Index 03 > FOREWORD 04 > INTERVIEW 07 > FINANCIAL RESULTS 08 > KEY FIGURES 09 > CSR MAIN ACCOMPLISHMENTS Governance 12 > OUR ORGANIZATION 20 > OUR APPROACH TO CORPORATE SOCIAL RESPONSIBILITY Environment 28 > MINIMIZING OUR ENVIRONMENTAL FOOTPRINT Society 44 > BUILDING A SUSTAINABLE RELATIONSHIP WITH OUR CUSTOMERS 52 > PROMOTING A RESPONSIBLE HUMAN RESOURCES POLICY 60 > CONTRIBUTING TO LOCAL DEVELOPMENT 68 > ANNEXES The information in this report relates to the 2011 fi nancial year, started on 1 January, 2011 and ended on 31 December, 2011. Where information relates to a different time frame, this is explicitly stated. Report published in April 2012. 2 Foreword “Air France-KLM remains committed to assuming its responsibilities.” ir transportation has seen considerable It is thanks to the mobilization of everyone across Group remains strongly mobilized in favor of a change over the past decade with the the company that we will return to the path of sus- worldwide system applying globally and equitably liberalization and opening of the world tainable and profi table growth while remaining true to all carriers and supports the efforts of ICAO in economy encouraging the emergence to our values. Amongst these values, and despite this respect. ofA new players. The competition from the low cost the crisis we are traversing, I remain personally This engagement in sustainable development, re- operators, Gulf State carriers and airlines in the very attached to Air France-KLM’s commitment to fl ected in our becoming a signatory of the United emerging countries represents a considerable sustainable development in its three inseparable Nations Global Compact and enshrined in our challenge. This is the new context currently fac- dimensions: economic, social and environmental. Corporate Social Responsibility Statement and ing us, compounded by the combined effects of Social Rights and Ethics Charter, I hereby reaffi rm. an unprecedented economic crisis and a steep Air transport must continue to pursue its mission rise in oil prices which are reaching record highs. of connecting people, to continue to act as a Despite the uncertainties of the current economic driver of economic activity and social progress, environment, Air France-KLM remains committed After three years of crisis and against a backdrop its development must be reconciled with respect to assuming its responsibilities. of signifi cant uncertainty, the European air transport for the environment. industry as a whole is increasingly fragile. Faced with this situation, it was crucial for Air France-KLM Air France-KLM has long been pursuing an ambi- JEAN-CYRIL SPINETTA to react and re-establish confi dence. tious environmental policy refl ected, notably, in the Chairman and Chief Executive Offi cer regular updating of its fl eet. of the Air France-KLM Group This is why the Group’s Board of Directors has set three priorities: restoring competitiveness implying In a constructive spirit, Air France-KLM has always a reduction in costs, restructuring the short and supported the application to aviation of a CO2 medium-haul operations, and rapidly reducing emission quotas system. Having been in force debt. These strategic orientations, which require since January 1, 2012, the EU-ETS directive now a change in business model, will be implemented applies to all fl ights to and from Europe. Faced by both Air France and KLM through a three-year with the strong opposition from non-European transformation plan, Transform 2015. States and the risk that the system potentially poses for the competitiveness of the European air transport industry, a compromise solution must be found. One avenue could be to limit its ap- plication, initially, to the European air space. The CSR REPORT 2011 3 Interview A look back at the Group’s situation in 2011 and the outlook for the next few years 2011 was marked by the slowdown in global eco- global sector. Global by its very nature but also KLM actively supports the creation of a fully- nomic growth and by signifi cant market volatility, due to its operating modes, the regulations that fl edged biofuels industry but we won’t be able particularly in Europe. The geopolitical events in govern the industry and the highly diverse social to achieve this alone. We are working with our Africa and the Middle East unleashed in Decem- models on which it is based. partners and all the players in the supply chain ber 2010, and the earthquake in Japan during Within a context of growing worldwide demand on the establishment of a fi nancially-viable market March 2011 also weighed on the economies of for air transportation, particularly in the emerging that is sustainable on a large scale. Air France these countries and those of their trading partners. countries, globalization has encouraged the emer- and KLM are amongst the fi rst airlines to have Alexandre de Juniac, Chairman and Chief Ex- gence of new players and intensifi ed competition operated commercial fl ights using biofuel and are ecutive Offi cer of Air France and Peter Hartman, across the entire range of products and services. resolutely committed to pursing this avenue. President and Chief Executive Offi cer of KLM, take The leading European airlines thus need to adapt a look back at the main trends shaping the Air their business models. WHAT IS THE AIR FRANCE-KLM France-KLM Group's activity in 2011 and at the At the same time, customer behaviour has seen GROUP’S CURRENT SITUATION outlook for the next few years. profound change with price becoming a key factor. AND HOW ARE THINGS LOOKING New technologies have completely transformed FOR THE NEXT FEW YEARS? COULD YOU GIVE US AN the relationship between customers and airlines OVERALL PICTURE OF with customers now expecting more responsive- ALEXANDRE DE JUNIAC— The deterioration in THE RECENT TRENDS FOR THE ness to keep them informed on a real-time basis. competitiveness and the insuffi cient profi tability AIR TRANSPORT INDUSTRY? at Air France-KLM led the Board of Directors to PETER HARTMAN— In this rapidly-changing set a series of strategic objectives and propose a ALEXANDRE DE JUNIAC— One of the main world, social and environmental considerations plan to transform the business over a three-year characteristics of air transportation is that it is a remain a top priority and air transportation stands period between 2012 and 2014. ready to assume its responsibilities. Within a con- We have been working with KLM on the practi- text of soaring fossil fuel prices, climate change cal implementation of the Transform 2015 plan represents a major challenge and an overall sector which will comprise two phases. The fi rst phase, response needs to be found at global level. Ahead announced in January 2012, has been refl ected of this, we continue to deploy all the levers at our disposal to reduce our carbon footprint. Over the medium to long term, signifi cant use of sustainable biofuel alternatives is key. Air France- “Sustainable development remains a cornerstone of the Group’s strategy, reflecting our commitment to corporate social responsibility.” PETER HARTMAN President and Chief Executive Offi cer of KLM “The Transform plan respects three principles: equitable application across all employee categories, maintaining investment in flight safety and improving the quality of the service offered to our customers.” ALEXANDRE DE JUNIAC Chairman and Chief Executive Offi cer of Air France in the implementation of immediate measures to ing productivity in all employee categories, redefi n- ate scale. To restore its profi tability, cargo is the reduce costs while the second, to be presented ing the product, and restructuring the main net- subject of specifi c measures within the framework in June, aims to completely transform the Group, work and those of the regional airline subsidiaries. of the transformation plan. Some of these meas- and particularly Air France, with an in-depth reform We also plan to improve the fi nancial performance ures are already under way, specifi cally network of its organization and working methods. of the long-haul fl eet. This will entail improving optimization and a new commercial strategy. For The plan respects three principles which I shall the productivity of all relevant staff, increasing example, KLM and Kenya Airways are the fi rst be monitoring very closely: equitable application capacity through better utilization of the existing airlines to offer a direct cargo service between the across all employee categories, maintaining our long-haul fl eet and reinforcing our presence in Guangdong industrial region in China and Nairobi. investment in fl ight safety and working conditions growing markets. This network, known as Safari Connection, con- and a resolute focus on improving the quality of nects Europe, China and Africa, thereby offering the service offered to our customers. HOW ARE THINGS LOOKING customers a rapid and effective cargo solution. FOR THE GROUP'S CARGO AND PETER HARTMAN— One of the Group’s priori- MAINTENANCE BUSINESSES? ALEXANDRE DE JUNIAC— For the aeronautics ties is to restructure the short and medium-haul maintenance sector, we want to consolidate our operations. The short and medium-haul network PETER HARTMAN— The cargo business was position within a very competitive environment. remains key to Air France-KLM’s development in seriously affected by the fall-off in demand during In 2011, we were able to maintain our market that it meets the needs of passengers traveling the 2011 second half despite the restructuring shares. This performance was all the more re- within Europe, while feeding the long-haul fl ights measures in place for the past year. IATA fi gures markable in that the economic crisis did not leave departing from the dual and complementary hubs show global air freight volumes declining by some the aeronautics maintenance market unscathed of Roissy-CDG and Amsterdam-Schiphol.