker health and 77 health and G4-LA5 safety committees that help monitor and advise on occupational health and saftey programs safety Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and 78, 80 G4-LA6 total number of work-related fatalities, by region and by gender G4-DMA Management Approach 70

G4-LA9 Average hours of training per year per employee by gender, and by employee category 70 Training and education Programs for skills management and lifelong learning that support the continued 71-72, G4-LA10 employability of employees and assist them in managing career endings 110, 114 Percentage of employees receiving regular performance and career development reviews, 75, 101, G4-LA11 by gender and by employee category 105

114 Material Indicator Description Page Comments / Omissions Aspect

Diversity G4-DMA Management Approach 67 and equel Composition of governance bodies and breakdown of employees per employee category 63-64, 91, opportunity G4-LA12 according to gender, age group, minority group membership, and other indicators of diversity 101-102 G4-DMA Management Approach 26 Local Percentage of operations with implemented local community engagement, impact 26, 34-36, communities G4-SO1 assessments, and development programs 103 G4-SO2 Operations with significant actual and potential negative impacts on local communities 89

G4-DMA Management Approach 93-96 Anti- corruption G4-SO4 Communication and training on anti-corruption policies and procedures 93-96

Customer G4-DMA Management Approach 43-44 health and Percentage of significant product and service categories for which health and safety safety 43-44, 102 G4-PR1 impacts are assessed for improvement

Product G4-DMA Management Approach 40 and service 40-42, labeling Results of surveys measuring customer satisfaction G4-PR5 100, 106

115 116