Sustainability Report 2017 ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION
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Sustainability Report 2017 ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION SUSTAINABILITY REPORT 2017 \Presentation \Who we are \Sustainability \Our business \Suppliers \Customers 2 SUMMARY \Environment \Employees \Safety \Society \About the report \Attachments \Credits ECONOMIC DIMENSION SOCIAL DIMENSION 76 ABOUT THE REPORT 29 HIGHLIGHTS 57 HIGHLIGHTS 77 Report and materiality 31 OUR BUSINESS 59 EMPLOYEES 79 Summary of GRI content 32 Pillars and differentials 60 STRAIGHT TO THE POINT: Managing employees Summary 84 Global Compact 34 Risk management 61 Proximity and engagement 85 Assurance 35 Financial and operating results 64 STRAIGHT TO THE POINT: Occupational health and safety 86 ATTACHMENTS 37 SUPPLIERS 65 SAFETY 94 CREDITS 38 66 03 PRESENTATION STRAIGHT TO THE POINT: Supply chain management STRAIGHT TO THE POINT: Operational safety 39 67 04 Guide for readers Joint development Safety culture 41 69 05 Message from the CEO CUSTOMERS SOCIETY 42 70 07 WHO WE ARE STRAIGHT TO THE POINT: Passion for flying STRAIGHT TO THE POINT: Driving regional development 43 71 08 Connecting people and destinations Managing satisfaction Sustainable tourism 73 11 LATAM Airlines Group on the map Social logistics 13 Decision making ENVIRONMENTAL DIMENSION 47 15 Commitment to ethics HIGHLIGHTS 48 17 Recognition ENVIRONMENT 49 18 SUSTAINABILITY Policies and systems 50 19 Strategy and approach STRAIGHT TO THE POINT: Climate change 51 22 Policy and management Commitments and results 52 25 Stakeholders Operating eco-efficiency Click on the buttons to navigate the PDF. ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION SUSTAINABILITY REPORT 2017 \Presentation \Who we are \Sustainability \Our business \Suppliers \Customers 3 SUMMARY \Environment \Employees \Safety \Society \About the report \Attachments \Credits Presen tation Presentation • ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION SUSTAINABILITY REPORT 2017 \Presentation \Who we are \Sustainability \Our business \Suppliers \Customers 4 SUMMARY \Environment \Employees \Safety \Society \About the report \Attachments \Credits Guide for readers very year in its Sustainability Report, LATAM presents cial dimensions, in line with the approach adopted by Context and positioning importance of the topic for the main advances and challenges in its effort to en- the Dow Jones Sustainability Index (DJSI). Lastly, the LATAM, for the air travel industry or, on a broader scale, sure balanced management of the different dimensions document provides more technical information about for society as a whole; of its business. Financial results, commitment to cus- the process of drafting the report and applying the Management approach initiatives and action focuses, tomers, passenger and employee safety, environmen- Global Reporting Initiative (GRI) guidelines. including the opportunities and challenges mapped. tal management and social and economic development Advances in 2017 recent achievements and measure- and other elements are connected in this report. Each block starts with a HIGHLIGHTS page to facilitate ment of results. rapid understanding of essential content. In the chap- In the 2017 edition of the report – covering the entire ters that make up the dimensions, summarized pan- It should be noted that these are aimed at ensuring operation in the period from January 1st to December els present the historical series of the main indicators. greater objectivity and transparency in accountability, 31st –, the Group has innovated in the way in which its These are Snapshot of recent events that LATAM without attempting to cover every aspect of LATAM’s shares information with stakeholders. has used since the 2016 report. management for sustainability. The publication is now ordered in five major blocks of Also new are the fact sheets, in which LATAM pro- In this quest for continuous improvement, suggestions E information. The first part focuses on institutional in- poses to go STRAIGHT TO THE POINT where key aspects and criticisms from readers are fundamental. Should formation and managing for sustainability. This is fol- of management are concerned. The new section is you wish to make comments or clarify any doubts, send lowed by three blocks that address the organization’s identified by its differentiated layout and comprises an email to: [email protected]. [102-53] performance in the economic, environmental and so- three elements: Enjoy reading it! ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION SUSTAINABILITY REPORT 2017 \Presentation \Who we are \Sustainability \Our business \Suppliers \Customers 5 SUMMARY \Environment \Employees \Safety \Society \About the report \Attachments \Credits dining experience, unique in the industry, that gives our Message from the CEO [102-14] passengers more options to choose from, a more com- fortable format, and gourmet quality food that showcase the best of Latin American and international cuisine, with over 300 new dishes. All this is available at no additional In 2017 we experienced the greatest transformation in cost to our passengers, who have loved the new service. new our recent history—a process that we undertook with routes the aim to improve our services to passengers and Along the same line, we have continued to invest in 30 move towards a simpler and more efficient organiza- self-service technologies, so that our passengers can were opened in 2017. tion. We aspire to become one of the most admired air- tend to themselves in a simple, transparent, and fully line groups in the world, and I am certain that the steps independent way. As an example, during 2017 we set we have taken in the last few years in terms of client up over 700 kiosks throughout more than 80 airports. initiatives, destinations network, productivity, and sus- The International Air Transport Association (IATA) ac- tainability have set us on the right path to achieve this. knowledged our self-service initiatives and certified us in the “Platinum” category of its “Fast Travel” program, Our commitment is to offer passengers a unique travel confirming our commitment with offering a leading experience; this is why all our decisions focus on cus- travel experience in the industry. tomer satisfaction. With the current trend aiming to- wards a customized travel, in 2017 the Group imple- In 2017, we made great achievements in terms of expand- mented a new business model for domestic markets. ing and optimizing our network, opening 30 new routes, Supported by “Mercado LATAM” and a new segmented including Santiago-Melbourne, whose 15-hour duration fares structure, this new model brought to over 85% of makes it LATAM’s longest non-stop flight. Moreover, the Enrique Cueto our passengers the access to tariffs up to 40% lower Group continued to strengthen its hubs, connecting Sao CEO LATAM Airlines Group and a greater flexibility in their travel. Its rollout among Paulo to Bariloche and more domestic destinations in our domestic affiliates implied a great effort from all Brazil, Lima to Rio de Janeiro and Cartagena, both Lima A new business of us at LATAM Group, and we are proud of the positive and Santiago to various secondary cities throughout Ar- model for domestic results we have obtained. markets brought gentina, and Santiago to Orlando and Santa Cruz. to over 85% of our Also, after seeing the great difference to the international passengers the Simultaneously, in 2017 we continued to work towards travel experience that on-board dining makes, we em- access to tariffs up obtaining the approval of the Joint Business Agreements barked upon the challenge of redesigning the traditional to 40% lower and a (JBAs) with American Airlines and IAG (British Airways food tray served on board the Economy cabin of flights greater flexibility and Iberia). The antitrust authorities of Brazil, Colombia, lasting over seven hours. As a result, we developed a new in their travel. and Uruguay have already granted their approval, and we ECONOMIC ENVIRONMENTAL SOCIAL DIMENSION DIMENSION DIMENSION SUSTAINABILITY REPORT 2017 \Presentation \Who we are \Sustainability \Our business \Suppliers \Customers 6 SUMMARY \Environment \Employees \Safety \Society \About the report \Attachments \Credits whose focus is both to compensate the environmen- In a nutshell, 2017 was a year of transformation, with LATAM UPHOLDS A LONG-TERM tal impact of our operations and to actively contribute important steps towards a more efficient organization, to society. Accordingly, for the fourth consecutive year, with a unique position in the market in terms of cus- COMMITMENT TO THE REGION, we were included in the “World” category of the Dow tomers offer and destinations network, so we can en- REFLECTED IN ITS SUSTAINABILITY Jones Sustainability Index (DJSI), which acknowledges sure that our business model will be competitive and the performance of the top 10% leading companies in sustainable in the long term. The market acknowledged STRATEGY, WHOSE FOCUS IS BOTH TO sustainability within this index, being among the only this improvement, which was reflected in the 54% in- COMPENSATE THE ENVIRONMENTAL three airline groups in this category worldwide. crease of stock price in 2017. I would like to thank our shareholders for the trust they have placed in this ad- IMPACT OF OUR OPERATIONS AND TO The efforts we have made these past years have mir- ministration and in LATAM Group’s project. rored in a steady improvement of our financial re- ACTIVELY CONTRIBUTE TO SOCIETY. sults. In 2017, operating income was the highest