IBERIA SUSTAINABILITY REPORT 1 Content guide IBERIA SUSTAINABILITY REPORT 3 Chairman’s01 Statement I am delighted to greet you from environment. There are many actions these pages for another year. around the aviation business which can be “greener”, and therefore one 2019 was a good year, in the broadest of the goals we wish to achieve is the sense of sustainability: we invested sustainable growth of operations. in caring for the environment and What is more, we are committed to in innovation, in our customers and the Sustainable Development Goals our employees; we achieved very of the United Nations, and thus we good financial results and continued have made public our commitment, contributing to a better society. A as part of IAG, to have zero net year, in short, about which we can emissions in 2050. feel satisfied. To this end, we foster sustainability However, at the time of writing through actions designed to these lines, now in 2020, there is a contribute to improving efficiency, disconcerting contrast between the such as renewing the fleet with year covered by this report and what the most sustainable aircraft in the is happening now, due to the effects market, operational measures to of Covid19, in the world in general reduce consumption and emissions, and this industry in particular which the use of electrical equipment in has forced us all to look at reality airports, sustainable management of from a new perspective and adapt. waste and use of renewable energy; and also through actions aimed at As I said at the beginning, however, employees, such as promoting car this report is about 2019, a year in sharing, electric vehicles and waste which the collective consciousness reduction. intensified in favour of becoming more environmentally careful and We can all contribute to making the responsible, being more respectful world more sustainable, more towards the planet and being aware habitable and healthier; companies that our actions today will have and people. repercussions on the lives of our children, grandchildren and future Together with sustainability, generations. innovation was key in how 2019 developed. I firmly believe that Aviation is one of the most thrilling innovation is essential to grow, to sectors in the world, but we know adapt ourselves to new situations, that we have an impact on the to offer customers what they need, IBERIA SUSTAINABILITY REPORT 4 because yesterday’s requirements are worst of scenarios that we could have not those of today, and nor will they imagined, Iberia has continued to be those of tomorrow. To this end focus on commitment and on we created a new department, the innovation. A commitment to society, Transformation Department, which is to the employees themselves, to the directly present on the Management environment. And innovation to adapt Committee of the of the company. to a new way of working, of assisting customers and of flying. This year, we have made great strides in this area, both internally and Allow me to end this letter with a externally, in our ways of working and couple of items of financial data. in the services that we offer to you, We are a private company and we our customers. However, we still have also have a duty to our investors and a long way to go. shareholders. 2019 was a positive year in which we achieved an Some examples are assisting operating profit of 497 million euros, customers through WhatsApp adjusted operating margin of 8.8%. and voice systems such as Alexa, Aura and Google Home; facial 2020 is going to be a very negative recognition, which we launched as year, due to the pandemic, but we are a pilot project for flights to Asturias working with the same willingness and Brussels, and scanning luggage and effort as the first day, in this case items using a mobile phone, thanks to to protect the future of the company collaborations with start-ups born out and jobs, its contribution to tourism of our accelerator project for these and the economy of our country and, companies, Hangar 51. Later in this of course, the health of our customers report, you will be able to find out in and employees detail what each of these initiatives consisted of, as well as many more Luis Gallego which we have rolled out over the course of the year. Among them, I would like to highlight the Stopover Hola Madrid product, a new service through which customers on connecting flights can increase their stopover time in Madrid and purchase trips, guided tours and museum tickets for the city and the surrounding area with significant discounts. And thus we promote our city, our hub and our country. 2020 was going to be the year for the launch of this product, but the situation created by Covid19 has forced us all to adapt to a new reality. When we publish the Sustainability Report next year, we will also have reasons to be proud of how, in the Iberia company profile IBERIA SUSTAINABILITY REPORT 6 Iberia02 company profile Achievements. With the focus on innovation The most Iberia is immersed in a process of now also assist its customers through digitalisation which aims to make it a the Amazon Echo, Google Assistant outstanding 100% connected airline. We want and Movistar Aura virtual assistants, to reinvent tomorrow, because it is in which can also be used to Check in achievements our DNA to be non-conformist and and find out flight status, among innovative and we believe we can be other benefits. in 2019 better every day. We want to leverage the synergies of both our flight and Prior to the flight, our customers also our ground operating processes have the option of finding out if their to advance even further and, by luggage meets the measurement developing innovative projects and requirements that allow them to take initiatives, make our operations more it into the cabin when they board. efficient and agile, so as to offer both And they can do this anywhere and our customers and our employees a at any time, without needing to go new-generation experience. to the airport. This is made possible through Iberia’s app and thanks to In following this strategy, we have the incorporation of virtual reality developed different projects to offer technology. our customers a new-generation experience. Once the luggage dimensions have been calculated and still before One of the main new features for our going to the airport, Iberia also offers customers involves the channels they passengers the opportunity to travel use to communicate with us, such “hands-free”, without a suitcase. as our new virtual assistant through Thanks to our collaboration with Bag WhatsApp which customers can use On Board (BoB), customers can go to to Check in, verify their flight status, the airport without having to worry view information about their booking about their luggage. All they have to and calculate the price for adding do is hire the service the day before additional baggage, among other their flight leaves. BoB collects the functionalities. luggage from anywhere in Madrid or Barcelona and the surrounding Another communication channel area and checks it in at the airport, with our customers for which the and the customer collects it when airline is constantly including new they reach their final destination. features is voice-based. Iberia can IBERIA SUSTAINABILITY REPORT 7 At Terminal 4 at Madrid-Barajas we on-board entertainment to a new launched facial recognition for dimension. customers who travel on our routes to Brussels and Asturias. This means To develop a lot of these new customers can identify themselves at additions, Iberia has applied open the general security control, the “Fast innovation to how it works, to Track” service and the boarding gate participate in programmes such as with their biometric profile, without Hangar 51, together with the rest needing to show their documentation. of the companies of the IAG Group, in order to evolve the innovation While on board, customers travelling strategy, experience new ways of with Iberia on some of our routes will working and develop new business have the chance to swim with sharks, opportunities walk with penguins and explore New York or Vienna, among other content, without moving from their seats. Iberia offers an on-board virtual reality glasses service that takes IBERIA SUSTAINABILITY REPORT 8 Sustainability, the overriding objective One of Ibería’s priorities is to grow its To boost environmental operations sustainably. The company sustainability, it has implemented is committed to the Sustainable measures to improve efficiency, such Development Goals (SDG) of the as sustainable management of waste United Nations and has set itself the and use of renewable energy, and goal of achieving zero net emissions taken action aimed at employees, of CO2 in 2050. In addition, it aims such as promoting the use of to contribute to the well-being of reusable cups instead of single-use the communities where it operates, items in offices and car sharing. support disadvantaged children and integrate people who are at risk of All the information about the exclusion. company’s main sustainable projects is available later in this report IAG incorporates Air Europa through Iberia The agreement for IAG’s purchase As well as reinforcing the network of Air Europa through Iberia enables between Europe and Latin America, the airline to join a strong group the acquisition will enable IAG to that offers great opportunities for gain connectivity and critical mass to development. The transaction, which open new routes and grow in markets includes maintaining the Air Europa where it is not currently present or brand, will contribute to making has a very limited presence, and offer Madrid a more efficient hub that customers better services.