2014 Social Responsibility & Sustainability Report Avianca Holdings S.A

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2014 Social Responsibility & Sustainability Report Avianca Holdings S.A.

Avianca Holdings Social Responsibility & Sustainability Committee Director Fabio Villegas Ramírez, Executive President and Chief Executive Officer (CEO) Coordinators Gilma Úsuga, Communications & Corporate Affairs Director for Colombia and Europe Claudia Arenas, International Communications and Corporate Affairs Director Permanent Participants Eduardo Asmar, Corporate Planning Vice-President Elisa Murgas, General Counsel Rosa Stella Patiño, Company and Corporate Affairs Legal Manager Consuelo González, Industrial Safety, Occupational Health and Environmental Care Manager María Andrea Ramírez, Business Analyst Manager of the CEO

2014 Social Responsibility & Sustainability Report Editorial Coordination: Communications & Corporate Affairs Directorate Asessment and Production: CREO Constructores de Responsabilidad y Ética Organizacional Scope and Coverage: This report corresponds to the management of Avianca Holdings S.A. during the 2014 fiscal period.

Table of Contents

1. Avianca Holdings S.A. Profile ...... 3 2. Letter from the CEO ...... 9 3. About this Report ...... 10 4. Avianca Holdings’ Commitment to its Shareholders...... 12 5. Avianca Holdings’ Commitment to Generating Value ...... 18 6. Avianca Holdings’ Commitment to Its Strategic Partners ...... 32 7. Avianca Holdings’ Commitment to the Environment ...... 36 8. Avianca Holdings’ Commitment to Its Employees ...... 52 9. Avianca Holdings’ Commitment to Social Development ...... 76 10. GRI Key Indicators G4 ...... 87

1. Avianca Holdings S.A. Profile Avianca Holdings S.A. (hereinafter “the Holding Company”) is a company incorporated in Panama, comprised of, among other companies, several air transportation companies that operate domestic and international flights: Aerovías del Continente Americano S.A. Avianca and Tampa Cargo S.A.S. incorporated in Colombia, Aerolíneas Galápagos S.A AeroGal incorporated in Ecuador, and the Grupo TACA companies: TACA International Airlines S.A. incorporated in El Salvador, Líneas Aéreas Costarricenses S.A. (LACSA) incorporated in Costa Rica, TransAmerican Airlines S.A. (formerly TACA Perú) incorporated in Peru, Servicios Aéreos Nacionales S.A. (SANSA) incorporated in Costa Rica, Aerotaxis La Costeña S.A. incorporated in Nicaragua, Isleña de Inversiones C.A. de C.V. (ISLEÑA) incorporated in Honduras, and Aviateca S.A. incorporated in Guatemala.

The Holding Company’s main investments include passenger, cargo and courier air transportation companies and other companies that carry out activities related to air transportation services, such as tourist services, engineering services, maintenance services, training services, and specialized services for air transportation company operations.

In this report, the word “Holding Company” refers solely to Avianca Holdings S.A., as the controlling, investing company. The word “Company” refers to Avianca Holdings S.A. and its subsidiaries, especially for the description of company practices and programs that are used by the controlling, investing company as well as by the companies that operate the Holding Company’s lines of business.

In the event that the report refers to actions carried out by any one (1) or more of the subsidiaries, the company that carried out such actions will be specifically mentioned by name. And when the report refers to “the subsidiaries”, “the Avianca Holdings’ companies”, “the operating companies”, “the affiliates”, or “the Holding Company’s subsidiaries”, it will be understood that the actions were carried out by each and every one of them or have been implemented for them.

The passenger airlines and the cargo airlines under the Holding Company met the company goals in 2014, thanks to: - A 169-aircraft operating fleet for passenger transportation and 5 aircraft exclusively for cargo transportation - 3 passenger hubs located in Bogotá, San Salvador, and Lima enabling fast connections among domestic flights and international flights, and cargo operating centers in Miami and in Quito - Direct operation to 106 cities in the Americas and in Europe, plus more than 1,300 destinations worldwide, connected through codeshare and interline alliances with Star Alliance member airlines - A work force comprising more than 20,000 direct hire and indirectly contracted employees, duly trained to perform the different jobs related to their commercial activities and to airline services in general in a safe, effective manner - The LifeMiles reward program, with more than 5.8 million members who have many opportunities to accrue and redeem their miles in flights, hotels, products and services around the world - More than 26 million passengers transported in 2014.

Strategic Focus The Holding Company is the Strategic North that guides the subsidiaries’ activities and, as the controlling company, governs their administrative management.

Mission We fly and serve with passion to earn your loyalty

Vision To be the leading Latin American Airline preferred around the world. - The best place to work - The best option for customers - Exceptional value for shareholders Values - Safety - Honesty - Passion and Warmth - One team - Excellence

Corporate Goals 2015 The 2010-2015 corporate goals set by the Holding Company are: - Profitability: To improve EBIT1 and diversify the business units to enhance profitability. - Strategic Positioning: To strengthen and optimize the hubs and route networks throughout the domestic markets in Colombia, Central America, Peru, and Ecuador. To increase operating productivity by simplifying and integrating operations under legal and regulatory requirements. - Customers: To consolidate customer service, offering differentiation through our service based on Latin American Excellence and acting as one sole company for our customers. - Employees: To make Avianca the best place to work. To do so, the Company seeks to adopt the Company values as our work pillars. The final goal is to consolidate an in-house culture focused on customer needs.

1 EBIT: Earnings before Interests and Taxes Awards and Acknowledgements Awards The frequent flyer program of the Avianca Holdings S.A. member airlines received the LifeMiles: ”Best top award for the functionality of the Freddie Awards Mile Redemption LifeMiles mile redemption process, as well as in the Americas” for the many options that the program offers for redeeming miles for trips, hotels, products and services around the world. Passengers acknowledged the excellence and Best Airline and professionalism of Avianca employees with Skytrax Best Service Staff the Skytrax Awards for Central America and the Caribbean. The Leading This award acknowledges companies in the e- Airline in Tourism e-Commerce Award commerce sector and their work in e-commerce in empowering the digital economy. Colombia Latin Music Marketing The Best Tour Fonseca Concert at 30,000 Feet Awards Sponsorship Highlights Avianca’s baggage processing in Avianca in the Star Alliance the Bogotá Hub with the Star Alliance Priority Bogotá Hub Baggage Delivery Regional Award Avianca received this award for having one of Avianca in the the best, fastest, most secure online “Best e- Premios Colombia en transaction websites. The Avianca website commerce Línea was said to have some of the best content, Initiative” interaction, design and functionality in the category country. This award was given to the airline for showing its support through tangible Teletón El Salvador Avianca Corporate Social Responsibility (CSR) activities. Cámara Colombiana de Informática y Telecomunicaciones Best e-commerce initiative in Colombia for (CCIT) (Colombian IT and Avianca having one of the best, fastest, most secure Telecommunications online transaction websites. Chamber) Premios Colombia en Línea Member of the Avianca Holdings S.A. Board of Directors, Mr. Roberto Kriete received the Colombian Ministry of 2014 National Tourism Award for his Avianca Holdings Tourism. 2014 National invaluable contribution to aviation in El S.A. Tourism Award. Salvador and to the development of flight connectivity, hence driving the tourism industry in the country and in the region. Passengers rated Avianca employee’s Premiación customer service skills at 10 airports. The Fundamentos del evaluation criteria were based on the Avianca Servicio customer service standards that comprise Colombia. Modelo CEL -Constructores de Excelencia Latina (Latin Excellence Builder Model).

Acknowledgements Avianca is continuously improving its Aviateca received IOSA Avianca processes, reaching higher quality and re-certification operational safety standards. Acknowledgement for Acknowledgement to the design and precise best A320 aircraft Avianca execution of technical processes in the technical reliability in Avianca fleet. the Americas The 100 Colombian Avianca Holdings companies with the best Acknowledgment to Avianca’s highly trained held sixth place, employees, according to personnel. with 5,833 points Merco Personas 2014. The employees chose the top 10 companies Avianca Holdings Acknowledgement by employees of the with the best human held third place. companies with the best human resources resources according to Merco Personas 2014 Acknowledgement to the company with the best human resources in Colombia. The variables considered in the evaluation include, Avianca held sixth MERCO Personas among others, the company’s level of success, place reputation, employees’ feeling of pride, work environment, professional development, and recognition. The renewal of Avianca’s registration as provider until 2016 enabled it to provide ISAGO Re-certification Avianca ground services through its Avianca Services business unit. Certified as an International Pet and This makes it the Number One member Animal Transportation Avianca Cargo company in Latin America for the safe Association (IPATA) transportation of live pets and animals. member.

Avianca’s VIP Lounge in Priority Pass program members and users Cali is the best VIP Avianca’s VIP chose Avianca’s VIP Lounge in Cali as the best lounge in Latin America Lounge in Cali one in the region. and the Caribbean Avianca held ninth place as the company in which students and Avianca held ninth place as the company in graduates CIA de Talentos which Latin American students and graduates dreamed of dreamed of working. working, according to a CIA de Talentos survey.

Acknowledgement to Avianca Holdings Highlighted the Company’s investor relations Issuers - Investor S.A. and information disclosure practices. Relations(IR)

The most valuable Colombian brands are Acknowledgement as known for their long tradition, constant one of the most valuable Avianca came in updating, and clear response to the functional Colombian brands, 14th and emotional needs of an ever-changing according to Brandz. market. The company readjusted its processes in order Responsibility as a Avianca Holdings to comply with the regulating financial Public Sector Company S.A. agencies’ requirements. German Efromovich, Avianca Board of Directors President as well as Roberto Kriete, The Latin American and Member of the Avianca Board of Directors Caribbean Air Transport received the Federico Blonch award for their Association (ALTA). Avianca exceptional leadership, vision in the aviation Federico Blonch Award. industry, spirit of corporative initiative, and Nassau, Bahamas. their sense of innovation, cooperation and integrity. Through quantitative interviews to passengers at airports in Bogotá, Cali, Medellín, Net Guatemala, Quito, Guayaquil, Lima, San Promoter Score (NPS) Avianca was in Salvador and San José, Avianca customer Acknowledgement to second place with relations were measured using variables such Avianca in the CORE 46% accumulated as customer satisfaction, disposition in market category in 2014 assessing the customer, and re-purchasing,

and customer satisfaction was evaluated for G4-PR5 the different points of contact during customers’ flight experience. Highlighted Mr. Roberto Kriete’s valuable contribution to the development of The Salvadorian Civil Salvadorian civil aviation. The Aviation Authority Avianca Holdings Acknowledgement to executives and (Autoridad de Aviación S.A. companies for El Salvador was attended by Civil – AAC) diplomats, businessmen, aviation authorities, and the media, among others. Every quarter, 34 areas take a survey for measuring internal customer satisfaction. The survey is measured in net promoters (NPS). In Net Promoter Survey for Avianca the first quarter of the year, two company Internal Promoters areas were acknowledged: the Specialized Services Category and the Mass Services Category. Renewal of the IOSA registration for COA TACA International. TACA became one of the Enhanced IOSA Auditing TACA first airlines in Latin America to voluntarily request the Enhanced IOSA Auditing Model and to receive the certification. Avianca had its Metrology Laboratory re- ACLASS ISO/IEC accredited and re-certified under the ACLASS 170252005 International Avianca ISO/IEC International Standard by complying Standard with the requirements demanded of testing and calibration laboratories. Avianca is among the Companies That Young People Dream About - 2014. The Cía. de Talentos study measured Latin American Estudio CÍA de Talentos Avianca students’ and new graduates’ preference of best company to work in. It occupied fifth place. Business travelers and readers of the Business Business Traveler Avianca Traveler Magazine chose Avianca as the Best Magazine Airline in South America and in Latin America.

2. Letter from the CEO

I am pleased to present this report that tells a story of innovation, transformation and learning generated by several generations of men and women who have made Avianca come to life in its 95 years of uninterrupted service to the country and to the region. This sixth Social Responsibility and Sustainability Report proudly confirms the importance of Avianca’s operations in promoting a better life quality and wellbeing for hundreds and thousands of persons who are part of our value chain. In this document, developed in accordance with the Global Reporting Initiative G4 Guidelines, we are fortunate to present significant advancements in environmental, social and financial management. In particular, we would like to highlight the adoption of rules and regulations aimed at underpinning the importance of transparency and integrity in Avianca employees’ individual and collective actions, to guarantee that Avianca operations are in harmony with the rights of our stakeholders and with environmental protection. Renewing fleet aircraft and applying the highest environmental standards, strengthening corporate management control mechanisms, and adopting international practices for human resource management and information management, are among our most important achievements for this fiscal period. Essentially, this report shows the relation between the set of duties and commitments taken on by the organization and our goal to fully embrace our current work and to ensure the company’s long-term success. I invite you to carefully read through this report to understand why our work is one of the main sources of inspiration in our lives.

3. About this Report

To continue advancing in terms of accountability and strengthening corporate transparency, Avianca Holdings S.A. presents its sixth Sustainability Report. This document gathers some of the most important achievements, milestones and lessons learned from the 2014 management of the Avianca Holdings’ companies. For the past two years, the Organization has reported its operating companies’ financial, social and environmental actions through sustainability reports that follow the guidelines set forth in the Global Reporting Initiative (GRI) Guide. This report follows the GRI G4 Guideline indicators with the general standard disclosure option of “in accordance” and includes a description of the process for determining materiality. All areas of the Organization participated in gathering and verifying information for this report, under the coordination of the Social Responsibility area, accompanied by the external consulting firm Constructores de Responsabilidad y Ética Organizacional (CREO).

Relevant Topics Avianca Holdings S.A. companies defined the content of this 2014 sustainability report based on the relevant topics that were internally identified and prioritized, which will be validated with the stakeholders in 2015 and 2016. Four document sources were used to identify the relevant topics:

The initial list of issues was validated by the Organization’s Sustainability Committee, with members from different Company areas, who chose and prioritized the important topics for corporate strategy. The issues were organized following the corporate commitments with the stakeholders, which enabled building the 2014 Sustainability Report structure. G4-18

Commitment Relevant Topic Chapter Stakeholder Commitment 1 Total Safety G4-27 Avianca Holdings’ Customers - The to its Customer Experience Commitment to Community at 2 Customers G4-27 Generating Value Large Avianca Holdings’ The External Social Development Commitment to Community Commitment 3 Social Development to the External Avianca Holdings’ The External Community 4 Provider Development Commitment to its Community 5 Responsible Purchasing Strategic Partners 6 Gas Emissions Commitment 7 Noise Avianca Holdings’ Customers - The to the 8 Waste Management Commitment to the External Environment Operation Energy Environment Community 9 Efficiency Employee and 10 Contractor Health and Safety Commitment Company-Employee Avianca Holdings’ 11 to its Relationship Commitment to its Employees Employees Organizational Culture Employees 12 and Wellbeing Learning and 13 Development Ethics and Avianca Holdings’ 14 Transparency Commitment to Shareholders Commitment Good Corporate Transparency 15 to its Governance Shareholders Avianca Holdings’ 16 Generating Value Commitment to Shareholders Generating Value

4. Avianca Holdings’ Commitment to its Shareholders Transparency being an essential imperative, in 2014 Avianca Holdings S.A. continued its efforts to guarantee that company employees kept the corporate values alive and to strengthen the mechanisms for timely information disclosure to the market. During the past year, the Organization made a series of adjustments and carried out important actions aimed at compliance with the requirements of the American financial system, given that, for the issuance and placement of American Depositary Shares (ADS) in November 2013, Avianca Holdings S.A. inscribed itself with the United States Securities and Exchange Commission (SEC) and lists its ADS on the New York Stock Exchange (NYSE). Trading in this important market has led to the Organization making a commitment to adhere to the corporate rules and regulations and practices applicable to Foreign Stock Issuers, which demand carrying out the following actions, among others: Anticorruption Policy (G4 – 56) It establishes rules of conduct applicable to all employees to guarantee compliance with, among others, the United States Foreign Corrupt Practices Act (FCPA) and other current anticorruption laws and regulations applicable to countries where the Avianca Holdings S.A. companies operate. The above policy complements the Código de Ética y Normas de Conducta de los Negocios (Ethics Code and Business Conduct Rules and Regulations) that governs the Organization, which was adopted by the Board of Directors in February 2013. In this context, Zero Tolerance was declared for any action that may be considered bribery or any other corrupt action. Since its adoption, a sensitization campaign was developed for disseminating the Anticorruption Policy and the Modifications to the Ethics Code and Business Conduct Rules and Regulations. The main topics regulated by the Anticorruption Policy are: - Provisions regarding employee conduct and handling relations with government officials and private sector providers; and - Provisions regarding books and records that guarantee the disclosure of reliable financial statements.

Insider Trading Policy and Procedure It is aimed at regulating stock negotiations and the use of important confidential information by officers from the Holding Company and officers from the Holding Company’s subsidiaries. This Policy complements the Ethics Code and Business Conduct Rules and Regulations section “The Improper Use of Confidential Information”; it establishes restrictions on negotiating or tipping important confidential information. The main topics regulated by the Insider Trading Policy and Procedure include: - Restrictions on stock negotiations or disclosing important confidential information. Negotiations include the purchase, sale, donation or any other transaction involving Organization shares listed in the public stock exchange - Defined time frames for officers to negotiate Organization shares within each fiscal year; and - The procedure for officers to buy or sell shares from the Holding Company’s subsidiaries. Adjustments to Corporate Governance Documents Aimed at adopting some governance practices applicable to foreign stock issuers with shares listed on the New York Stock Exchange, some modifications were made to the following documents: The Good Corporate Governance Code, and Rules and Regulations of the Board of Directors, the Shareholder’s Assembly, the Avianca Holdings S.A. Auditing Committee and the Avianca S.A. Auditing Committee. Modifications to the Ethics Code and Business Conduct Rules and Regulations (G4 – 56) The Code contains the values, principles, and rules and regulations that guide the reciprocal actions of the Organization and of its employees, actions among employees, and toward the customers and the community at large, which includes any obligations stemming from local and international laws and regulations applicable to the subsidiaries as well as to the employees in each country where they operate and provide services. The Organization developed dissemination campaigns for the Modifications made to the Ethics Code and Business Conduct Rules and Regulations, as it is customary whenever modifications are made to such documents; also, in 2014, direct employees had access to the e-learning course on the Code, which closed the year with 12,423 certified employees. There is no obligation to certify knowledge on the Code except for new employees as part of their orientation process. Furthermore, aimed at ensuring greater transparency in handling the Ethics Line, third party reception of employee, customer and provider questions, complaints and grievances was approved regarding the violation of the Ethics Code and Business Conduct Rules and Regulations, plus allegations regarding unethical conduct by employees, administrators or third parties. Through the Ethics Line, employees, customers and providers can report, in an open, confidential or anonymous manner, suspicions of violations of the Ethics Code and Business Conduct Rules and Regulations, the Anticorruption Policy, or any other rules and regulations, policies or behavior standards. The Ethics Code and Business Conduct Rules and Regulations were complemented, adding the following items: - The Improper Use of Privileged Information - Impartiality and Conflicts of Interest - Provider, Contractor and Customer Relations. Governance Structure (G4-34) (G4-39) The Organization has a Corporate Governance structure that guarantees straight- forward, transparent administrative management and is governed by the Good Corporate Governance Code, which contains the rules of conduct applicable to the Organization’s Administrators.

Sharholders' General Assembly

President of the Board of Directors Board of Directors Germán Efromovich

President CEO Fabio Villegas R.

CFO CRO CFO Chief Operating Chief Revenue Officer Chief Financial Officer Officer Estuardo Ortíz Gerardo Grajales Santiago Diago

Shareholders’ General Assembly It is the highest level of governance in the Organization and has annual meetings for verifying the results of the operation, approving the Board of Directors’ and other administrators’ management report, among other functions. Board of Directors (G4 – 34) Pursuant to the Social Compact, the Holding Company’s Board of Directors is comprised of eleven (11) principal members who are elected by the Shareholders’ General Assembly for one-year periods with a re-election option, and who may be of any nationality. There are also six (6) independent members of the Board of Directors who are elected pursuant to the independence criteria established by the rules and regulations of the New York Stock Exchange. Their functions include providing the Holding Company with strategic direction and establishing general policies, as well as reviewing topics related to management and compliance with the Holding Company’s strategic goals and financial results; aspects that are assessed in the quarterly meetings or whenever deemed necessary, governed by the Board of Directors’ Internal Rules and Regulations. Composition of the Board of Directors (G4-40) (March 2014-March 2015)

Germán José Alexander Roberto J. Efromovich Efromovich Bialer Kriete (President)

Eduardo Oscar Darío Mónica Isaac Yanovich Klepacz Morales* Aparicio* F*

Álvaro Ramiro Juán Jaramillo Valencia Guillermo Buitrago* Cossio* Serna V*

* Independent members

Board of Director Committees (G4-34) (G4-40)

Auditing Committee •The Auditing Committee is comprised by independent members of the Board of Directors. This committee is in charge of supervising the effectiveness of the internal financial control systems, of internal control in general, and of assessing risk for the Holding and risk regarding relations among officers •It also ensures the integrity of the financial statements, compliance with the legal requirements set forth in the public stock market rules and regulations, and the competence and independence of the External Auditing team, and it approves internal auditing procedures and monitors compliance. •This Committee is comprised by Oscar Darío Morales, Isaac Yanovich, Juán Guillermo Serna and Mónica Aparicio. Human Resources and Compensation Committee •The functions of the Human Resources and Compensation Committee are to establish the human resources development and management model and strategy and to recommend the basic philosophy and the objectives and corporate goals regarding compensation for the Holding's employees. •This Committee is comprised by Roberto Kriete, José Efromovich, Ramiro Valencia and Marco Baldocchi. Financial Committee •The functions of the Financial Committee are to do detailed follow-up on the Holding's financial performance, as well as managing associated risks. It is in charge of analyzing and recommending to the Board of Directors the capital and indebtedness structure of the Holding. •This Committee is comprised by Germán Efromovich, Álvaro Jaramillo, Alexander Bialer and Juan Guillermo Serna. Conflicts of Interest (G4 – 41) The Ethics Code and Business Conduct Rules and Regulations and the Good Corporate Governance Code regulate the prevention, disclosure and handling employee conflicts of interest and Administrator conflicts of interest. Except for the Administrator conflicts of interest, all employee conflicts of interest are handled and resolved by the Ethics Committee. Any possible Administrator conflicts of interest are handled by the Auditing Committee and by the Holding Company’s Board of Directors. Internal Control In the year 2014, the internal control system and the reports issued by Internal Auditing, the Fiscal Reviewer’s Office, the Auditing Committee and the Board of Directors, did not discover material findings that could affect the integrity and truthfulness of the financial information or compliance with the accounting rules and regulations applicable to the Organization. Nor were there any frauds that affected the quality of the Avianca Holdings S.A. financial and accounting information. Through the Internal Auditing Directorate, the risk matrix documentation was completed and effectiveness tests were conducted on the control of processes that have a material impact on the financial statements, thus guaranteeing the reliability of the Company’s Internal Control. Furthermore, the Company has done ongoing auditing and monitoring of the key business processes (Operational, Financial and Technical) aimed at ensuring the Organization’s proper Internal Control. Risk Control The Holding Company is continuously working on the implementation of the Corporate Risk Management System (RMS) through the identification, assessment, control and handling of the different types of risks that may affect reaching the Organization’s Strategic North, in order to protect its assets and to achieve its corporate goals. The second phase of the RMS implementation finished in 2014; it initiated the monitoring and follow-up of the first strategic risk map, which led to the first risk map update. Also, the integration of the different corporate risk management strategies continued, and the first activity carried out was to align the quality risks and the operational safety risks. Finally, a diagnosis was made of the status of business continuity management, aimed at developing a system that will enable the company to continue providing service in the event of severe business interruptions or disasters.

5. Avianca Holdings’ Commitment to Generating Value The Avianca Holdings S.A. economic performance data includes the information of Aerovías del Continente Americano S.A. - Avianca and its subsidiaries (including Tampa Cargo in Colombia, among others), and the information of Grupo Taca Holdings Limited and its subsidiaries (including Taca International in El Salvador, Lacsa in Costa Rica, and Taca Perú in Peru, among others). All figures are expressed in USD million.

Direct Economic Value Generated (G4-EC1) In 2014, Avianca Holdings S.A. generated a total operating income of USD 4,703.5 million, which represents a 2.04% increase as compared to USD 4,609.6 million recorded in 2013. In the consolidated integral profit and loss statement at December 31, 2014, passenger transportation revenues continue to represent the largest contribution to AVIANCA’s EVG, given that this heading recorded USD 3,862.7 million.

Operating Income (Figures in USD million)

$5,000.00 $4,703.57 $4,609.60

$4,000.00

$3,000.00

$2,000.00

$1,000.00

$0.00

Operating Income by Type of Service Provided

2014 Operating Income Distribution by Type of Service

Cargo and others, 18%

Passengers, 82%

Domestic Transportation (Figures in USD million) $1,400.00 $1,200.00 $240.13 $196.06 $1,000.00 $800.00 $600.00 $1,071.25 $1,031.30 $400.00 $200.00 $- 2014 2013

Passengers Cargo and Courier

International Transportation (Figures in USD million) $3,500.00 $3,000.00 $324.73 $308.68 $2,500.00 $2,000.00

$1,500.00 $2,791.47 $2,831.10 $1,000.00 $500.00 $- 2014 2013

Passengers Cargo and Courier

Total (Figures in USD million)

Domestic International Others

$5,000.00 $275.99 $242.47 $4,000.00

$3,000.00 $3,116.20 $3,139.78

$2,000.00

$1,000.00 $1,311.39 $1,227.36 $- 2014 2013

 The heading “Other Operating Income” includes income from the frequent flyer program, ground operations, leases, maintenance, and interline agreements, among others.

Financial Investment Revenues In 2014, Avianca Holdings S.A. received revenues from interests in the amount of USD 17.09 million, and revenues from derivative instruments in the amount of USD 5.9 million. Total EVG 2014 • $4,726.5 millones de USD*

* The 2013 report did not include Financial Investment Revenues, such as Revenues from Interests and Derivative Instruments (the value of these items may be found in the Avianca Holdings S.A. and Subsidiaries’ consolidated financial statements), thus enabling a balanced comparison of the total EVG values reported. Economic Value Distributed The total economic value distributed by Avianca Holdings S.A. and all of its subsidiaries in 2014 was USD 4,630.8 million. This amount was distributed among different headings including fuel purchases, operational costs and provider costs, contractor and employee salaries and benefits, government tax payments and dividend payments, financial obligations, and social investment.

Total EVD 2014 • $4,630.8 millones de USD

Costs invested in fuel purchases increased near 1.51%, from USD 1,325.7 million in 2013 to USD 1,345.7 million in 2014. Such growth still indicates a constant upward trend in consumption, mainly due to the increased number of routes and flight frequency for destinations operated by the Holding Company’s airlines. Operational costs, comprised of the headings passenger services, infrastructure and maintenance services, depreciation and amortization, property rental, real estate and aircraft leases, ground operations facilitation payments, flight operations and air traffic operations, and general and administrative marketing and sales, recorded USD 2,2295.9 million at the end of the 2014 fiscal period. USD $2,295.9 million*

2014 Operational Costs

* The Operational Cost heading presented in the 2013 report excluded fuel costs. The 2014 report excluded fuel costs as well as employee salary costs and taxes; therefore it is not possible to compare the Operational Costs from the two periods. The total amount of Avianca Holdings S.A. direct hire employee and indirectly contracted employee salaries and benefits for the 2014 period was USD 725.7 million, which represented an increase of 7.53%.

Salaries and Company Benefits (in USD million) $1,000.00 $725.79 $800.00 $674.95 $600.00

$400.00

$200.00

$- Employee Salaries and Social Benefits (EVD)

2014 2013

In 2014, expenses due to interests were USD 133.9 million, and the dividends paid by the Holding Company were USD 38.9 million. These headings represent payments that have been posted to funding providers. Payments made to the government amounted to USD 90.3 million, which included all local taxes, municipal taxes, sales tax, and current income tax2. The total amount invested in the community was USD 25,ooo.

2 The differed tax is not considered when calculating the income tax; that is why the result is different from the headings presented to the shareholders as net tax and final net profit. Economic Value Withheld The economic value withheld for the 2014 period was USD 95.7 million and this report does not include differed tax or foreign exchange rate differences. The Organization’s net income in 2014 was USD 128.4 million, as a result of Avianca Holdings S.A. continuity and strength in the different markets where its companies operate.

Total EVW 2014 • USD $95.7millon

The Holding Company Airlines Improve Their Market Positioning As a result of service positioning in strategic markets and adjustments in seating capacity and an increase in fleet aircraft, the airlines recorded the transportation of 26,230,019 passengers from January to December 2014. This amounted to an increase of 6.5% as compared to the same period in 2013 with 24,625,062 passengers transported. ASK seating capacity amounted to 41,052 million, which represents an increase of 5.9% compared to 2013, with an average Load Factor of 79.4%. The airlines’ CASK ex fuel3 expenses increased by 1.9% including expenses generated from implementing the operational growth strategy and the change of fleet aircraft. Also, RASK4 recorded an increase of 1.8%. International Markets In 2014 the Holding Company airlines transported 10,601,255 passengers on their international routes, recording an increase of 2.6% as compared to the 10,332,760 passengers transported in 2013.

Domestic markets (Colombia, Peru, and Ecuador) In 2014 the total number of passengers transported on routes inside Colombia, Peru, and Ecuador amounted to 15,628,764 passengers, with an increase of 9.4% as compared to the 14,292,302 passengers transported from January to December 2013.

3 Cost Available Seat per Kilometer - excluding fuel 4 Revenue Available Seat per Kilometer Fleet Renewal In 2014 the Holding Company airlines continued their fleet modernization strategy. In the 2014 period, 30 aircraft were incorporated: four Boeing 787-8 Dreamliner aircraft, two Airbus A330-200 aircraft, six Airbus A321 aircraft, two Airbus A320 aircraft, six Airbus A319 aircraft and ten ATR 72-600 aircraft. Including the newly incorporated aircraft, the operating fleet is now comprised of the following aircraft:

Operating Passenger Fleet at December 31, 2014 Aircraft TACA5 AVIANCA AEROGAL CESSNA 9 ATR 42 7 8 ATR 72 6 Embraer 190 12 Airbus A318 10 6 Airbus A319 17 11 2 Airbus A320 37 19 6 Airbus A321 3 10 Airbus A330 1 Boeing 767-300 1 Boeing 787 4 TOTAL 169

Destinations, Route Network and Alliances During 2014, aimed at offering more connection options and coverage, the Organization increased the Holding Company airlines’ seating offer on international routes, adding Bogotá-London flights and Pereira- Cartagena-New York flights. Also, important adjustments were made to the domestic flight offer in the Colombian, Peruvian and Ecuadorian markets, driving the commercial and touristic dynamics of each country and of the region with the new Bogotá-Villavicencio route in Colombia and Lima-Iquitos in Peru.

New Domestic Market Services Colombia Bogotá – Villavicencio 14 Frequencies

Peru Lima – Iquitos 7 Frequencies

International routes (in each case, indicated segment and return)

More International Market Frequencies

5 Aircraft described under TACA may be operated by TACA International Airlines S.A., Líneas Aéreas Costarricenses S.A. (LACSA), TransAmerican Airlines S.A. (formerly TACA Perú), Servicios Aéreos Nacionales S.A. (SANSA), Aerotaxis La Costeña S.A., Isleña de Inversiones C.A. de C.V. (ISLEÑA) or Aviateca S.A. Route Frequencies Bogotá, Colombia - Santiago, Chile 7 Bogotá, Colombia - Guatemala City, Guatemala 3 Bogotá, Colombia - San Juan, Puerto Rico 2 Bogotá, Colombia - Habana, Cuba 1 Bogotá, Colombia - Cancún, Mexico 7 Barcelona, Spain - Bogotá, Colombia 3 Bogotá, Colombia - Lima, Peru 7 Lima, Peru - Cali, Colombia 1 Guatemala City, Guatemala - San José, Costa Rica 7 San José, Costa Rica – Panama City, Panama 17

New International Route Services Route Frequencies Bogotá, Colombia - London, UK 4 Pereira, Colombia - Cartagena, Colombia - New York (JFK), USA 3

Connection Hubs In 2014, the Organization continued consolidating the three passenger airline connection hubs: Bogotá, Colombia; San Salvador, El Salvador; and Lima, Peru. Improved itineraries and connection times between routes operated by different airlines resulted in better seat occupancy and an optimized flight experience for users on routes with different segments throughout the Americas and to Europe.

Bogotá, Colombia Operations through the Bogotá Connection Hub amounted to 3,188 weekly departures to 23 cities in Colombia, 5 cities in North America, 7 cities in South America, 10 cities in Central America, Mexico and the Caribbean, and 3 cities in Europe, connecting hundreds of domestic and international travelers with different destinations in these regions every day.

San Salvador, El Salvador Through the San Salvador Hub, the Holding Company airlines operated more than 650 weekly departures from and to 11 destinations in North America, 6 destinations in South America, and 12 destinations in Central America, Mexico and the Caribbean.

Lima, Peru In the Hub located in the capital of Peru, the Holding Company airlines operated 559 weekly departures to 15 cities in South America, 5 cities in Central America, Mexico and the Caribbean, 1 city in North America, and 9 domestic destinations.

6 Codeshare and Interline Agreements In 2014 the Holding Company airlines continued offering codeshare operation services with ten international airlines, thus achieving coverage in Latin American countries and in others beyond the continent. The greatest demand under codeshare agreements was for connections to Spain, with Iberia; to Mexico, with Aeroméxico; to other countries in South America, with Satena, Sky Airlines and OceanAir (Avianca in Brazil); and to Europe, with Lufthansa and Turkish Airlines.

6 Information taken from the Avianca S.A. Management Report Besides the above agreements, the Holding Company has more than 100 current interline commercialization agreements with other airlines on five continents plus an intermodal agreement with the railway company Renfe in Spain. Also, frequent flyers benefited from frequent flyer program reciprocity agreements with 27 Star Alliance member airlines, including United Airlines, Air Canada, Singapore Airlines and Lufthansa, among others, and frequent flyer program benefit exchange agreements with Iberia and Aeroméxico.

Advances in Process Homologation

AeroGal In order to offer better, more convenient response times, thus optimizing the time that clients spend at all of the contact points and bettering their experience, the airline developed the Business Transformation Project (ETP, its acronym in Spanish), which enabled standardizing the following processes: ticket inventory, issuance, and sales; check-in; boarding; baggage handling; operational issues; and revenue optimization. Furthermore, one sole technological platform was adopted, procedures for entering Star Alliance were aligned, and changes in the image and in customer service were implemented using the trademark Avianca Ecuador.

During 2014 the airline also made important achievements on other action fronts:

- International Operations. During the second half of 2014 international operations to Panama, Aruba, Viru Viru (Bolivia), and Curacao were added to the service portfolio, which led to increased revenues and a broader route network supply.

- Transfer to the Nuevo Aeropuerto Internacional de Quito (NAIQ) (New Quito International Airport). The different company areas worked jointly to recover optimum On Time Performance percentages as well as optimum service during the NAIQ operation. The action plans carried out throughout the year allowed gradual improvement of the arrival time indicator and of the itinerary compliance indicator during this move that resulted in better customer service.

- Ground Operations. In recent years efforts have been made to standardize ramp processes. The end of 2014 boasted homologated training, aircraft cleaning procedures, baggage claim, and service provision, among others. In addition, projects, such as the supply of drinking water, assistance to flights operated by TACA International, TACA Perú, and Star Alliance member airlines were carried out; they represented significant savings for Avianca Holding S.A.

Avianca Holdings’ Commitment to Safety (G4 – PR1) The operations of the Avianca Holdings companies are based on Safety, a fundamental value in the air transportation industry. Following that principle, the companies work pursuant to the guidelines set forth in the Operational Safety Management System that in turn is governed by regulatory demands and directives set forth by the International Civil Aviation Organization (ICAO).

In compliance with the Operational Safety Management System, decision making processes related to operations design, execution, and improvement have been optimized. Also, the culture of operational safety has been reinforced thanks to the creation and implementation of an integral safety policy, as well as the dissemination of the personnel´s operational safety duties and responsibilities. Indeed, the level of the employee´s intervention in said system is explained in detail based on his or her role in the hierarchical structure of the organization, thus enabling effective operational risk management and continuous improvement along with operational growth. Some of the achievements made using this system include:

- Operational Safety Management System Documentation. In 2014, the Operational Safety Management System manuals and corresponding procedures were updated, in order to ensure ever better operational risk management –the identification of hazards and the treatment of risks and their potential consequences-. In addition, the company obtained ISO 9001 certification for the Operational Safety Management System. - Operational Safety Report Program. In 2014, the number of safety reports increased 24.5% as compared to the year before, reaching a record number of 6,400 events, out of which 89% were classified in the category of acceptable, tolerable risk; that figure shows the important progress made in the culture of prevention. - Operational Risk Analysis. After process implementation, diverse risk analyses were made in key projects as well as initiatives aimed at identifying and mitigating potential hazards in the operations before said projects were implemented; that was done when the Boeing 787-8 fleet was incorporated as well as with the decision to use regulated temperature containers, among others. - Operational Safety Inspections. The company continued inspections at the airports where the subsidiary airlines currently operate, aimed at identifying any condition that is a risk to operations and managing it with the aeronautics authorities, in order to drive the adoption of risk management measures. - Job Performance Evaluation and Operational Risk Management Monitoring. With the implementation of the Operational Safety control board, decision making processes regarding proper human resource assignment to ensure safe operations have been reinforced. Also, the level of top management empowerment regarding Operational Safety management has increased, with an evident evolution that has permitted effective monitoring to verify meeting the Avianca Holdings´ safety objectives. - Promotion of Operational Safety. In addition to giving initial and recurring Operational Safety training, virtual training, with access for all of the subsidiaries’ employees has been developed. Also, communications channels aimed at different levels of the Avianca Holdings companies were established, resulting in increased awareness of the need to proactively identify operational risks and keep the culture of safety in mind while performing duties. Among the safety promotion media, it is worth highlighting the Safety Committee that enables an effective two-way communication flow between the line personnel and top management.

Cargo Transportation and Courier Service Airline Line of Investment Results Avianca Cargo’s cargo operation, along with the national cargo transportation service in Colombia for express courier service dispatches, transportation of packages and merchandise, afforded by the business unit Deprisa – ascribed under Avianca S.A.- consolidate another one of the organization’s lines of investment; this one represents 11% of Avianca Holdings’ consolidated revenues. Cargo Transportation Avianca Cargo, the brand under which the Avianca Holdings cargo business line operates, has the mission of mobilizing goods and merchandise, using cargo planes operated by Tampa Cargo S.A.S. and/or using the available capacity on passenger transportation flights. Some of the highlights of the 2014 achievements were:

- Capacity and Fleet. In 2014 Avianca Cargo recorded a 17% growth in ATK capacity7 as compared to 2013. It was mainly due to a 25% increase in the cargo plane fleet, propitiated by more Airbus

7 Available Metric Ton per Kilometer A330F aircraft operations than in 2013 when the mixed fleet (Airbus A330F, Boeing B767-300, and B767-200 aircraft) was still in operation. At 2014 closing, a fleet of four A330F and of one B767-300 was operating. Likewise, the capacity for cargo on passenger planes also recorded an increase, 8%, mainly driven by the addition of the wide-body aircraft routes. The fleet of A330-200F aircraft, specially designed for the transportation of perishable goods and with a capacity of up to 68 metric tons, allows simultaneously transporting goods of various natures, thanks to the system of temperature control by area in those aircraft.

- Cargo Volumes. The cargo volumes in RTK8 transported by the cargo business recorded a growth of 25%, mainly concentrated on the following routes: Bogotá-Miami, Medellín-Miami, Lima- Miami, and Miami–Brazil.

- Service Portfolio. In 2014 the Special Products portfolio strengthened thanks to the expansion of the network for “valuable cargo” transportation, after the certification and qualification of the London, Tegucigalpa, La Paz and Santa Cruz de la Sierra stations. This product was introduced on the Peruvian domestic market, enabling the transportation of valuables among the cities of Lima, Cuzco, Arequipa, Chiclayo, Trujillo, Piura, and Juliaca.

- Infrastructure o Bogotá Cold Store Floor. In 2014 the Bogotá cold store floor started being changed; it was updated with a ball transfer system floor that gives better operating efficiency in terms of cargo mobilization and storage and reduces the work accident rate in the area by 100% as compared to the previous system. In January 2015 the project was completed; the total investment was USD 765,000. o Edificio 708 (Building 708). The Bogotá warehouse installed capacity increased 24% by renting additional space, which enables proper handling of the present cargo volume. This space now allows attending up to three aircraft simultaneously. The annual cost is USD 700,000. o Cooling Tower. In August the Avianca Cargo cooling tower in Miami was changed; the work cost USD 130,000. The investment represented the efficient guarantee of the cold chain process. o Warehouses in North America. The contracts with warehouse service providers in North America were unified, representing an annual savings of USD 280,000.

At December 31, 2014 the cargo fleet comprised a total of nine aircraft, out of which six are being operated and three are being subleased, as is shown below.

Total Cargo Fleet Owned/under Aircraft Airline Operating Lease Total Financial Lease Airbus A330-200F Tampa Cargo 5 - 5 Airbus A330-200F Avianca 1 - 1 Boeing 767-300F Tampa Cargo - 1 1 Boeing 767-200F Tampa Cargo - 2 2 TOTAL 6 3 9

At the end of the period, Avianca Cargo had an operating fleet of four Airbus A330-200F and one Boeing 767-300F aircraft. And one Airbus A330-200F aircraft was grounded.

8 Revenue Metric Ton per Kilometer Deprisa Business Unit9 In 2014 Deprisa, the Colombian domestic and international market transportation and logistics solutions unit, advanced significantly in its growth and expansion strategy. In compliance with its business plan, it created and implemented significant projects in the package delivery market, establishing new customer service options. In addition, it was able to materialize competitive sales by implementing its new IT system and streamlining its different logistics centers in Colombia and in the United States.

International Market The international courier service network was consolidated with the strengthening of Avianca Express. It now boasts a network with more than 190 sales points in the United States and 42 distributed among Spain, Canada, Panama, Costa Rica, Ecuador, Aruba, and England. Furthermore, the products Premium Priority and Next Day were launched in 2014; they offer faster delivery times.

Products Deprisa’s product portfolio has broadened, now offering a new option for customers through Deprisa Mercancías. This product was designed to respond to corporate customer demands for sending packages of up to 200 kg. by land and offers a new payment alternative, called Deprisa Contra-entrega (COD payment).

Infrastructure Structural changes were made in 2014 on some Colombian bases, resulting in better locations, larger facilities, and greater security. The remodeled stations represent around 1,750 m2, a 58% enlargement at the Sincelejo, Neiva, Bucaramanga, Siberia, Villavicencio, and Medellín stations. The facilities at the airports in Riohacha, Leticia, Villavicencio, and Montería increased around 237 m2, equal to a 900% enlargement of warehouse and customer service areas.

Service and Communication Wishing to offer business clients preferential treatment, Deprisa developed a customer service model for its 98 high-value business clients. Some of the model benefits include special waiting times for pick-up and distribution, personalized attention when managing their dispatches, and assessment and accompaniment in packaging and safety processes, among others.

Quality Certifications Given its rigorous administrative, technical, operational, and service procedures, Deprisa was able to keep its certifications in:

- The IATA World Air Safety Registry, the IATA Operational Safety Audit, and the IATA Safety Audit for Ground Operations (ISAGO) - ISO 9001 Quality Management System - ISO 28000 Safety Management System.

Results. Thanks to the above achievements and initiatives, Deprisa recorded a 7.9% growth in sales and a 24% growth in business profitability. Also, Deprisa kept its leadership in the Colombian domestic cargo air transportation market, recording a 38.2% share in October and a growth of 15.9% in metric tons transported.

(Accrued Share, January-October 2014. Source: Colombian Civil Aeronautics Unit).

9 Information taken from the Avianca S.A. Annual Report Results for Other Lines of Business LifeMiles Corp. The subsidiary in charge of the frequent flyer program for the Avianca Holdings S.A. passenger carriers is LifeMiles Corp. It is in the process of consolidating the independent handling of the reward programs, including, among them, the frequent flyer program in charge of commercializing the value of the miles granted to the reward program.

During 2014 efforts were made to improve the program, adding new mileage accrual and redemption options to benefit the members, thanks to a consolidated network of commercial allies. All of the above aims at optimizing frequent flyer services. The main activities carried out during this period are listed below.

- Enhanced Accrual and Redemption Network In order to offer more benefits to its members, in 2014 LifeMiles implemented new options, such as:  De Compras con LifeMiles (Shopping using LifeMiles). An alliance with retail partners regarding LifeMiles accrual or redemption when making purchases at the sales points of over 200 stores in Colombia. 2015 expects to see this benefit extended to Central America.  Catálogo de Premios LifeMiles (LifeMiles Reward Catalog). In December 2014 a new catalog was launched in Colombia in alliance with Linio. It now comprises 22,000 products, with a projection for gradual growth. 2015 expects to see it extended to Peru, Ecuador, and Central America.  Renta-autos LifeMiles (LifeMiles Rent-a-Car). Thanks to an alliance with Connexions, it is now possible to accrue and redeem LifeMiles when renting cars in over 180 countries.  LifeMiles Things to Do. The partnership with Connexions also allows accruing and redeeming LifeMiles on over 9,000 tours and in other activities in over 300 cities around the world.  LifeMiles Mobile App. The mobile application for Android smart phones launched in 2014 allows members to redeem airline tickets with Avianca from their devices, among other functionalities. In 2015 the iOS version will be launched for Apple users, as will new functionalities to complement De Compras con LifeMiles (Shopping using LifeMiles).  New Airline Partners. New agreements for frequent flyers were entered into with Aeroméxico and with Air India, thus allowing members to accrue and redeem LifeMiles when flying with said airlines.  On-board Duty Free. Now members can accrue LifeMiles when they make on-board Duty Free purchases on Avianca flights.  In addition, new alliances were made with Hoteles IHG and AccorHotels, as well as with Traveling Connect.

- New Benefits. In April 2014 the CENIT acknowledgement was created. It permanently grants LifeMiles Élite benefits to travelers over 60 years of age who have been continuously loyal to Servicio Avianca and who have accrued over one million miles in trips using Avianca. This new benefit was granted to 64 members in 2014. Every year the frequent flyers meeting the requirements established for obtaining this lifetime benefit will increase. Avianca Tours10 Seeking to offer a commercially more robust tourist product, in 2014 two important actions were carried out: in terms of supply, the volume of plans placed on the market increased, with the influence of Viajes Éxito, a channel with outstanding expertise in selling vacation packages. In parallel, there was a migration of the Avianca Tours call center in the customer service area, in order to provide the end customers as well as the travel agencies better customer service.

10 Information taken from the Avianca S.A. Annual Report

In 2014, the Sixth International Golf Tournament took place with excellent results, as Avianca (as a brand) and Avianca Tours placed in a specialized segment with significant commercial potential, thus achieving a growth in value of 13% as compared to 2013 and revenues of over USD 500,000.

For this fiscal period, Avianca Tours revenues rose to USD54.7 million, representing a growth of 5.6% in revenues and a growth of 12% in passengers, as compared to the previous year. Avianca Services11 In 2014, Avianca Services, the business unit specialized in industrial aeronautics service provision and commercialization, made important achievements:

- Accreditation of Technical Processes. In cooperation with the Avianca S.A. Technical Instruction Center team, the Colombian Civil Aeronautics Authority granted Avianca Services the technical airplane line program certification. This certification enables it to offer persons aspiring to work as airline aviation technicians access to a high-quality study program that covers the actual sector needs in that field. Likewise, it will enable this unit to continue expanding its educational training programs. - Simulator Services. 2014 saw the initial commercialization of the ATR72-600 flight simulator, adding the companies Aeromar de México in Mexico, Caribbean Airlines in Trinidad and Tobago, and CAE Flight Training Center in Chile to this Business Unit’s list of customers in this segment. - Educational Training. The On-Board Service Attendant and Airport Service Attendants program exceeded the number of 160 students seen last year, boasting 284 persons in training, thus recording a 78% growth. The year 2015 will see the first graduation of the students in this program. - Line Maintenance. Within the internationalization plan for these services, United Airlines became one of Taca Perú’s customers in Lima. In Colombia Vensecar Internacional (from Venezuela) and Airpanama (PARSA S.A.) joined the customer list for these services. Likewise, airport service and line maintenance service provision was broadened to cover the new Insel Air operations in Barranquilla, the second Bogotá-Mexico City frequency of Interjet, and the increased JetBlue operations in Bogotá and in Cartagena. - Services at Airports. In 2014, the contract with Satena and Air Transat (charter flights) continued and the charter flight company Italiana Neos joined the customer list. - Overhaul Services. Support continued for the Colombian Air Force and for the Venezuelan airline Aserca Airlines.

In 2015, Avianca Services intends to expand its commercialization of airport services and line maintenance services in Central America and in South America, to achieve active overhaul sales and service provision by opening an additional production line in Bogotá. As regards training, the objective is to start the Airplane Line Technician program, to open evening training sessions for the On-Board Service Attendant and Airport Service Attendants program; and to consolidate the commercialization of the ATR72-600 flight simulator.

11 Information taken from the Avianca S.A. Annual Report 6. Avianca Holdings’ Commitment to Its Strategic Partners In its search for new synergies, to build alliances and renew evaluation and development methodologies, Avianca Holdings S.A. continued strengthening relations of trust with its providers, strategic partners with whom it made negotiations in the amount of USD $1,523,72312.

Providers of non-technical services to the Avianca Holdings companies represented a group of 3,167 companies and organizations during the second half of 2014. Although the companies integrated under the Holding do not have a defined policy for the use of local providers, 58.6% of non-technical purchases were negotiated with companies located in the HUBS (Colombia, El Salvador and Peru) where the Avianca Holdings operating companies conduct their operations (G4- EC9) Provider Evaluation and Development Program This program covers the relation that the Avianca Holdings operating companies have with their strategic partners, including selection, evaluation, monitoring, auditing, and accompanying them throughout the supply chain. In 2014 Avianca Holdings opened a space for good practice exchange initiatives, which contributed new focuses and ideas for the program projects: 1. Networking. For this activity, Avianca S.A. was the host in association with the Bogotá Chamber of Commerce. It generated a network with 13 other large companies in Colombia for provider evaluation; some of the best experiences regarding the topic were shared and this space promoted a community for the exchange of knowledge, contacts and experiences. 2. Collaborative networking. Provider development being the common denominator, Isagen summoned several large Colombian companies for the purpose of sharing efforts and lessons learned on the topic. Avianca Holdings S.A. participated in the meetings held in 2014, during which the Avianca Holdings companies started developing various work fronts, to take advantage of the benefits offered by the Ministry of Industry and Commerce, aimed at driving

12 The amount of the purchases was only available for the second half of 2014 because Avianca Holdings S.A. changed its Enterprise Resource Planning ERP, which is a set of information systems that enable integrating certain company operations, especially those that regard production, logistics, inventories, dispatches, and accounting. In 2014 Avianca Holdings S.A. migrated its operations to Oracle ERP Solutions; that is why, some of the data published in this chapter only includes data from the second semester of that year.

Provider development. This initiative also generated an improved methodology and scoring system for the assessment model in place; the changes will be reflected in 2015. 3. Provider Development Pilot Program in alliance with the Bogotá Chamber of Commerce (CCB is the Colombian acronym). Making a diagnosis of their company, led by the CCB, participating providers identify gaps and opportunities for improvement in their development process and enjoy the necessary accompaniment to be able to successfully work on the gaps identified, enhance their capabilities, and validate their business conditions as well as their potential for internationalization, all for free. The 10 companies that participated were selected by the Avianca Holdings S.A. Administration and Purchasing Directorate based on their performance and the need for support as identified in the evaluations that had been made. Provider Evaluation and Acknowledgements to Providers Currently the Organization highlights the members of its supply chain with the greatest impact on the processes of the Avianca Holdings operating companies and those that obtain the highest scores according to the evaluation criteria that include:

- Business Management Indicators. These indicators serve to verify compliance with specific requirements, such as compliance with labor matters, among them: payroll payments, training, occupational health and occupational safety. - Business Management Auditing. This covers compliance with the provisions in the “Master Requirements Form” and in the corresponding contract. In 2014 a total of 19 Business Management Audits were conducted. - Technical Indicators. These indicators evaluate aspects pertinent to the operations for which the provider is contracted. - Technical and/or Quality Control Audits. The Management area carries out this activity, verifying compliance with the technical specifications that provider must meet to provide an excellent service. As a result of such evaluations, in 2014 acknowledgements were made to 38 providers during a ceremony with their colleagues, representatives from the user areas, and representatives from the Organization´s Steering Committee.

2M SERVICE S.A. DE C.V. AAACESA ALMACENES FISCALIZADOS S.A. AERO DISPATCH SERVICES LTD. AERODESPACHOS S.A. AGENCIA WARREN S.A. DE C.V CARGO FORCE INC. CASA PHILLIPS COOPAVA CRISTIAN CABRALES Y CIA S.A.S CURAҪAO GROUND HANDLING SERVICES N.V. GATE GOURMET BOG GATE GOURMET MIA GIRAG PANAMA S.A. GODDARD CATERING GROUP EL SALVADOR S.A. IG SERVICES S.A.S. INTEREXPRESSO S.A. INTERNATIONAL MEAL COMPANY INVERSIONES O&E S.A. IVAN GONZÁLEZ S.A.S. L.A.S.A. LYS SERVICE CAR S.A.C MAGIC TOURS MT S.A.S MONVI S.A.S. PERISHAIRPORT CIA. LTDA. REPRESENTACIONES AVIA S.A.S RIAÑO MORENO LA BELLEZA & CIA. S. EN C.A. SAYT S.A.S SERDAN S.A. SIATO LTDA. SPE S.A. SWISSPORT BRAZIL SWISSPORT FLL SWISSPORT MIA SWISSPORT NYC TALMA SERVICIOS AEROPORTUARIOS S.A. TERMINALES SANTA MARIA S.A. TRI FIT S.A. TVO COMUNICACIONES LTDA.

Providers obtaining a score below 65% undergo a follow-up process during which opportunities for improvement are identified, assessment meetings are held, and specific objective action plans are developed, using physical meetings, teleconferences, deliverables, and assignments. 30 follow-ups were done on 24 providers in 2014. Avianca Holding’s companies also continued evaluating provider performance regarding matters of Human Rights, which contributes to better integrated operations. A total of 534 Type B and Type C providers and 81 Type A providers were analyzed in 2014. (G4- HR11) 2012 2013 2014 Total Type A Providers 74 83 81 Providers Analyzed 100% 100% 100% Contracts Rejected 1.39% 0% 0%

User areas also have a space for venting their dissatisfaction with provider services, accompanied by the Provider Administration and Development office that does the corresponding follow-up and verifies service improvement. There were 18 complaints in 2014, which were worked out, with a 92.7% average of user area satisfaction.

7. Avianca Holdings’ Commitment to the Environment

Safety, Health and the Environment (SHE) The mission of the Safety, Health and the Environment area is to encourage commitment and leadership regarding Industrial Safety, Occupational Health, and Environmental Care, therefore contributing to making the Avianca Holdings S.A. subsidiaries the best places in which to work. Focused on fulfilling said mission, the Avianca Holdings companies work under the guidelines of the ISO 14,001 Environmental Management System, IOSA13, and ISAGO14 rules and regulations specific to the Aviation Industry and national and international laws and regulations. The Environmental Management action fronts are described below.

Environmental Management. Set of strategies aimed at preventing environmental pollution through the rational use of natural resources and the implementation of cleaner production practices, thus enabling compliance with applicable laws and regulations and other environmental commitments.

 Integral work with the Social Responsibility area  Project accompaniment  Environmental inspections  Handling environmental contingencies  Attention to the requirements of authorities and of interested parties  Efficient use of water and energy  Waste management  High impact provider follow-up  Monitoring atmospheric emission indicators  Hazardous and conventional waste management  Promotion of cleaner production projects  Improving environmental care competencies  Plans for handling environmental contingencies

13 IATA Operational Safety Audit (IOSA) is an internationally renowned and accepted evaluation system, designed to evaluate air transportation company operations management and control systems. 14 IATA Safety Audit for Ground Operations is a tool for the control and improvement of ground operations safety; it also helps decrease airline costs by drastically reducing the number of accidents and injuries. Environmental Management Standardization In order to standardize environmental management, the Avianca Holdings companies used diagnostics tools to evaluate compliance with applicable environmental laws and regulations and the requirements of ISO 14,001, OHSAS 18,001, and ISAGO-IOSA standards at all stations. They also defined three phases for standardization at a corporate level, giving priority to closing legal gaps. The three phases are:

Phase III Maintenance and Phase I Applicable Phase II International Constant Improvement Standards (2011-2015) Legislation (2011-2014) (2015 hereinafter)

Diagnosis and closure Diagnosis and closure of of environmental gaps regarding standards Constant improvement regulation gaps in each ISO 14001 – 2004 of the Environmental country Management system ISAGO: Certifications IOSA: Certifications

During Phase I, the Organization had external cooperation for carrying out environmental diagnostics in the following stations:

Data in COP at November 2013. Dx Executed. Dx. Pending

The diagnostics enabled consolidating legal environmental requirements, evaluating their compliance at each station, and defining action plans for closing gaps. Acknowledgements and Certifications In 2014 national and international audits were conducted to evaluate all environmental management aspects at a physical or documented level. The SHE area participated in the following audits:

SYSTEM PERU ECUADOR

 SISO and GA internal quality  Complete environment, safety  ISO 14.001:2004 Re-certification audit and occupational health  Smart Voyager  External quality audit under technical evaluation by the  SART 333 standard ISO 9001:2008 for Airport Operator, which  IOSA for Aerogal certifying SISO and GA receved an Excellent score processes

COLOMBIA

 IOSA for Avianca CAM  RUC requirement evaluation  IOSA for Taca International for contracting with Cerrejón.  FAA audits OHSAS 18001 compliance

diagnosis with a result of 68%

Goals At the end of 2012 the Holding Company subsidiaries defined the strategic macro goals described below, regarding Safety, Health and the Environment for 2013-2015.

Environmental Policy Through their Environmental Policy, the Holding Company subsidiaries sketch guidelines, establish objectives and set goals within the Environmental Management System (EMS). With the following commitments, the Holding Company asserts its interest in the protection and preservation of the environment and the rational use of natural resources.

Decrease fossil fuel consumption

Reduce hazandous waste

Implement pollution prevention mechanisms in all of its activities

Diminish greenhouse gas emissions and noise

Comply with applicable environmental laws and regulations and with other environmental commitments

Constantly improve its environmental performance

Promote environmental commitment to employees, providers, and contractors

The Holding Company subsidiaries can count on the Corporate Safety, Health and Environmental (SHE) Manager’s Office to disseminate the general guidelines and standardize the most appropriate SHE practices in all operations areas. Environmental Formation, Training, and Sensitization In 2014, the Avianca Holdings’ companies gave training on important environmental aspects. As compared to 2013, there were 9,269 more employees trained on environmental topics, such as proper waste handling, the efficient use of natural resources, and environmental contingencies. The increase in trained employees was related to the startup of the Corporate Orientation Environmental Management and Handling of Environmental Contingencies Module for mid-management level employees using the e-learning formation tool. This tool enables fast employee access to the contents, thus facilitating easy learning. To complement the training sessions, there were sensitization activities and practical workshops that contributed to building a culture of respect and environmental protection.

2014 TRAINING

Number of Environmental TrainingModule employees trained

Environmental Management10,789 Orientation. Avancemos 7,107 (Let’s Go Ahead) ( e-Learning platform)

Handling1,520 Environmental Contingencies (for mid- 705 management level employees). Avancemos Mantenimiento (Let’s Go Ahead with Maintenance) ( 2013 2014 e-Learning platform )

Waste Management (Practical workshop) 770

Handling Environmental Contingencies (Practical 652 workshop)

Environmental Management System 666

Orientation for Contractors 889

Total 10,789 Initiatives The Holding Company initiatives to mitigate the environmental impact generated by their operations, implemented by its subsidiaries, focused on cleaner production and concentrated mainly on:

PLA plastic cups: Biodegradable Napkins: 10,903,800 PLA* 29,379,200 biodegradable plastic cups were used napkins** were used for for Avianca onboard Avianca onboard services services and in VIP and in VIP lounges lounges in 2014

* Polylactic Acid is a polymer, made up of lactic acid particles, used to make biodegradable containers. It easily dissolves in water and carbon oxide in approximately 12 weeks.

** These napkins were made from renewable plant-derived natural resources (recycled fibers), which makes them biodegradable, thereby reducing the environmental impact related to the life cycle and use of natural resources.

Solid Waste Recycling

571.8 metric tons of conventional solid waste were recycled for future use, aimed at reducing

the number of landfills Solid Waste Solid

Fleet Renewal (G4 – EN27) Avianca has the most modern fleet in the region. At the end of 2014 each aircraft in the fleet aircraft had been manufactured 5.4 years before, on an average. This year, 31 new aircraft have been incorporated into the Company fleet:

 4 B787-8  6 A319  2 A320  6 A321  3 A330  10 ATR72 The Avianca Holdings’ companies continued the fleet aircraft renewal, simplification and streamlining process by incorporating 31 aircraft with environment friendly technology. Fuel Saving Strategies

ENGINE AND AIRCRAFT WASHING Washing the engines and the aircraft more often controls the layer of grease generated by regular use, which restricts the entry of air into the combustion chamber, leading to increased engine temperatures and a less efficient combustion process. Also, washing the aircraft improves its aerodynamic processes by eliminating resistance, which results in lower fuel consumption.

APU/GPU OPTIMIZATION The Auxiliary Power Unit (APU) is a third engine in charge of IDLE REVERSE ON providing the aircraft with LANDING electricity, hydraulic pressure, On long runways, landing and air conditioning; it uses A1 can be done without having jet fuel. The Ground Power Unit the engine expel air forward, (GPU) provides the aircraft with in order to slow down and electricity while it is at the use its breaks. Using the airport, using diesel fuel. engines, but not at APU/GPU optimization consists maximum power, the proper of reducing APU use at airports speed is maintained for where the GPU service is entering the disembarkation WATER REDUCTION available, as long as the GPU area. This reduces fuel The amount of drinking usage costs are equal to or lower consumption and increases water supplied is than APU usage costs. Maximum the useful life of the controlled according to APU usage is established in the engines. flight distance. APU usage policy, based on airport temperature.

REDUCED FLAP TAKE-OFF There are three (3) possible flap configurations for take-off. Flaps are part of the wings and, by changing positions, they enable the aircraft to increase or reduce air resistance. When runway conditions allow, the flap configuration can be adjusted, in order to optimize fuel consumption by reducing air resistance at take-off.

OVERFUELING The actual amount of fuel THRUST REDUCTION supplied to the aircraft is ALTITUDE monitored, aimed at avoiding REDUCED FLAP LANDING an excess of fuel over the Reducing engine power at an When runway conditions altitude of 1,500 feet during amount established in the allow, a configuration below take-off minimizes the time fueling order as it indicates the Full Flaps is used upon during which the aircraft flies amount of fuel required for the landing, to reduce air at full power, which reduces scheduled flight segment and resistance and thus optimize any additional fuel pursuant to fuel consumption and engine fuel consumption. wear and tear. applicable law.

SINGLE ENGINE TAXI In airports where the boarding gate is far from the runway, single engine taxying is used. When the aircraft is leaving the airport, this strategy is called Single Engine Taxi Out and when the aircraft is arriving at the airport, it is called Single Engine Taxi In.

Fuel Consumption (G4-EN3) In 2014, fuel consumption increased 5.10% as compared to the year before. Said increase was related to the companies’ adding routes to their network and to increased frequencies. Also, an increase in thermal value is directly proportionate to an increase in fuel consumption. In that same year, the seat capacity measured in Available Seats per Kilometer (ASK) increased 5.9%, and passenger traffic capacity measured in Revenue Passengers per Kilometer (RPK) increased 4.5%, ending the year with a consolidated seat occupancy factor of 79.4%.

Annual Fuel Consumption (in gallons)

429,703,000 346,512,035 382,320,904 408,863,408

2011 2012 2013 2014

Annual Fuel Consumption (in Terajoules)

58,692 52,220 55,845 47,329

2011 2012 2013 2014

Fuel Consumption by Block Hour (G4-EN5) Fuel consumption by block hour refers to measuring the total fuel consumption from when the gate is closed at the station of origin to when the passenger door is opened at the station of destination. The following chart shows the variations of fuel consumption by block hour by fleet in 2014for each one of the Holding Company subsidiaries.

FUEL CONSUMPTION IN GALLONS PER BLOCK HOUR AND BY TYPE OF AIRCRAFT Variation FLEET AIRCRAFT 2012 2013 2104 2013 - 2014 in % Airbus 318 597 609 607 -0.33 Airbus 319 692 723 691 -4.43 Airbus 320 698 698 679 -2.72 Avianca Airbus 330 1,654 1,667 1,646 -1.26 ATR 72 0 157 160 1.91 FOKKER 50 146 145 146 0.69 Airbus 319 735 729 730 0.14 Airbus 320 799 790 780 -1.27 Taca Airbus321 972 970 947 -2.37 Airbus 330 1,496 1,594 1,650 3.51 Embraer 90 611 622 626 0.64 ATR 42 133 128 - Regional Caravan 100 98 99 1.02 Airbus 319 618 612 622 1.63 Aerogal Airbus 320 671 671 689 2.68 Airbus 330 0 1,611 1,564 -2.92 Boeing 767- 1,306 1,297 - -0.33 Tampa 200 Boeing 767- 1,518 1,469 1,404 -4.43 300

Aircraft Fleet Emissions According to studies conducted by the Intergovernmental Panel on Climate Change

(IPCC), out of the total amount of carbon dioxide (CO2) produced by man, the aviation industry produces around 2%; plus, it is estimated that the worldwide demand for passenger flights will have increased 5% per year from 1990 to 2015, whereas the total consumption of aircraft fuel (passenger transportation, cargo, and military operations) will have increased 3% per year. The above is mainly due thanks to improvements in aircraft efficiency. By investing in new technologies and in developing proper operational procedures, the aviation industry has kept its gas emissions from growing proportionately to the increasing number of passengers transported, an average 5% per year.

APPROX. GAS EMISSIONS GENERATED BY AIRCRAFT ENGINES NOx, CO, Sox,VOCDM*, particles and other oligoele-ments. 1% H2O CO2 29% 70%

*Volatile Organic Compounds Different from Methane (VOCDM): These compounds are mainly comprised of hydrocarbons belonging to some of the following chemical groups: alcohols, aldehydes, alkalines, aromatics, ketones, and halogen products. These substances easily vaporize at room temperature, and many of them have no color or smell.

GEI EMISSIONS IN CO2 TONS (G4-EN15)

2,220,445 2,220,445

2,121,311 2,121,311

2011 2012 2013 2014

1,923,000 1,923,000

1,634,694 1,634,694

1,498,503 1,498,503

1,410,814 1,410,814

1,369,152 1,369,152

1,291,468 1,291,468

309,800 309,800

268,687 268,687

257,327 257,327

211,148 211,148

202,593 202,593

159,427 159,427

153,989 153,989

150,310 150,310

31,731 31,731

30,203 30,203

28,707 28,707

9,522 9,522

Avianca Taca Aerogal Tampa Regional

In 2014, the absolute value of CO2 emissions showed an increase of 4.85% as compared to those of the previous year. Such increase was the result of the Holding Company’s subsidiaries’ growing operational activities. The emissions were calculated using a JET A1 density of 3,0972 kg/gl and an emission factor of 3.15 CO2 ton/fuel ton.

CO2 Emissions by Ground Equipment at the Bogotá Station In 2014, CO2 emissions at the Bogotá station were reduced by 3.58%, thanks to the some of the combustion-powered equipment having been replaced by electrical equipment. Approximately 40 pieces of electrical equipment have been incorporated into operations in the past 5 years.

CO2 EMISSIONS BY EQUIPMENT/MAN HOUR (IN KG)

12.53 12.21

11.81

11.38

2011 2012 2013 2014

Noise In accordance with its commitment to the aviation industry, the Holding Company continues working toward reducing the impact generated by aircraft noise. In average, new aircraft produce 50% less noise than aircraft built 10 years ago, according to information furnished by Boeing and by Airbus; and it is calculated that new generation aircraft noise emissions have been reduced 15% as compared to the previous generation. Mandatory Noise Reduction The United Nations intergovernmental body, International Civil Aviation Organization (ICAO) introduced a new noise limit standard in 2006 called Chapter 4, aimed at guaranteeing that new aircraft will be 10 decibels lower than those built under Chapter 3 specifications. Said standard is part of a series of measures for optimizing the noise level of reaction engines. ICAO calculates that the number of people exposed to air traffic noise was reduced by 35% in the entire world from 1998 to 2004. It is worth mentioning that all Avianca aircraft (A318/ A319/ A320/ A330/ ATR72/ Boeing 787) are STAGE 4 noise level certified. This categorization is issued by the aircraft manufacturer. Thus, Avianca has shown that it has state-of-the-art technology for air industry operations, and that it is in compliance with noise reduction procedures at airports as defined by the aeronautics authority. Furthermore, the single engine taxi out and single engine taxi in, mainly aimed at saving fuel, also reduces the noise impact on the population, as one engine is shut off.

Waste (G4-EN23) The Avianca Holdings subsidiaries generate two types of waste: conventional waste and hazardous waste. They manage waste using the Integral Waste Management Plan aimed at preventing negative environmental impact. Non-hazardous Waste CONVENTIONAL WASTE RECYCLED (IN TONS)

2013 432.87 2014 571.8

RECYCLED WASTE BY TYPE OF MATERIAL (IN TONS) 382.7

69.9 74.8 36.4 8

In 2014 a total of 571.8 tons of ordinary waste were recycled; 32.1% more than the previous year. This was made possible thanks to more coverage in the dissemination of recycling strategies and of employee sensitization strategies regarding the importance of environmental protection. For example, the art expo “Entre la conversión y la metamorfosis” (“Between conversion and metamorphosis”) gathered 14 contemporary artists who used cardboard, paper, plastic, metal, and wood to make their art pieces.

CONVENTIONAL WASTE RECYCLED (IN TONS) 2013 2014 Variation as a % COLOMBIA 406 478 17.7 ECUADOR 8.5 16 88.2 EL 8.9 47.7 436.0 SALVADOR SAN JOSÉ 0.67 3.6 437.3 GUATEMALA 8.8 13 47.7 LIMA 0 13.5 100.0 TOTAL 432.87 571.8 32.1

Hazardous Waste The Avianca Holdings’ companies gave training and held conferences on the proper handling of hazardous waste, during which practices for preventing possible impact on natural resources and human health were disseminated. The companies produced 253 metric tons of hazardous waste, surpassing the amount produced in the previous year by 4.2%. The increase in hazardous waste was due to the growth in operations and in aircraft maintenance. The different types of hazardous waste were properly disposed of according to their characteristics.

HAZARDOUS WASTE MANAGED (IN TONS)

2014 2013 241.85 232

TONS OF HAZARDOUS WASTE RECYCLED BY TYPE OF MATERIAL

HAZARDOUS WASTE MANAGED (IN TONS) 2013 2014 Variation as a % COLOMBIA 185 175.2 -5.3 ECUADOR 13.6 17.8 30.9 EL 20.4 10.45 -48.8 SALVADOR SAN JOSÉ 2.8 23.6 742.9 GUATEMALA 5.7 5.9 3.5 LIMA 7.3 8.9 21.9 TOTAL 232 241.85 4.2

Water Consumption

The Holding Company’s water consumption was reduced by 5.9% thanks to the water reduction actions implemented in activities with significant water consumption.

Said actions were implemented in:

1. Bogotá: administrative offices, air terminal, hangars and Helicol 2. Quito: AV control areas at the airport 3. San José: administrative areas 4. Guatemala: hangar and administrative areas 5. Lima: airport areas 6. El Salvador: administrative areas and hangar

In the cities of Bogotá, Quito, San José and El Salvador, water collection is handled by the local waterworks company; also, in El Salvador and in Guatemala water is collected from underground sources.

152,145 3

140,687 WATER CONSUMPTION (IN M )

38,542

40,211

9,722

6,861

500

735

1,177

2,940

3,210

Bogotá Quito San José Guatemala Lima El Salvador

2013 2014

Waste Water

While washing aircraft parts and components and ground equipment, the Holding Company subsidiaries generate waste water, which undergoes physical-chemical and microbiological treatment, and proper disposal by external companies that have permits as required by each country’s environmental authorities. In 2014 a total of 3 67. 4 m of polluted water underwent treatment.

Environmental Expense and Investment In 2014, the Holding Company subsidiaries made an environmental investment, besides the purchase of new aircraft, amounting to USD 626,298, which represents an increase of 80% as compared to the previous year.

Regional Investment North America, Central America and the Caribbean USD 20,150 Corporate USD 39,466 South America USD 36,149 Colombia - Europe USD 530,533 Total USD 626,298

8. Avianca Holdings’ Commitment to Its Employees

To attract the best talent, procure a good work climate, and propose initiatives that connect our employees to the corporate strategy are the key missions of the Organization’s Human Resource Management area, thanks to which Avianca Holdings can meet its business objectives and maximize the valuable support of its subsidiaries’ human resources. In 2014 emphasis was made on the employees’ total development, through training, wellbeing, health and safety, leadership, and evaluation processes, among others, for the purpose of strengthening the passion and human warmth that characterize our operations and the service of the Avianca Holding’s companies.

Passion and Human Warmth (G4-LA12) A team of 20,485 professional employees enabled Avianca Holdings to meet its corporate objectives during 2014. Thanks to its efforts and dedication, this team, 7% larger than last year’s, reached important milestones in service, operating excellence, coverage, and customer service, among others. Distribution by Gender

12,912 12,031 11,363

7,573 6,912 7,096 Men Women

2012 2013 2014

Distribution by Age Groups

51.10% 49.70%

42.53% 40.70%

2013 2014

8.20% 7.77%

18 to 30 years of age 30 to 50 years of age over 50 years of age

Distribution by type of post

61% 59%

2013 2014

15% 13% 12% 10% 7% 6% 6% 5% 3% 3%

Operating Technical Administrative Professional Mid-management Directing

Employees by Gender and by Type of Post (G4-10) 2013 2014 Type of Post Men Women Men Women Operating 7,331 4,504 6,954 4,514 Technical 1,402 99 1,132 45 Administrative 756 384 319 579 Professional 1,769 1,145 1,228 1,078 Mid- 1,303 733 1,473 761 management Directing 356 235 346 217

15 Employees by Type of Contract and Employment (G4-10) 2014 Indirectly Temporary Direct Hires Contracted Type of Working Men Women Men Women Men Women Contract Hours Full-time 6,241 2,892 Indefinite Part-time 488 281 Fixed Full-time 2,216 2,139 265 231 Term Part-time 37 124 Full-time 2,923 1,486 Bid Part-time 114 108 Full-time 625 311 Fixed Bid Part-time 3 1 Total 8,945 5,312 3,037 1,594 930 667

Employees by Type of Employment and Region (G4-10)

Indirectly Direct Hires Temporary Total Contracted Men Women Men Women Men Women Men Women Central America 3,440 1,690 91 86 3,531 1,776 South America 1,395 901 211 265 1,606 1,166 North America 231 152 4 14 4 235 170 Colombia- 3,879 2,569 3,033 1,580 628 312 7,540 4,461 Europe

Turnover Index (G4-LA1) In 2014 the largest number of new entries of personnel was seen in the Colombia – Europe region. In the Central America, South America, and North America regions there were negative turnover indexes because there was a greater number of removals than of new entries; notwithstanding, in general terms, counting all of the regions, there was a total of 249 new entries and of 234 removals, which represented a positive turnover index.

15 As of the year 2014 contracts were classified into four categories different from the types seen in prior years; that is why, there is no comparative table with the data for the years 2012 or 2013. Central America New Employees Removed Employees Men Women Men Women 18 to 30 years of age 3 4 9 7 30 to 50 years of age 1 4 3 4 Over 50 years of age 1 0 3 1 Total 5 8 15 12

Employees at the Employees at the Beginning of the New Entries Removals Turnover Index End of the Period Period

5,362 13 27 5,319 - 0.26%

North America New Employees Removed Employees Men Women Men Women 18 to 30 years of age 0 0 0 0 30 to 50 years of age 0 0 1 1 Over 50 years of age 0 0 0 1 Total 0 0 1 2

Employees at the Employees at the Beginning of the New Entries Removals Turnover Index End of the Period Period

411 0 3 407 - 0.73%

South America New Employees Removed Employees Men Women Men Women 18 to 30 years of age 2 6 12 9 30 to 50 years of age 2 0 7 1 Over 50 years of age 0 0 1 0 Total 4 6 20 10

Employees at the Employees at the End of New Entries Removals Turnover Index Beginning of the Period the Period

2,798 10 30 2,769 - 0.71%

Colombia and Europe New Employees Removed Employees Men Women Men Women 18 to 30 years of age 74 132 56 68 30 to 50 years of age 4 15 26 16 Over 50 years of age 1 0 6 2 Total 79 147 88 86

Employees at the Employees at the Beginning of the New Entries Removals Turnover Index End of the Period Period

10,072 226 174 10,151 - 0.51%

Remuneration The job description is the basis for defining salary allocation, compensation, and remuneration for the different posts. This process also takes into account the criteria of performance results, problem solving, and skills, in order to keep a balance between market values and the value that the Avianca Holdings companies allocate to each post. The Hay Group method is used for this evaluation; it is based on a system of profiles and scales:

 The result of the evaluation analysis states the total number of points for the post and its weight within the Organization.  Using this result, the salary compensation is allocated for the post, ensuring that it is established according to the principles of equity and competitiveness. Every year the Avianca Holdings companies acquire applicable market salary scales for each country or region and internal compensation studies are updated, in order to detect any need for salary adjustment and to identify and compare salary allocations to the market situation.

2014 Salary Adjustments Country Description

 The best paid post showed an increase of 1.94% as compared to an average salary variation of 18.55% for the other posts. Colombia  Inflation adjustments ranging from 1.94% to 2.79% according to the type of contract as well as movements stemming from specialization plans were taken into consideration for determining those percentages.  The best paid post showed an increase of 3% as compared to an El Salvador average salary variation of 3.75% for the other posts.  Inflation adjustments were taken into consideration for determining those percentages.  The best paid post showed an increase of 5.2% as compared to an Peru average salary variation of 5.37% for the other posts.  Inflation adjustments were taken into consideration for determining those percentages.  The best paid post showed an increase of 6% as compared to an average salary variation of 10.87% for the other posts. Ecuador  Inflation adjustments were taken into consideration for determining those percentages, as well as increases in critical posts and retention plans to fight losing human resources to other companies.

Social Dialog Pursuant to Avianca Holdings S.A.’s commitment to respect and promote human rights, and, among them, labor rights and the rights to freedom of association and to collective bargaining as provided for in ILO conventions, all of the employees of the Avianca Holdings subsidiaries can be automatically covered by the collective bargaining agreements. Along these lines, dialog and collective bargaining negotiation processes have sought to jointly define operations management and extralegal benefit granting criteria.

Collective Bargaining Agreements (G4.11) Affiliated Country Trade Union Employees Asociación Colombiana de Auxiliares de Vuelo (ACAV) 408 (Colombian Flight Attendants Association) Asociación Colombiana de Aviadores Civiles (ACDAC) 443 (Colombian Civil Aviation Pilots Association) Asociación Colombiana de Ingenieros de Vuelo (ACDIV) 6 (Colombian Flight Engineers Association) Asociación Colombiana de Mecánicos de Aviación (ACMA) 11 Colombia (Colombian Aviation Mechanics Association) Sindicato Nacional de la Industria del Transporte Aéreo (SINDITRA) 74 (National Air Transportation Industry Trade Union) Sindicato de los Trabajadores del Transporte Aéreo Colombiano 403 (SINTRATAC) (Colombian Air Transportation Workers Trade Union) Sindicato Nacional de Trabajadores de Avianca (SINTRAVA) 217 (National Avianca Workers Trade Union) Asociación de Trabajadores de Tampa (ASOTRATAMPA) 62 (Tampa Workers Association) Sindicato Nacional de Trabajadores de Transportes, Transformación, 55 Aviación, Servicios y Similares (National Trade Union for Workers in Transportation, Transformation, Aviation, Services and Similar Fields) Asociación Sindical 1° de Mayo de Trabajadores y empleados del Comercio 36 Mexico en General, Agencias Automotrices, Comisionistas, Agencias y Oficinas Particulares, Similares y Actividades Conexas del D.F. (May First Trade Union Association of Workers and Employees in Commerce in General, Automobile Dealerships, Brokers, Private Agencies and Offices, Similar Fields and Related Activities in the Federal District) Sindicato Único de Trabajadores de Trans American Airlines 131 (Trans American Airlines Workers Unique Trade Union) Sindicato de Tripulantes , Agentes de Servicio al Pasajero e Instructores de 191 Peru Trans American AirLines S.A. (SINTRAITA) (Trans American AirLines S.A. Crew, Customer Service Agents and Instructors Trade Union) Asociación del Personal Técnico Aeronáutico de la República de Argentina 1 (Republic of Argentina Technical Aeronautics Personnel Association) Argentina Asociación de Personal Aeronáutico (APA) 21 (Aeronautics Personnel Association) Total 2,059

Advance Notice (G4-LA4) Country Description

There is no legal minimum term of number of weeks for advance notice to workers and their elected representatives, before implementing substantial changes in the organization, which may affect them. However, in the operating areas each leader communicates Operations Plan Peru changes to his or her teams before they are put into practice. Also, in the current collective bargaining agreement signed with Sindicato Único de Trabajadores de Trans American Airlines (Trans American Airlines Workers Unique Trade Union), there is a job security clause that states that the trade union must be informed in advance of group layoffs. A minimum term of nine weeks is required for the employer to request that the Labor Authority grant a dismissal action in the case of Ecuador non-renewal of a fixed-term contract. If the notice is for contract termination due to non-compliant performance during the trial period, the notice can be issued as late as the very day on which the trail period term is completed. Also, when contract termination is due to the employer’s unilateral decision, no grace period or advance notice is necessary; notice can be given on the same day on which the contract is terminated.

The employer’s advance notice to employees was excluded because there Venezuela is no legal figure of dismissal without just cause.

In matters of work contracts, employees must give a thirty-day advance notice when they wish to leave the company and employers must give Bolivia employees a ninety-day advance notice to employees who have worked three consecutive months or more. The party who fails to give advance notice will pay an amount equal to the salary for the established periods.

Labor law provides that workers and employers alike can resort to unilateral work contract termination, observing the following terms:  Workers who wish to leave the company must give a fifteen-day advance notice.  Employers who wish to dismiss an employee must give an advance Argentina notice, the term of which is based on the worker’s time in the company:  fifteen days if the worker is in the trail period.  one month if the worker has been in the company for up to five years.  two months if the worker has been in the company for more than five years. The legal advance term for a company to notify dismissal must be equal to Brazil or more than thirty days if the contract so specifies. In the case of dismissal with just cause, no advance notice is necessary.

Either of the parties to an indefinite term contract can terminate it with advance notice to the other party, the term of which is determined according to the following:  thirty days if the worker has completed the trial period and has up to one year of service Paraguay  forty-five days if the worker has more than one year and up to five years of service  sixty days if the worker has more than five years and up to ten years of service  ninety days if the worker has more than ten years of service. If the worker continues working during the advanced notice term, such term will be included when calculating the worker’s time of service.

Uruguay There is no legal term for advance notice either for the employer or the employee to terminate a work relation.

Advance notice of dismissal varies according to the employee’s time of service: Costa Rica  4 weeks if the employee has been in the company one year or more.  2 weeks if the employee has been in the company less than one year but more than six months.  1 week if the employee has been in the company less than six months. There are no legally established terms for advance notice; however, the Mexico terms are normally established by the workers’ trade union involved.

Colombian law eliminated advance notice terms and the Organization has Colombia no policy relating to that matter.

Guatemala and The minimum advance notice term is one day. Honduras

The advance notice term is nine weeks; it only applies if operational North changes affect 33% of the employees and it would only apply to the America employees on the Tampa Cargo payroll, not to the other employees in the region.

Benefits and Loans (G4-LA2) During 2014 more than 209,355 benefits were granted to the Avianca Holdings S.A. subsidiaries’ employees; they contributed to enhancing their life quality at personal and at family levels alike. The benefits consisted of the following, among others: - Transportation aids - Food aids - Health aids - Educational aids - Productivity incentives.

Loans in 2014

Type # of Employees Benefited Calamity 117 Ordinary 774 Housing 23

Safety and Occupational Health For employee health and safety management, the Avianca Holdings companies use the Safety Management System, aligned with International Civil Aviation Organization standards (ICAO). It comprises mechanisms that enable identifying the hazards associated with the activities that each of the Avianca Holdings operating companies carries out, preparing risk assessment s, and establishing protocols, duties, responsibilities and activities aimed at strengthening a safety culture for the performance of all of their operations.

Health and Safety Committees (G4-LA5) The Health and Safety Committees, led by the Safety, Health and Environment Management Office, are a participation mechanism where all direct hire employees are represented. It channels their suggestions and contributions for compliance with health, safety and environmental objectives. Pursuant to the law in each country, these committees are made up of representatives designated by the directing officers of the operating companies and of a group chosen by the employees; in some cases, the latter are determined by election. Where there are no norms regarding the composition of such committees, the subsidiaries have proactively created work teams, thus enabling interlocutors among the dependencies and the Safety, Health and Environment Office, and the teams also help carry out scheduled prevention activities. The functions of these committees focus on giving support to the management of the Avianca Holdings operating companies concerning topics of workplace risk prevention, the promotion of safety and occupational health, and communication between the employees and the company regarding workplace safety and occupational health. The data shown in the table below corresponds to the employees who work for the companies Avianca, Tampa Cargo, Aerogal, Trans American Air Lines S.A., Taca International, Taca Costa Rica, Star, Lacsa and Aviateca, located in Colombia, Ecuador, Peru, Chile, Bolivia, Venezuela, Costa Rica, El Salvador, Guatemala, and Mexico, respectively.

Colombia and Europe Region The Safety and Occupational Health Committees (one for Avianca and one for Tampa Cargo) are comprised of an equal number of company representatives and employee representatives; the latter are elected by vote.

 Make safety inspections.  Give support to work accident investigations.  Oversee and participate in the Safety and Occupational Functions Health Management System (SG-SST is the Colombian acronym).  Propose and participate in accident prevention activities.  Serve as an employee participation and consultation body.

Company Employees

Participation •Avianca: 5 •Avianca: 5 •Tampa: 3 •Tampa: 3 •with its corresponding deputies •with its corresponding deputies

Central America

Functions Occupational •Safety Inspections •Emergeny Brigades Costa Rica Health •Substandard Conditions and Actions Committee •Definition of Imrovement Plans

Functions •Safety Inspections Industrial Safety •Work Accident Investigation El Salvador Committee •Special Projects

Functions •Safety Inspections •Work Accident Investigation Guatemala HSE Committee •Special Projects

Company Employees

Participation • Costa Rica: 11 • Costa Rica: 13 • El Salvador: 18 • El salvador: 18 • Guatemala: 7 • Guatemala: 7

North America Mexico - HSE Committee

Functions Participation

Safety Work Accident Special Projects Company: 7 Employees: 8 Inspections Investigation

South America

Participation Country / Committee Functions Company Employees Peru: Safety and Occupational Health 6 6 Committee

Chile:  Identification of 2 2 Safety and Occupational Health hazards Peer Committee  Risk Assessment  Safety Bolivia: Inspections Safety and Occupational Health  Work Accident 2 2 Mixed Committee Investigation

Venezuela: Safety and Occupational Health 4 4 Committee

Quito 6 6  Work Accident Investigation Guayaquil 6 6  Building, Facilities, and Ecuador Cuenca Equipment 6 6 Safety and Inspections  EPP Inspection Occupational Malta 6 6  Workplace Health Peer Conditions Baltra 6 6 Committee Analysis  Promotion of San Cristóbal Employee 5 5 Prevention Coca Measures 5 5

Health and Work-related Accident Indicators (G4-LA6)

Work-related Accident Injury Index16

20 14

4.25 9.85 2.49 0.5 2.28 3.42 3.16 5.32 Total Colombia and Central America South Europe America 20 13

5.76 4.13 0.99 1.95 1.73 1.41 2.8 2.5

Thanks to the reporting culture throughout the Organization, the data used to calculate this index includes all of the events, even those that did not generate disability or those that only required one day for the pertinent medical attention, which represent 54% of the total number of reported events. That means that, out of the total number of events during the year, 46% required more than two days of disability. The work-related accident injury index, including all of the stations for which there is information17 indicates that, for every 200,000 man hours, men had approximately three work-related accidents and women had five. The indicator was higher than in 2013 due to an increase in employee reports, as part of the campaigns for sensitization and strengthening a Safety Culture within the Avianca Holdings subsidiaries. To reduce the number of work-related accidents causing injuries, joint efforts with the areas are being made to develop effective protection measures and to continue reinforcing a culture of self-protection and of protecting others.

16 Calculation: (number of work-related accidents / total number of man hours) * 200,000 17 The recorded data corresponds to employees who work for the companies Avianca, Tampa, Aerogal, Trans American Air Lines S.A., Taca International, TTS, Taca Costa Rica, Star and Lacsa located in Colombia, Ecuador, Peru, Costa Rica, and El Salvador, respectively. The data for contractors was not included in this indicator. The Workplaces Where Most Accidents Occurred

Aircraft Ramp or Platform Public Accesses 52% 12% 6% Blows Blows Blows (44%) (58%) (76%) Sprains (21%) Sprains Sprains Barotraumas (29%) (12%) (13%)

Parts of the Body Most Affected

Several Hands Feet Parts 15% 14% 13%

Measures Adopted

• 61% of the reported events occurred inside the aircraft and 40% of them were due to an employee hitting a part of the body against the aircraft or against on-board elements. To reduce such injuries, efforts are being made with the operational areas, thus generating improvement plans and prevention measures such as Colombia a review of the elements purchased for on-board service, procedue adjustments, a review of protection measures, follow- up on the indicators, employee training, designs according to ergonomic standards, and a review of personal protection equipment, among others.

• 42% of the events occurred inside the aircraft and 76% of them were due to an employee hitting a part of the body against pieces of equipment. In this region there is outstanding support from the Safety and Occupational Health Committees for South investigating the events. The area chiefs have become more empowered and they are the ones who disseminate the lessons America learned from the events. In addition, during this year there was an event that resulted in an employee's death; it was caused by a road accident on the way to work. The Organization is working on a road safety program to reduce the probability of the occurrence of this type of event.

• 41% of the events occurred on the ramp and out of them 44% involved blows and 44% sprains. As part of the measures implemented to reduce such events, the Organization has sought Central to improve personal protection measures for processes America associated with standard aircraft design issues. Also, the importance of a safe behavior has been reinforced among the employees, as has the culture of safety that the Organization promotes.

Work-related Disorders and Illness Ratio18

0,06

0,04 0,04 0,03 Men 0,02 0,02 Women

2012 2013 2014

During the year there were only four cases of work-related disorders and illness in Colombia; they involved muscular-skeletal disorders in the upper limbs.

18 Calculation: (total number of disease originated in the workplace / total number of man hours) * 200,000 To detect the appearance of this type of disorder in time, Epidemiological Surveillance Systems have been implemented for priority risks and joint sessions with the Labor Risk Administration are held to follow up on the cases under study, in order to ensure a timely, favorable response for the employees. The Avianca Holdings operating companies showed increased coverage of occupational health medical exams for the purpose of detecting possible cases in a timely manner, even in countries where the law does not so require.

Index of Work Days Missed due to Work-related Accidents or to Work-related Disorders

or Illness19

2014

15.09 23.22 20.32 3.93 22.64 22.40 18.69 16.72 Total Colombia and Central America South

Europe America

2013

11.9 18.3 15.6 9.6 12.9 11.06 13.3 13.4

The index of work days missed in general, including all of the stations for which there is information, indicates that, for every 200,000 man hours, men missed approximately 19 work days20 and women missed approximately 17, due to work accidents or work-related disorders or illness. In Colombia, men missed the most work days (59%) and the percentage was highest for Tampa representing 82% of the absences. Notwithstanding, the index of missed work days was higher for women, due to the lower number of man hours for that population. Likewise, in Central America men missed more work days (91%) due to work accidents or work-related disorders or illness. Women were absent fewer work days than the year before, the index dropping from 27% reported in 2013 to 9% in 2014.

19 Calculation: (number of work days missed due to work-related accidents or work-related disorders or disease / total man hours) * 200,000 20 The days calculated are calendar days or natural days; they are posted according to the dates stated in the medical supporting documents (days of disability or days of rest ordered by the doctor). In South America, men missed more work days due to work accidents or work-related disorders or illness, representing 62% of the total days missed. The most representative report was seen in Ecuador where men represented 80% of the absences from work whereas in Peru women represented 58% of the work days missed.

Absenteeism Index21

2014

5,633 6,185 1,238 923 2,381 5,010 3,266 4,193 Total Colombia and Central America South

Europe America

2013

6,513 6,742 523 522 1,063 1,021 2,895 3,083

The index for absenteeism due to disorders or illness, including all of the stations for which there was information, states that, for every 200,000 man hours, men were absent 3,266 days and women were absent 4,193 days, due to work accidents, work-related disorders or disease or common illnesses.

21 Calculation: (number of work days missed due to disability caused by general illnesses, work-related accidents and work-related disorders or disease / total man hours) * 200,000 Most Frequent Illnesses or Disorders

Colombia

•Respiratory disorders (20%) •Traumas, poisoning, and other external causes (13%) •Muscular and skeletal disorders and conjunctive tissue disorders (13%) •Infectious and parasitic diseases (13%)

Centroamérica

•Respiratory disorders •Muscular and skeletal disorders •Digestive disorders

Ecuador

•Respiratory disorders (13%) •Muscular and skeletal disorders (12%) •Digestive disorders (11%)

Perú

•Muscular and skeletal disorders (14%) •Traumas, poisoning, and other external causes (10%) •Respiratory disorders (5%)

Activities for Reducing the Occurrence of Disorders and Illness Region Activities

 Promoting healthy habits to prevent cardiovascular risks  Transmittable gastrointestinal and respiratory disorders and Colombia disease prevention activities  Talks on alcohol and psychoactive substance consumption  Talks on sexual and reproductive health  Talks on cancer prevention  Nutrition and metabolism control sessions Central  Kidney health issue sessions America  Health fairs  Vaccination sessions  Talks and workshops aimed at preventing common pathologies frequently seen in the region  Vaccination sessions  Cardiovascular risk prevention programs  Transmittable gastrointestinal and respiratory disorders and South America disease prevention promotion activities  Health fairs  Nutrition and metabolism control activities, among others. Risk Prevention and Control G4-LA7 During 2014 health promotion and prevention activities continued, as did activities to identify risk factors. Epidemiological surveillance programs and systems were executed for timely identification of work-related and personal conditions that can affect the employees’ health. Also, intervention activities continued, to avoid employee exposure to the risks that generate such disorders and diseases and information systems were developed for case follow-up and to monitor the effectiveness of the activities carried out. Hazard: Exposure to Noise

5,624 2,537 Personnel Exposed Direct Hires Contracted

In 2014 there were no work-related disorders due to this hazard.  From the health perspective, epidemiological surveillance program and systems were executed for timely identification of work-related and personal audiometric tone conditions of airways and bones, which may affect the employees’ health due to noise exposure. And sensitization activities were carried out, explaining the effects that Management noise has on health.  From the safety perspective, hygiene studies were conducted, to monitor the levels of exposure to noise; the effectiveness of the personal protection equipment used was checked on an ongoing basis; training on the proper use and maintenance of such equipment was given; and their use was verified during safety inspections.

Hazard: Exposure to Carcinogen Substances (BTX -Benzene, Toluene, Xylene)

330 276 Personnel Exposed Direct Hires Contracted

In 2014 there were no work-related disorders due to this hazard.

 From the health perspective, work-related medical exams were conducted for a timely detection of disorders associated with chemical risks (hepatic and renal tests, phenols in urine tests, blood work tests).  From the safety perspective:  less toxic substances were sought; they must also meet the recommendations of the aircraft manufacturers given the characteristics of the industry;  options were sought for personal protection equipment that can offer proper protection against the various levels of exposure; Management  exposure level monitoring was done;  work was done with the areas involved, to generate measures to reduce employee exposure to such substances;  processes were substituted, seeking less exposure to chemical substances;  training was done to reinforce safe storage and use of chemical substances;  work was done on implementing emergency equipment availability control methods;  procedures were created for the safe transportation and handling of such substances.

Hazard: Exposure to improper positions, load handling, accumulated trauma

13.308 5.925 Personnel Exposed Direct Hires Contracted

In 2014 there were four cases associated with this hazard.  Sensitization talks were given and workshops were held on proper posture and measures to be taken when carrying out activities that involve exposure to biomechanical risks.  Articulation flexibility and mobility exercise programs were carried out. Management  Process modification designs took into account ergonomic recommendations, to avoid the generation of such injuries.  Experts on these topics gave technical support, to monitor employees most exposed to such injuries.  Ergonomic criteria were kept in mind when acquiring new furniture, equipment and, tools.

Health and Safety Aspects in Agreements with Trade Unions (G4- LA8) The data recorded below corresponds to employees who work for the companies Avianca, Tampa Cargo, and Trans American Airlines S.A. located in Colombia and in Peru. The collective bargaining agreements with the trade unions of Avianca, Tampa Cargo, and Trans American Airlines were not modified in respect to safety and health benefits. For the purpose of this report, the collective bargaining agreements with the main nine trade unions of these companies are discussed below. For Avianca, not only the commitments acquired regarding the trade unions are stated, but also the commitments that it has, as stipulated in its Voluntary Benefit Plan (PVB in Spanish), which cover all of the non-union employees. Health and Safety Coverage Description Aspect included (Percentage) Four of the nine agreements of the Avianca Holdings Partial or total subsidiaries include agreements regarding this topic. economic aid for Pursuant to such agreements, the operating healthcare or for 44% company pays an aid for medical or dentist service subsidized medical provision, an aid for a medical plan with a higher insurance policies level of healthcare coverage, and partial or total payment of healthcare insurance. One agreement specifies the subsidiary’s obligation to supply first aid kits, sanitary facilities, refillable water coolers and other drinking water sources for Supplies for Safe employee consumption, protection elements, Workplace 11% equipment, materials, and tools, in spite of the fact Conditions that supplying such items is covered by law and are for the benefit of all employees. The same agreement further specifies that there must be employee rest areas. Special Concessions for Employees with One trade union agreement in Colombia stipulates Chronic Illnesses or 11% that the company agrees to grant a maternity bonus for Pregnant for each child born. Employees Trade Union One agreement sets forth trade union participation Participation in in the Workplace Safety and Health Committees as Safety and Health 11% well as in work-related accident or work-related Issues in the disorders or disease investigations, in order to Workplace propitiate a safe, healthy workplace. Maternity and Paternity Leaves (G4-LA3) 397 maternity or paternity leaves were granted in 2014, representing 40% more than those recorded in 2013. All of the employees who took the leave returned to their posts. One year after the leave there was a retention rate of 93.2% for women and of 95.7% for men. 2013 2014

Women Men Women Men Employees who took a maternity or 123 159 248 149 paternity leave Employees who returned to work 120 157 248 149 after the leave Employees who remained 12 119 155 229 146 months after they took the leave Retention rate after a maternity or 96% 97% 93.2% 95.7% paternity leave

Training and Development (G4-LA9) In 2014 the Avianca Holdings subsidiaries conducted a total of 1,337,798 hours of training in different programs. The programs represented an average of 48.73 hours of training for each male employee and of 33.64 hours of training for each woman employee. The greatest number of training activities was for employees in operational posts.

Employees Hours of Training Average Men Women Men Women Men Women Administrative 2,184 3,011 25,247 27,303 11.55 9.06 Operational 13,157 14,530 722,338 562,910 54.9 38.74 Total 15,341 17,541 747,585 590,213 48.73 33.64

To support employee professional career development, in 2014 USD84,000 was invested in external educational program development at a postgraduate level or higher. Furthermore, job performance evaluations were made on 48% of the employees with administrative or coordination posts.

Attention to Complaints and Claims 2,810 complaints and claims regarding work practices were received in 2014, 46% more than the year bef0re; they included rights of petition, grievances, and petitions for effective legal protection based on fundamental rights; all of them were submitted to the Relations Management Office. Likewise, eleven legal actions were filed in Peru as were seven in Ecuador. The main claims received entailed situations of prolonged disability (over 11 months and 10 days) where the aid for paying social security ceased and the situation resulted in a suspension of the work contract, pursuant to a measure recently adopted in 2014. Out of the complaints submitted, 2,774 were resolved, excluding the administrative grievances handled by the Labor Ministry because, pursuant to law, they are still under investigation.

9. Avianca Holdings’ Commitment to Social Development

Building and implementing the Corporate Social Responsibility and Sustainability Plan reiterates Avianca Holdings’ commitment to the sustainable development of the regions where it operates. This commitment becomes a reality with programs that promote the wellbeing and the better life quality of the Holding Company’s employees, customers, providers, shareholders, investors, and the external community. These activities are aimed at aligning sustainability management with the different lines of business, in order to respond to economic, environmental, and social development needs through the projects and initiatives implemented. Social Dimension of the Corporate Responsibility and Sustainability Plan

 Promote social projects in topics of health, education, and culture, which will contribute to improving the employees’ life quality and the life quality of the communities where the Holding Company airlines operate.

 Earn the passengers’ loyalty by providing quality service and involving them in social Social Responsibility and projects that will project them as social Sustainability Plan action promoters.

Programs (G4-15) The Organization has the programs described below; they are aimed at contributing to improve life quality of the communities where Avianca Holdings S.A. operates, and especially of some vulnerable populations whose needs can be satisfied through the products and services provided by its subsidiaries.

Miles Bank The Miles Bank benefits children of scarce resources who need specialized medical treatment or surgery in a city other than the city where they live. The program works thanks to the airlines’ support and the support of the LifeMiles frequent flyer program members, who participate in this initiative by donating the miles that they accrue on their trips. In 2014 the program had 395 beneficiaries, an accrual of 5,018,813 miles and USD 116,882.57 in airline tickets.

1,692 43,185,891 beneficiaries miles accrued from the Company and from LifeMiles from 2006 to 2014 members from 2006 to 2014

395 Beneficiaries

5,018,813 Miles accrued from the Company and from LifeMiles members

2014 3,767,000 Results Miles redeemed

USD 113,010 In value for miles redeemed

USD 116,882.57 In value for national and international tickets

Miles Redeemed Beneficiaries Miles Redeemed Fundación Cardioinfantil 136 2,004,000 Individuals (cases in Colombia) 24 757,000 Individuals (international cases) 28 1,006,000 Total 188 3,767,000

Airline Tickets Value of the Tickets Used Beneficiaries (in USD) Fundación Cardioinfantil 50 9,198.07 Individuals (cases in Colombia) 119 91,450.26 Individuals (international cases) 38 16,234.24 Total 207 116,882.57

Avianca Solidaria This solidarity program channels corporate support in emergency situations of natural disasters and social crises. It also offers support to social impact projects in the countries where the Holding Company airlines operate:  Transportation for medical personnel, volunteers and victims  Transportation of cargo consisting of donations and aid items  Economic and in-kind contributions. Thanks to this program, 52,485.7 kg of cargo was transported in 2014 as humanitarian aid in Colombia, with a value of USD 124,118.

Transportation of Food Kits and Water

From Bogotá to Riohacha

Weight: 22,275 kg

Sponsored by Avianca, Deprisa, Fundación Juan Felipe Gómez Escobar, Terpel, Conexión Colombia, Expreso Brasilia S.A., and the Colombian Air Patrol

Commercial Value: USD22,383

Transportation of Water

From Bogotá to Riohacha

To benefit the population of La Guajira affected by the draught

Weight: 934 kg

Led by the Avianca flight attendants group

Commercial value: USD939

Transportation of Technological Equipment for Fundación Golondrinas Classrooms

From Bogotá to Medellín

Weight: 51 kg

Requested by Conexión Colombia with the support of Deprisa

Commercial value: USD24

Medical and Dental Care Drive Transportation of medical equipment, medicine, and supplies for the health brigade

From Bogotá to Leticia To benefit the native Indian peoples of San Sebastián, San Antonio, Castañal, and San Juan de los Lagos

Weight: 1.100 kg

Sponsored by Avianca, Deprisa, Terpel, and the Colombian Air Patrol

Commercial value: USD1,904

Other Deprisa Transportation for Humanitarian Aid Purposes

Multiple destinations

Weight: 22,324.2 kg

Commercial value: USD18,914

Excess Baggage Cost Waiver

Social Responsibility related baggage cost waiver: 52 cases

Total weight waived: 5,723 kg

Total amount waived: USD78,955

Jean Day with a Social Purpose Fundación del Quemado

USD999 donation by Avianca employees, to support the recovery process of the Fundación del Quemado severe burn patients

Recycle-a-thon of plastic bottles for the foundation to use in patient treatments 78.5 kg collected

“Niños por América” Program This initiative is aimed at giving children of scarce resources who stand out for their behavior and academic excellence the opportunity to fly and visit different regions of Latin America and other regions where we fly to. Beneficiaries get the chance to learn about the aviation industry through educational activities. The first activity takes place at the city of origin air terminal, where the children can learn how the airline works, how aircraft fly, and other aspects related to the airline’s operations and service.

153 USD 3,613.51 Children beneficiaries in 2014 in value from donated airline tickets

153 children benefited from this program in 2014, with ticket donations that amounted to USD 3,613.51. The main destinations for that year included Santa Marta, Cartagena, Madrid, and Cuzco.

“Yo colaboro” Volunteer Work Some employees of the Avianca Holdings’ subsidiaries participate in social development programs in countries where the Company operates. Aligned with the program philosophy, the employees who voluntarily join the “Yo colaboro” program play an active role in the activities and projects led by the Social Responsibility area, donating their time, energy, knowledge, economic and in-kind contributions. 88 volunteer activities were carried out in 2014 to support 31 projects in Colombia, Guatemala, Ecuador, Peru, Costa Rica, Salvador, Curacao, Mexico, the United States, and Honduras, which required a contribution of USD25,707 from the Company and from its employees.

Colombia City Projects Supported Doctora Clown Voz Animal Asociación Ámese Best Buddies Bogotá Colegio Integrado de Fontibón ABO Aldeas SOS Fundación Cardioinfantil Fundación Bambi (led by Deprisa) Pereira Fundación Enseñando con Amor Manizales Fundación Niños de los Andes Cúcuta AMCAF Bucaramanga Fundación Servidores del Servidor Aldeas SOS Cali El paraíso de la mascota Medellín Clínica Infantil Santa Ana Barranquilla Fundación Futuros Valores International Stations Country Projects Supported Peru Escuela Pachacitec 148 en Ventanilla Clínica de quemaduras Aldeas SOS Casa Ronald Mc Donald Guatemala Centro Educativo Especial Álida España FUNDAECO Escuela Reyna Barrios Fundación Ayúdame a Vivir Centro escolar Dr. Victorino Ayala Aldeas Infantiles SOS El Salvador Centro de Bienestar Integral El Boquerón Caserío Las Marías en Cantón San Isidro Comunidad La Cuartería Actividad ambiental Parvularia en Cuyultitán Costa Rica Comedor San Lázaro Biblio-Recreo Aldeas infantiles SOS Alcaldía Puerto López Ecuador Hogar de paz CETI Paraíso Campaña: Mejor es dar

Specific Volunteer Work Led by Employees Country Activities Carried Out La Caja del Amor – Internal Customer Service in Bogotá Lechetón milk drive in Barranquilla Colombia Donation to Fundación Bosque Popular in Bogotá Parroquia San Miguel Arcángel in Bogotá Honduras Guided visit for vulnerable population children Support to the project “Jesus Sharing Smiles”

United States Christmas volunteer work in New York with the Missionary Sisters of Charity Support to a disabled young man in Los Ángeles Curacao “Clean Up 2014” island clean-up campaign Christmas volunteer work with children from Fundación Hogar Mexico Dulce Hogar Christmas volunteer work with children from Hogar Luz de Guatemala Fátima El Salvador Children’s Day celebration at Hospital Benjamín Bloom

Jean Day with a Social Purpose For the start of the school year, Company employees joined a campaign to donate school kits for the benefit of children from different institutions in participating countries. A total of 9,141 school kits were gathered and delivered to schools in the countries where Avianca Holdings’ companies operate.

Place Collected School Kits Beneficiary Institution

Bogotá 2,926 Colegio Integrado de Fontibón

Manizales, Pereira, Armenia, Granja Infantil de Jesús de la 711 Cali, Medellín, Bucaramanga Buena Esperanza - ICBF

Colegio La Concepción de Barranquilla 35 Barranquilla

Guatemala 378 Escuela Reyna Barrios Zona 13

El Salvador 2,172 Centro Escolar de Cuyultitán

Costa Rica 508 Escuela de Guarari

Educativa Inicial #148 de Peru 405 Ventanilla

Ecuador 2,006 Aldeas SOS

In addition, another Jean Day initiative took place in 2014 to support the Fundación Voz Animal, which collected USD946 and 81 donated items, to support the foundation’s processes.

Strategic Alliances Aimed at broadening the support given by the Avianca Holdings S.A. subsidiaries to the development of Latin America, the Company forms alliances with leading institutions in social, educational and cultural projects in the region. 132 projects benefited from discounts in airline ticket fares in 2014. The tickets were used by the project managers and/or members of the benefited communities for their activities. These alliances represented an investment of USD 271,356.27. Art and Culture Aimed at strengthening the national identity and encouraging local artist expositions, the Avianca Holdings’ companies support different cultural spaces by transporting artwork. In 2014, the airlines transported 2,154.2 kg to different domestic and international destinations, which required an investment of USD 11,619.22 USD.

Pereira Art Museum Master Federico Uribe presented his painting and sculpture exhibit “Color Construido” (“Constructed Color”) at the Pereira Art Museum; this exhibit is the successful result of the artist’s interest in construction. To support the artist and his exhibit, Avianca contributed by transporting the pieces between Miami and Bogotá.

Avianca’s Art Collection This collection started as an initiative led by the directors of Aerovías del Continente Americano - Avianca in the 1980’s, aimed at encouraging artistic and intellectual expressions in the Colombian society. It is now one of the main national cultural treasures. Currently comprising 368 works of art (paintings, sculptures, engravings, and drawings, among others), this extraordinary legacy is kept carefully organized, classified, and under custody. Its interest in supporting art in all its forms has led the Company to decide to share this artwork with the public. Through an alliance with the Bogotá Modern Art Museum (MAMBO), which manages part of the collection through a commodatum agreement, art expos are being held, to encourage interaction with students, scholars, businessmen, experts, and occasional visitors, through activities that empower the spirit. So, over the past three years the touring art expo “Exposición Itinerante”, comprising 48 carefully selected works of art has been seen at the Tolima Art Museum, the Zenú Contemporary Art Museum in Montería, the Caldas Modern Art Museum, the Bucaramanga Modern Art Museum, the Rayo Museum in Roldanillo-Valle, and the Visual Arts Museum at Universidad Jorge Tadeo Lozano in Bogotá. In 2014 the Company transported 1,074.2 kg of that collection between Bogotá and Cali for public exhibits, with a total investment of USD 10,059.33. Workshops and Training Under the coordination of the Social Responsibility area, the Company did 30 volunteer workshops that contributed to strengthening the employees’ skills and aptitudes, as well as sensitizing, motivating, and improving teamwork. Training sessions took place in eight cities in Colombia and at six international stations.

Donations In 2014 the Company made donations to different Colombian foundations and foundations from the other countries where the Holding Company subsidiaries operate, for a total of USD 387,621.67, out of which USD 25,299.51 were contributed by employees and passengers. Likewise, the Company made donations in-kind that corresponded to 164,397 kg of materials and inputs aimed at helping the supported foundations fulfill their missions. Monetary Donations Beneficiary Concept Donation Amount Monetary donation for the show held by the Colombian National Beauty Contest at the FCI USD22,974.83 Fundación facilities. Cardioinfantil Economic result of the RunTour athletic  USD75,960.33 games held for the social purpose of  265,000 miles valued equipping the Cardiovascular Pediatrics Unit. in USD7,950 Teletón Quito Donation from Company resources USD10,500 (Ecuador) Donation from on-board wristband sales USD2,515 Teletón Donation from Company resources USD83,454 Colombia Donation from Company resources USD80,000 Teletón El Donation from on-board promotional Salvador USD22,784.51 product, food, and wristband sales ANDI “Soy Capaz” campaign USD5,212 CeCo RS: El Salvador Art Museum USD520 Other donations CeCo Roberto Kriete: El Salvador Asociación USD33,460 AGAPE

Donations in Kind Beneficiary Concept Donation in kind Biblio-Recreo Books left by passengers in Company 150 books (Ecuador) aircraft Fundación Sol de Plastic caps for medical treatment handling 450 kg los Andes for children with cancer. Fundación Sanar 120 kg Donation of uniforms with the old Avianca  151,000 kg logotype, aimed at generating employment Fundación Vespa  Commercial value: and economic stability for women heads of USD2,521 household Donation of leather remnants and aircraft Fundación Semilla seat fabric, to be used for making wallets 1,623.13 kg de Mostaza and purses  1,300 units Conexión  Commercial value: Colombia USD4,706 Donation of blankets  1,405 units The Colombian  Commercial value: National Navy USD22,704  3,832 servings Asociación Reto a Donation of food from the food court in the  Commercial value: la Esperanza Bogotá Air Terminal USD12,360 FIDES Delivery of packages of unclaimed items: 350 stacks baggage, baby carriages, wheelchairs, etc... Aldeas Infantiles that had been stored for over six months at 404 stacks SOS airport warehouses Aldeas SOS (Perú) Delivery of recycled paper 6,209 kg Fundación Tierra y Delivery of plastic caps 110.3 kg Ser (Perú) Delivery of recyclable employee waste Fundación Aurora materials, for rural community women to 4,643.24 kg (El Salvador) use in handcrafted accessories Iglesia Cristo Vive de San Lucas Delivery of uniforms with the old TACA 160 kg Sacatepéquez, logotype Guatemala.

10. GRI Key Indicators G4

This report was made pursuant to the Sustainability Reporting Guidelines for Global Reporting Initiative GRI G4, general standard disclosure option. Indicator Answer/ Chapter Page Omission Strategy and Analysis G4.1 Provide a statement from the Letter from the CEO 9 most senior decision-maker of the Organization (such as CEO, chair or equivalent senior position) about the relevance of sustainability to the organization and to the organization’s strategy for addressing sustainability. G4.2 Provide a description of key Letter from the CEO 9 impacts, risks and opportunities. Organizational Profile G4.3 Report the name of the Avianca Holdings S.A. organization. G4.4 Report the primary brands, Avianca Holdings S.A. 3 and 4 products, and services. Profile G4.5 Report the location of the Panama City, Republic of organization’s headquarters. Panama G4.6 Report the number of Avianca Holdings S.A. 3 countries where the organization Profile operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report. G4.7 Report the nature of The Company is ownership and legal form. incorporated in the Republic of Panama. It is a stock corporation that has it stock listed on the Colombian Stock Exchange and on the New York Stock Exchange G4.8 Report the markets served Avianca Holdings S.A. 3 (Including geographic breakdown, Profile / Avianca Holdings’ 23 to 25 sectors served, and types of Commitment to customers and beneficiaries). Generating Value G4.9 Report the scale of the Avianca Holdings S.A. 4 organization, including: Profile / Avianca Holdings’ 18 to 20 -Total number of employees Commitment to - Total number of operations Generating Value - Net sales or net revenues. G4.10 Report the following labor Avianca Holdings’ 53 to 56 information: Commitment to Its - Report the total number of Employees employees by work contract and gender. - Report the total workforce by region and gender. G4.11 Report the percentage of Avianca Holdings’ 57,58 total employees covered by Commitment to Its collective bargaining agreements. Employees G4.12 Describe the organization’s Avianca Holdings’ 32 supply chain. Commitment to Its Strategic Partners G4.13 Report any significant During 2014 there were no changes during the reporting significant changes. period regarding the organization’0s size, structure, ownership or its supply chain. G4.14 Report whether and how the Avianca Holdings’ 26,27 precautionary approach or Commitment to principle is addressed by the Generating Value organization. Avianca Holdings’ 38, 39 Commitment to the Environment G4.15 List externally developed Avianca Holdings’ 45 to 47 economic, environmental and Commitment to the social charters, principles or other Environment initiatives to which the Avianca Holdings’ organization subscribes or which it Commitment to Social endorses. Development G4.16 List the main associations of During 2014 Avianca S.A. which the organization is a was an active member of: member (such as industry -Asociación del Transporte associations) and national and/or Aéreo en Colombia international advocacy (ATAC); Asociación organizations that the Nacional de Empresarios organization endorses. de Colombia (ANDI); Cámara de Comercio Colombo Americana; Cámara de Comercio Colombo Venezolana; Federación Colombiana de Transportadores de Carga por Carretera (COLFECAR); Asociación Colombiana de Agencias de Viaje y Turismo (ANATO); International Air Transport Association (IATA); Latin American and Caribbean Air Transport Association (ALTA) Identified Material Aspects and Boundaries G4.17 List all entities included in This report does not the consolidated financial contain information for the statements and report whether following companies that any such entity is not included in are included in the Avianca the sustainability report. Holdings S.A. financial statements as subsidiaries: Aerospace Investments, Limited; Aviation Leasing Services (ALS), Inc.; Aviation Leasing Services, Investments (ALS), S.A.; AVSA Properties II, Inc.; Intercontinental Equipment Corp.; Little Plane, Limited; Little Plane Six, Limited; Southern Equipment Corp.; Turboprop Leasing Company, Limited; Technical & Training Services, S.A. de C.V.; Ronair N.V.; Getcom International Investments, SL; Avianca Leasing, LLC; Avianca Inc.; Turbo Aviation Two, Limited. G4.18 Explain the process for About This Report 10, 11 defining the report content and the Aspect Boundaries. G4.19 List all the material Aspects About This Report 11 identified in the process for defining report content. G4.20 For each material Aspect, All of the reported material report the Aspect Boundary within Aspects is relevant to all of the organization. Otherwise, the subsidiaries included in indicate that the Aspect is not this report. material for some of the entities in the organization. G4.21 For each material Aspect, Material aspects outside 11 report the Aspect Boundary the Organization: safety, outside of the organization. customer experience, emissions, noise, waste management, energy efficiency, social development, supplier development and responsible procurement Stakeholders: customers and external community G4.22 Report the effect of any There are no restatements. restatements of information provided in previous reports, and the reasons for such restatements. G4.23 Report significant changes The 2014 report has no from previous reporting periods in significant changes from the Scope and Aspect Boundaries. previous reporting periods in scope, coverage or evaluation methods. Stakeholder Engagement G4.24 Provide a list of stakeholder Shareholders – Customers groups engaged by the – Employees – External organization. Community, including suppliers and authorities G4.25 Report the basis for During the integration of identification and selection of the different companies stakeholders with whom to that currently comprise engage. Avianca Holdings S.A., a homologation of processes was conducted on all operational fronts, including sustainability management. This verification identified the stakeholders of the different companies and the actions that they had been carrying out, based on which one sole Social Responsibility and Sustainability Plan was designed and approved for the entire Organization; it is now being socialized with said stakeholder groups and being implemented in all of the organization areas. This Plan defines Avianca Holdings’ corporate commitment to its strategic stakeholders. To its customers, Avianca Holdings is committed to offer better service; to its shareholders, Avianca Holdings is committed to generate exceptional value; to its employees, Avianca Holdings is committed to be the best place to work; and to the external community, including suppliers and authorities, Avianca Holdings is committed to contributing to their wellbeing in the regions served by the Avianca Holdings S.A. subsidiaries. G4.26 Report the organization’s The Organization has approach to stakeholder different communications engagement, including frequency channels with its of engagement by type and by stakeholder groups, some stakeholder group, and an of them are institutional indication of whether any of the means of communication engagement was undertaken with the employees and specifically as part of the report suppliers; the Net preparation process. Promoter Score (NPS) study with customers that enables knowing their level of satisfaction with its services; the Web page that makes information relating to the organization’s performance available to the shareholders; the corporate Web page that gives information with relevance for all stakeholder groups and shares different contact options; and Avianca Holdings’ corporate presence in social networks, institutional e- mails for generic accounts, and letter writing. The last three offer more direct, immediate contact with all stakeholder groups. Each one of these channels offers different contact frequencies with stakeholder groups but they are all permanently available and once the socialization and implementation phase of the Social Responsibility and Sustainability Plan is complete, some of these channels will become involved in the reporting preparation process. G4.27 Report key topics and About This Report 11 concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns. Report Profile G4.28 Reporting period for 2014 information provided in the report. G4.29 Date of most recent 2013 previous report (if any). G4.30 Reporting cycle (such as Annual annual, biennial). G4.31 Provide the contact point for Gilma Usuga, questions regarding the report or Communications and its contents. Corporate Affairs Director [email protected] G4.32 Report the "in accordance" About This Report 10 option the organization has chosen as well as the GRI methodology (Core-Comprehensive). Report the GRI Content Index for the chosen option. G4.33 Report the organization’s This report is not subject to policy and current practice with external assurance. regard to seeking external assurance for the report. Governance G4.34 Report the governance Avianca Holdings’ 14 to 16 structure of the organization, Commitment to Its including committees of the Shareholders highest governance body. Identify any Committees responsible for decision-making on economic, environmental and social impacts. G4.39 Report whether the Chair of Avianca Holdings’ 14 the highest governance body is Commitment to Its also an executive officer (and, if so, Shareholders his or her function within the organization’s management and the reason for this arrangement). G4.40 Report the nomination and Avianca Holdings’ 15 selection processes for the highest Commitment to Its governance body and its Shareholders committees, including: - whether and how diversity is considered. - Whether and how independence is considered. - Whether and how expertise and experience relating to economic, environmental, and social topics are considered. - Whether and how stakeholders (including shareholders) are involved. G4.41 Report processes for the Avianca Holdings’ 16 highest governance body to ensure Commitment to Its conflicts of interest are avoided Shareholders and managed. G4.52 Report the process for Avianca Holdings’ 56, 57 determining remuneration. Report Commitment to Its whether remuneration consultants Employees are involved in determining remuneration and whether they are independent of management. G4.55 Report the ratio of Avianca Holdings’ 56, 57 percentage increase in annual total Commitment to Its compensation for the Employees organization’s highest-paid individual in each country of significant operations to the median percentage increase in annual total compensation for all employees (excluding the highest- paid individual) in the same country. Ethics and Integrity G4.56 Describe the organization’s Avianca Holdings’ 12,13 values, principles, standards and Commitment to Its norms of behavior such as codes of Shareholders conduct and codes of ethics.