REGISTRATION DOCUMENT 2017 REGISTRATION DOCUMENT 2017 DOCUMENT REGISTRATION INCLUDING THE ANNUAL FINANCIAL REPORT WWW.AIRFRANCEKLM.COM 11802038_AFKL_DOC_DE_REF_220x280_GB.indd802038_AFKL_DOC_DE_REF_220x280_GB.indd ToutesToutes lesles pagespages 112/03/20182/03/2018 119:289:28 0_VA_V5 04/04/2018 15:12 PageI Selected financial information 4 FINANCIAL REPORTAFR 185 AFR 5 Highlights of the 2017 financial year 6 5.1 Investments and financing 186 5.2 Property, plant and equipment 188 Highlights of the beginning 5.3 Comments on the financial statements 190 of the 2018 financial year 8 5.4 Key financial indicators 195 Financial statements 5.5 Consolidated financial statements 200 5.6 Notes to the consolidated CORPORATE GOVERNANCE REPORTAFR 9 financial statements 207 1 5.7 Statutory Auditors’ report on 1.1 The Board of Directors 10 the consolidated financial statements 287 1.2 Compensation of the company officers 40 5.8 Statutory financial statements 293 1.3 The Group Executive Committee 54 5.9 Five- year results summary 306 1.4 Share capital and 5.10 Statutory Auditors’ report shareholder structureAFR 55 on the financial statements 307 1.5 Information on trading in the stockAFR 63 5.11 Statutory Auditors’ special report on regulated agreements 2 ACTIVITIESAFR 65 and commitments 310 2.1 Market and environment 66 2.2 Strategy 70 6 OTHER INFORMATION 311 Activities 6.1 History 312 2.3 Network business 74 6.2 General information 314 2.4 Low- cost business (Transavia) 89 6.3 Information on the agreements 2.5 Maintenance business 90 concluded in connection 2.6 Fleet 96 with the business combination between Air France and KLM 315 6.4 Legislative and regulatory environment RISK AND RISK MANAGEMENTAFR 101 3 for the air transport industry 317 3.1 Risk management system 102 6.5 Information and control 320 3.2 Risk factors and their management 104 3.3 Organization and functioning GLOSSARIES 322 of internal control 113 3.4 Ethics and compliance 120 Air transport glossary 322 3.5 Market risks and their management 122 Financial glossary 324 Table of concordance CORPORATE SOCIAL RESPONSIBILITY: for the Registration Document 326 4 SOCIAL, CITIZENSHIP AND Information included by reference 329 Table of concordance for ENVIRONMENTAL INFORMATIONAFR 127 the Annual Financial Report 330 4.1 Social information 129 4.2 Social indicators for the Group 142 4.3 Note on the methodology for the reporting of the social performance indicators 146 4.4 Corporate citizenship information 149 4.5 Environmental information 157 4.6 Environmental indicators 168 4.7 Note on the methodology for the reporting of the environmental indicators 172 4.8 Monitoring of Act No. 2017-399 known as the Duty of Vigilance Law 175 4.9 Table of concordance for The components of the the social, corporate citizenship Annual Financial Report are identified and environmental information 177 in the index by the following pictogram AFR 4.10 Report by one of the Statutory Auditors 180 0_VA_V5 04/04/2018 15:12 Page1 REGISTRATION DOCUMENT 2017 AIR FRANCE - KLM INCLUDING THE ANNUAL FINANCIAL REPORT Group profile In its principal businesses of passenger and cargo transportation, low-cost operations and aircraft maintenance, Air France - KLM is a leading global player. This Registration Document is an unofficial translation of the French Document de Référence, which was filed with the Autorité des Marchés Financiers on Thursday March 29, 2018 pursuant to Article 212- 34 of the AMF General Regulations. This unofficial translation has been prepared by Air France - KLM for the information and convenience of English-speaking readers and has not been reviewed or registered with the AMF. No assurances are given as to the accuracy or completeness of this translation, nor any responsibility assumed for any misstatement or omission that may be contained therein. The French Document de Référence may be used for the purposes of a financial transaction if supplemented with an offering memorandum approved by the AMF. In the event of any ambiguity or discrepancy between this unofficial transation and the FrenchDocument de Référence, the French version shall prevail. 2017 Registration Document — Air France-KLM 1 0_VA_V5 04/04/2018 15:12 Page2 MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER Dear Sir or Madam, Dear shareholder, Within a buoyant but extremely competitive context for the air transport industry, Air France - KLM returned to the offensive in 2017 and achieved substantial progress. The Group is thus positioned as a European leader in terms of traffic expressed in passenger revenue- kilometers, having carried nearly 100 million people across five continents, i.e. 5.6% more than in the previous year. This growth was accompanied by a marked improvement in performance and a significant reinforcement in the Group’s financial structure: in 2017, Air France - KLM generated operating income of €1.5 billion, up by 42% relative to 2016, while net debt was reduced by €2 billion. These results reflect the commercial dynamic and attractiveness of the Group’s airlines and we are proud of the Air France - KLM teams who have implemented the Group’s projects and enabled the realization of its strategy. 2017 was also marked by major progress on the many projects aimed at strengthening our businesses and regaining the offensive within the framework of our Trust Together strategic plan. “The Group is thus positioned as a European leader in terms of traffic expressed in passenger revenue- kilometers, having carried nearly 100 million people across five continents.” 2 Air France-KLM — 2017 Registration Document 0_VA_V5 04/04/2018 15:12 Page3 The Group consolidated its partnerships The measures deployed within the framework of with strategic, commercial and capitalistic Trust Together have enabled Air France - KLM agreements, positioning it as the European to return to growth and reinforce its position. pillar in the world’s leading airline network. The whole of the Group remains mobilized 99 Air France - KLM thus announced, firstly, the around putting these actions on a long- term creation of a single trans- Atlantic joint- venture footing and pursuing its growth. MILLION between Air France - KLM, Delta Air Lines, Inc. PASSENGERS and Virgin Atlantic and, secondly, the intensification of its partnership with China Eastern Airlines. These two commercial alliances were consolidated by capitalistic links, Delta Air Lines, Inc. and China Eastern Airlines each acquiring a 10% stake in our share capital. Jean-Marc Janaillac 1.14 We also worked on reinforcing our positioning Chairman and Chief Executive Officer MILLION TONS in Asia via an expanded partnership with Jet of Air France - KLM OF CARGO Airways to offer our customers multiple travel options between India and Europe but also the United States with access to our trans- Atlantic joint- venture with Delta Air Lines, Inc. 2017 also saw the launch, in record time, of 537 Joon, a ‘’new- generation’’ airline, the ongoing AIRCRAFT IN growth and positive results for Transavia, the OPERATION move up- market thanks to cabin refurbishment, the arrival of new, latest-generation aircraft in our fleet and, lastly, investment and project launches in the digital transformation at the service of customer intimacy. 314 DESTINATIONS 116 COUNTRIES SERVED 2017 Registration Document — Air France-KLM 3 0_VA_V5 04/04/2018 15:12 Page4 Selected financial information SELECTED FINANCIAL INFORMATION Pursuant to Article 28 of Regulation (EC) no.809 / 2004 of April 29, 2004, the review of the financial situation and results for the financial year ended December 31, 2016 figuring on pages 2 and 3 of the 2016 Registration Document and the review of the financial situation and results for the financial year ended December 31, 2015 figuring on pages 2 and 3 of the 2015 Registration Document are incorporated by reference in this document. (See also Section 5.4 – Key financial indicators, page 195). Revenues Income from current operations (in € billion) (in € million) 25.7 25.8 1,488 24.8 1,049 780 Revenues stood at €25.8 billion, 3.8% higher Income from current operations amounted to than in 2016. €1,488 million, up by €439 million on the (1) 2016 level. 2015 2016 2017 (1) Servair was reclassified as a discontinued operation. 2015 2016 2017 Information by business segment 2017 2016 2015 Income / (loss) Income / (loss) Income / (loss) from current from current from current Revenues operations Revenues operations Revenues operations At December 31 (in €bn) (in €m) (in €bn) (in €m) (in €bn) (in €m) Network (1) 22.48 1,192 - - - - Passenger - - 19.68 1,057 20.54 842 Cargo - - 2.07 (244) 2.42 (245) Third-party maintenance 1.82 215 1.83 238 1.588 214 Transavia 1.44 81 1.22 0 1.10 (35) Other 0.04 - - ( 2) 0.05 4 (1) Since 2017, the Passenger and Cargo businesses have been regrouped under Network. 4 Air France-KLM — 2017 Registration Document 0_VA_V5 04/04/2018 15:12 Page5 Selected financial information Net income/(loss), Group share Restated net income, Group share (in € million) (in € million) 792 785 409 The restated net income (1), Group share amounted to €785 million versus 118 €409 million in 2016, an increase of 193 €376 million. 2017 The net result, Group share stood at €(274) (1) After adjusting for non-current items (including the 2015 2016 million, due to a non-current net expense of result from discontinued operations, unrealized €1,429 million relating to the de-recognition foreign exchange gains and losses and the valuation of two KLM pension plans. 2015 2016 2017 of the derivatives portfolio. (274) Net debt Operating free cash-flow (in € billion, at December 31, 2017) (in € million) 4.31 696 3.66 589 1.66 347 Net financial debt stood at €1.66 billion at The Group generated operating free cash- December 31, 2017, down by €2 billion flow of €696 million, up by €349 million on relative to December 31, 2016.