CORPORATE SOCIAL RESPONSIBILITY REPORT 2009-10 KEY FIGURES

104,721 FULL-TIME EQUIVALENT WORKFORCE

594 AIRCRAFT IN OPERATION Europe 236 121 DESTINATIONS DESTINATIONS IN 107 COUNTRIES North America 18 DESTINATIONS 71.4 MILLION PASSENGERS CARRIED Caribbean 11 DESTINATIONS Africa & 80.7% Middle SEAT LOAD FACTOR East 52 DESTINATIONS Indian 1.5 South Ocean MILLION TONS 3 DESTINATIONS OF CARGO CARRIED America 11 DESTINATIONS

BREAKDOWN OF THE GROUP’S WORKFORCE BREAKDOWN OF PASSENGER REVENUE BY (IN FULL TIME EQUIVALENT, 31 MARCH 2010) DESTINATION, 2009-10

38% Europe 15% Asia / Pacific 62% France 15% Africa & Middle East 5% Europe 27% Netherlands 8% Caribbean & Indian Ocean 3% Africa - Middle East 16% North America 11% Rest of the world 1% Asia - Pacific 1% North America 8% South America 1% South America

The information in this report relates to the 2009-10 financial year, started on 1 April, 2009 and ended on 31 March, 2010. Where information relates to a different time frame, this is explicitly stated. 3 DESTINATIONS Ocean Indian

How to read this report the of profile the describes transport and air sector the of environment global issues the with the deals It it. facing and challenges and sector the understand you help to designed is section first The The third section, which is divided into into divided is which section, third The non-financial our ratings. corporate and suppliers, our of shareholders in particular), the commitment the way we work with our stakeholders (our (CSR) describe and organization and approach Responsibility our Social present we Corporate section, second the In positions. public its and group, Air France-KLM how it is governed, • sections four of consists report This 20 DESTINATIONS Pacific Asia

environmental and social indicators in in indicators social the and present 53 to environmental 50 pages on tables The figures. and indicators key with out fleshed text expository This an by followed KLM. is and France Air plans by action deployed and ambitions joint the presentation of a with begins issues CSR key five the of each report, present the In • auditors. statutory Group’s the of one of our methodology reporting and the opinion our key performance indicators, details of details indicators, our key performance find will you report, the of part final the In them. with deal we way the and issues key five our describes sub-sections, five objectives for each company each for objectives management commitments, Joint Building asustainablerelationship withourcustomers Promoting aresponsible humanresources policy Our approach tocorporatesocialresponsibility Understanding thesectorandGroup Miminimizing ourenvironmental impacts Combating climatechange Driving localdevelopment • Business France. (“New in force in Act Regulations”) NRE the to reference to this end. this to with the issues, and the progress achieved the of to deal Group the by deployed appreciation resources his/her express to One of the stakeholders has the opportunity partnerships. issues, the outcome and of consultations of types with engaged dialogues them the and on what concerned, the of stakeholders presentation a with CSR ends key issues five the of each report, this In Indicators andmethods Group relations with stakeholders with relations Group Addressing keyissues CONTENTS Foreword 50 44 38 32 26 20 18 12 06 04 03

CONTENTS PURSUING OUR EFFORTS, REASSERTING OUR VALUES

In spring 2010, the eruption of Iceland’s Eyjafjöll volcano led to a paralysis of Europe’s skies as relentless as it was unexpected. A ‘world without planes’, of which some people dream, became reality.

So what happened next? Several million travelers were stranded far from their destinations. Companies, sectors and countries were seriously affected and even weakened; not to mention the airline and tourism industries, already reeling from the economic crisis, for which this new situation only made matters worse.

Paradoxically, this time where part of the world was prevented from flying underlined the crucial role of air transport in the globalized economy and in bringing people and cultures together. We are convinced that by ensuring this in an ever more controlled and responsible way, our industry will be confirmed in this role well into the future. That is why at Air France and KLM we stand by our CSR commitments, set out in our Group Corporate Social Responsibility Declaration and our Social and Ethical Charter, and 04 confirmed by our membership of the UN Global Compact. This report explains these efforts amid a particularly challenging year. A year marked by the tragic loss of the passengers and crew of flight AF447 between Rio de Janeiro and Paris, a disaster still unexplained at the time of writing. Amid a continuing global crisis, a year which dented our bottom line, with a severe drop in traffic and even larger fall in revenues. We reacted to this situation by making deep structural and economic changes, slashing costs while making the most of synergies between our companies.

Aviation is a people business. While others have focused on redundancy plans, we set ourselves the priority of doing all we can to safeguard jobs while improving competitiveness. To this end, we have developed a completely original structure based on the adaptability of our staff and the solidarity of our businesses.

In a very tough competitive environment, we need to be outstanding to retain the confidence of our customers. Our priorities include safety, high quality standards, innovative service provision based on the latest technologies, and reinforcing our network.

We assume our responsibilities at the local level, where we generate business, development and employment, not only for the regions in which we are based but also for Chief ExecutiveOfficerofAirFrance Chief ExecutiveOfficerofAirFrance-KLM Pierre-Henri Gourgeon CO limit to responses collective for push to continue we summit, Copenhagen the arises from what see to important is it Although sector. transport air the in actors committed the with Faced by staff our encourage also We promoting theirinitiativesand puttinginplaceinnovativesolutions. quality. air affect that emissions and noise for notably by progress further making are we terms, environmental In strong the was involvement ofourteamsandassetsinresponse totheHaïtidisaster. 2010 January in example recent A operations. humanitarian numerous partners. Beyond our contribution to aid and development programs, we lead and support the countries to which we fly. We have therefore built lasting relationships with our regional ambition fittingfortheplaceweoccupyinglobalairtransport. In this way our Group is setting the industry standards for corporate social responsibility: an biofuels thatdonotcompetewiththefoodchain. of development the in role leading a taking while procedures, flight and consumption fuel move forward, we are playing our role in this joint effort by modernizing our fleet, optimizing to Keen (ICAO). Organization Aviation Civil International the of aegis the under agreement emissions. We call on the United Nations to include international aviation in a specific global hleg o ciae change climate of challenge President andChiefExecutiveOfficerofKLM Peter Hartman Ar rneKM s n o te most the of one is France-KLM Air , utn or oa impact local our cutting 2 ,

05

FOREWORD UNDERSTANDING THE SECTOR AND THE GROUP

AIR TRANSPORT SECTOR ISSUES

AIR TRANSPORT: REFLECTING THE GLOBAL ECONOMY

Air transport drives our globalized economy, allowing tourism Airlines operate in a very competitive environment where and trade to develop while bringing people and cultures margins are small. Air transport is always one of the first together. sectors hit by global events: from wars and epidemics to hurricanes and volcanoes.

AIR TRANSPORT ON THE FRONTLINE OF THE GLOBAL ECONOMIC CRISIS

The economic crisis led to a sharp decline in air traffic demand, 2010, with losses for the decade running at over US$ 50 billion. cancelling two years of growth combined with an even steeper A mild recovery is forecast for 2010, which should result in drop in unit earnings, notably for business travel and cargo an estimated gain of US$ 2.5 billion. European airlines should traffic. face losses of around US$ 2.8 billion, as they were particularly In 2009, airlines lost US$ 9.9 billion, according to estimations affected by the eruption of the Icelandic volcano and the weak by the International Air Transport Association (IATA) in June growth in Europe.

AIRLINE SECTOR SUBJECT TO VERY SPECIFIC CONSTRAINTS

The extreme volatility of oil prices affects companies’ forecasts change thereby imposing new burdens on the sector. In 2012, 06 as much as their results. The numbers speak for themselves: airlines will join the European Union Emission Trading System fuel represented 13% of sector costs in 2000 but had risen to (see our public positions, page 17). 33% in 2008 and 24% in 2009, according to the International Air Transport Association (IATA). Airlines face ever stricter regulations for security and consumer protection, which in turn mean more restrictions for customers

Air transport creates about 2% of man-made CO2 emissions, and higher costs for carriers. a value which is often overestimated by the public at large, but Finally, unlike rail transport, aviation funds all of its infrastructure does not exempt the airlines to take their part in the collective costs, from ground to flight. It also pays for security, safety effort of combating climate change. Regulations are emerging, and soundproofing measures for communities living close to notably in Europe, to cut the impact of air transport on climate airports.

A RESPONSIVE AIR TRANSPORT INDUSTRY

Tailoring capacity to demand Adjusting staffing levels, consolidation and mergers Unlike in previous crises airlines were quick to respond, In 2009, airlines cut their workforce by 0.8%, mainly via adjusting to demand by cutting capacity from late 2008 redundancy and productivity plans. (therefore avoiding overcapacity). However, these measures The airline sector is still very fragmented. While Delta is the have not been enough to stem the sharp drop in unit earnings. world’s largest airline by traffic after its merger with Northwest In 2009, airlines cut their capacity by 1.6% as passenger traffic Airlines, the company still represents only 7.1% of regular fell 1.8% on average against 2008 figures. This helped to traffic. Consolidation and mergers, already a trend in the airline maintain the seat-load factor (76 % for IATA airlines in 2009). business, have been accelerated by the crisis.

Financial management Despite their financial results, airlines managed to raise US$ 25 billion in 2009, mainly in the form of bonds. They also made considerable efforts to cut spending, while continuing to improve the quality of service. fights. These are also fed by regional subsidiaries (for subsidiaries byregional fed also are These fights. intercontinental with connect traffic regional and european of flows smaller that so arrivals, and departures coordinating in Charles de Roissy- Gaulle and hubs: Amsterdam-Schiphol. two Their strength its lies around built world, the of rest the and Europe between network largest the serves GroupToday the Netherlands, Martinair KLM: transavia.com AF: transavia.comFrance Other fleet KLM: Cityhopper CityJet AF: BritAir, Régional, Regional fleet Cargo Long-haul Short andmedium-haul years) 9.8 age: (average 2010 March 31 of as aircraft Operational fleet: modern A 169 in destinations 898 serving airlines, thirteen of up made is This share. market by world the in alliance largest second the Air France and KLM play a driving role in the SkyTeam alliance, alliance global and strong A akey representing resource fortheGroup’s sustainabledevelopment. sense, economic and efficiency energy its for known is fleet The Europe. in fleets modern most and The Group operates a fleet of 594 aircraft – one of the youngest as nosinglemarketrepresents more thanathird ofturnover. Active in all world markets the Group has a balanced network, Air network balanced and strong A STRENGTHS GROUP BASIC for itsownfleetandthoseofotherairlines. services, maintenance aviation and transport cargo transport, passenger are businesses main three Its own identity. its and retainsbrand which of each KLM, and France Air airlines, two and company holding single a of up made is Group The BUSINESSES THREE COMPANIES, TWO GROUP, ONE FRANCE-KLM: AIR

France: BritAir, CityJet,Regional;andKLMCityhopper). Average Age (years) 11.0 5.1 4.6 8.1 9.8 AIR FRANCE AIR

A380, A330-200, Type of Aircraft 777-200 A318, A319, A320, A321 Bombardier A340-300, 747-400, Embraer, 747-400 737-800 Fokker, 777F

/-300 Number ofAircraft (396 intotal) € at valued are synergies Cost Europe. in market largest the fourth to access privileged Group the gave airline restructured sealed by a close operational and commercial partnership. The In January 2009, the purchase of an equity stake in Alitalia was Alitalia to link strategic A million peryear. billion. This brings Air France-KLM an estimated profit of € with shared costs and earnings creating a turnover of some € level of integration. Business activities are closely coordinated, high particularly a shows Atlantic the of side either on groups joint largest two the a of alliance This formalized Atlantic. North the Delta for venture and France-KLM Air 2009, April In Atlantic North the for partnership unique A and otherservices. sharedon programsbased loyalty service, customer excellent with strongnetwork ensurea to key is Cooperation countries. oldest airline in the world still operating under its original the name. passenger- anniversary; 90th per its traffic celebrated KLM sector of 2009, In kilometer. terms transport in air second and the turnover in by second ranks France-KLM Air 140 144

99 370 millionayear 7 6 Average Age (years) 10.2 10.4 10.5 10.1 5.8 , ofwhich€ KLM /-700 /-800/-900 Type of Aircraft MD11, 747-400

777-200 737-300 90 millionforAirFrance-KLM. 747-200/-400, 737-700/-800, F70, F100, A330-200, EMB 190 767-300, 747-400 MD11

/-300, /-400,

Number ofAircraft (198 intotal) 41 44 61 48 4

145

8 07 UNDERSTANDING THE SECTOR AND THE GROUP THE 2009-10 FINANCIAL YEAR

Negative financial results The 2009 -10 financial year was marked by major operational and ‘Economy Comfort’. These are accompanied by a major losses of €1.55 billion reflecting the difficult year that the restructuring of medium-haul services and cargo operations. airline has lived as a direct result of falling of passenger traffic (-3.2%) and cargo (-13.7%), accompanied by a further Air France and KLM are adjusting to lower demand by cutting reduction in unit revenues, specially in business class. For flight frequencies rather than discontinuing routes. This Air France-KLM, this was combined with the very negative preserves the balance and performance of the network and impact of past fuel hedges, which had allowed the Group to its two hubs, while still connecting regional economies around make considerable gains before summer 2008 and to enter the world. the global downturn in excellent financial health. Despite these losses the Group shows stable finances and satisfactory Cargo has also been rationalized by cutting the number of liquidity, as of 31st March 2010. freighters in service from 24 to 14 over two years. This was made possible by carrying freight in the holds of passenger In the 2009-10 financial year, Air France-KLM’s turnover aircraft and Combi freighters, thereby improving load factors stood at €21 billion (-15%), based on 77.5% for passenger (+ 2.2 points, with notably + 8.9 points in the 4th quarter). traffic (-13.6%), 11.6% for cargo operations (-27.8%), 4.6% for aircraft maintenance (-4%) and 6.3% for other activities (catering, charters, etc.). • Cutting costs and safeguarding jobs To maintain its financial strength, Air France-KLM launched a Air France-KLM responses major, early drive to cut costs. The investment plan was revised The deep restructuring launched by Air France-KLM in 2009 is down by €4.5 billion over the financial years 2009 -11, while +PZWVZHSVMHPYJYHM[ HUKMPUHUJPHSHZZL[Z 0UK\Z[YPHS (LYVUH\[PJHS -SLL[ starting to bear fruit in passenger transport as well as cargo. the goal of yearly cost reductions was raised to €700 million ÁT Á T ÁT ÁT Structural operational and workforce changes enabled a rise in over the year 2009 -10. This objective was exceeded. unit earnings and a drop in non-fuel costs. Investments By adjusting capacity to demand, the Group has maintained its The present economic climate is threatening jobs. There are and developments seat-load factor at the very high level of more than 80%. large numbers of redundancy plans underway in the airline sector, however Air France and KLM have taken a supportive, responsible approach, seeking by all means possible to keep *HZOMSV^ 3VHU MYVT ÁT • Adapting and restructuring existing jobs. This means improving staff mobility and flexibility, VWLYH[PVUZ 5VUWYVMP[ 08 Air France-KLM is rolling out pioneering structural and Á T )HURZ :WVUZVYZOPW imposing a freeze on new hiring, cutting outsourced labor, PUJS\KPUNLU]PYVUTLU[HS Other Suppliers economic responses to both the crisis and changes in and offering a voluntary redundancy plan for around 1,684 ZWVUZVYZOPW -\LS:\WWSPLYZ -SLL[VWLYH[PUNSLHZLZÁ T Á T ÁT 6[OLYL_WLUKP[\YLÁ  T customer expectations. In its long-haul operations, the positions in Air France applying to over 1,800 employees (see 9LWH`TLU[ Group has cut capacity in response to falling demand while page 39). In the space of two years the Group workforce, 9,=!Á T VMKLI[ .YVZZPU[LYLZ[ Á  T L_WLUZLZ boosting services with new products like ‘Premium Voyageur’ including temporary staff, has been cut by almost 11%. ÁT

OUTLOOK FOR 2011-12 7HZZLUNLYZ *HYNV 4HPU[LUHUJL

The financial year 2010 -11 will benefit from a large number All these various measures in the short and longer term are of measures which are fully expected to bear fruit. The Group preparing the Group for the landscape after the crisis. One of

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Biofuels powered Boeing 747 A380 million) euro (in groups stakeholder by income of Distribution bodies andairports. supervisory governments, of behalf on collect airlines which taxes numerous pay to customers tickets, of price the of top On earnings Group of flow the various stakeholdersineuro million. of summary a gives below employees, table including The communities. local and results, authorities public suppliers, Group’s the on depend parties that interested many are there shareholders our Beyond GROUPS STAKEHOLDER BY DISTRIBUTION INCOME ;H_LZVU[PJRL[Z HZULZ*YV4HPU[LUHUJL *HYNV 7HZZLUNLYZ Á T 9,=!Á T (PYWVY[Z :[H[L SVJHSH\[OVYP[PLZ VWLYH[PVUZ *HZOMSV^ Á T MYVT 9LWH`TLU[ ,TWSV`LLZ Á T HUKMPUHUJPHSHZZL[Z >HNLZ +PZWVZHSVMHPYJYHM[ and developments Á  T VMKLI[ Investments ÁT ÁT 3VHU (PYWVY[MLLZ )HURZ ÁT L_WLUZLZ .YVZZPU[LYLZ[ (PYWVY[Z ÁT In 2009 France forthe‘SolidarityFundDevelopment’. checks, as well as specific taxes, including money collected in environmental strikes, bird preventing salvage, and firefighting airports, of development the civil and expenses running security aviation, including duties, government fund to used are PUJS\KPUNLU]PYVUTLU[HS

-10, ZWVUZVYZOPW :WVUZVYZOPW 5VUWYVMP[ Á T 0UK\Z[YPHS Á T taxes stood at ,UYV\[LJOHYNLZ (PY[YHMMPJJVU[YVS  Á T -\LS:\WWSPLYZ ÁT € (LYVUH\[PJHS 1.8 billion for Air ÁT :[H[L SVJHSH\[OVYP[PLZ ;H_LZHUKMLLZ ÁT SLWY[ULZZÁT -SLL[VWLYH[PUNSLHZLZÁ [L_LK[Y  T 6[OLYL_WLUKP[\YLÁ

France Other Suppliers ÁT -SLL[ ‑ KLM. :OHYLOVSKLYZ +P]PKLUKZ These ÁT 09 UNDERSTANDING THE SECTOR AND THE GROUP CORPORATE GOVERNANCE

APPLYING CORPORATE GOVERNANCE PRINCIPLES TO ENSURE IMPROVED GOVERNANCE

Comprising 15 members, four of whom are of Dutch The evaluation highlighted some very positive developments nationality, the Board of Directors determines the orientations in the functioning of the Board since the last formal evaluation of the company’s activities and ensures their implementation. carried out in 2007. Its functioning is now that of a Board of The Board relies on the recommendations of its specialized Directors of an international listed company and the separation committees to ensure the smooth operation of the Group of the functions of Chairman and Chief Executive Officer has in conjunction with the management. The Board operates been effectively implemented. according to accepted French corporate governance principles as set out in the AFEP-MEDEF Corporate Governance Code • Independence of Directors updated in 2008, notably as regards the remuneration of the After having examined the situation of each Board director, the executive Directors. Board of Directors meeting of March 31, 2010 reiterated its In application of these principles the Board of Directors position that seven Directors were independent in view of Its regularly discusses and updates its mode of governance: ownership structure (notably the French State and employees) and the specific rules governing the appointment of a number • Reduction in the duration of Board Directors’ terms of of its Board Directors. office and staggered renewal The Board considered that all the Board Directors had In order to comply with the governance principles as competences and professional experience that are useful presented in the AFEP-MEDEF Corporate Governance Code to the company, whether or not they are considered to be and adopt the conclusions of the evaluation of the functioning independent in the light of the AFEP-MEDEF criteria. of the Board of Directors, the General Shareholders’ Meeting of July 10, 2008, decided to reduce the duration of Board • Internal regulations of the Board of Directors Directors’ terms of office from six to four years and to include On June 17, 2004, the Board of Directors adopted its internal the option of a staggered renewal process for mandates in regulations notably specifying the terms for the organization the bylaws. A proposal will thus be submitted to the General and functioning of the Board and also determining the powers Shareholders’ Meeting on July 8, 2010 to set the duration of of each of the specialized committees established within the new or reappointed Board Directors’ terms of office at two, Board. three or four years to ensure the smooth renewal of the Board The internal regulations are regularly updated; they were, in of Directors. particular, modified by the Board of Directors meeting of March 26, 2009 in order, notably, to specify the roles and powers • Evaluation of the functioning of the Board of Directors of the Chairman and the Chief Executive Officer following the 1110 During the 2009-10 financial year, the Board of Directors separation of the functions of Chairman and Chief Executive commissioned an independent firm to evaluate its functioning, Officer, effective January 1, 2009. based on interviews with the Board Directors, which were The internal regulations are available on http://www.airfranceklm-finance.com handled under the seal of anonymity and were the subject of a (Corporate Governance section). presentation and discussion during a Board meeting.

BOARD OF DIRECTORS 2009-10 STATUS AND SPECIALIZED COMMITTEES

Composition of the Board of Directors 10 directors appointed by the General Shareholders’ Meeting (of which seven non-executive Directors) 2 representatives of the employee shareholders appointed by the Shareholders’ Meeting 3 representatives of the French State appointed by ministerial order Separation of the functions of Chairman and Chief Executive Officer since January 1, 2009

Directors’ term of office Four years (exceptionally two or three years to ensure the smooth renewal of the Board of Directors)

Number of meetings and average 9 meetings of Board of Directors; attendance rate: 89.6% attendance rate Training for Board of Directors members At the time of their appointment or at any time during their term of office, each director may benefit from the training necessary to fulfil their mandate. Such training is organized by the Group

Board of Directors Committees Audit Committee Remuneration Committee Appointments Committee

Number of members 7 (o/w three independent) 3 (all independent) 3 (all independent)

Number of meetings 4 1 1

Average attendance rate at meetings 75% 100% 100%

Annual evaluation of the functioning of the In 2010, a formal evaluation was carried out by an independent firm based on interviews with directors Board of Directors and Committees with the findings reported anonymously. These were then presented to the Board and discussed by it at one of its meetings Compensation of the company officers - Publication of compensation modalities and amount paid to executive directors in the Reference Document, the management report and on the Group website. Executive directors receive neither stock options nor bonus shares. Should they leave the company they do not receive any special indemnities. - Publication of Board directors’ fee modalities and their amount in the Reference Document and in the management report SUSTAINING QUALITY SHAREHOLDER RELATIONS SHAREHOLDER QUALITY SUSTAINING BEHAVIOR ANTI-COMPETITIVE PREVENTING ETHICS BUSINESS AND COMPLIANCE Crepnacs sn ot o l 700 ebr o the of members 7,000 all shareholders to for out newsletter sent quarterly (Correspondances) a States, United and Europe the in agencies rating and investors with meetings well- conferences, press are and briefings profiles: different investors to tailored and events and media of shareholders range a uses France-KLM Air informed, its that ensure To shareholders our with dialogue regular Pursuing Attendance rate by mail totheChairman,orvoting attorney represented, grantingpowerof Number ofshareholders present, One share equalsonevote 2010 31, March at capital share of Breakdown and 2009) 31, more than 75% by European Marchinstitutions, as of March 31, 2009. in 65% to (compared interests French by owned 63.4% was France-KLM Air 2010, 31, March of As usat o h olgto fr i tasot opne to implemented aprocedure fortheiridentification. has companies France-KLM Air transport shareholders, their air control and for monitor obligation the to Pursuant structure Shareholder epniiiy ifrain hrn, en o cooperation of means sharing, information responsibility, strictly to airlines’ two the corporate as such addressestopics guide The it. with comply of commitments the as law competition well of as field French), the in enacted and principles of major details the out Dutch sets It versions. (English, electronic and paper languages in both three in France Air Group the of employees for has Manual available made The been Manual. Compliance Law of Competition publication its the with 2007 September in law competition to related policy compliance specific own its build to started the with manner France law,Air competition effectiveby up set requirements many most the in comply effectively To annual preceding trading month the from during and some company’sshares posts the in sensitive in company executives the of senior Charter employees Compliance officers, The company Ethics. of prohibits Code Financial a Charter Compliance and a adopted has Directors of Board The GENERAL SHAREHOLDERS’ MEETING OF JULY 9, 2009 JULY9, OF MEETING SHAREHOLDERS’ GENERAL 70.6% 15.7% 11.8% 1.9% Employees Treasury shares Others French State 49.76% shares representing 146,412,318 15,359 shareholders Yes ‑ ‑ KLM KLM

Changes in employee share ownership share employee in Changes round ofvoting. first the in both cast votes the wereof majority absolute an 2010, with the elected 8, to July presented of Meeting be Shareholders’ will General who candidates, successful The and hence of the votes, were able to express their preference. 30% of employee shareholders, representing half of the shares was run entirely online, Theelection including all campaign posters, and close to staff). other and crew deck electoral (flight two colleges the of one in candidate a choose to invited all were shareholders employee former and Employee 2010. 8, expires at the end of the General Shareholders’ Meeting of July discussions of the Audit Committee. Their current term of office on the Group’s Board of Directors. They are also involved in the seats Twohave shareholders employee the representativesof the Group’s second-largestshareholder. representing collectively employees, former or current of of half proportions highest stock index, with close to the 12% of Group equity owned by over of 120 SBF the in companies the of one ownership share employee has France-KLM Air Group’s personnel the Involving to year a times four canvass andpassontheexpectationsofsmallshareholders. meets which (CCRAI), Shareholders also created in 2000, the Consultative Committee was for Individual shareholders individual for forum advisory additional An briefings forindividualshareholders alloverFrance. in part regularlytakes Groupalso press, the business the with partnership Group. In the by published information financial all features which website dedicated a and Club, Shareholders’ Air France-KLMReference Document,pages229and230.] law, see competition concerning action legal ongoing [To about more out find in-house postercampaignaddressing thetopic. an and issues, law competition to dedicated hotline a out, notably rolled been also have awareness staff raising of means Other module. e-learning complementary a of launch the with used by over 8,000 staff in 2008 is to be fleshed out mid-2010 in- the module training online the subject, by the on experts legal house made sessions training hoc ad the to addition In program. compliance rules competition the of framework the this to Further preventionof means new publication, in developed been have non-compliance. of consequences the and financial informationmustcomply. of disclosure the for responsible company the of executives principal the which with principles Financial the defines Ethics The of Code results. half-year and quarterly the preceding days twenty-one of period a for and announcements results 11.3% MARCH 2007 MARCH 11.2% MARCH 2008 MARCH 12.0% MARCH 2009 MARCH 11.8% MARCH 2010 MARCH 11 UNDERSTANDING THE SECTOR AND THE GROUP OUR APPROACH TO CORPORATE SOCIAL RESPONSIBILITY

As world leader in our sector, we strive for profitable growth while working tirelessly to protect the environment and ensure social progress. We are building our future business by rolling out innovative products and tailored services to best meet the expectations of our customers. Corporate Social Responsibility is part of our strategy and is increasingly becoming a part of our culture. We do this by limiting the negative impact of our activities and by making economic and social contributions to the regions we serve. To this end, we proactively engage our stakeholders in our CSR approach which is based on five key issues (see page 19).

SETTING THE STANDARDS IN CSR

Despite a very difficult financial situation, the Group has The Group’s vision on CSR is laid out in the July 2006 maintained its commitments, requiring a large dose of flexibility Corporate Social Responsibility Statement, sealed by the and creativity from company and employees. Group’s Social and Ethical Charter of 2008 (see page 38). This commitment was strengthened by the Group-level adoption Our approach to CSR is underlined by the signing of public of the Climate Change Plan in 2007 (see page 20) and by the commitments, including the United Nations Global Compact, Air France-KLM Sustainable Development Charter for Group and a pledge to work in line with the fundamental rights and suppliers (see page 15). Several in-house charters supplement principles of the UN Declaration of Human Rights, the EU these commitments, including the KLM Code of Conduct, the Charter of Fundamental Rights, and the protocols of the Anti-harassment Charter and Block Release Training Charter International Labor Organization (ILO). at Air France.

At domestic level, Air France also endorsed the Diversity Charter, the Charter for Corporate Commitment to equal opportunities in the State educational system, and the Good Parenting Charter.

BUILDING OUR COMMITMENTS AT EVERY LEVEL 12 The Group’s CSR policy is applied at all levels, from senior Every year, the sector’s CSR risks and issues are added to management priorities to implementation via unit action plans. the Group’s strategic plan, which sets out the strategy for the CSR departments are responsible for policy and deployment following three years. in each organization. The Group’s internal auditors have carried out several CSR

CSR is guaranteed at the highest level within both airlines: for audits in areas such as occupational safety, training, the CO2 Air France, at Executive Vice President, member of Executive offset program, and conflict of interest risks in procurement. Committee, level, and for KLM at Board level.

CSR Governance within the Air France-KLM group

Air France-KLM group At Air France and KLM

Board of Directors Executive Committees Board of Directors - Determines the strategic - Supervise the airline CSR (Air France) and Board orientations of the company’s policy and associated risks of Managing Directors activities and ensures their - QSE Management Review and Supervisory Board implementation twice a year at Air France, (KLM) - Reviews the management report, and at KLM Safety & Quality Same responsibility which informs among others EVP Board as Air France-KLM Board on social and envirornmental of Directors performance - The audit committee monitors the effectiveness of the group’s internal control and of the group’s risk management systems Support Functions

CSR Department - Define and implement CSR policy Group Executive - Coordinates the Environmental Internal Audit Operational Activities Committee (GEC) Management System Independently - Ensures the responsibility - Approves the CSR and monitoring of the assesses the HR Department policy, which is included Quality-Security-Environment effectiveness - Define and implement social policy in the annual Group (QSE) systems of the risk management - Negociates with the unions Strategic Framework - Integrates CSR policy system and performs the collective agreements, regarding - Approves the annual in operations assurance audits national regulations audit plan - Manage emergency and crisis situations LISTENING TO STAKEHOLDER FEEDBACK STAKEHOLDER TO LISTENING - - - - - its CSRefforts: In 2009-10, Air France-KLM achieved the following awards for ACHIEVEMENTS CSR OF RECORD A Client satisfactionsurvey - f viewsandrecommendations drawnfrom surveysor - - Internal the applying guidelines. by Initiative’ Reporting ‘Global stakeholders the in defined as external test, materiality and internal with closely works Group the issues, CSR identify and review To and tohelpeachdivisionsetappropriate actionplans. level management senior at progress monitor to used be will indicators These issues. key five regarding goals their as well 2009 In 3000. ISAE Engagements’ Assurance on Standard with ‘International the auditors. line in statutory indicators, two environmental and its social of check They one by year every audited is which system reporting shared a up set Group the 2006, In PERFORMANCE CSR TRACKING Air Franceand‘Three yearplan’atKLM; Choices Alliance(March 2010) KLM wontheSeafoodChampionA Netherlands inOctober2009 KLM wasnamedPartneroftheY Marianne d’Oraward forCSR(December2009) Air FrancewasthefirstFr July 2009(thefirstaward giveninthiscategory); the environment category, from AirlineBusinessmagazinein Air France-KLMwontheAirlineBusinessStrategyA sector intheDowJonesSustainabilityIndex; For thefifthtimeinar Risk managementr meetings; Staf Issues definedintheairlinepr

-10, KLM set various CSR performance indicators, as indicators, performance CSR various set KLM elated toCSRissues. ow, theGroup cametopoftheairline ench companytowinthe2009 ojects: ‘Vision 2010’at ojects: ‘Vision ear 2009byWWF ward bySeafood ward, in

nomto i gvn n o or CO our how on given is information year’s this of dialogue content the influenced has more in-depth report: stakeholder test. how on materiality given be the can example clear applying A by and stakeholders various with dialogue by shaped been has policy CSR Group’s The - - - 25, 31,37,43and49).Theseinclude: are summarized in charts at the end stakeholders of each key issue (see external pp. our with interact we ways various The External to allrelevant activitiesinFranceandTheNetherlands. 10 last the over result,a As years. applied was 14001 ISO of version 2004 the and improvement continuous objectives for management plans out action rolled have airlines Both sector executives atKLM. retaining and senior all for France, Index Sustainability Jones Dow the in leadership Air at for managers performance operations safety occupational targets: management senior into indicators CSR built also have KLM and France Air - - - their climateimpacts. on communications of transparency for index Disclosure SBF120 the in Carbon 2009 the of Leadership part Index, which awards is the top France 20 French corporations Air Finally, Ethibel 2007. July and 30 since performance, CSR PIONEER its for monitored www.ethibel.org),been Ethibel and (see France-KLM the Registers Investment Air in EXCELLENCE featured Series. also Index has FTSE4Good and Global, EXCELLENCE (ESI) Index Sustainability Ethibel the Eurozone, GroupThe featuresalso Aspi agencies: rating of indices the in stakeholder of result dialogue withourcargocustomers. a as Passenger, and Cargo between in othersectors; community; questionnaires. CSR workinggroups heldbyspecialistassociations; stakeholders whiledraftingannualCSRreports; opinions, expectationsandr comments andcontributionsfr customer surveys,InstantFeedbackKiosks,web2.0 analyzing r benchmarking competitorsandcorporatebestpractice discussions withairlineassociations(IA egulatory trends andratingagency ecommendations drawnfrom om shareholders; 2 msin s divided is emission TA andAEA)orin

13 OUR APPROACH TO CORPORATE SOCIAL RESPONSIBILITY PROMOTING CSR IN OUR SPHERE OF INFLUENCE

Air France-KLM believes that its influence on CSR is not only felt encouraging subsidiaries, suppliers, and partners – including within the Group. It also supports major innovation projects while the SkyTeam alliance – to launch their own CSR programs.

PUSHING THE INNOVATION AGENDA

Finding CSR solutions is often a collective effort. The Group is scheme which involves all businesses and departments: therefore integrating innovation at all levels of its CSR efforts, from Research and Development to Procurement and Inflight rolling out the most pioneering technological programs with its Services. In 2009-10, over 50 managers were trained in this employees and partners. field, ensuring this aspect is respected from the design phase for all new products and services. Air France offers participative innovation programs to all staff. In 2009, KLM co-founded the Mainport Innovation Fund, The oldest was launched by the aviation maintenance team which invests in technological projects launched by Dutch in 1995 (Programme Innovation Qualité, PIQ), and has been companies for more sustainable aviation. Supported by the a model for similar schemes launched more recently by other Dutch government, this fund combines two leading industry departments of Air France. players (KLM and Schiphol Airport), the Technology University of Delft and a major financial institution (Rabobank). In their procurement policy, Air France and KLM apply CSR criteria to maximize the environmental impact of a product KLM is also co-founder of the SkyNRG consortium for the throughout its lifecycle, while taking into account relevant development of sustainable biofuels and promoting their social and economic aspects (see page 15). To this end, availability. Air France is a partner in a project that produces Air France has launched a cross-cutting eco-design training second generation biofuel (see page 23).

WORKING WITH ITS SUBSIDIARIES

The Group brings subsidiaries on board its CSR policy with 14 joint schemes, including tailored meetings and programs. The CSR policy of Servair, the Roissy-based catering company, is for example based on four commitments: - Guarantee customers a healthy and safe product - Encourage diversity and equal opportunities throughout the company - Reduce environmental impacts - Follow an ethical approach that safeguards local development

Servair has also launched related schemes for disabled staff. In 2009, 5.2% of its workforce was made up of handicapped employees. Servair, catering company

GALVANIZING THE SKYTEAM ALLIANCE

As partners in the SkyTeam global network, Air France and Air France was invited by the alliance to chair the SkyTeam KLM share with other members a strong commitment to CSR. working group in this field. In late 2009, KLM held a two-day In 2008, SkyTeam was the first alliance to sign a CSR charter, workshop in Amsterdam focusing on CSR within SkyTeam, committing all partners not only to protect the environment but allowing partner companies to exchange good practices and also to respect their social responsibilities while supporting the plan new joint projects. economic development of areas in which they operate. foreseeing changes in activity trends, tracking economic and economic tracking trends, activity in changes foreseeing include measures oversight Basic crisis. of times in especially The Group also aims to minimize risks in all business activities, the Group). across days 50 average (on times lead payment agreed with signing contracts that serve the interests of all parties while complying involves which relations supplier strong build to aim we success, our to vital are suppliers as France-KLM, Air For COMPLIANCE ENSURING WHILE SUPPLIERS RESPECTING is workers handicapped employ that companies to work more its at and hubs the destinations, around with over jobs two-thirds indirectof these many in Europe. creates Outsourcing France-KLM also Air suppliers, of number great the of result a As RESPONSIBILITIES SOCIAL AND sites, REGIONAL OUR MEETING production of including risks location sustainability licenses, lists environmental which questionnaire, registration a on based chosen are Suppliers suppliers. dealings with and approach its in ensure consistency to and system transparency management supplier a uses Group The ONLINE REGISTRATION AND MANAGEMENT SUPPLIER for call a to tender. respond they whenever Charter Sustainability the Compact, Global Nations Air United the to signatory a As SUPPLIERS OUR AMONG PRACTICES RESPONSIBLE INSPIRING a code of conduct addressing sign ethical behaviour within supplier’s to invited are internal processes procurement the in and and involved responsibility buyers stakeholders business and social employees Procurement among referrers. promotes performance actively environmental Group The BUYERS AMONG AWARENESS RAISING select to purchasers been suppliers. support to have criteria, CSR points including Reference set processes. optimizing savings chain. enable while to perspective supply global a into sustainable reductions cost a to Air contribute to approach procurementintegral an creating on been has focus year This PROCUREMENT RESPONSIBLE TO COMMITTING SUPPLIERS WITH WORKING

France-KLM France-KLM ek t ain utiaiiy invto and innovation sustainability, align to seeks ru ak is upir t sg u t a to up sign to suppliers its asks Group rtra hl t lwr ul osmto ad simultaneously and reduce CO consumption fuel lower to help criteria, on-board equipment, while meeting other comfort and reliability and seats lighter example, For lifecycle. entire the over lowest is ownership of cost total whose one be to purchase best the considers France-KLM Air services, environmental and products indirect) of and impact (direct the account into Taking and managenon-compliance. to include social and environmental aspects in order to monitor This year the goal is to enlarge the scope of auditing processes and safety quality are for already part of processes daily requirements and for Air France-KLM. suppliers auditing this, to Next and evaluatingperformance. social indices, regularly exchanging information with suppliers, of onboard blankets, and logistics for engine spare parts. through cleaning the uniforms, ofdistribution the sectoras diverse as activities sheltered the in companies million by €10 generated over are Today departments. all for concern major a r ete bne o t b aodd i ln wt E REACH EU with regulations onchemicalsinparticular. that line in materials avoided, be the to or includes banned either are which list and material charter restricted supplier a France-KLM Air the with compliance the suppliersofAirPodcompressed airpowered vehicles. those supplying aircraft de-icing fluid (an organic product), and including qualities, responsible ecologically or socially selected their for been already have suppliers and products Several CSR training courses. or eco-design intranet basic attended procurement have some dedicated while portal, a through practices CSR relationships. Procurement employees are also informed about 2 emissions. 15 OUR APPROACH TO CORPORATE SOCIAL RESPONSIBILITY DIALOGUE WITH ALL STAKEHOLDERS

Stakeholder feedback helps to shape the Group’s CSR The Group also enables stakeholders to comment on CSR strategy. This means listening long-term to the expectations of policy and its development in their own publications. Meanwhile customers, employees, people living close to airports, experts, a newsletter named ‘Le Courrier, Air France partenaire de l’Ile associations, local authorities, civil society representatives de France’ offers a regular forum for interested parties. such as NGOs. Other applications are used in Group commitments with Engaging with various stakeholder groups helps to track stakeholders, from online media to newsletters to organizing societal developments and expectations, dilemmas for meetings, visits, conferences, roundtables and so on. Concrete Air France-KLM and possible CSR innovations. examples are mentioned at the end of each of the five key CSR issues defined by Air France-KLM. These examples are There are several avenues for dialogue, from company complemented by an interview with a relevant stakeholder. initiatives such as the open day for stakeholders in Group The stakeholders we interviewed last year expressed also this maintenance (with Air France Industries-KLM Engineering & year their view in order that Air France and KLM can test the Maintenance) at the Bourget fair in 2009, to working under relevance of the key issues. competent authorities, such as Environmental Consultative Committees held in the 10 main French airports (see page 27).

Air France has joined consultations with the Dermagne Commission for the controlled development of Roissy-CDG (see page 27), as well as the Grenelle Commitments Convention

with quantifiable targets for reducing noise and CO2 emissions in France (see page 21 and 26). Air France also plays a role in various associations around Roissy-CDG, including ‘Pays de Roissy’. This was founded to promote a regional movement for social and economic development in a 15 km radius around the airport (see page 45).

For more than a decade KLM has been involved in the Schiphol Regional Review Board (CROS) on noise abatement (see 16 page 27). Since 2008, KLM has taken part in the Business and Human Rights Initiative, an initiative taken by UN Global Compact in The Netherlands. This draws on the results of the ‘Ruggie Report’ focusing on CSR for upholding human rights. This year, KLM carried out an impact analysis on procurement and security, to deepen its knowledge on the subject.

Amsterdam-Schiphol Airport te hne w fe ae eesr, oeie by sometimes necessary, are feel we changes the - - ovide lawmakers and politicians with information necessary - The ambitionoftheAirFrance-KLMgroup isto: POSITIONS PUBLIC TAKING BY RESPONSIBILITY ITS EXERCISING Consumer rights Air strategy) Book andtheroll-out ofthe EU2020 (in theframeworkoffuture EUWhite Redefining European transport policy fuels Alternative Single European Sky (EU ETS) Union EmissionsTrading Scheme Integration ofairlinesintotheEuropean Climate change competitive distortion. all avoid to regulations international and European national, advocate means ofpurposefulinitiatives, drive subjects whichare increasingly complex, airline industry so that they can draft laws and regulations on the facing currently issues the of understanding an form to pr

/

Rail co-modality h efcie mlmnain n apiain of application and implementation effective the and fuelconsumptionhenceCO European Sky. Anefficientairtrafficcontrol systemisessentialforguaranteeingflightsafety, cuttingcosts The Group isdelightedwith theadoptionin2009oflawspavingwayforimplementationSingle fuels. alternative airtrafficmanagement,ordeveloping be allocatedtocombatingclimatechangee.g.bymodernizing It alsoconsidersthatrevenuesasaresult generatedbygovernment ofauctioningemissionsrightsshould non-EU hubs(carbonleakage). The Group willcontinuestriving toensure thattheETSdoesnotdistortcompetitionordiverttrafficto than astraighttax,whichgeneratesnodirect environmental benefits. Air France-KLMhasalwayssupportedthe“capandtrade”mechanism,consideringitismore effective Deal) andIATA. to developingproposals designed toreconcile thetwoprincipleswithinAEA,AGD(Aviation Global Differentiated Responsibility(CBDR)principleenshrinedintheRioConventionandhasactivelycontributed same markets.TheGroup considers thatthisprinciplecanbereconciled withthatoftheCommonBut in theframeworkofChicagoConventionbasedonequaltreatment forairlinesoperatingonthe (which isbyitsverynature global) through asector-specific, globalapproach. Thismustbeapplied Air France-KLMconsidersthatitwillonlybepossibletocurbtheemissionsofairlineindustry operating intheEuropean Union. work onConsumerRightsandcarefully monitorstheharmoniousapplicationofrulestoallairlines that provided forintheapplicablelegislation.AirFrance-KLMcontributestoEuropean Commission’s Customer care iscentraltothebusinessofGroup. TheGroup already offers more extensivecare than Access totherailmarketshouldbeguaranteedallnewentrantspromote high-qualityco-modality. trains asameansofextendingthecatchmentarea around airports. Air andrailare potentiallycomplementarytransportmodes.TheGroup accordingly supportstheuseof dimensionofairtransportintoaccount. using thesametransportmodes,andtotakeinternational that itisnecessarytoguaranteealevelplayingfieldforthedifferent modesoftransportbetweenoperators contributing totheCommission’s workonreducing transport-generatedhindrances.TheGroup stresses adaptation oftheinfrastructure required tomeetthemobilityneedsofEUcitizens.AirFrance-KLMis The European Commission’s White Bookwilladdress thedecarbonization oftheairlinesector, andthe and emergingcountriesalike. Air transportwillremain anessential driverofeconomicandhumandevelopmentforindustrialized is acceptablebothinenvironmental andsocialaswelleconomicterms. industry’s carbonfootprint.TheGroup supportsresearch andproduction ofsustainablebiofuelsthat Air France-KLMconsidersthatsustainablebiofuelsconstituteapromising avenuetominimize theairline lobbyists’ charter. EU’s the signed have lobbyists, as and, arguments Group’s the put to Brussels in based arerepresentatives Group Three transport air the represent sector andadvocateitspublicpositions. to is role whose the Netherlands), in Representatives Airline Marchandeof Board - l’Aviation BARIN and de France Nationale Fédération - (FNAM bodies national and Association) Airlines Regions European - ( (IATA - International Air Transport Association), European bodies To achieve this end, the Group bodies belongs to international AEA - Association of Europeanregionalof (ERA Airlines), Association bodies - AEA AIR FRANCE-KLM PUBLIC POSITIONS PUBLIC FRANCE-KLM AIR 2 emissions.

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17 OUR APPROACH TO CORPORATE SOCIAL RESPONSIBILITY ADDRESSING KEY ISSUES

OUR FIVE SUSTAINABILITY KEY ISSUES

The materiality test carried out in 2009 by Air France-KLM confirmed the Group’s identification of the sustainability key issues and helped complete the mapping process. The diagram on this double page illustrates the different issues. The initiatives implemented by the group to minimize its impacts, together with the results and performance achieved, are set out in detail in the following pages.

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19 COMBATING CLIMATE CHANGE COMBATING CLIMATE CHANGE

Climate change knows no borders, so global action is needed to limit greenhouse gas emissions. Air

transport accounts for around 2% of man-made CO2 emissions, but the sector’s continued growth requires it to pursue and increase its efforts to limit its impact. Determined to play its part, Air France-KLM seeks a global commitment for the air transport sector, which it sees as crucial. We call on the United Nations to include international aviation in a separate post-2012 global agreement under the aegis of the International Civil Aviation Organization (ICAO). Keen to move forward, we

are playing our role in this joint effort by driving down our CO2 emissions, notably by bringing forward the deployment of sustainable biofuels. These are key to reducing our carbon footprint and our dependence on fossil fuels.

OUR JOINT COMMITMENTS

Air France-KLM set up a ‘Climate Action Plan’ to combat - asks all its staff to work towards ambitious environmental climate change. As part of this, the Group: action plans, from fuel saving in the sky to cutting emissions on the ground; - supports the Kyoto Protocol and efforts to achieve a new - promotes research programs for renewable energy sources agreement post 2012. It has joined schemes to ensure a fair such as sustainable aviation biofuels; contribution of the aviation sector in collective efforts; - supports environmental protection programs led by NGOs; - continues to modernize its fleet, contributes to aviation - provides its customers with transparent and reliable

research, and encourages the entire supply chain to cut information on their travel-related CO2 emissions, via a

CO2 emissions; calculator based on real operating data, and opportunities to compensate them.

20 OUR MANAGEMENT OBJECTIVES

OBJECTIVES SCHEDULE ACHIEVEMENTS 2009-10 STATUS AIR FRANCE

-20% CO2 emissions for flights to 2012 Targets exceeded thanks to the replacement of B747s with B777-300s overseas territories based on 2005 level back in 2008. Reductions extended by capacity cuts in response to the

-5% CO2 emissions for domestic flights based economic crisis. on 2005 level

3.7 liters/passenger/100km 2012 3.8 liters/passenger/100km in 2009

-300,000 metric tons of CO2 per year by 2012 2009-20 189,000 metric tons of CO2 saved in 2009-10 (Fuel plan) -500,000 metric tons of CO2 per year by 2020

60% of ramp equipment fleet to be electrically 2020 41% of ramp equipment fleet electrified in 2009-10 powered by 2020 AIRKLM FRANCE Green electricity in the offices 2010 More than 85% of electricity used by KLM buildings in the NL is generated from renewable energy

Partnership with WWF-NL: CO2 neutral growth 2011 No CO2 growth in current year (2007-11) KLM partnership with WWF (NL) complemented by endorsement and support the road to sustainable aviation fuels: heading Sustainability Board SkyNRG

20% CO2 reduction per ton/kilometer in 2020 2020 ~ 60,000 metric tons of CO2 saved in 2009 vs. 2008 (Weight & Fuel (based on 2009 levels) program)

Support innovative research programs Permanent Technical University Delft; CleanEra project and Technical University Delft Design Challenge; co-creation of design for aircraft of the future Development of alternative fuels

Target partly achieved On target Target achieved or exceeded the speciallyestablishedAviation GlobalDealGroup (AGD). and Airlines) European of Association (the AEA Association), concrete sector,its proposalsfor developing IATAwithin TransportAir (International in role leading approach. a sector plays global France-KLM a Air of part as cut effectively be only can emissions its global, nature by is business airline the As in December2010. Mexico, Cancún, in held be to COP16, one, next the as such gas emissions. Achieving this goal will require similar summits, to agree on a global agreement for the reduction of greenhouse was goal main the which for issues change climate discuss to countries member Nations United 192 of gather to achievement was COP15 main The 2009. of end change the at Copenhagen climate in held Parties), the of Conference fight 15th (the COP15 beyond meetings to other for calls It challenge. agreement massive a is effectively global a Reaching Cancún to Copenhagen From emissions and1.6%oftotalgreenhouse gasemissions. POLITICAL AND REGULATORY CONTEXT Source : IPCC CO global of 2% around contributes sector transport air The FOOTPRINT CARBON TRANSPORT’S AIR BACKGROUND: Share of air transport industry in global man-made CO man-made global in industry transport air of Share emissions 3 2 1 Intergovernmental PanelonClimateChange Intergovernmental www.copenhagencommunique.com www.sealthedeal2009.org/the-climate-petition AND THE ENTIRE AVIATION SECTOR AVIATION ENTIRE THE AND FRANCE-KLM AIR OF COMMITMENT THE related emissions: aviation- cut to goals specific to committed globally and jointly have bodies control traffic air and airports airlines, manufacturers, move, unprecedented an In role significant the a on playing within IATA. impact also its is cut and to environment has years France-KLM many for Air worked in change. part its climate play to combating airlines member its all of behalf - om 2020,toensure thestabilizationandneutral - - on pledged IATA Conference, Copenhagen the At compared to2005levels. by 2050,50%r growth ofCO fr year; by 2020,toimpr UNDERSTANDING… 1 , Stern Review 2 emissions; eduction ofCO ove energyefficiencyby1.5%a ~2% 15-17% 3-4% Maritime Transport Air Transport Ground Transport 2 emissions

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Cpnae Communiqué’ ‘Copenhagen UN-led ‘Seal the deal’ campaign deal’ the the ‘Seal UN-led supported personally KLM and France Air of CEOs The involvement CEOs KLM and France Air • commitments national Consistent does notcreate unfaircompetition. role in the first phase of the EU system and remains attentive it directive’s the plans for emissions and activities. The Group has played a key for monitoring filing meant up this France-KLM, gearing Air For started application. Group the 2009, In industry from 2012. airline the to the apply will include directive modified gas to sector.The aviation 2008 in greenhouse revised was trading 2005, in up for set quotas, system Union European The Trading System Emission European the join to prepares France-KLM Air with 700othercompaniesinmore than60countries. together change, climate curb to agreement global ambitious • by made Air Franceshowsitiswellontracktomeetitsgoals. commitments of monitoring The hard. particularly address to their environmental impact, despite the crisis that has hit them continue Airlines commitments. their achieve to Commitments authority (DGAC), confirmed that all partners had worked hard the 2008 Summit. After two years of monitoring, the French January civil aviation in EnvironmentGrenelle the at sector aviation the for Agreement signed France Air Summit Environment the aviationmore sustainable. make to parties involved with plan action integral an as document serves The 2009. September 7 on Management, Water and Works Public Transport, of Minister Dutch the Eurlings, The Knowledge & Innovation Agenda was submitted to Minister

In France: two years on from the Grenelle Grenelle the from on years two France: In The Dutch Knowledge & Innovation Agenda Agenda Innovation & Knowledge Dutch The of globalman-madeCO Air transport emissions 3 ~2 a elrto pooig an promoting declaration a , 2 . They also both signed the signed both also They . % 2

21 COMBATING CLIMATE CHANGE THE GROUP’S CARBON FOOTPRINT

CO emissions and Air France-KLM traffic 2 Since 2000, CO2 emissions growth was successfully (passenger and cargo) decoupled from traffic growth. In 2009, the Group’s traffic dramatically decreased due to the unfavourable economic context. Nevertheless, thanks to an accurate adaptation of its 140% capacity, Air France-KLM succeeded in preserving a good fuel 130 % efficiency of its fleet.

120% Breakdown of Air France-KLM CO2 emissions 119% 110%

100 % 106% 77% Long-haul 1% Ground operations 90% (passenger 15% Medium-haul transportation: 58%, 7% Short-haul 80% cargo transportation: 19%) 2001 2002 2003 2004 2005 2006 2007 2008 2009

Traffic CO2

AIR FRANCE-KLM: CUTTING CO2 EMISSIONS FROM THE CORE OF ITS BUSINESS

Fleet modernization KLM has chosen an integrated approach to cut fuel costs

In 2009, Air France-KLM continued to modernize its fleet and CO2 emissions: the ‘Weight and Fuel plan’. This aims despite the economic crisis. to reinforce the constant fuel awareness and generated over Air France rolled out ten new medium-haul and six new long- 500 weight saving ideas. In 2009, it helped save more than haul aircraft, including two A380s. This aircraft delivers a 15% 20,000 metric tons of fuel compared to the previous year.

cut in CO2 emissions per seat compared with the Boeing 747-400, which it replaces. • Optimizing air space Sixteen aircraft were added to the KLM fleet, as fifteen older Air France and KLM are involved in two major programs: generation planes were retired. The ten new Embraer 190s Collaborative Decision Making (CDM) to improve local are 9% more fuel efficient than the F100, which they replace. handling at their hubs and Single European Sky Air Traffic 22 Thanks to its continued efforts, the specific fuel consumption Management Research (SESAR). of the group decreased by 13% since 2000. Air France is also involved in the Atlantic Initiative to Reduce Emissions (AIRE), which studies the roll out of ‘green’ routes Fuel efficiency measures to and from the USA (see Focus on…). Meanwhile, reducing

Air France is working hard to save 300,000 metric tons of taxiing and waiting times at Roissy-CDG should cut CO2

CO2 per year by 2012 and 500,000 tons per year by 2020, as emissions by 19,000 metric tons by 2012. set out in its Fuel Plan of 2008. In 2009-10, around 60,000 metric tons of fuel were saved, almost 1% of total Air France • Optimizing flight procedures

consumption. The Quality Innovation Program (based on the Pilots systematically apply procedures to help them cut CO2 maintenance staff contributions), generated 27 ideas that emissions, without compromising flight safety. In practice, saved 1,551 metric tons of fuel. these are based on ongoing research into flight level and optimum speeds, negotiating direct paths with air traffic control, the adoption of continuous descent approach (CDA) procedures, or taxiing with one engine switched off.

Cutting weight, improving performance

FOCUS ON… The lighter the aircraft, the less fuel it burns and less CO2 it emits. Trimming just 1 kg from each plane in the Air France fleet saves over 80 metric tons of CO per year. The new AIR FRANCE OPERATES FIRST ‘GREEN’ 2 GATE TO GATE FLIGHT FROM EUROPE TO short-haul seat, for instance, will save 1,700 tons of fuel THE USA per year from 2010: the equivalent of 650 flights from Paris- Marseille. The first gate-to-gate ‘green’ transatlantic flight took off on 6 April 2010. Heading from Roissy-CDG to Miami Cutting the weight of equipment on KLM aircraft (wine bottles, in a Boeing 747-400ER, Air France used optimized disposable cutlery, etc.) led to an estimated saving of almost procedures at every stage of the flight, coordinated 2,000 metric tons of CO2 in 2009. by numerous experts1, to save 6 metric tons of To automatically generate load plans for its wide body

CO2. The flight was part of AIRE (Atlantic Initiative to freighters, KLM has introduced LoadCode software, based Reduce Emissions), a program run by the European on an algorithm that allows to position loads for an optimal Commission and Federal Aviation Authority, and center of gravity. This results in improved fuel efficiency and managed by SESAR-JU on the European side. Once these procedures are ready for all Air France long-haul thus less emission.

flights to North and South America, CO2 emissions will be cut by 135,000 metric tons per year.

1 Paris Airport (ADP), French Civil Aviation Authority (DGAC), NATS, NAV Portugal, American Federal Aviation Administration (FAA), SESAR Joint Undertaking and Air France (Source: IATA) (Source: CO for factors Key 1 importance ofdevelopingsustainablebiofuels. awareness the on external and internal raise to as well as safe, and feasible technically is it that demonstrate to was aim The by powered flight was filled with observer 50% fossil kerosene and 50% ever camelina kerosene. first sustainable biofuels on 23 November 2009. One of the engines the operated KLM KLM by flight biofuel-powered The • with and sector taking theleadinfollowingthree initiatives. the by commitment within their show KLM and France Air governments, commitment raising Beyond aviation fuelsmarket. sustainable viable commercially a of development the enables that framework regulatory stimulating a common for governments push and clear a to us helping actors, aviation developing and airlines other with approach are KLM and France Air Fuels andEnergyforAviation). Alternative for Way (Sustainable SWAFEA and (SAFUg) group Users Fuel Aviation Sustainable the of membership active very this theme via bodies such as IATA and AEA, but also the through a on industry airline entire the mobilize to needs France-KLM Air pushed development have sustainable and criteria. economic KLM technical, of and set a France with line in aviation, for fuels sustainable Air of commercialization 2008, Since strategy Biofuels CO the achieve to route promising most the are biofuels Sustainable FUELS ALTERNATIVE SUSTAINABLE Scheme costs. Therefore the search for an alternative to to alternative an KLM. and France Air for for priority strategic a is fuel search fossil the Therefore costs. Scheme Trading Emission from exempt staying and supply of security Biofuels powered aircraft

Carbon NeutralTimeline ASTM International isAmericanSocietyforTestingASTM International andMaterials CO2 Emissions 2 reduction goals of Air France-KLM while providing providing while France-KLM Air of goals reduction Baseline 2 emissions reduction emissions Economic Measures ATM Investments/Improvements Forecasted EmissionsGrowth without ReductionMeasures Technology Development Ongoing FleetRenewal/ Low Carbon 2050 Fuels

ky hs ws asd n 09 ASTM 2009: in passed was phase key A cleared obstacle an Technicalcertification: of BtLindustrialization. charge in Company future the of part be may and year 2014, from per BtL of tons metric 2000 receive to set is France Air France. in productionchain BtL full a of feasibility technical the Bure- the at demonstrate to seeks This 2009. December in Saudronfacility project demonstration sustainable (BtL) a Liquid to of Biomass One Phase launched France, Air including partners, its and Commission) Energy (Atomic CEA France’s aircraft France Air powers biofuel waste Forestry • including Board Sustainability KLM’s partnerWWF-NetherlandsamongseveralNGOs. a by advised jetfuel. be affordable will and SkyNRG sustainable truly with aviation supply Group Sea North to mission the with with SkyNRG, create to Associates partnership Spring and a sealed KLM 2009, In consortium SkyNRG • and criteria. the The recognized. aim is to prevent the rise of a patchwork of separate standards of internationally be membership to standard a for their sustainability striving are through (RSB), Biofuels Sustainable KLM, on Roundtable and France Air biofuels for criteria development sustainable Setting fossil kerosene. be to set are oils certified by the end of hydrotreated 2010, at first in a 50/50 combination with on based fuels input. as Meanwhile, used resource the Fischer- of the regardless by process, Tropsch derived fuel to applies approval This JetA1. of Synthetic traditional of 50% use with mixed when (SPK) the Kerosene Paraffinic approved kerosene, body certification Artist impression oftheplant 3.8 Group specificfuelconsumption 95 and emissions

liters/passenger/100km gCO 2 /passenger/km 1 , an international international an ,

23 COMBATING CLIMATE CHANGE CLIMATE AND TECHNOLOGICAL RESEARCH

Air France supports research on aviation’s climate The impact of contrails and cirrus on the radiation impact balance

Air France supports further research into aviation’s effects Aviation not only generates CO2, but also water vapor and on the climate. The airline is part of the Environmental NOX, whose high-altitude effects have a complex impact on Network of CORAC (the French Strategic Advisory Board our climate. Recent results from the European QUANTIFY and for CivilAviation Research) and has joined projects including ATTICA programs reflect major uncertainties. The life spans MOZAIC-IAGOS. For the latter, since 1994, it has carried of these impacts range from a few hours for contrails to 100

equipment on its planes to measure H20, CO, 03, droplets years for CO2, rendering complex any comparison. There is and cloud-borne ice crystals. clearly a lack of knowledge of these effects, admitted by the scientific community. It therefore does not recommend using

CO2 emissions as reference values for these other effects. FOCUS ON… KLM and Technical University discuss next WWF-NL: TWO YEARS OF PARTNERSHIP generation aircraft KLM held a ’Design Challenge’ in partnership with the KLM and the World Wide Fund for Nature – The Netherlands have Technical University of Delft. The competition was based on worked together since 2007 on combating climate change and web 2.0 interactivity; a project with two teams of 10 students

nature protection. Part of the agreement on CO2-reduction is the working on designs for the sustainable aircraft of the future. endorsement and support of WWF-NL for KLM’s strategy in the field The students were guided interactively by experts from KLM of sustainable biofuels, marked by the creation of SkyNRG. Johan and tutors at TU Delft, i.e. by a collaborative working platform, van de Gronden, Director of WWF-NL says: “The establishment of a blog where students update their design progress, and a SkyNRG is a groundbreaking initiative. KLM’s demonstration flight serves as a concrete step towards achieving a more sustainable forum that enabled all KLM staff to share and refine ideas. future. We still have a long way to go in relation to biofuels for aviation but by investing in this manner, KLM is once again taking the lead.”

INITIATIVES TO COMBAT DEFORESTATIONS AND PROTECT GLOBAL BIODIVERSITY

Deforestation severely affects biodiversity and the carbon Working with the country’s authorities, 66 local people storage. Deforestation is responsible for around 20% of global oversee the project to reforest, restore and protect over

CO2 emissions, more than all forms of transport combined. 500,000 hectares, while helping local communities to efficiently and sustainably manage their forests, in respect to 24 Madagascar their food need. Air France funds a massive, €5 million program to reverse deforestation in Madagascar. This program is led by the Destination Nature and Biodiversity Taskforce GoodPlanet Foundation and locally operated by the WWF- 2010 is the International Year of Biodiversity. KLM has set Madagascar. Madagascar is an island with prodigious up a program, Destination Nature, which contributes to the biodiversity and half its forest cover has disappeared over the sustainable development of nature and biodiversity at its past 50 years as a result of slash-and-burn agriculture, the destinations. creation of pasture land, and fuel-wood gathering. At Board level, KLM participates in the national Taskforce on Biodiversity and Natural Resources. The Taskforce is drafting policy recommendations for biodiversity conservation and restoration. The integration of economy and ecology (along FOCUS ON… the lines of the TEEB-concept, The Economics of Ecosystems and Biodiversity) is at the core of the recommendations, to be SCIENTIFIC BENEFITS published later in 2010. OF THE MADAGASCAR PROGRAM

The Madagascar program involves 60-70 million metric tons of captured carbon dioxide. It also improves EMISSIONS CALCULATION AND scientific knowledge on measuring the carbon dioxide stored in forests. Working with European and COMPENSATION US research bodies, GoodPlanet is responsible for this aspect, which supplements WWF’s fieldwork. Air France and KLM offer their passengers and cargo This pilot project was showcased to the scientific customers a CO emissions calculator available on both their community at the Copenhagen Conference in 2 December 2009. websites, and the option to compensate via Gold Standard projects (see page 36).

Primary forest in Madagascar DIALOGUE WITH OUR STAKEHOLDERS

EUROPEAN, - Climate change FRENCH AND DUTCH - CO reduction AUTHORITIES 2 ENVIRONMENTAL NGOS - Helping to draft proposals at AEA - Climate change - Air France funds program to combat and IATA in particular for a global - Sustainable biofuels deforestation run by GoodPlanet and approach to climate change for aviation WWF in Madagascar - February 2010: Air France submits - Fighting against - WWF-NL endorsed biofuels demonstration its second annual monitoring report for deforestation flight KLM and participates in Sustainability commitments made at the Grenelle - Biodiversity Board of biofuels joint venture SkyNRG Environment conference - Air France and KLM support the enlargement - September 2009: Implementation of Knowledge of SAFUG (Sustainable Aviation Fuel User and Innovation Agenda that describes actions Group) to be taken for a sustainable aviation industry - Support the Roundtable of Sustainable - Presentations at national and international Biofuels in setting acceptable and workable sustainability conferences sustainability criteria for biofuel - KLM receives subsidy for « Well to - KLM participates in IUCN (International Wing » biofuels programme from Dutch Union for Conservation of Nature) government - KLM participates in Dutch Taskforce Biodiversity

CUSTOMERS SCIENTIFIC COMMUNITY AND AIR TRANSPORT INDUSTRY - Publishing survey results and regular information on - Helping to prepare the COP15 work carried out by the Group - Air France partner of SWAFEA on climate change (onboard - Climate change

(European Commission study on COMBATING CLIMATE CHANGE - Climate change magazine and website) - Single European Sky - CO reduction alternative biofuels) and FCA (Future 2 - Showing films onboard about - New aircraft and fuels alternative fuels) at the DGAC (French - Carbon offsetting sustainable development projects - Operational procedures Department of Civil Aviation) - Sending out newsletters and leaflets - Air France joins French Strategic Advisory explaining COP15 issues 25 Board for Civil Aviation Research - Air France KLM Cargo offers - Research by TNO for KLM Inflight to CO mpensation to clients 2 determine environmental impact of less - KLM won Seafood Champion weight versus biodegradable products award 2010 for serving - Involvement of Air France & KLM in sustainable fish on board SESAR JU - Air France operates the first green gate to gate flight from Europe to US

Two questions to

How do you assess the performance of Air France-KLM on combating climate change? The low carbon fuel goals are aggressive and, if achieved, would be a revolutionary change for aviation. Destination Nature and the program to combat deforestation in Madagascar are key contributors to combating climate change, and mitigate concerns about where alternative fuels might be coming from. What do you expect from Air France-KLM? AIRE stood out. The concept is a clever one, which can be used as a model for the industry. It shows that Deron Lovaas flying green is not a hardship and that you can dramatically cut emissions while still providing thesame Federal Transportation services. Policy Director, NRDC1

How do you assess the performance of Air France-KLM on biofuels? AFKLM’s leadership within the RSB and SAFUG is commendable and critical for developing a commercially viable set of sustainability requirements for producing biofuels. They send an important signal to the marketplace given their position in the supply chain. What do you expect from Air France-KLM? I’d like to see AFKL continue to participate actively in the RSB. It would also be fruitful to form direct relationships with providers of biofuel and biomass feed projects. It’s about sending a strong signal to the Debbie Hammel Senior Resource market: that they can form partnerships and demonstrate that the feedstocks can be grown, processed and Specialist, NRDC1 used within their supply chain. Keep up the good work! 1 NRDC: Natural Resources Defense Council MINIMIZING OUR ENVIRONMENTAL IMPACTS

Beyond their CO2 emissions, the main environmental impacts of airlines are noise, energy and water consumption, local emissions and waste production. Thanks to pioneering solutions, Air France and KLM are making progress in reducing their impact above and beyond regulatory compliance. In 2009-10, despite the economic crisis, the Group continues to modernize its fleet with a view to cutting aircraft noise: its major impact on local communities close to airports. It limits its energy consumption on the ground by various means, from using electric vehicles to constructing new buildings in line with the highest environmental standards. It implements eco-design principles from the birth of projects to the optimization of planes’ end of life cycle. It also encourages staff and suppliers to roll out their own pioneering environmental projects.

OUR JOINT COMMITMENTS

Air France-KLM is rolling out new and innovative practices, - invest in eco-design by improving the environmental setting new standards while meeting commitments from its performance of products linked to its services, Environmental Management System. To this end, the Group complemented by in-depth analysis of sites and processes; continues to: - involve employees in environmentally-friendly actions, promoting plans while supporting innovations to improve - renew its fleet with the best available technologies, while processes; implementing the most efficient procedures to mitigate noise - engage suppliers and service providers to launch projects to and emissions from its flight operations; improve their environmental performance.

OUR MANAGEMENT OBJECTIVES

26 OBJECTIVES SCHEDULE ACHIEVEMENTS 2009-10 STATUS AIR FRANCE Design a new application to monitor regulatory 2008-10 Call for tenders issued. Submissions are currently being examined. compliance

Design a new reporting application for aircraft 2008-10 Application development finalized. greenhouse gas emissions based on operating Usage of the application to calculate 2009 emissions. data

Contribute to the reduction of polluting 2012 Since the lauch of Air France’s ‘Boussole’ corporate travel plan, emissions caused by commuting in the Paris private car use has fallen 7 points. region with a 10% shift in transport methods

Increase while keeping noise emissions activity 2012 21.9% reduction in noise energy compared to 2005 below 2005 levels (10 main French airports) AIRKLM FRANCE Introduction of 25 sustainable products 2009-10 Some examples of sustainable catering products: onboard - Organic wine in Europe Select class - Fish certified by the Marine Stewardship Council (MSC) in World Business Class on departures from Amsterdam - MSC certified lunch on Intercontinental Flights on departures from Amsterdam - Sustainably farmed milk

2% annual improvement in energy efficiency 2020 - Energy Efficiency Plan as part of the (voluntary) Long-Term Agreement in energy efficiency till 2020. Safe and conditional measures yielded a 9.2% energy efficiency improvement, while aiming for a 2% annual improvement on average - Introduction of a Heat & Cold Storage System at KLM Headquarters

Decrease noise hindrance at Schiphol Ongoing After a two year trial, an innovative fixed radius turn has been successfully implemented on a Standard Instrument Departure

Target partly achieved On target Target achieved or exceeded 50% 100% specifically to reduce noise. Increase of the use ofthis now is the carriers being investigated. other of and types its B737’s aircraft other on Increase by technique noise. turn reduce to radius specifically fixed innovative to the world in an airline implement first the is KLM trial, year two a After at (see CDA proposal the Report Understanding…). Dermagne implements a with it line in when Roissy-CDG DGAC the with partner again will France Air 2010, In noisiest flight. the the Descent of cuts phases approach CDA Continuous The airport. the Orly at out (CDA) Approach rolling for (DGAC) Authority In 2008, Air France was the partner of the French Civil Aviation procedures abatement noise Developing those twoplanes. amount of movements, thus noise that would be generated by one B777’sthe halves a A380 an operating Therefore,A340’s as one. an plus same the is capacity seating A380’s to The set is it which B747-400, a replace. of that half an almost by is generated A380 noise the take-off, On 2020. for ACARE program) the (under Commission European and ICAO the by set targets mitigation noise with complies already technology.plane The mitigation noise state-of-the-art theA380, features which tooperate airline European first the is France Air new long-haulaircraft. two and medium-haul new twelve service into brought A380s; KLM two including planes long-haul medium-haul new six new and ten (A320s) purchasing by 2009 in commitment this met France Air downturn, economic severe the Despite fleet renewal… to reduce noiseandlimitemissions”. Group pledged “to introduce the best available technologies in In its Corporate Social Responsibility Statement, July 2006, the source at noise Reducing indicator energy noise total France-KLM Air and, where necessary, restricting operations. land-use regulating procedures, abatement source, at noise cutting recommends This (ICAO). Organization Aviation Civil International the of Approach Balanced the follow KLM and France Air pollution, noise minimize to efforts their of part As HINDRANCE NOISE CONTROLLING Traffic 100% 2000 100% 118% 2005 Noise Energy 79% 120% 2006 75% 122% 2007 75% 124% 2008 76% 116% 2009 71% to soundproofing housesoflocal residents. In 2009, Air France and KLM contributed more than €40 million and Orly. as project groups for sustainable development of Roissy Environmental joined has Advisory Committees (CCE) France at all major French airports, as Air well ICAO’s the Approach. to parties Balanced all been with along policy have pollution noise a route-optimizations six Air France-KLM actively years contributes to local dialogues, shaping past the - with cooperation and dialogue in - investing been has - reported amongothersthefollowingprogress: government’s which Airport, Schiphol Dutch of development the on body the advisory Table’, ‘Alders also are the sector in airline represented the of professionals and Inhabitants environment the and relations communities Local Air France&KLMplanesatRoissy-CDG,terminal2F implemented, cuttingnoisepollutionfor18,000people. In scheduled, KLMplayingamajorrole. November through theSchipholRegionalReviewBoard (CROS). mainly years, many for area airport Schiphol the of residents KLM 00 plt o fl dy D apoce is approaches CDA day full for pilot a 2010 h ipeetto o te emge proposals. Dermagne organize the to of asked implementation was regionthe of Prefect Paris the Greater by chairedthe commission a 2009, In einl set, rm eeoig ulc transport public developing to residents fromlocal safeguarding from aspects, themes, egional - - abatement noise from aspects, environmental - led to35proposals whichcover: future Roissy-CDG’s for approach fundamental This to is and theprotection oflocalresidents”. aim declared airport the The of development harmonious the “combine airport”. Roissy-CDG some of provide development to sustainable “the President on recommendations French the by was asked Council, Environmental and Social Economic, France’s of President Dermagne, Jacques 2008, In srnl ipid tef y okn fr the for working by itself implied strongly eight establishedcommissions. Air OF ROISSY-CDG AIRPORT” ROISSY-CDG OF DEVELOPMENT SUSTAINABLE THE “FOR REPORT’: ‘DERMAGNE THE ewrs o rmtn rgoa gvrac and governance planning bodies. regional promoting to networks access tojobsandhousing; areas; natural to developing assistance soundproofing to r social all

France UNDERSTANDING… ‑ CDG 27 MINIMIZING OUR ENVIRONMENTAL IMPACTS AIR FRANCE-KLM ACTIONS TO MINIMIZE ENVIRONMENTAL IMPACTS

Local emissions - Scrap Program (see Focus on... page 30) - A reduction of 22.6% in Volatile Organic Compounds (VOC) emissions at Air France Industries, after replacing the paint thinner and installing semi-automatic washing equipment - As part of scheduled replacement of KLM’s ground support equipment, 40 new Ground Power Units (GPUs) and 6 new transporters have been equipped with soot filters; reducing 90% of soot emissions per vehicle. - Being a major user of the renewed B-pier at Schipol, KLM Painting operation uses fixed electrical power and electrical air-conditioning units during ground-handling. This measure led to less APU use, resulting in a decrease of 900 tons of fuel consumption and emissions.

28

Energy consumption • Certifying new buildings Sustainable vehicles • Upgrading existing buildings - The headquarters of KLM’s and equipment - A new air conditioning system subsidiaries, Martinair and - Continuation of testing phase with heat and cold storage has transavia.com will be the first of AirPod vehicles, powered by saved 90% of gas and 30% of Dutch office building to receive compressed air, at Roissy and electricity at KLM headquarters. the Leadership in Energy and Amsterdam airports. - Adjusting the voltage of KLM Environmental Design (LEED) - Using 41% of electric ramp hangars from 230 to 207 volts platinum certificate. Among other equipment at Roissy-CDG has led to energy savings. things solar panels on the roof (target 60% by 2020) will provide 30% of the energy - Air France has joined a scheme, needed for heating. piloted by ‘La Poste’, to define - Pursuing High Environmental the specifications of a licensed Quality (HQE) standards at electric vehicle, in partnership Air France, specifically at with other French companies. - the Equinoxe building, the first certified logistics building in Europe - the loadable cargo equipment building in Europe - the custom-made A380 hangar

A380 hangar at Roissy-CDG Compressed air vehicle - - eater useoftheEcoshine - - consumption Water cargo palettes. is collectedtoclean90%ofthe building where enoughrainwater Innovation atAirFrance‘sCargo maintenance timeontheground. water usageandreducing cleaning theiraircraft; eliminating researching thepossibilitiesofdry Engineering &Maintenanceare Air FranceIndustriesandKLM diluted withverylittlewater). (cleaning aircraft withaproduct process atAirFranceIndustries Gr consumption. meters andmonitoringof Further installationsofwater - - ocessing 28400tonsofServair - Waste for 2010. implementation pilotisscheduled site atKLMCateringServices.An producing energyfrom wasteon Feasibility studyconcludedfor 30% since2007. cutting paperconsumptionby of itsprintersby70%inFrance, project atAirFrance:reduction Implementation ofthe‘Optiprint’ converted intoenergy). per year(20%recycled, 80% (Air France’s subsidiary)waste Pr Aircraft cleaning A380 cateringoperation cutting over35%ofde-icingfluidused. de-icing vehicles,KLMsucceededin Almost doublingthenumberofnew Pollution Ground and Water New de-icingvehicles 29 MINIMIZING OUR ENVIRONMENTAL IMPACTS OPTIMIZING THE LIFE CYCLES OF AIRCRAFT

As planes are in service for several decades, it is important under the new industrial process: no run-off, separation of to consider their entire life cycle and to maintain a permanent waste streams, and appropriate channeling: destruction, dialogue with suppliers. Broadly speaking, regular discussions recycling and re-processing. In addition, 80% of the weight of with manufacturers of planes and engines allow Air France and the dismantled aircraft has been recovered. KLM to reduce the environmental impact of their equipment, from the design stage of new aircraft to ensuring improvements For KLM, dismantling of the Fokker 100 has enabled parts to to equipment in service. be re-used as spares. Also, environmentally friendly materials are used for packaging aircraft parts. The rest of the aircraft In 2009, Air France launched a dismantling end-of-life program was shredded into small pieces, with the metal parts melted for its aircraft. As part of this, five A320-100s have now been and reused. dismantled. Air France has complied with all commitments

FOCUS ON…

FOCUS ON… SCRAP MATERIAL RECLAMATION PROGRAM

GIVING A SECOND LIFE TO ENGINE In early 2009, KLM Engineering & Maintenance, GE PARTS Aviation (GE) and SOS Metals Inc., began a joint Scrap program. This aims to recover used material, Air France Industries has launched Turbine Support thus reducing the need for new raw materials when International (TSI), a subsidiary set up in a joint manufacturing aircraft engine components. This year venture with Aviation Repair Technologies Services. KLM managed to recover, melt down and re-use TSI is located in Arkansas and specializes in the 100 metric tons of selected alloys used in aircraft dismantling (or ‘tear-down’) of CFM56-5 and CF6‑50 components, such as engines. This became a and CF6-80 aircraft engines. The parts recovered Group program when Air France joined in 2010. The are inspected and certified for return to service, thus SkyTeam alliance of international airlines, of which guaranteeing the highest safety levels. the Group is a member, has also shown interest in the scheme. This Group program aims, next to the above mentioned environmental benefit, to convert 30 costs into revenues.

Dismantling aircraft engines Metal scrap

SUSTAINABLE INFLIGHT PRODUCT MANAGEMENT: WASH OR THROW AWAY?

Air France-KLM’s environmental decisions are based on The result of the LCA is irrefutable: CO2 emissions are far impact studies called Life-Cycle Analysis (LCA1). LCAs take lower for transporting an item in lightweight plastic than for a into account that a decrease in weight of inflight products washable, re-usable one, which is heavier. This holds true even

results in less fuel burned and so less CO2 emissions. This if the plastic ends up being incinerated (due to the draconian extra element shows that choices made on the ground, are not health regulations that state that any object that has come always fitting those at 30,000 feet. into contact with animal-related non-EU food products must be incinerated). Also, as plastic cutlery is lighter than stainless steel and plastic (PET) wine bottles are lighter than glass, Air France-KLM has therefore started to change these products.

1 An LCA is the investigation and evaluation of the environmental impacts of a given product or service caused by its entire existence from production to disposal. nvironmental nvironmental - future aircraft future of priorities E Two questions to Twoquestions DIALOGUE WITH OUR STAKEHOLDERS OUR WITH DIALOGUE Airport NoiseControl) (French Authorityfor President ofACNUSA Forges de Lemoyne Patricia ASSOCIATIONS ASSOCIATIONS RESIDENTS AND COMMUNITIES LOCAL echnological echnological - - - - - Roissy-CDG from theDermagnereport at projects surrounding airports development Agreement’ regulating capacity 10 majorFrench airports and residents committeesat Implementing r Continuation ofnoiseinsulation KLM isanactivepartytothe‘Alders Air Francejoinsenvir performance performance T INDUSTRY INDUSTRY AERONAUTICAL 80% lessNOx quieter aircraft, emitting objectives: 50%cleanerand Research inEurope) Council forAeronautics in linewithACARE(Advisory quality andnoisemitigation motorists toimprove air manufacturers and Dialogue with ecommendations onment - - - EXPERTS EXPERTS RESEARCHERS, UNIVERSITIES, catering products Life cycleanalysisfor cleaning aircraft Studying optionsfordry KLM CateringServiceswaste energy production from Feasibility studyforonsite quarter land late, eating into the nocturnal time slot between midnight and 5am. Although some of the of some Although causes may be out of the 5am. airline’sand hands, we encourage it to lead midnight in-depth studies to find ways to improve.between slot time nocturnal a the around into eating andmidnight, late, land quarter 11pm between scheduled flights authority’s long-haul the dozen respect gradually its to of to pledged But has is recommendation. France-KLM goals Air and main night; at the aircraft of noisiest the one with Roissy, away around do communities local the for tranquility ensure To What doyouexpectfromtheGroup? local with relations communities. its develop further to France-KLM Air encourage We to understanding. key is authority, mutual the ensure by enabled communities, local with dialogue why is That airlines. all to applies it five times less noise. Unfortunately these efforts are barely noticeable in the noise index at Roissy because or four around produce latter the as move, positive very a is B777s with B747s generation last replacing example: For renewal. fleet major a to thanks is This traffic. in rise strong a despite 2001 since dropped in field a is This goals. reduction which noise Air France-KLM has made a lot of progress: with the acoustic signature of its operations concerned has consistently especially are we authority, control noise a As How doyouassesstheperformanceofAirFrance-KLMincutting itsenvironmentalimpacts? - Air quality Air - Noise - nvironmental nvironmental - management management E aising aising - educing - impact environmental awareness R R

EMPLOYEES AUTHORITIES CERTIFICATION AND NATIONAL eam Roundtableon - - - - - by KLM Sustainable Flyingorganised electronic newsletters,etc. Suggestion) Program), 210QIS(Quality Initiative at AF:5800PIQ(InnovationQuality ’Boussole’ company products (healthandsafety at work) and mutagenicchemical SkyT Information forum,inter Participatory innovationpr Relocation planforAirFrance’ Inventory ofcar - - - for sustainablebuildings Environmental Design)certificates and LEED(LeadershipinEnergy HQE (HighQualityofEnvir certification forAirFranceandKLM Monitoring audits-ISO14001 services aviation, airportsandairnavigation national departmentsforcivil Dialogue andjointpr ommitment to to ommitment - Recycling - Eco-design - ompliance -

supply chain» supply «responsible a C REACH with C cinogenic - Future aircraft aircraft Future - waste Onboard - ojects with nal press,

ograms onment) s SUPPLIERS - - - and SOSMetalsInc cooperation withGeneralElectric clauses inprocurement Charter andenvironmental monitoring Authorization forCHemicals) (Registration Evaluationand Launching theScrapPr Including mor Applying theSustainability CUSTOMERS - - oducing 25sustainable - University Delft(CleanEra) next genaircraft ofTechnical interior, supportingdesign Customer surveyonair onboard AirFranceplanes Optimizing drinkspackaging with WWF-NL aircraft incloseconsultation products onboard KLM Intr e suppliersinREACH ogram in craft

31 MINIMIZING OUR ENVIRONMENTAL IMPACTS BUILDING A SUSTAINABLE RELATIONSHIP WITH OUR CUSTOMERS

To maintain and enhance the loyalty of its customers in an ever more competitive environment, Air France‑KLM needs to show outstanding responsibility in its customer relations. Its priorities include: guaranteeing safe journeys for the 71.4 million passengers carried on the Group’s extensive network, while providing the expected service levels at all stages of the journey. Air France-KLM has made a public commitment to offer all its customers a high quality service. By offering a wide range of personalized solutions, from the simplest to the most exclusive, it provides passengers with a tailored service, regardless their budget, taste, culture or language. Providing sustainable services, while involving its customers, demonstrates the responsible conduct of Air France-KLM in carrying out its business.

OUR JOINT COMMITMENTS

Air France and KLM are committed to pursue actively a solid - respecting customers’ privacy and lasting relationship with customers, suppliers and partners, - listening to our customers as part of their corporate social responsibility. This means: - offering innovative services, in line with our commitments as - ensuring safe and secure mode of transportation a responsible company - providing reliable, relevant and transparent information

32 OUR MANAGEMENT OBJECTIVES

OBJECTIVES SCHEDULE ACHIEVEMENTS 2009-10 STATUS

Improve service quality Ongoing - Provide transparent information about our operational performance - Offer a proactive service for handling incidents - Assure regular service quality according to 7 standards; nearly 5,000 employees trained in 2009 in the Customer Preference Program - Punctuality: Air France 3rd European company in departure punctuality, KLM number one in arrival punctuality among comparable airlines

Innovate while integrating Ongoing - Extended range of sustainable catering products by 14 (KLM) CSR in our product range - Integrating eco-design principles within our range of products and services, with all new suppliers

- Launching the CO2MPENSATION service for Air France Cargo-KLM Cargo - Safeguarding the privacy of our customers - Providing tailored service for certain destinations taking into account the diversity of our customers - Lower the environmental impact of industrial activities with “green maintenance”

Engage our customers Ongoing - KLM European Tour of Inspiration to the Air France and KLM main markets including CSR in Air France-KLM CSR proposition policy - Annual CSR questionnaire among 3,800 Flying Blue members - Raising CSR awareness with onboard magazines, online and documentaries - Offering miles donations for NGOs

Target partly achieved On target Target achieved or exceeded performance appraisals. quality. service helps Moreover, excellent France-KLM’sall course services, without exception, are subject Air to annual training on build First’ to ‘Customer staff the them, meet to and contribution, everyone’s on service. depend requirements of These quality their improve continuously both to by companies made pledges the highlights it counters, sales and charter Service commitments the 7 made public by Air of France and KLM. Displayed the at coreticket offices charter, the form internal now simple Standards a than more Much Standards Service 7 the to Committed airline forarrivalpunctuality. first the is KLM and punctuality departure for airline third the is France Air hubs): international of correctiveout (operating airlines AEA to major among podium the KLM on being of objective subject their achieved and France Air annual 2009-10, are in in punctuality For and measures. included standards, are appraisals, These service performance month. every including assessed is performance, Operational PERFORMANCE OPERATIONAL OF QUALITY THE MEASURING of privacy the and doing operation secure between a business, balance commercial anoptimal for solutions finding for contributor major a is KLM department, security its Through the effectiveness ofsecuritychecks. improve to technology imaging advanced including including equipment, new of trials in involved actively is France-KLM Air terrorism, of threat the to linked developments recent Noting protect itscustomers,staff andassets. to procedures security its strengthened has Group the acts, fromthreatsaviation terroristcriminal potential againstor With operations all into security Building crews (pilotsandcabincrews). of safety risks from senior management to ground staff to flight analysis and monitoring ongoing guarantee companies Both certification IOSA Association). obtained Transport Air International have the from audits safety (operational both and and commitment regulations, professionalism, the on currentbeyond Europeango staff.airlines all Both of attention all above but procedures,and equipment on only not depends safety Flight businesses Group three all in safety Airline required toensure suchatragedyneverhappensagain. measures the place in put and identify to tragedy,and this to into It mourning. is vital to establish the circumstances that led June2009, on 1 families their sent and people 228 of death the caused deJaneiro-Paris which Rio AF447 flight of loss tragic the mentioning without safety flight of speak Wecannot COMPANIES BOTH FOR PRIORITIES SECURITY: AND SAFETY r cekd n sae ec mnh y l gop senior its ownactionplanstoimprove customersatisfaction. group all by out sets department each audit, the month of result a As managers. each shared and checked are topics with results The destination. satisfaction, final to reservation initial from customer ranging monitor to routes all on 2009 in out werecarried onboardsurveys 500,000 Morethan satisfaction customer Monitoring - - - the mainaspectsoftransportcontract: reflecting been launched, have targets performance Specific of itspunctualityeachmonth. Air France is the only European company to publish the results performance operational about Transparency to (PVGM), create aseamlesspassengerflowby2015. Management Border Innovation Program in, the involved is is department security KLM example notable A airline of field the security. in process making decision well considered a to lead requests must This practices. receives and knowledge often share to department security governmental KLM international bodies, by respected Well passengers. delivering luggageatthedestination. ensuring smoothconnections; ensuring planesleaveandarriveontime; make continuousprogress inthiscrucialarea. on hopes its pinning transparency and intends to is demonstrate its desire to France Air Company, the outside from experts independent to up opening By valid forensuringoptimumsafetylevelsinlate2010. deems it recommendations the submit will panel The of allprocesses andactivities involvedinflightsafety. review in-depth an out carry to experts independent ‘Trajectoire’, dubbed and, at the initiative same time, to ask an team international of in-house to an decided launch France Air further, even things protective take To take and investigation, measures tobolsteroperationalsafetylevels. the Authorities leading the with cooperate fully disaster, the by stricken families the for support full provide to which were obligations, and future immediate its fulfill to of flight AF447 on 1 June 2009, Air France geared up In the immediate aftermath of the tragic disappearance INDEPENDENT EXPERTS EXPERTS INDEPENDENT TO ENTRUSTED TASK A SAFETY: FLIGHT FOCUS ON… FOCUS

33 BUILDING A SUSTAINABLE RELATIONSHIP WITH OUR CUSTOMERS PROVIDING A SERVICE THAT MEETS CUSTOMERS’ EXPECTATIONS

Air France-KLM has set up a systematic process for customer information and feedback to best develop a set of products and services that meets their needs and expectations.

4

PERSONALIZE Thanks to inter-cultural training, 3 staff is better able to serve passengers from different cultural backgrounds. Both Air CLARIFY France and KLM have tailored Air France-KLM provide their services to meet the needs of customers with transparency among others American, 2 about fares and conditions at Brazilian, Chinese, Indian and various stages in the booking Italian passengers. process. Further service SIMPLIFY improvements have been made Air France-KLM offers tailored Since 28 March 2010, by adding more information services for passengers with Air France offers two very about fare choices. reduced mobility: ‘Saphir’ at 1 different products: Moreover, the best fare Air France and ‘KLM Cares’ ‘Premium’ and ‘Voyageur’, available is automatically shown provide personalized solutions as well as innovative options, at the top of search results at every step of the journey, DIALOGUE such as the premium offer on on the Air France and KLM from the point of reservation to Air France and KLM hold airfrance.com. websites. Both companies the option of taking your own regular customer panels and websites offer simplified search wheelchair aboard. 34 questionnaires, such as In Touch The new medium-haul services and KLM website shows the top (online) and SCORE (onboard). from Air France were shaped frequently asked questions of its Since 1 February 2010, the two The Flying Blue survey on CSR by feedback from customers. customers. companies harmonized their is held annually among They wanted the main service services for obese customers a representative target group features of Air France at more traveling in economy class, of 3,800 frequent flyers. competitive rates, to build on with the option to buy a second our strengths to better meet seat at a 25% reduction. The KLM proactively reaches out to customers’ needs, and to clearly second seat is fully refundable, its customers via social media, differentiate the various classes often possible when the cabin including Twitter and Facebook. of travel. is not full. The Group’s social networking site Bluenity boasts 100,000 In response to the same In 2009, KLM Health Services members and 1,600,000 visits demands, KLM’s new launched a new and complete since its launch in 2008. ‘Economy Comfort’ was healthcare service for developed. passengers and expats from other companies, designed in three stages: healthy travel, healthy at the destination and healthy home again.

All crew members are qualified in first aid, while every plane is equipped with a first aid kit and an automatic defibrillator.

Air France A380s also have a medical space with a real bed, to care for suffering passengers. messages senttocustomers. applications tobettercoordinate has alsolaunchedin-house acceptable. AirFrance-KLM that advertisingpressure is majority ofcustomersfeel by itscustomers.Thevast advertising burden, perceived Air Francealsochecksthe and itspartners. use ofcustomerdataonly and hasensured theexclusive data suppliedbyitscustomers has ensured theprotection of For manyyears,AirFrance-KLM by andforAirFrance RESPECT 5

‑ KLM ADDED VALUE VALUE ADDED a suitableindustry. it Meanwhile, passengers. creates social value by the choice of a company from among risks the allergy well as washing, as impact environmental normal its cut cleaning with has company dry blankets the Voyageur replacing of by example: Another handicapped of employees initsnetworkofsuppliers. hiring the promoting by provision, its company it tries to create social value through service of to performances products and principles services. environmentalGoing further, as a eco-design responsible the applied maximize has France Air FOCUS ON… FOCUS

selected thebestentries. and more sustainable.Ajury more enjoyable,more efficient the bestideaformakingflying, The aimwastocomeupwith named Creative Challenge. of the airline industry in a contest present theirvisionsofthefuture challenged youngpeopleto social-networking siteHyves Schiphol andtheDutch KLM, Amsterdam Airport for theGroup andsuppliers. success, providing inspiration competition hasbeenamajor principles. Theinternational tomorrow basedoneco-design to create themealtraysof European designstudents The companyhasalsoasked (See page30). and serviceprovision environmental performance Cycle Analysis,tooptimize making tools,includingLife- eco-design usesdecision- cycle. To workeffectively, through theentire product life- of theirproducts andservices, environmental andsocialimpact Air France-KLMconsiderthe ECODESIGN 6 New AirFranceshort-haulseats metric tonsofannualCO leading toareduction of5,200 means lessfuelconsumption the seatitreplaces. Lessweight recline, andis4.9kglighterthan comfort, legroom andabetter ergonomists, itoffers more developed inpartnershipwith perfect exampleofthis: The newshort-haulseatisa wherever possible. also tryingtoimprove them without reducing quality, while cut theirenvironmental impact board are scrutinizedinorder to All products andequipmenton been added. trade cateringproducts have 14 newsustainableandfair Seafood ChoicesAlliance, a covetedaward from the MSC certifiedfish,whichwon Rainforest Alliancecoffee and After theintroduction of palm oil,soyaandGMOs for sustainable alternatives for tendergivepreference to of itscateringproducts. Calls to improve thesustainability including WWFNetherlands, and anumberofNGOs, working closelywithsuppliers airline cateringindustry, KLMis To setthestandard inthe PRODUCTS RESPONSIBLE emissions 7 2

incidents. passengers incaseofbaggage pro-actively informits KLM hastheambitiontoalso Together withAirFrance, this service. provided bythepassengersfor numbers ande-mailsaddresses effectively usingthecellphone rerouting information,assuch their flightandifapplicablewith its customersonthestatusof KLM alsopro-actively informs airport). (even before theirarrivalatthe them assoonpossible connections, andinforms even incaseofmultiple based ontheirentire journey, ROC processes passengers thanks tostate-of-the-arttools, best replacement options: service offers customersthe delayed, AirFrance’s ROC Where aflightiscancelledor need forcustomerservice. service in2009,bypassingthe 201,000 passengersusedthe delays orproblems. Around service incaseofmajorflight Air Franceoffers aproactive theRecoveryprogram, With ADAPTING transport itscustomers. tirelessly toinform,assistand 20 April,theGroup worked Eyjafjoll volcano,from 16to after theeruptionofIceland’s During theclosure ofairspace 8 35 BUILDING A SUSTAINABLE RELATIONSHIP WITH OUR CUSTOMERS INVOLVING CUSTOMERS IN SUSTAINABLE DEVELOPMENT

Calculating carbon emissions and proposing Measuring customers satisfaction perception on CSR offsetting services In February 2010 Air France-KLM for the 3rd consecutive year Air France-KLM customers may offset their journeys thanks to have submitted a CSR questionnaire amongst 3,800 Flying CO2 compensation services: Blue members. Over all the knowledge on the Air France‑KLM - via Air France’s partnership with the GoodPlanet Foundation, CSR activities and priorities has increased considerably and - or at KLM via its CO2 ZERO program, investing in Gold these are also in line with what the passengers expect from Standard renewable energy projects. us what our contribution should be. Still the passenger’s

perception on the CO2 impact of flying is high, 18 %, whereas Informing customers and raising awareness the actual impact is around 2 %. The Group continues to reach out on sustainability issues via its wide communications network and using all available marketing and communications tools. These include websites, onboard magazines and special documentaries.

PROVIDING RESPONSIBLE CARGO AND MAINTENANCE SERVICES

Air France-KLM has opted for innovation for a sustainable Innovate to simplify development policy covering all cargo logistics and maintenance In 2009, Air France Cargo-KLM Cargo developed together procedures. It does so in partnership with suppliers, shippers with customers and customs, a new cargo logistics chain, and carriers and governmental bodies. particularly for quality perishables. While ensuring safety, health, environmental and economics criteria, customs authorities only have to check 3-4% of the total shipment instead of the usual 60%. This innovative ‘Green Lane’ logistics process, FOCUS ON… originating Ghana, allows a much faster handling time. A second Green Lane, originating Peru, is under construction.

THE AIR FRANCE CARGO-KLM CARGO CHECKPOINT New CO MPENSATION for Cargo customers AT SCHIPHOL 2 Air France Cargo-KLM Cargo is the first major air carrier to offer

In September 2009, the Dutch State Secretary of Finance officially the option of CO2 neutral air freight transport to customers. This 36 opened the Cargo Checkpoint at Schiphol. A unique and pioneering new service was launched in April 2009, allowing both freight partnership between Amsterdam Airport Schiphol (AAS), the forwarders and shippers to gain detailed insights into the CO2 Netherlands Customs Authorities and KLM Cargo, it has all the emission of their shipments and the option to compensate via qualities to make Schiphol the premier cargo airport in Europe. Gold Standard projects.

The key concept is that government inspections are carried out within the handlers’ logistics process, therefore minimizing potential interruptions to the logistics chain. The methods of various bodies are brought into line, creating a single drive-through moment. This concentration of inspections and inspecting bodies is unique in the world.

Currently in its test phase, the Cargo Checkpoint represents the first concrete step toward achieving seamless cargo flows.

OFFERING A HARMONIZED MAINTENANCE SERVICE

Air France Industries KLM Engineering & Maintenance (AFI- improving relations by updating the customer throughout the KLM E&M) is always attentive to the needs of its engineering maintenance schedule (fluid information, clarifying reciprocal customers: i.e. airlines around the world on Maintenance, commitments, etc.). Repair, Overhaul market. As part of the Integrated Management The project has cut lead-times for engine repairs by an average System (IMS), Customer Support Managers formally and of 5 %, therefore better meeting the needs of customers. regularly survey customers to monitor expectations and In addition to this, Air France Industries’ Single Global measure satisfaction. Therefore AFI-KLM E&M can improve its Certification (including the eight international reference responsiveness and quality of service. This, for example, is why standards), is a distinctive asset that builds confidence among AFI-KLM E&M launched an ambitious project at Roissy‑Charles maintenance customers and other stakeholders. de Gaulle Airport to restructure engine maintenance yards, DIALOGUE WITH OUR STAKEHOLDERS

AIRLINE PARTNERS - Permanent dialogue and feedback analysis - SkyTeam CSR permanent -O C calculator and 2 working group INDIVIDUAL compensation offer - Flight safety - CSR involvement - CSR SkyTeam charter CUSTOMERS AIRCRAFT MAINTENANCE - Feedback analysis on AND ASSOCIATIONS CUSTOMERS security issues

- 7 quality standards charter Single and global certification - More than 500,000 customer including quality, safety and questionnaires completed - Green environmental standards, as - Social media: KLM facebook and maintenance well as risk control standards Twitter account, Air France-KLM Bluenity community - Twice yearly meeting with FlyerTalk passenger association - CSR questionary NATIONAL AND EUROPEAN - Dialogue with European Association of AUTHORITIES people with disabilities - Customer specific survey leading to KLM Health Travel Offer - Lobbying - IOSA certification - Working group on New European Regulations on passengers rights - AFNOR working group on ISO 26000 CORPORATE CUSTOMERS - Unique and global certification CARGO AND TRAVEL for Air France Industries AGENT CUSTOMERS NGOs - Carbon neutral cargo shipment

- CO2 reporting offer - Permanent dialogue - Sustainability annex in - KLM: use of WWF and feedback analysis sustainable fish charter corporate contract -O C calculator and 2 - Air France: study of CO - Acting to improve awareness compensation offer 2 on CSR - Partnerships storage capacity of the - Active role in promotion of to challenge CSR rainforest in cooperation sustainable tourism. improvements with GoodPlanet and WWF BUILDING A SUSTAINABLE RELATIONSHIP WITH OUR CUSTOMERS

AIRPORT 37 SUPPLIERS - Smartboarding (paperless boarding - CSR procurement - Safety & security process) charter - Accessibility - Corporal scanner test - Share CSR - Promote sustainable catering - Groud handling - Improved Customs process ambitions - Promote the hiring of process on cargo clearance handicapped persons - New dedicated SkyTeam - Promote local procurement area and lounge in London airport

How do you assess the performance of Air France-KLM on building a sustainable relationship with customers? Two questions to I think Air France-KLM is doing a great job in its relationship with its clients. The customer panels and questionnaires, improved transparency about integration of eco-design principles, sustainable catering,

and CO2 offset service: Air France-KLM is really the frontrunner in its sector. Rabobank and Air France‑KLM have a good relationship because we share the same long-term sustainability values. We both understand that we have to be careful with our planet, and that if we fail then generations after us will have a problem.

What do you expect from Air France-KLM? My recommendation is to clarify the planet dimension in your joint commitment statement for building a sustainable customer relationship. I can see an opportunity for bringing that message to your passengers, cargo and maintenance customers. If you share your long-term view of sustainability with your clients, in concrete ways, that would be a real step forward. You could take the whole process of booking, entering Ruud Nijs the airport and flying and position yourself as the ‘sustainable airline’ – and then put this in your onboard Director Corporate Social magazine. I would be proud to know as a frequent flyer that Air France-KLM is top of its sector. It would Responsibility, Rabobank NL be a great step forward because airlines are perceived as the biggest polluters. Air France-KLM has all the ingredients because it is doing so much good work: I think you can do it. PROMOTING A RESPONSIBLE HUMAN RESOURCES POLICY

Based in over 100 countries, Air France-KLM is home to 104,721 staff (in full time equivalent), the vast majority of which live in France and The Netherlands. In spite of the tough global economic climate, the Group has chosen to do all it can to safeguard employment and strengthen competitiveness. To this end, the human resources policies of both companies promote the broad-based employability and mobility of its staff. Based on common values and commitments, these policies push the Group toward greater diversity and equal opportunities. They also ensure that training and safety in the workplace remain key priorities.

OUR JOINT COMMITMENTS

The Air France-KLM Social Rights and Ethics Charter, signed - promote social rights in line with conventions of the in 2008, defines the fundamental rights and values that are the International Labor Organization and Social Charters pillars of The Group’s identity and cohesion. The charter gives adopted by the European Union and Council of Europe; direction to The Group’s main goals, to: - encourage responsible social dialogue and trust at all levels; - support the fundamental principles of the United Nations’ - foster staff employability and mobility; Universal Declaration of Human Rights and the European - actively pursue and reinforce all measures promoting health, Union’s Charter of Fundamental Rights; safety and dignity in the workplace; - respect equal opportunities and forbid any kind of discrimination

OUR MANAGEMENT OBJECTIVES

OBJECTIVES SCHEDULE ACHIEVEMENTS 2009-10 STATUS AIR FRANCE Develop staff skills and support professional Ongoing In 2009, 275 staff in France joined geographic mobility schemes; there were 38 mobility, to boost employability and safeguard 1,337 job changes (of which 177 moved into the cabin crew sector) jobs, as part of the new 3-year employment 2009-2012 employment agreement signed agreement Implemented plan for 1,684 voluntary redundancies applying to over 1,800 people. Increase the employment ratio of disabled 2011 A 0.43% increase in the employment ratio of disabled workers compared workers by 0.5% per year with 2008 The number of workers with disabilities has remained constant, despite the overall reduction in the workforce

Renew the 3rd Gender Equality Agreement 2010 Equal pay measures for 251 female non-managerial ground staff.

Reduce the frequency of workplace accidents 2009-12 In 2009, there was a 5% cut in the frequency of workplace accidents in by 30% France, part of a total reduction of 27% since 2005 KLM Stimulate mobility inside and outside the Ongoing Pilot study for employees with limited formal education: offering a program company to acquire an official diploma

Increase employees’ awareness of their own Ongoing Providing tailored career advice to all employees, supported by a health and wellbeing dedicated website Increase mobility for physically strenuous jobs Create an equal opportunity mindset to Ongoing Dialogue initiated between senior managers on how to raise the percentage promote diversity of high ranking women

Build more flexibility into the workforce and Ongoing Over 1,000 employees assist ground operations on a voluntary and contracts temporary basis

LOCAL STAFF Finalize negotiations to harmonize working 2010-11 Working conditions harmonized in 31 countries conditions at joint Air France-KLM outstations Define additional social benefits Audit on retirement policies and health insurance carried out Annual survey on perception and satisfaction Ongoing Action plans per regions are set up and implemented, based for all employees on the ‘Inter’Face’ survey

Target partly achieved On target Target achieved or exceeded LIMITING THE IMPACT OF THE ECONOMIC CRISIS ON JOBS BY IMPROVING IMPROVING BY JOBS ON COMPETITIVENESS CRISIS ECONOMIC THE OF IMPACT THE LIMITING okr. n 09 ams 30 mlye wr voluntarily were employees 320 almost 2009, In workers. staff during peaks times, thus avoiding the need for temporary ground operational assist to asked were staff office KLM, At helping customerscheck-induringpeaktimesatairports. days working 600 over spent staff the administrative goal, same with and parallel In months. several and weeks between several lasting periods for operations, reinforce to helped in 2009, 160 Air France employees from various departments and companies the between solidarity deepened This front. and contracts to term on meet temporary system overloads, notably on reliedthe operational fixed been have resources on internal work, freeze temporary total the Following face ofvitalchanges. increased in 2009, or showing the will and flexibility of staff made in the were adjustments several employment protect To employment protect to Adapting time equivalent,alongwiththeexpiryoftemporarycontracts. full 10% of reductionstaff a to led has strategy this KLM, For which defines theprocedure tofollowforsuchaplan. 2009, July in signed agreement, planning resources This employees. part-time entailed some lengthy talks with social partners ahead of the human including over to people apply will 1,800 and staff ground for out rolled been 2010 has in redundancies voluntary 684 1 reduction for plan workforce a the so target, achieve to enough not is attrition Natural productivity. in gains necessary the mobilize swiftly to place in structures put and competitive more become to needs France 2008, apply,Air to but continue and successful autumn were since France Air by implemented Measures and activity, in peaks with promoting greater mobilityandteleworking. cope to measures temporary employment, part-time more introducing supplement hiring: on curbs the turn in measures Other 2010. in renewed and crisis; it is economic therefore a path the chosen by Air France-KLM in in 2009 jobs protect to way key a is hiring Limiting jobs of number the rationalizing Responsibly more resilient andabletoadjustfuture changes. staff making is schemes, support and mobility It job up stepping responsiveness. the and policy, commitment employment encourages responsible Group socially a by Guided by employment. preserving crisis while competitiveness economic safeguarding the overcome to aims France-KLM Air and career counseling. information on offers vacancies, help in writing resumes, Center applications Navigation Cargo established newly The year. candidates, fiscal the in internal matches interdivisional successful by 350 to leading filled otherwise and possible vacant when left were leave voluntary of kinds other or retirement ending, contracts time limited by created vacancies KLM, At themselves withselectiontests. familiarize and interviews selection attend letters, cover and 2009 launch of workshops to teach staff how to draft resumes April the with aids, new of developed also audience It people. 600 combined nearly a to talks themed 57 delivering and visits 1,600 receiving transfers, jobs these for guidance and support provide to continued Mobilité) (Espace Unit Mobility the 2009, in Thereforeresources. internal on premium a puts groundstaffFrance Air for mobility geographic Professionalor and preserve employment. a with develop to mobility helps that policy a of part as internal schemes, of number supports strongly France-KLM Air mobility internal Promoting were employedwithKLM’s subsidiaries. members crew 100 over addition In council. working the and unions by supported program on a of part month as handling, KLM’sground assist every voluntarily co-pilots rationale, and captains 380 same average the Following involved. 39 PROMOTING A RESPONSIBLE HUMAN RESOURCES POLICY TRAINING STAFF TO INCREASE AND DIVERSIFY THEIR SKILLS

Given the changes in the labor market, the economic crisis meeting the educational requirements of the desired diploma, shows the importance of adaptability: to ensure company resulting in a reduced number of classes to be granted the competitiveness and promote staff mobility. Air France and diploma. A second program was offered to employees without KLM continued to invest in training employees in 2009, any formal education beyond primary school. With one school especially for staff with limited qualifications. day per week and four days at work, these employees receive their diploma – equivalent to a high school diploma – after two Investment in training at Air France amounts to 8.7% of the years. total wage bill, and remains higher than the French legal minimum of 1.6%. Air France contributes to securing careers, notably for employees seeking a new diploma, by ensuring their work experience is credited via the VAE (Validation des Acquis de l’Expérience) system with a certificate of professional experience.

A program, specifically targeting those with the lowest qualification levels, helps to boost staff skills in French language and math, while improving their independence in professional or personal learning situations. Professionalization schemes continued at a sustained rate (3,000 in 2009) for retraining, change management projects, or to assist staff returning to work after long absences. In 2009 investment in training at KLM amounts to 2,500 euros per employee. Moreover KLM focuses on employees with limited formal education to enhance their employability. They were offered a program to acquire an official diploma. A first program charts skills acquired through work experience for each employee. Points were awarded for competencies Staff training

40 A RESPONSIBLE MERGER OF TWO AIRLINES AND VALUES SHARED BY ALL

There are distinct human resources policies, laws and cultures contracts in over 100 countries are asked to fill out the InterFace in France and The Netherlands, but the Group has drawn employee satisfaction survey, which, once the findings have up a set of rules and principles to enable the airlines to work been analyzed, leads to the deployment of local action plans. together and notably to harmonize the working conditions of In the survey launched in March 2010, 69% of the 7,376 locally employed staff in 39 countries where operations are employees polled filled out the survey. A total 77% of combined. respondents said they were satisfied with their material This harmonization process, launched in 2006, is on track with working conditions, 82% with their occupational health and negotiations concluded in 31 countries. safety conditions, 85% with their company as an employer, and 92% of those surveyed said they were in a job they liked. The Air France-KLM Social Rights and Ethics Charter, signed in 2008, defines the fundamental rights and values which are the pillars of The Group’s identity and cohesion. This charter, translated in three languages, was made available to Group staff in 2009.

Air France-KLM wants its employees – wherever they operate worldwide – to enjoy social protections (for expenses linked to sickness, maternity, accidents or death) to guarantee a decent standard of living. The status analysis carried out in 2009 on the situation of local Air France and KLM staff showed that almost all Group employees benefit from this locally. Moreover, the Group supports its staff in finding the best ways to adapt to the requirements of its policy on local conditions and to sign up to quality assurance contracts, while complementing public schemes if they do not offer the required quality. Working together... Since 2007, all Air France and KLM staff on local employment Air France and KLM employees in Dubaï 2,0 3,0 4,0 5,0 6,0 WORKPLACE HEALTHY A PROMOTING AND SAFETY GUARANTEEING at Air France Air at coefficient (IF*) frequency injury Industrial (TMS), andthewearingofpersonal protective equipment. other issues, including prevention of Musculoskeletal Troubles During 2009, new staff awareness programs were rolled out harassment, on with socialpartnersearlyin2010(see Focuson…). stress, (i.e., risks addiction, violence), and to this end an agreement social was signed and psychological Air France has worked hard to strengthen tools for preventing abuse, alcohol on charter the of signing 2008 the Following risks addressing and identifying awareness, Raising and Africa South including risks, Nigeria. health particular with countries in communities local and staff for malaria and AIDS HIV/ of prevention the on measures offering and awareness raising on efforts its continuing is France-KLM Moreover,Air assess itsresults. to Amsterdam University VU at research scientific of subject ‘ergo the is program The methods. on working introducedand postures best colleagues the advise has to employees trained Maintenance who coaches’, & Engineering KLM to beincludedinallthree collectivelaboragreements. play.offeredunions was to garantee this protocolstating The foul of evidence is there unless action, disciplinary any from employees who caused or reported reoccurring, an accident fromare protected accidents prevent to measures out roll to able Tobe especially issues. safety workplace, undetected or new safe out rooting a by promote to mission the managers with senior champions’, ‘safety introduced has KLM manager andexecutives. operational of pay performance-related for criteria the appraisal in included are objectives quantitative and agreements objective new signed have Départements Overseas French and France in VPs Executive context, this In 2011. and 2009 between 30% by injuries industrial of rate the cut to program new a with ambition this continues France operational Air management. in notably 23%, of drop a ultimately was There years. three over 30% by injuries industrial of rate the cutting of goal ambitious the itself set France Air 2006-2008, From risk reduice to ourselves Organise * with par a on flight safety. workplace the the in for safety priority ranks a which Group, is levels safety staff highest the Ensuring employees/year) IF (number of industrial accidents, resulting in absenteeism, per 100 per absenteeism, in resulting accidents, industrial of (number IF -30% Objective 2005 5,85 2006 5,55 2007 5,07 -30% NewObjective 2008 4,50 (-23%) 2009 4,27 (-5%) 2010

2011 2,74 and literacyprograms foremployees(where necessary). heights, at working staff for measures safety driving, friendly include: eco- equipment, protective personal wear staff schemes that checking prevention Other (CHSCT). sub- Committees reported its Safety and being Hygiene Indutries of France Air accidents by investigated and performance occupational the with monitors contractors, also Group The OHSAS 18001certification,aswellAirFranceIndustries. environment attained work has Servair initiatives. preventive the and (‘ergonomics’) rolled of improvement various has in including managers aboard, aspects, and operators train passengers to program for a out meals supplies and safety at work. Servair, Air France’s subsidiary which prepares Subsidiaries are also committed to ambitious plans to improve sub-contractors and subsidiaries at safety Promoting on medicinealcoholanddrugs. awareness raising on and jetlag with cope to how on 2009 in crewcabin for campaigns frequentcommunication runs KLM os riig cee fr community for schemes training ous - prevent to information practical of distribution - - both ground staff andcabincrew. to Itcomprises: applying managers), HR and managers workers, social doctors, (company stakeholders all mobilize to monitored by a is dedicated and committee. risks, Above social all, and it aims psychological of audit an on based approach preventive a takes agreement The national agreements onstress and andharassment. European of part forms which unions, staff by signed unanimously 2010, in agreement an negotiated France Air balance. work-life the improve to and risks psycho-social limit to years 15+ past the Many initiatives have been launched by Air France over AND SOCIAL RISKS RISKS SOCIAL AND PSYCHOLOGICAL PREVENTING HANDLING ATSCHIPHOL HANDLING BAGGAGE AUTOMATED NEW aircraft withalmostnophysical effort. the from and to containers transferring machinery, operate will Employees accidents. occupational of tothe risk the reducing therefore incontrary process, loading current be involved will traffic vehicular no process, loading new the In containers. into and will be loaded and unloaded, fully automatically, from are luggage where KLM hall the construct and to closely working AAS million). 45 of from level (up current year the a bags million 70 with cope (AAS), to able Schiphol be Airport will Amsterdam center at handling introduced baggage new a 2012, In at eachoffice. management risks multi-disciplinary numer the FOCUS ON… FOCUS FOCUS ON… FOCUS groups with a dedicated manager dedicated a with groups

41 PROMOTING A RESPONSIBLE HUMAN RESOURCES POLICY PROMOTING DIVERSITY WITHIN THE GROUP

Women in the Group (%) 2009 resources policies and management processes (training, Board of Directors 6.6% careers, occupational safety, remuneration, etc.). In 2009, 251 women benefited from pay equalization measures. KLM Executive Committees Group (GEC): 0% facilitates women in management roles through mentorship. AF: 8.3% KL*: 0% Extending the employment of seniors Senior managers / executives AF: 25.3% The Air France Human Resources and Skills planning KL*: 17.4% agreement, signed in July 2009, features a chapter entitled ‘Managing the second part of the career and facilitating the Ground staff managerial AF: 30.2% KL: 23.0% employment of seniors’. The text was completed with an amendment for ground staff, as well as two specific action Flight crew managerial AF: Cabin crew: 51.3% plans for flight crews (pilots and cabin crew). Cockpit crew: 3.7% KL: Cabin crew: 73.0% Cockpit crew: 2.8% Boosting numbers of disabled workers In 2009, the regulatory employment rate for disabled workers Ground staff, non-managerial AF: 40.3% in France was 3.57%. Against this backdrop Air France KL: 25.8% continues its integration schemes. Despite natural attrition Flight crew AF: Cabin crew: 64.7% among disabled staff through retirement, and restrictions due Cockpit crew: 6.7% to the company’s regulated professions (e.g., pilots, cabin KL: Cabin crew: 82.1% Cockpit crew: 4.2% crew, etc.) disabled staff numbers are stable. Despite the hiring freeze, Air France has maintained the * Definition for KLM changed compared to last year hiring target of 85 disabled staff over 3 years. The company’s commitment also involves stepping up outsourcing to the Promoting equal opportunities and combating sheltered sector, representing 480 indirect jobs for 2009. all types of discrimination The agreement also provides for a €9 million budget earmarked Air France-KLM pursues a social policy based on preventing for disability in 2009-2011. In 2009, €3 million were invested, discrimination, equal opportunities, and respect for diversity. 46% of which went on maintaining staff in employment and 7% To highlight this pledge, Air France has applied for certification on raising awareness among employees. with the ‘label diversite’. To this end, an audit of career development has been launched to guarantee equal treatment In the Netherlands companies are financially responsible for for all employees. a period of two years for employees who become disabled. The workforce of KLM Catering Services (KCS), a KLM Since 2010, KLM has extended the period to twelve years. This subsidiary, is made up of around 45 nationalities. KCS focuses includes employees that are no longer employed with KLM. An on what connects people rather than stressing diversity of employee is considered disabled when becoming ill and no race, religion or gender. To anchor this principle KCS offers longer capable to fulfill a job or carry out duties amounting to master classes for managers and is developing a special his or her former salary level. KLM will supplement the salary ‘solidarity training’. for a number of years and take measures in order to let the 42 employee return to his or her job or perform other duties at Promoting gender equality the same salary level. Through adjustments of the workplace, At Air France negotiations continue for a third corporate working times and duties and offering treatment of the illness, agreement on professional equality. To ensure these the employee is facilitated. If measures do not have the desired commitments are respected, male-female comparative effect, limitations are to be conquered through job mobility indicators have been built into the monitoring of human within or outside of KLM.

INVOLVING STAFF IN THE GROUP’S CORPORATE SOCIAL RESPONSIBILITY PROGRAM

The strategy as seen by employees invests in Corporate Social Responsibility’. At KLM a yearly The Air France-Ipsos employee satisfaction survey is held Internal Perception Monitor is held on employee satisfaction. twice a year in-house among almost 3,000 staff. In April 2010, Since 2007 CSR forms part of this survey, to assess whether 82% of respondents said that ‘Air France is a company that employees think the company acts responsibly in this regard. This year the outcome increased to 81.6% compared to 79.1% last year.

FOCUS ON… Initiatives involving employees With the Quality Innovation Program (PIQ), Air France rewards AIR FRANCE AND KLM: the best proposals sent in by staff to innovate and improve TWO ATTRACTIVE COMPANIES their day-to-day activity. At KLM, the ‘CSR Drive In’ aims to Air France ranked first in the 2009 Top 50 most raise awareness of CSR and encourage personal contributions attractive employers, as voted by junior executives to CSR projects. from business schools. It also ranked eighth among those coming from IT and science engineering Air France and KLM have launched measures to limit the schools, according to the Universum Survey 2009 use of cars in journeys between home and the workplace. (carried out among junior executives with one to eight These programs promote eco-travel, car-sharing, cycling and years’ work experience). In 2009, KLM ranked fifth in the Intermediair Ebbinge teleworking. At Air France, the rate of car use has dropped Image survey, one of the most representative surveys from 79% to 72%, while the use of shared transport has grown among highly educated young professionals in The by 4%. Netherlands. aising awareness awareness aising - Satisfaction - Perception - AUTHORITIES EU AND NATIONAL about CSR about R Two questions to Twoquestions - - - Compact NL Chairman, UNGlobal Van Heemstra Andre STAKEHOLDERS OUR WITH DIALOGUE 2007-2012 to French MinistryofEducation, Secondment of11AirFranceengineers policies exchange ofbestpracticestoimprove occupational safetywhichresulted on between KLMandothercompanieson meetings Regular government-supported against Discrimination) HALDE (theFrench HighAuthority Air Regular meetingsbetween

France andMinistrieswith EMPLOYEES - - - nal Perception Monitoring) - - - Perception surveys: employed outsidethehomecountries Air France Executive Committeeandallstaff dialogue betweenAirFrance Launch ofinteractiveblogtopr CSR e-newsletter KLM ‘CSR Café’(4x/year)andDrive-In’at and 81.6%CSRperception (79.1%in2008) employee satisfaction:95.7%(92.4%in2008) the group and94%saythey are proud; KLM more than88%are motivatedtoworkwithin combination betweenAirFranceandKLM: staff/yearbi-annual pollof1,500 onthe IPM (Inter Annual Inter’facepollof7 6,000 staff eachyear In-house AirFranceIPSOSpollof Air France-KLMis goingaboutitspersonnelpolicy, comesacross verypositively. grow.employees way your the of report,and each this areseeing Overall interestedyou in that of top on it’ssay people; you dismissing when not another and employment full maintaining of context the in thing step forward to move from a model of performance appraisal to one of personal development. That’s one It’s clear that the Group takes an interest in the personal growth of each of its employees. It’s an important What doyouexpectfromAirFrance-KLM? feeling thatyou’re ingoodhands.IcanseeboththeseelementsatAirFrance-KLM. through to the cabin. For the traveler there is a strong link between the social harmony of the crew and the filters that and staff its about cares together.France-KLM family Air the keeping of idea the is statement stuff. powerful strong also Another is staffqualifications for low training with areExtra work linked. closely to bring they survey.staffenergy France-KLM the Air and the pride Staffin quoted those especially staff, Charter is in line with the UN Global Compact for human rights. What makes it all tangible is the support of I see when I’m in the plane receiving their services. Another key point is that their Social Rights and Ethics human It’s very responsible positive and it underlines my own experience a flying with Air France-KLM. It’s promoting in harmony with what on France-KLM Air resources policy? of performance the assess you do How mployment, - on-discrimination, on-discrimination, - conditions working training, diversity N E , withCSRQuizat ,000 personnel ,000 omote

- Occupational safety Occupational - discrimination Non - Diversity - conditions Working - egotiations on egotiations - dialogue Social - policy resources human N

WORKS COUNCIL WORKS EUROPEAN UNIONS TRADE BODIES BODIES AND ASSOCIATIONS PROFESSIONAL - - - KLM andtradeunions labor conditionssignedbetween KLM: collectivelaboragreement on risks prevention ofpsychological andsocial 3-year agreements onemployment and and endorsementssigned,includingtwo Air France:16collectiveagreements agreements withsocialpartners Negotiations andsigningofcollective - - - -company workinggroups (ORSE, - the studydelivered on work-related health,1stdatainputfor disabilities agreement onemploymentofworkerswith Performance’ program business schoolonthe‘Diversityand Federation ofMerchant Aviation disability groups andtheFrench National ANVIE, IMSetc.)atAirFrance,with KLM participationin5-yearscientificstudy KLM inputinframeworkofcorporate Air FrancepartnershipwiththeEssec Inter 43 PROMOTING A RESPONSIBLE HUMAN RESOURCES POLICY DRIVING LOCAL DEVELOPMENT

By transporting passengers and goods, as well as aid, knowledge and know-how, aviation is the main vehicle of exchange between people and cultures. Thanks to its economic, technological and financial aspects, aviation supports and stimulates other industries, including tourism. A major actor in global economic development, airlines also play a key role at local level, in the countries where they are based and also their destinations. For many years Air France and KLM have had a stake in the regions around their hubs and destinations, forging lasting relationships with local and regional partners. Aware of their responsibilities, they contribute to numerous training and development aid programs. They also lead and support humanitarian projects via permanent foundations or in support of NGOs, working together during human tragedies like the disaster arisen in Haiti in January 2010.

OUR JOINT COMMITMENTS

Despite the difficult economic backdrop, Air France-KLM is - investing in the future by developing skills, through determined to pursue or even strengthen its commitment to education and apprenticeships; local socio-economic progress: - making use of its human, logistical and financial esourcesr - contributing to regional development by its ability to create to aid and invest in humanitarian and development business and work with all local actors, including the supply programs; chain; - supporting the local expertise of NGO partners in order to - building lasting relationships based on information, dialogue contribute to the United Nations Millennium Development and partnerships with the full range of local actors; Goals.

OUR MANAGEMENT OBJECTIVES 44 OBJECTIVES SCHEDULE MAIN ACHIEVEMENTS 2009-10 STATUS AIR FRANCE Contribute to local economic development Ongoing Participation in working groups on sustainable development of around our main offices Roissy-CDG and Orly areas Support local sheltered sector: creation of ANRH launderette Support networks of SMEs (ARD Forum for international companies, member of local SMEs’ associations)

Boost communication with local communities Ongoing 3 editions of ‘Le Courrier, Air France partenaire de l’Ile-de-France’

Support local development and training Ongoing Taking active roles on the boards of local associations JEREMY, Airemploi, associations, as well as joining their projects AFMAé and Pays de Roissy-CDG

Maintain a strong commitment to humanitarian Ongoing Funding of €5 million for humanitarian projects and sponsorship projects. Raise annual funding for the Air France Foundation to €2 million by 2011

AIRKLM FRANCE Support sustainable development for local Ongoing Corporate funding projects focused on education, environment, art and communities around KLM bases and at heritage (€2 million) destinations served with environmental and social projects

Continue to contribute to the UN Millennium Ongoing 5 staff projects on a volunteer base (a/o Tanzania, Philippines, China, Development Goals South Africa, Nigeria and Surinam) Concrete contribution to 7 MDGs through a range of socio-economic activities, increasingly combined with environmental benefits (e.g Ubuntu reducing car tire waste, Close the Gap avoiding ICT-waste) Participating in various tables such as IDUT, IUCN, UNGC NL 4 new KLM AirCares projects

Contributing to shape the future of Amsterdam Ongoing Two official Alders-table meetings Airport Schiphol and enhance the livability Further contribution to operational measures carried out by CROS of its surrounding region via dialogue with (See also page 27) communities

Target partly achieved On target Target achieved or exceeded l-eFac rgo aon Prs Ar rne employs at employed France directly people Air 119,400 the of Paris, 50,000 nearly around region Ile-de-France strong. remains hubs aviation the between link the that condition on Hispeed Antwerp/Brussels, and Schiphol NS Airport Amsterdam between the in transport air to alternative rail partners a studying is KLM cooperative, transport and logistics With Amsterdam- Schiphol. and Roissy-CDG including capitals, several between European service cargo rail speed high a develop to aims which project, CAREX the joined has Cargo France Air Understanding…). (see Aerotropolis association new the and (ARD) Agency Economic Region Paris the by launched area regions, such as the international promotion The Group supports initiatives that planpromote and develop these environment. of economic dynamic and ‘Grand and Roissy’ airport small international an and corporations major to proximity their from benefit to seeking enterprises, medium attract hubs two The while generating60,000indirect jobs. Group, KLM at jobs 33,000 over including jobs, direct 60,000 Roissy Roissy-CDG at spin and bases jobs indirect forge main also They their Amsterdam-Schiphol. and around jobs direct and activity economic generate KLM and France Air level, local At business regional Developing DEVELOPMENT LOCAL AND REGIONAL TO CONTRIBUTING ‑ offs across their regional and national economies. In the In economies. national and regional their across offs ‑ D ad ry iprs Shpo i rsosbe for responsible is Schiphol airports. Orly and CDG soito fudd n eebr 09 ih the with 2009 December in an founded Europe, Aerotropolis association of member a is France Air goods traffic. to boost its central position in terms of passenger and FedEx, Aerotropolis Europe will enable the Paris region SkyTeamand of hubs Asian and US the around Built jobs inthearea. range of projects is expected to create close to 15,000 full The center,etc.). commercial spaces, convention showroom, park, business (CAREX, Roissy-CDG to close projects development local representingseveral investors institutional and private groups Aerotropolis such asLondonorFrankfurt. businesses to better compete with other airport areas, the promote to aims new attract to regionis goal aroundThe Roissy-CDG. which and FedEx of support AEROTROPOLIS EUROPE AEROTROPOLIS UNDERSTANDING...

Roissy-Charles deGaulle Airport:engineoftheregional economy regional authorities. to the ‘Grand Paris’ project, and made presentations at several The airline has also taken part in regional debates, contributed surrounding region. the to more benefits airport’sdevelopment the that ensure to and area Roissy Air the with links the support, strengthen to aims this France With airport. Roissy-CDG of development Roissy at work on forum Day,a Mobility Electric an held association 2009-10, 300-member this In association. the at groups working six the lead to members staff two provides France Air actions, its support Roissy n diin Ar rne s mme o te Py de ‘Pays the of member a is France Air addition, In the of residents Schiphol Airportarea. with dialogue continuous in is KLM Tables Alders and (CROS) Board Review Regional Schiphol Through Public Works and Water Management and Ministry of Finance. Agriculture, Nature and Food Quality, Ministry of Transport and of Ministry Affairs, and Economic of Parliament Ministry the from of delegations members for visits working hosted KLM mid-school studentsfrom citiessurrounding theairport. to visit one-week a during doors its opened France Air staff, volunteers to thanks 2010, early In facilities. the visit to able were airport Roissy-CDG around municipalities from officials elected 2009, late In residents. and officials for facilities their of tours regular give KLM and France Air awareness, mutual raising while regions, local their in themselves root Tofurther interested parties intheIle-de-Franceregion. targeting Courrier’, ‘Le as such media dedicated through communicate and debates local join They partners. regional with dialogues proactive pursue airlines both reside, Rooted in two business regions where most of their employees stakeholders local with dialogue long-term Pursuing ‑ D’ soito, hc i hle t st p To up. set to helped it which association, CDG’ ‑ D, n jie te eae n h sustainable the on debate the joined and CDG, ‑ based training opportunities with stakeholders with opportunities training based 45 DRIVING LOCAL DEVELOPMENT SHARING KNOWLEDGE AND SKILLS FOR FUTURE GENERATIONS

Developing local skills through training Working with companies in the sheltered sector Air France has co-founded three associations – Airemploi, The Group actively supports companies that employ staff who JEREMY and AFMAé – to contribute to the development of are handicapped or marginalized. It works with the sheltered local skills. sector in fields as varied as the distribution of uniforms, cabin - Airemploi informs people about career openings and training blanket dry cleaning, and engine spares logistics. courses in the air transport and aeronautical sectors. In In 2009, Air France worked with 55 organizations in the 2009, it held 255 conferences in middle- and high-schools sheltered sector in the regions around Roissy, Orly and and provided information to nearly 6,700 people. Toulouse, for a total of €11 million and 485 full time jobs (see - JEREMY (JEunes en Recherche d’EMploi à Roissy et OrlY), Focus on...). The airline also allocated part of its vocational promotes the employment of unskilled school-leavers around education tax, some €772,000, to organizations that train Roissy-CDG and Orly airports. In 2009, 266 young people handicapped people. attended training courses for airport jobs, among them KLM regularly employs young people from Global Start. This 129 did internships at Air France. 62% of the trainees were organization based in Amsterdam works with young people already hired. This year, a specific course has been set up in who are socially marginalized or have no qualifications, partnership with Servair for a group of disabled jobseekers. giving professional training in Information and Communication - AFMAé (Association pour la Formation aux Métiers de Technologies. l’Aérien) trains 388 young people at its ‘Apprentice Training Center’ (CFA) in 2009-10, among them 149 at Air France Industries despite the airline’s freeze on hiring. Ultimately, 61% of the trainees from 2008-09 were employed the year after.

Several KLM departments work with young people in the external community, running professional training and CSR awareness programs. A few examples: - Supporting the funding and organization of apprenticeships with Regional Education Centers (ROC) for ground handling procedures and aviation maintenance. - Design Challenge for 20 aerospace students with Delft University. - The AIESEC Ambassador program, an international platform for students to explore and develop their leadership potential 46 in the field of CSR. - JINC (Youngsters in Companies), a regional institution that prepares high school students for future work, avoiding early drop out. Aircraft maintenance apprentices

FOCUS ON… FOCUS ON…

WORKING WITH THE SHELTERED SECTOR TECHNICAL EDUCATION CENTER KENYA TO CREATE A NEW ACTIVITY KLM Group and Kenya Airways are set to launch a To help develop the sheltered sector, Air France repair center project to train aircraft maintenance asked ANRH*, an association that helps handicapped and repair workers in Kenya. Funded with €40,000 people find work, to create an activity to wash and raised entirely from an auction at KLM Engineering repackage passenger blankets from Roissy-CDG. In & Maintenance, the project will be linked to the KLM 2009, a launderette employing 25 disabled people AirCares program to raise awareness and boost was built close to the airport in Tremblay-en-France, passenger miles donations; this in turn helps to cut able to handle 15,000 to 30,000 blankets per day. The travel expenses and reinvest freed-up money. initiative is expected to generate around 10 extra jobs The center is needed because maintenance and in the near future. repairs in Kenya have quality and customer service Beyond the creation of jobs tailored to each handicap, issues due to a lack of adequate processes, structures, the laundry equipment and procedures were designed knowledge, skills and equipment; available equipment to respect the environment by saving water and is mostly second hand and there is no local repair energy. Air France works also in partnership with expertise. ANRH to improve social and professional support for The project brings long-term opportunities for people handicapped employees. to improve their incomes and living conditions.

*Association pour l’insertion et la réinsertion professionnelle et humaine des handicapés tourism. sustainable and development economic protection, child of for been have supported in Africa, South micro-creditAsia and Latin projectsAmerica, in the fields 85 in 2009, In communities. notably marginalized programs, of development member long- support term founder to helps and a years 30 over for been Life for Acting has France Air exploitation. commercial and sexual trafficking, human of victims child of protection the to contributes France Air Life, for Acting NGO ECPATWith the on…). and Focus (see action of field main its as need in children chosen has which Foundation, France Air Air France proved its humanitarian commitment by creating the of tons metric 9 around medical equipmentandmedication. carries and NGOs to tickets logistics 660 for transport mainly offers France organizations, Air 2009-10, air In assistance. non-profit medical emergency 40 provided over France to assistance Air 2009-10, In commitment France Air The on Africancontinent. led projects concern contributions the of half other Near initiatives. and campaigns raising awareness sponsorship, equipment, skills and people of transport free donations, cash of In 2009-10, its total contributions equaled €9 million in the form in humanitariananddevelopmentprograms. people together, the Group has also long played an active role future and regulations and laws. In line with for its commitment made to bring are Compact decisions important of and anticipated are trends Global part global where Nature, take as of Conservation for to Union International such voice and authorities, strong partners a international KLM, them France, gives Air subsidiaries of power combined The PROGRAMS DEVELOPMENT AND HUMANITARIAN SUPPORTING AND INFLUENCING features It destinations. its at as well as development base local home the help various at to enhances designed KLM, policy within initiatives Community to Company KLM’s benefit from extraincomeandbetterlivingconditions. The sustainably.project involves thousands of families who in foreststhe long-term will their giving manage to and communities local skills transferring By programhelps the support, legal and organizational technical, dimension. social a has WWF and Foundation GoodPlanet by run and France Air by The project to combat deforestation in Madagascar supported each year. there trained African are sector from aviation the staff in operating 1,500 companies Nearly services. ground airport in airport in Mali, which provides regulatory and technical training Bamako at based l’Aérien, de Métiers des Africain Institut the IAMA, with partnered has France Air end, To services this companies. ground African professionalize help to Gabon, and Senegal Mali, in Afrique) en Développement Investissement, of development (Assistance, programAÏDA a named run has France Air 2001, Since transfer. skills social of form the and in notably Group served, economic countries the the countries, 107 to and contributes destinations 236 to Flying SERVED COUNTRIES OF ECONOMY THE TO CONTRIBUTING Initiative Group SustainableOutgoingTourism (IDUT). the in actively participating and Netherlands The in University tourism, sustainable of concepts sustaining the on Chair of Sustainable Tourism of the working Wageningen also is KLM charity programs andcommercial developmentinitiatives. activities, sponsoring departmental work, voluntary individual eun ikt t Hii t spot h country’s the support to Haiti, reconstruction. to 500 tickets than more return of equivalent the – miles million 36 over generated passengers among run campaign A Haiti’ in volunteers Program. young ‘100 of people young of special rates. The Group also supported the transport with transport cargo and freeofferingtickets 300 by - Internationale Médicale Aide Cross, Red Hunger,the Against Action Borders, Without Doctors World, the of Doctors - NGOs an five up with set partnership exceptional France Air 1947, since Haiti in activity In at KLMHQ. auction an including initiatives, spontaneous other in and Foundation France Air the by launched appeal in staff by raised was €100,000 Program. Food the World and UNICEF for equipment emergency and carry aid to provided, Domingo Santo neighboring to been made were have flights cargo community.9 and Haitian the rates for particularly aid emergency Special with evacuation. assist tackle and to situation resources the material and all human deployed France-KLM available Haiti Air in 2010, January earthquake 12 the on followed that hours the In http://fondation.airfrance.com For more information,pleasegoto: Africa, India,Brazil,MadagascarandFrance. the Foundation, which will fund the five programs in South to with full in solidarity donated €300,000, in raised This auction Foundation. for up seats 380 put France Air flight, round-trip inaugural A380’s the For the of 20th Child, theconference Rights drew almost1,000delegates. the the on Marking Convention the children. of street anniversary of plight the in on headquarters UNESCO at Paris, the Foundation held an international conference 2009 November In in 67countriesforatotalbudgetof€10million. children of thousands helping launched, programs was it 550 since backed has Foundation The NGOs. and bodies it voluntary by 2009, run programs 63 In supported operates. France Air where countries in difficulty, and great France in in or both disabled sick, are who people young and children help to programs supports Foundation France Air the 1992, in Created HAITI THE AIR FRANCE FOUNDATION FRANCE AIR THE FOCUS ON… FOCUS FOCUS ON… FOCUS

47 DRIVING LOCAL DEVELOPMENT KLM initiatives Initiatives supported by Group employees In line with the United Nations Millennium Development Goals, The network ‘Les Amis de la Fondation Air France’ features the KLM AirCares program supported seven projects past over 1,950 staff in a range of voluntary and fundraising year, via a combination of a starting donation, publicity and schemes. In 2009, they supported Foundation projects by the option of using miles donated by frequent flyers to buy giving their time for extra school tuition, helping families with tickets and save on travel expenses. A total of 40 million miles sick children, taking kids for a day at the seaside, and doing have been donated to the various projects (equivalent to over cell phone collections. Large numbers of employees, especially 500 return tickets from Amsterdam to Nairobi), while almost cabin crew, are also members of the Aviation Without Borders €100,000 has been raised by various staff initiatives and on association, accompanying sick children en route to France board donations to support these projects. and the Netherlands for treatment or transporting packets of medication. The Ubuntu Company project in Durban, South Africa, involves Others are involved in spontaneous actions, including a scheme the design and production of trendy flip-flops from recycled run by seven apprentices trained at Air France Industries, who car tires, which also helps reduce waste in the area. Ubuntu organized a collection of 9,000 books, school textbooks and supported the local economy by hiring 70 HIV/AIDS infected toys. Carried by Air France Cargo, the gifts were distributed women, also providing them and their children medication, by the trainees themselves to schools in the Thiès region of sanitation, education and nutrition. KLM Cargo took care of Senegal in November 2009, in a poignant mission. logistics and transport from the factory to the various fashion and shoe outlets in The Netherlands. The flip-flops were also Examples of initiatives carried out by KLM employees include for sale in the KLM staff shop, as part of KLM’s Sustainable support for cancer research (Pink Ribbon, Koningin Wilhelmina Label concept for commercial development. Foundation, Kika Child Cancer) and other projects.

A group of 70 seriously ill children of Stichting Hoogvliegers Wings of Support helps children in developing countries, (High Flyers Foundation) was invited on board of the 777 flight involving a voluntary commitment from flight crew and ground celebrating KLMs 90th Anniversary. Also, 90 senior citizens staff at KLM and Martinair. Together they have launched were invited for their first time flight ever flying over Holland. hundreds of projects from building schools and orphanages to setting up sports teams. transavia.com supported the Peter Pan Foundation, facilitating free holiday flights of children with chronic diseases. Both airlines also work at local level, such as in China or in The Philippines, where KLM teams have helped to collect money for among other things funding and building in 2010 around 30 homes for homeless people in the Manila region. 48

FOCUS ON…

CYCLING BLUE FOR KENYA

To celebrate KLMs 90th anniversary in 2009, KLM AirCares sponsored the Cycling Out of Poverty Foundation. Staff and passengers were both involved, donating money and miles and generating over €80,000. The project involved offering micro credits to families to either start a bicycle taxi business or purchase bicycles for their children to help them get to school. In addition, KLM launched a new sustainability scheme, also financed through micro credits: bicycle repair shops. The project paid for the construction of facilities and the training of 75 people.

Bicycle repair shop ocal training and and training ocal - skills-sharing L - - - Two formalAldersTables - - - MemberofCAREX - COMMUNITIES COMMUNITIES LOCAL & AUTHORITIES Review Board (CROS) Member ofSchipholRegional Schiphol area Information kitfornewresidents of 10 biggestFrench airports Member oftheCCEandCCAR local cooperationandresearch Pole ofCompetitivenesstoenhance Member ofASTech, Aeronautics promotion plan Region AgencyRoissy-CDG Member ofAerotropolis andParis 1 Policy Division,OECD Regional Development Merk Olaf Two questions to Twoquestions DIALOGUE WITH OUR STAKEHOLDERS OUR WITH DIALOGUE OECD:Organisationfor EconomicCo-operationandDevelopment STRUCTURES STRUCTURES TRAINING AND ASSOCIATIONS LOCAL - - raining andapprentice programs with ------1 from GlobalStart student associationse.g.AEISEC Regional EducationCenters facilities atLelystadAirport in 2009 professional trainings:149apprentices information onairtransportcareers trainings: 129traineesin2009 Hiring sociallymarginalizedstudents Knowledge andinspirationsessionswith T Development oftrainingandeducation Design ChallengeDelftUniversity Member ofAFMAébysupporting Member ofAir Member ofJEREMYby

- Local dialogue Local - conomic regional conomic - od iln srie hv ln pae a oe n einl cnme. o ie cerr picture, clearer a give To economies. regional in role a played long have services airline Good What doyouexpectfromAirFrance-KLM? local employmentonothercontinents,suchasAfrica. on impact positive a has also Europe to goods and people of movement The hubs. airport with cities in based be to likely moreare headquarters addition, In France-KLM. Air as such services, airlines good of As sectors. knowledge-intensive as such knowledge, tacit therethe studies, and significant economic jobs a by hi-tech is presence of confirmed between relationship lot a with businesses for vital is which contact, face-to-face enable They markets. labor regional various in employment creating destinations, employment in general. Air France-KLM and their hubs are good examples because they fly direct to many creatingand jobs hi-tech attracting competitiveness, regionalroleeconomic in key a play services Airline How doyouassesstheperformanceofAirFrance-KLMondriving localdevelopment? opportunities inthe sheltered sectoraround airportsandatdestinations indevelopingcountries. fewer with people also but HQs at workers international skilled, highly benefit only not airports that case the make it’sto Then easier playing. already is France-KLM Air that role the to complementary are they why clarify to good be would It projects. France-KLM’sgood-will Air are there Then growth. economic Air business cooperation business E

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GOs projects through through projects GOs - and umanitarian - permanent foundations permanent and partnerships N programs development H ocal economic economic ocal - development social and L SUPPLIERS LOCAL ocal dialogue and and dialogue ocal - activity knowledge activity transport air sharing L - Technical trainingcenterinKenya - - - fer tendertoregional suppliers - products fortheDutchmarket Durban producing sustainable staff ofAfricanfirmstrained catering of sustainablefoodforonboard hired in2009 launderette: 25disabledpeople Support totheANRH Logistic supportofafactoryin IAMA InstituteinBamako:1 Of AND INSTITUTIONS AND NGOS - LeadersforNature withIUCN ings ofSupport:2,000KLMand ------Martinair staff involved 1,950 volunteerstaff medical equipment projects), KLMAirCares (7NGOs) ofSupport(197 for Life(85projects), Wings by AirFranceFoundation(63projects), Acting University in IDUTandfundingofachairatWageningen the MillenniumDevelopmentGoals principles andpursuingthefulfilmentof W Friends oftheAirFranceFoundation: Donation ofticketsandfr Sponsoring ofhumanitarianpr Pursue sustainabletourismbymembership Involvement inUNGlobalCompact BUSINESS ACTORS BUSINESS REGIONAL ------to PaysdeRoissy-CDG 2 AirFrancestaff dedicated France andKLMfacilities Working visitsandtoursatAir Agenda Knowledge andInnovation Cooperation inNSHispeed regional debates Participation toParisarea published Three issuesof‘LeCourrier’

,500 ,500 ee transportof ojects supported 49 DRIVING LOCAL DEVELOPMENT INDICATORS AND METHODS

NOTE ON THE METHODOLOGY FOR THE REPORTING OF ENVIRONMENTAL INDICATORS

In 2005-06, under the aegis of the Air France-KLM Group’s 3.1/ Air operations The consumption of natural gas is the buildings of KLM and its Disclosure Committee, and validated by the college of Statutory subsidiaries (except Transavia and Martinair) in Amsterdam have • CO2 emissions Auditors, the Group’s environmental performance indicators were been included. The sharp decrease for CO emissions for the Group between defined in order to comply with the requirements of the French 2 The conversion of the quantity of gas used as energy is carried 2008 and 2009 is related to the decrease of Jet Fuel consumption New Economic Regulations law (Les Nouvelles Regulations out taking into account the quality of gas specific to France and consequently to the unfavourable context and less activity. Economiques, NRE, May 15, 2001) and the European Regulation the Netherlands. (EC 809/2004). • SO2 emissions The increase in consumption for Air France this year is mainly

As of the 2007-08 financial year, the Group chose to have a The calculation of SO2 emissions from the air operations is based due to a change in the scope for one entity (addition of a gas selection of environmental indicators (indicated by the symbols on the sulphur content of the fuel loaded, respectively, on the power plant). Amsterdam and Paris platforms, applied to all fuel used during √ and √√) verified by one of the Statutory Auditors, KPMG Audit, • Consumptions of superheated and iced water for 1 the year by KLM and Air France. with the highest level of assurance, reasonable assurance , for climate comfort fuel consumption and related CO emissions for air operations The decrease of SO2 emissions from the air operations for 2 For Air France, the superheated and iced water is supplied by ADP ( ) and a limited level of assurance1 for the other verified Air France between 2008 et 2009 is due to less Jet Fuel √√ (Aéroports de Paris) in Orly and Roissy and used respectively for indicators ( ). consumption and a low average sulphur content in the fuel √ heating and cooling. supplied in 2009 on the Paris platform. The decrease in superheated water consumption this year for 1/ Scope The increase in SO emissions from the air operations of KLM 2 Air France is mainly due to an error in the reporting done last year between 2008 and 2009 is explained by the higher average 1.1/ Scope covered and scope N-1 and buildings being excluded from the scope. The variation is also sulphur content of fuel supplied on the Amsterdam platform. - For the air operations, the environmental reporting due to a seasonal effect between 2008 and 2009. consolidation scope is identical to last year and covers all flights • Total noise energy The decrease in iced water consumption this year for Air France operated by Air France and its subsidiaries BritAir, Regional and This indicator was implemented by the Air France-KLM Group to is due to a change of climate comfort system which has been CityJet and those operated by KLM and its KLM Cityhopper (KLC) manage the evolution in the noise footprint of its activity. The total removed from one Orly freight hangar. subsidiary. KLM subsidiaries, Transavia and Martinair, have not noise energy indicator is calculated according to the methodology • Consumption of DFO for climate comfort been included. defined by the DGAC. It applies to all flights with Air France or KLM Fuel oil consumption for power generators, vehicles and ground - For the ground operations, the environmental reporting code operated, franchised and chartered, code share excepted. support equipment are not included in the indicator because consolidation scope is identical to last year and covers more The change in noise energy and traffic is determined by these are not used for heating and cooling. They are reported than 90% of the sites in France and in the Netherlands: comparing total noise energy calculated for the calendar year with separately. - The international outstations are not taken into account. that of 2000. • Ground operations emissions (CO , SO and NO ) - For Air France, indicators of domestic outstations are not • NO and HC emissions 2 2 X x The scope for CO , SO and NO emissions includes fuel oil and reported when fixed charges invoiced by airports do not Air France: For Air France, a specific tool has been developed in 2 2 X gas for heating, as well as vehicles and ground support equipment provide detailed information. The contribution of domestic 2009 to calculate more precisely the total emissions of NO and X emissions (except those of Servair and its subsidiaries), emissions outstations affected by this issue is marginal compared to HC. The methodology is based on the ‘fuel flow 2’ methodology by related to power generators, cooking gas consumption and engine the published data. Boeing2. The calculation of these indicators is done for each flight test runs. • The Air France consolidated subsidiaries are BritAir, and is obtained from data recorded during the flight. The different The variation between 2008 and 2009 for CO and SO emissions Regional, CRMA, Sodexi, Servair and its subsidiaries. For Servair parameters recorded are the temperature, mach, fuel flow, 2 2 comes from an error related to fuel oil consumption for ground and its subsidiaries, reported environmental data only include pressure, and the calculation is also based on engine certification 50 support equipment being counted twice for one site in 2008. activities in France. Transavia France is excluded from the information (ICAO data). Based on the corrected value, 2009/2008 variation is +9.4% for Air France reporting scope. For 68% of the flights, which corresponds to more than 90% of CO and +58.5% for SO . • The KLM consolidated subsidiaries are KLC, KES, KCS and KHS. all Air France aircraft, recorded data has been used to calculate 2 2 For Air France, NOx emissions related to engine testing are based Transavia (NL) and Martinair have been excluded from the KLM emissions specific to each flight. Emissions for other flights were on a theoretical factor that does not necessarily reflect the actual reporting scope. estimated from the calculated flights average emissions. testing conditions. The emission factor was based on the average - The reporting period for the Group environmental data is Emissions for Air France aircraft only have been included in this NO emissions from all engine types regulated by the ICAO within based on the calendar year to ensure consistency with national tool. The BritAir, Regional and CityJet subsidiaries included in the X the operational LTO cycle averaged on the flight phases. The figures for greenhouse gas emissions, unlike financial reporting tool scope in 2008, have not been included in the tool scope in contribution of NO emissions related to engine testing is equal which is based on the IATA year (April 1 to March 31). 2009. Since the methodology and scope have changed in 2009, X to 3% of the reported data. 2/ Reporting tools 2008 and 2009 data are not comparable. KLM: For KLM, two distinct methodologies are applied to calculate • VOC Emissions The environmental indicators are collated at local level via two NOX and HC emissions depending on the aircraft: the ‘fuel flow’ Included are direct emissions of solvents contained in the reporting tools: Osyris (Enablon software) for Air France and methodology and the ‘P3T3’ methodology (developed by General products. VOC emissions are calculated from the actual quantities CaeSaR for KLM, available respectively at each Air France and Electric). of products which have been used; VOCs in collected waste are KLM subsidiary. The methodology used for the calculation of low altitude emissions excluded. The reliability of the reporting process is supported by definitions is similar for Air France and KLM. It is based on the LTO cycle and For Air France, the reporting scope was extended to include third of each indicator and user guides to contributors available in on engine data communicated by the ICAO. Taxiing time used is party orders as well as paint kits. both French and English. Consistency tests have also been the actual taxiing time. • HC emissions implemented. The consolidation of the Air France-KLM Group environmental • In-flight fuel jettison In 2009, apart from industrial emissions of VOC, were also data is carried out by the Air France sustainable development An exceptional operation (approximately one flight in 10,000 in calculated hydrocarbon (HC) emissions from vehicles and ground direction. 2009) involving the jettisoning of a quantity of fuel in flight to avoid support equipment, test benches and aircraft fueling. an overloaded plane on landing whenever a flight is aborted. Each • Effluents 3/ Details and methodology, commentaries on variations operation is effected in close coordination with air traffic control Both Air France and KLM entities need to be compliant with At Air France-KLM Group level, the regulatory requirements under strict conditions governing geographical location (avoiding the regulations on effluents of each country. Each site has and the reporting and consolidation principles are outlined in a urban zones) and altitude (generally at or above 2,000 meters). requirements for the limits of effluents and the frequency of document entitled the Instruction Memo Environment, which is 3.2/ Ground operations measurements. updated annually. The assembly of data, calculation methodologies The definition has changed to be more understandable and • Water consumption and operational consolidation are defined in procedures which are because limits and frequencies of measurements varied from The consumption of drinking water is taken into account for all specific to Air France and KLM, but which are harmonized. site to site and from country to country and because the values ground activities. Water used on board flights is not included. Within the framework of an approach based on continuous were fluctuating depending on the measurements. The number The decrease this year is due to less activity and consumption improvement, the methodologies used for certain performance of exceedings of the regulatory limits for heavy metals, for reduction measures. indicators have been more precisely defined. When these changes phosphorous and for nitrate compounds is now reported and have a significant impact on the data, comparison with the figures • Consumption of gas published. for previous years is not relevant. This is why, in such cases, the The consumption of cooking gas in the catering activity of Servair pro-forma change is indicated in the commentary. and its subsidiaries, an Air France subsidiary, is included.

1 The review work was conducted in accordance with the International Standard for Assurance Engagements (ISAE 3000), specific to extra-financial data verification. 2 Baughcum, S. L., et al. “Scheduled Civil Aircraft Emissions Inventories for 1992: Database Development and Analysis, Appendix D: Boeing Method 2 Fuel Flow Methodology Description.” Report NASA CR 4700, The Boeing Company, April 1996. one sitein2008. Basedonthecorrectedvalue, CO is+9.4%for 2009/2008variation (5) This variation comes from an error related to fuel oil consumption for ground support equipment being counted twice for andcooling. heating for used not because included not equipment support ground and vehicles generators, power for consumption oil Fuel (4) (3) Water consumptioninaircraftnotincluded. (2) KLManditssubsidiaries: KLC, KES, KCS, KHS. included. andMartinairarepartially transavia.com (1) Air Franceandsubsidiaries: Regional, Britair, Group, Servair Sodexi, CRMA. na: notapplicable nc: method). (changeinscopeorcalculation notcomparable 2009(limitedlevelofassurance). KPMGfor √ Figuresverifiedby ** All flightswith AFcodeoperated, franchisedandchartered, codeshareexcepted. * Air √ : levelofassurance). for 2009(reasonable by KPMG Figuresverified √ : INDICATORS ENVIRONMENTAL Ground operations Ground Operations Air photochemical pollution photochemical to contributing substances of Emissions Consumptions and eutrophication and acidification to contributing substances of Emissions of the regulatory limits regulatory the of exceedings of Number Effluents production Waste Waste emissions gas Greenhouse Emissions consumption Water Consumptions indicator energy noise Global fuel materials: raw of Consumption Noise impact Noise emissions gas Greenhouse Emissions eutrophication and acidification to contributing substances of Emissions Energy consumption Energy Other emissions Other In-flight fuel jettison fuel In-flight Figures verified by KPMG for 2009(limitedlevelofassurance). by KPMG Figuresverified

France only.

(3)

√ (8)

Of which low altitude altitude low which Of Of which low altitude low which Of SO t) 00 (< t) jettisoned Fuel 00 jettison fuel of Occurences t) (< 00 (< CO NO HC HC Of which low altitude low which Of

√ 2 3 3 3 2 X Emissions of HC of Emissions Phosphorus compounds Phosphorus andcooling forheating consumption Energy Heavy metals Heavy SO compounds VOC VOC compounds organic volatile of Emissions NO industrial waste waste industrial non-hazardous of Quantity CO industrial waste waste industrial hazardous of Quantity Nitrogen compounds Nitrogen Electricityconsumption recycled recycled waste industrial hazardous of % √

√ √ √ 0 0 0

2 2 X √ √

√ √ √ √

f f f

√ √ √

√

(9) water water heated Super Iced, water water Iced, Gas Gas DFO

√ √ (7) √ √

√ (4) √

√ √ √ 000 tonnes 000 tonnes 000 000 tonnes 000 000 tonnes 000 tonnes 000 000 tonnes 000 000 tonnes 000 000 tonnes 000 √ number 10 tonnes

Unit 000 m 000 number number number 12 tonnes tonnes tonnes tonnes tonnes tonnes tonnes MWh MWh MWh MWh MWh Unit J k % 3 2 425,502 145,056 171,407 and +58.5% for SO and+58.5%for 79,388 16,065 69,176 27,075 11.072 5,520 2007 2,074 1,074 0.836 8,589 1,443 135.0 2007 54% 14.0 268 784 123 121 1.70 22 8.5 3.6 na 1.1 42 Air France/KLM Group France/KLM Air Air France/KLM Group France/KLM Air 417,990 157,975 164,110 89,833 61,054 12,947 14.925 27,506 6,084 1,659 2008 1,728 7,030 1,145 1,804 143.5 8,731 2008 48% 26.5 889 1.93 144 1.08 142 8.9 3.4 na 1.1 47 2 . 149,353 421,581 164,189 84,290 84,290 61,067 11,738 25,269 12.902 5,961 1,870 2009 8,021 130.8 1,979 2009 nc nc nc 58% 18.7 1.09 979 166 1.79 127 917 8.9 4.2 51 1

(10) (10) (10) (6) The scope for CO for scope The (6) (2) PerimeterKLMGroup: KLMandCityhopper. by Flightsoperated andMartinairareexcluded. transavia.com (1) Perimeter Air different. are measurements of frequency and limits regulatory France, Air and KLM between compared be cannot Effluents (10) metals monitoredin2007and2008are:(9) Heavy Cr, Cd, Ni, Cu, Pb, Sn, Zn. discharged ineffluentskg. consistency. better a for quantities changed as 2008, has reported and were indicators (8) 2007 of data In definition The testruns. engine (7) New indicator in 2009. Emissions of HC are coming from different sources such as: fueling, ground support equipment, included asof2008. are runs test engine and consumption gas cooking generators, power to related Emissions equipment. support ground -11.8% +10pts -29.4% -7.6% -10.6% -14.5% -13.6% 09/08 09/08 -6.2% -9.0% -9.3% -2.0% -8.1% -8.1% -9.1% -7.3% 3.9% 0.9% 8.2% 0.0% 0.0% 8.5% 3.1% 0.5% 9.7% nc nc nc nc (3) (3) 36,211 326,561 145,056 16,065 50,720 81,520 17,336 1.30** 12.4 5,504 9.549 4,455 2007 2007 2,074 0.747 521 809*

47% 91.6 809 109 France Group: all by AF flightsoperated Air 23* 0.8 6.4 1.9 52 71 19 na (4) (3) (5) Modifica

(6) (6) 2 The data hasbeencorrectedduetoaligmentoftheKLMfigurewithThe data formulas. AFKLM Variation 2009/2008accordingtothe2009method. , SO , (6) Air France Group France Air Air France Group France Air 2 43,357 320,991 and NO and 164,110 43,237 63,997 12,947 17,360 10.108 1.27** 1,184* 21.2 6,890 5,006 0.794 1,658 2008 5,511 2008 1,728 610 93.6 40% 91.7 tion of the calculation methodusedin2009. tion ofthecalculation 865 141 32* 6.5 0.8 1.6 na (6) (6) X (6)

emissions in 2007 includes fuel oil and gas for heating, as well as vehicles and vehicles as well as heating, for gas and oil fuel includes 2007 in emissions 37,396 149,353 327,094 15,865 42,664 69,211 82.3 82.3 11,738 1,381* 1.18** 13.2 5,036 4,839 2009 639 7.720 1,870 2009 0.741 2.6 52% 33* 742 112 6.2 0.7 85 1 1 0 (5) (6) (6) (5) (6)

(1) (1) -10.2% -12.2% -37.7% -13.7% -23.6% +12pts -12.5%

-14.2% 09/08 09/08 16.6% -8.6% -8.6% -4.6% -6.7% -9.0% -9.3% -3.3% -1.3% -7.1% 8.2% 4.8% 3.1% 1.9% 8.1% nc nc nc nc nc

France, BritAir, andCityJet. Régional (3) (3) (5) (5) 89,887 98,941 0.40 0.40 18,455 43,176 3,085 0.089 9,739 1.523 2007 1,065 2007 43.4 84% 2.47 12.3 634 263 265 217 0.3 2.1 1.7 1.6 19 52 na na na na

(4) KLM Group KLM 93,979 10,146 46,476 97,000 KLM Group KLM 17,817 0.290 3,221 2008 4.817 2008 1,078 0.66 49.9 84% 1.24 620 279 281 140 0.3 2.4 1.8 5.3 2.9 15 50 na na na na

46,894 94,487 94,978 18,403

0.348 2,985 9,404 2009 5.182 2009 1,122 48.5 0.61 84% 595 237 278 0.3 2.7 1.6 5.5 18 54 42 na na na 2 0 0

(2) (2)

09/08 -11.1% 20.0% 20.0% -16.0% 12.5% -15.7% -4.0% -2.8% 09/08 -7.3% -7.3% -7.6% -0.4% -2.6% 0.0% 7.6%

0.9% 3.3% 3.8% 4.1% 1.1% 0 pt 0 na na na nc nc nc nc

51 INDICATORS AND METHODS NOTE ON THE METHODOLOGY FOR THE REPORTING OF SOCIAL PERFORMANCE INDICATORS

In 2005-06, under the aegis of the Disclosure Committee, and Air France-KLM group. Air France following the accident are provided in the passenger validated by the college of Statutory Auditors, the Air France‑KLM The notes below refer to the references in the tables on page 53. section of this report. (page 33) group’s social performance indicators were defined in order to comply • Employees Despite the context, the fall in the frequency and severity rates at with the requirements of the French New Economic Regulations law Note 1: The number of people employed by the Group (expressed as Air France is the result of the ambitious action and prevention plans (Les Nouvelles Regulations Economiques, NRE, May 15, 2001) and headcount) on both permanent (CDI) and fixed-term contracts (CDD) implemented by the company. the European Regulation (EC 800/2004). at December 31 in the reference year. KLM and KLM subsidiaries Since the 2007-08 financial year, the Group has chosen to have The Group’s reporting scope was extended to include three new The frequency and severity rates are calculated based on the a selection of the social indicators verified by one of the Statutory subsidiaries: VLM, Transavia France and Martinair, i.e. some 2,132 theoretical hours worked. Auditors, KPMG Audit. These indicators are shown by the symbol ) √ additional employees. Note 1: Until 2008, KLM also reported work-related accidents not in the tables on page 53. Note 2: In 2009, based on the 2008 scope, the number of involving time off work as soon as they were qualified as accidents The nature of the work undertaken and its conclusions are presented Air France‑KLM group employees stood at 105,957, i.e. a reduction in the workplace. In 2009, this definition was changed to limit the on page 54. The level of assurance for the 2009 financial year is of 3.7%. By employee category this fall was -4.2% for ground staff, reporting of work-related accidents solely to those involving time off moderate1. -2.9% for cabin crew and -2.2% for flight deck crew. work. This explains, for KLM and its subsidiaries, the very significant 1/ Reporting scope The reduction in employees is the result of a series of measures fall in work-related accidents and the frequency rate between 2008 implemented in response to the economic crisis such as the and 2009. The Air France-KLM social reporting consolidation scope is based on hiring freeze and the review of posts to establish whether or not Note 2: Despite a reduction in the number of work-related accidents the number of employees (expressed as headcount) on the payroll at replacements could be appointed in the event of departures. involving time off work, the increase in the severity rate is explained the end of the calendar year. Note 3: Employees on permanent contracts are calculated excluding by lengthier absences from work following work-related accidents. The NRE reporting scope covers 96% of the average employees in expatriate staff. Note 5: The health and safety data of the KLM subsidiaries are cal- the Air France-KLM group at the end of the calendar year, expressed culated without the Cobalt Ground Solutions subsidiary. For the first in full-time equivalent • Recruitment on permanent contracts time, KLM’s transavia.com and Martinair subsidiaries have been The subsidiaries of Air France and KLM over which the Group has at The indicator concerns only employees hired on permanent contracts included in the frequency and severity rates in 2009. least 50% control and whose acquisition dates back at least one full (CDI). year and which have a significant number of employees are included For Air France, the calculation of the number of employees recruited • Training in this NRE social reporting. on permanent contracts includes those initially recruited on a fixed- Air France and Air France subsidiaries Note that the number of employees for each of the subsidiaries, term contract transferring to a permanent contract during the year. The amounts taken into account for the calculation of the indicator including Air France and KLM, comprises their entire workforce For KLM, only employees recruited directly on a permanent contract showing the percentage of the total payroll dedicated to ongoing including local staff employed internationally. are taken into account. vocational training are reported in line with Declaration 2483 relating - For 2009, the Air France consolidated subsidiaries are: Bluelink, • Departures to company contributions to training. BritAir, CityJet, VLM, CRMA, Regional, Servair Group (ACNA, Bruno Note 4: The departures cover all reasons for departure, including at Note 2: In 2009, following the hiring freeze, the reduction in the Pegorier, OAT, Servair SA, CPA), Sodexi and Transavia France, the end of fixed-term contracts, explaining the difference between number of employees and the optimization of the training offer, the representing 73% of the employees of the subsidiaries in the Air the total number of departures and the departures indicated by need for internal training was reduced. The number of ground staff France group (average employees at the end of the calendar year reason. transferring to cabin crew positions also declined (200 hours of trai- in full time equivalent). In 2009, note the significant number of departures for other causes ning per transfer). - In 2009, this scope was extended to three new subsidiaries: VLM, and notably for the non-renewal of fixed-term contracts. For flight deck crew, each change of aircraft type involves specific CPA (in the Servair group) and Transavia France. • Percentage of women; Organization of working time training. The fall in recruitment and internal mobility led to a reduction - For 2009, the KLM consolidated subsidiaries are: Cygnific, Cobalt in new aircraft qualifications meaning a significant fall in training Ground Solutions, KES (KLM Equipment Services), KHS (KLM Note 5: The calculation of the indicators for the proportion of women hours. Health Services), KLM UK Engineering limited, KLM Cityhopper (UK in the workforce and the organization of working time is based on the Note 5: The training data for the Air France group’s subsidiaries are and BV), transavia.com, KLM Catering Services Schipol B.V. and number of employees on both permanent and fixed-term contracts calculated without the Transavia France subsidiary. Martinair, representing 97% of the employees in the subsidiaries of at December 31 of the reference year. KLM and KLM subsidiaries 52 the KLM group (average employees at the end of the calendar year Note 6: The increase in the number of part-time employees at KLM KLM does not currently have a centralized reporting system solely for in full time equivalent). is explained by the increased flexibility in KLM’s HR policy facilitating the costs of training although this data is now reported. Note that the - In 2009, the reporting scope of the KLM subsidiaries was changed those employees who so wish to move to part-time working and by disclosure of this information is not required by Dutch law. with: the freeze on recruitment which is usually on a full-time basis. - The inclusion of a new subsidiary: Martinair. Note that KLM’s OTHER SOCIAL DATA FOR THE AIR FRANCE AND KLM • Number of disabled employees TABLES Cobalt Ground Solutions subsidiary is the result of the Air France and Air France subsidiaries The indicators reported in the other social data tables are subject to merger between the AFSL and KLM Ground Services Limited For Air France, the number of disabled employees reported are different qualification and legal reporting obligations in France and subsidiaries that were included in the NRE social reporting those for whom a valid certificate, pursuant to French law (DOETH2), the Netherlands, which means they are not comparable and need scope in 2008. is available, whatever their ability to perform the tasks involved in to be presented separately for Air France and KLM. The subsidiaries - The withdrawal of the CSC India subsidiary due to the reduction their position. concerned in these tables are listed below. in KLM’s shareholding which fell below the 50% threshold Note that the data for international employees is reported based on required to be included in the reporting scope. • Health and safety - Absenteeism local legislation. The reporting period for the Group’s social data is based on the Cases of barometric otitis and musculoskeletal disorders are Note 3: For Air France: the increase in the disabled employment rate calendar year to ensure consistency with the social performance recorded as work-related accidents in France and represent more at Air France is notably explained by significantly higher recourse to indicators of other French companies. Note that the reporting of than half the work-related accidents reported by Air France in 2009, the protected sector. financial information is based on the IATA year (April 1 to March 31). whereas they are recorded as sick leave by KLM, pursuant to Dutch The number of employees with disabilities remained stable despite law. 2/ Reporting tools the retirement departures; seven employees were recruited despite KLM and KLM subsidiaries the external hiring freeze in application of the 2009-11 three-year The indicators are complied and consolidated using the Osyris The system for monitoring days of absence implemented by KLM agreement. software package developed by the company Enablon and deployed does not at present include the data relating to days of absence due Note 3: For the Air France subsidiaries: The increase in the number across the entire reporting scope. to work-related accidents. of employees with disabilities in the subsidiaries is explained by the The reliability of the reporting process is supported by precise • Work-related accidents increase in the reporting scope and by a pro-active policy on the definitions of each indicator and user guides for contributors in the There are significant differences in reporting methods for work- hiring of persons with disabilities, particularly at the Servair group Osyris tool, available in both French and English. Consistency tests related accidents between France and the Netherlands (see which signed a specific agreement in this regard. have also been implemented. paragraph on absenteeism) KLM and KLM subsidiaries This year, a general reporting procedure was added which defines the Air France For KLM, an individual is considered to be disabled if unable to carry process for compiling, calculating and consolidating the indicators. Air France only reports accidents involving time off work, pursuant This procedure is based on an instruction memorandum issued by out his or her work or any other work at an equivalent salary level. to French law. the Air France-KLM group’s Finance Division. This requires the employer and the employee to look for another The frequency and severity rates are calculated based on : The consolidation of the Air France-KLM group’s social data is carried position with a salary as near as possible to the previous level and - The theoretical hours worked by the ground staff from which out by Air France’s sustainable development department. gives the employee the right to government benefits to compensate hours of absence due to illness, maternity and workplace for the possible difference. 3/ Details and methodology, accidents are subtracted. Note 3: Due to a change in Dutch law, the number of disabled em- - The hours of commitment for the flying crew, corresponding to commentary on variations ployees working for KLM declined between 2008 and 2009. the number of hours of exposure to occupational risks within the Note 6: The reporting of disabled employees was extended to KLM’s CONSOLIDATED NRE SOCIAL DATA FOR THE framework of their activity on the ground and in flight. subsidaries in 2009 with the exception of Martinair. AIR FRANCE-KLM GROUP TABLE Note 1: Air France regrets 13 work-related fatalities during 2009, 12 This table presents the indicators relating to employees, recruitment, of whom were the crew members on flight AF447 between Rio and • Collective agreements signed departures, the proportion of women employees and those working Paris when it was lost on June 1, 2009. In 2009, the reporting of KLM and KLM’s subsidiaries was extended part time. These indicators are consolidated at the level of the More detailed information on the measures implemented by to include the collective agreements signed during the calendar year.

1 The review work was conducted in accordance with the International Standard on Assurance Engagements (ISAE 3000), specific to the verification of extra-financial data verification. 2 Annual declaration mandatory under French law. N.A.: not available N.A.:not assurance). of level (moderate 2009 for KPMG by verified : indicators √ Consolidated NRE social data for Air France-KLM group France-KLM Air for data social NRE Consolidated SOCIAL INDICATORS SOCIAL Other social data for Air France France Air for data social Other Total staff staff Total Health and safety and Health of which redundancies (incl. Economic) Economic) (incl. redundancies which of Total leavings leavings Total Ground staff Ground Percentage of females part-time employees employees part-time females of Percentage Cockpit crew Cockpit of which deaths deaths which of Cabin crew crew Cabin Cockpit crew crew Cockpit Total staff with disabilities disabilities with staff Total disabilities with staff Total Total Total Number of training hours by employee employee by hours training of Number accidents workplace of rate Frequency crew Cabin Disabled staff Disabled crew Cabin crew Cabin Ratio of disabled staff (under French law) law) French (under staff disabled of Ratio crew Cabin Cabin crew Cabin Cockpit crew Cockpit Part time employment at 31/12 at employment Parttime Ground staff staff Ground trained/workforce) agents of (number rate Participation training to devoted payroll total of Percentage resignations which of Percentage of women at 31/12 at womenPercentage of Cockpit crew crew Cockpit staff Ground accidents workplace fatal of Number staff Ground Leavings staff Ground contract permanent under Recruitments staff Ground Cockpit crew Cockpit contracts) fixed-term and contracts (permanent 31/12 at Headcount Absenteeism Collective agreements Collective Training staff Disabled accidents workplace Total territories.overseas French the and France Continental in France only Air concerns italics in Data * agreements Collective crew Cockpit trained/workforce) agents of (number rate Participation Training accidents workplace Total safety and Health staff Ground leave Maternity Ground staff staff Ground Staff under permanent contract contract permanent under Staff Cockpit crew crew Cockpit Cockpit crew Cockpit Total staff with disabilities recruited during year year during recruited disabilities with staff Total retirements which of Cabin crew crew Cabin crew Cockpit Cabin crew Cabin Cabin crew crew Cabin Percentage of males part-time employees employees part-time males of Percentage Total staff with disabilities recruited during year year during recruited disabilities with staff Total employees time part of Percentage Cabin crew Cabin reporting social NRE of Scope Cabin crew crew Cabin accidents workplace of rate Severity crew Cockpit Ground staff staff Ground employee by hours training of Number crew Cockpit Cabin crew crew Cabin staff Ground accidents work to Due Ground staff staff Ground crew Cockpit Scope of reporting for Air France subsidiaries subsidiaries France Air for reporting of Scope staff Ground illness to Due √ (5) (2) (5) (2) (2) √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ (3) (3)

NRE social data social NRE (4) √ √ Air France Air √ √ √ √ √ √

(100% of the staff headcount, registered and payed)* and registered headcount, staff the of (100% (5) (6) (5) √ (3) √ (5) Subsidiaries Air France Air Subsidiaries

(1) √ (1) √ √ √ √ √ √ √ √ √

√ √ √ (according to local legislation) local to (according 103,772 110,369 25,545 76,177 22.2% 72.3% 39.7% 42.7% 2007 37.1% 4,509 8,647 6,624 2,018 3,012 2,611 5,161 1,121 5.3% 1,118 9.5% 566 342 931 143 √

√ Air France-KLM group France-KLM Air 104,601 110,878 26,308 75,668 22.9% 39.9% 42.9% 72.2% 2008 37.0% 10.1% 6,206 8,902 2,594 4,804 4,280 1,208 1,852 1,047 3,011 96% 5.5% 355 995 691 135 10.4% 10.4% 3.14% 19.1% 2008 2008 27.62 2,586 100% 100% 2.0% 0.8% 0.2% 0.2% 2.6% 1,444 4.5% 6.4% 0.4% 0.7% 1.8% 94% 85% 0.98 70% 99% 89% 94% 92% 290 897 177 45 23 NA 31 34 40 26 42 81 19 18 2

108,367 104,425 3.58% 15.3% 73,015 26,121 26.62 36.8% 23.9% 42.2% 42.6% 71.8% 10.3% 2009 2009 2,388 8.7% 100% 100% 2.9% 0.3% 0.3% 5.6% 9.2% 4.6% 2.5% 0.5% 0.7% 0.7% 1.8% 6,232 9,231 1,644 1,435 1,562 1,795 1,147 2009 1,315 90% 92% 7,913 1,177 0.95 5.5% 73% 99% 88% 88% 92% 96% 385 931 246 155 136 111 34 16 96 60 35 38 30 25 27 37 19 13 7 09/08 09/08 09/08 -45% -20% -20% -23% -28% 111% -25% -77% -21% -21% -16% -13% -12% 33% 22% 32% 47% 14% 12% 11% -8% -8% -4% -4% -3% -2% -2% -2% -7% -1% -1% 0% 0% 6% 2% 4%

09/08 -0.8% -0.2% -0.6% -3.5% -2.3% -0.7% -0.7% -40% -80% -64% -89% -49% -31% 5.6% 2.2% 0.4% 3.7% -11% 4.1% 30% 28% 37% 15% -3% Other data for KLM for data Other N.C.comparable :not available N.A.:not assurance). of level (moderate 2009 for KPMG by verified indicators : √ Total staff with disabilities disabilities with staff Total Total training costs in in costs training Total staff Disabled accidents workplace for rate Frequency accidents workplace fatal of Number N.C.: notcomparable N.A.: notapplicable * KLM: staff. concernsKLMwithoutinternational data in costs training Total Training agreements Collective staff Disabled accidents workplace fatal of Number accidents workplace Total safety and Health staff Ground leave Maternity Absenteeism Scope of reporting for KLM subsidiaries subsidiaries KLM for reporting of Scope Cockpit crew crew Cockpit Severity rate of workplace accidents accidents workplace of rate Severity accidents workplace of rate Severity Health and safety and Health disabilities with staff Total Training agreements Collective Ground staff staff Ground illness to Due Frequency rate for workplace accidents accidents workplace for rate Frequency crew Cockpit crew Cabin Cabin crew crew Cabin Total workplace accidents accidents workplace Total Total training costs in in costs training Total in costs training Total Total Air France group FranceTotal Air 52,592 16,209 71,586 74,320 43.0% 40.0% 65.5% 31.4% 2008 17.9% 3,538 2,920 1,540 1,250 1,927 5,519 3,196 6.0% 94% 7.7% 435 834 650 295 323 98 transavia.com, SchipolB.V., Services KLMCatering Limited, KLMUKEngineering Martinair. KLM subsidiaries: Cygnific, CobaltGroundSolutions, KES, KHS, KLMCityhopper(UKandBV), :** KLMgroup KLMandsubsidiaries. : group Servair ACNA, BrunoPegorier, OAT, SA, Servair CPA. Air Francesubsidiaries: BritAir, BlueLink, CRMA, CityJet, VLM, Regional, Sodexi, Transavia Franceand * :Air Francegroup Air Franceand Air Francesubsidiaries. √ : : levelofassurance). 2009(moderate KPMGfor verifiedby indicators √ √ Air France group France Air √ √ √ √ 50,333 70,342 16,290 72,191 (6) 43.0% 39.9% 65.4% 32.7% 18.1% 5,568 4,303 5,221 1,286 1,051 2009 (3) 6.2% 7.0% 95% 736 737 631 133 819 181 114

99

(5) KLM € € per full time equivalent equivalent time full per € equivalent time full per € √ √ from which Air France Air which from 43,529 61,002 63,010 (100% of the staff headcount, registered and payed)* and registered headcount, staff the of (100% (1) √ 15,106 √ √ 100% 33.6% 64.8% 44.4% 19.5% 2008 41.1% 2,366 2,463 4,375 1,356 1,484 2,810 (1) √ 8.2% 6.4% 253 367 877 797 191 310 82 (according to local legislation) local to (according

* √ √ (2) √ (2) √ KLM Subsidiaries KLM 60,686 59,506 15,081 41,333 40.9% 35.2% 44.4% 64.7% 19.8% 3,444 2,665 100% 4,272 1,099 2009 6.7% 7.5% 440 534 653 628 100 (1) √ (1) √ 151 374 114 99

√ √ 36,558 23,076 10,099 33,015 33.0% 82.9% 42.6% 30.4% 14.9% 57.3% 2008 3,383 2,668 1,884 1,084 1,761 99% 4.7% 558 667 256 724 161 312 Total KL groupTotalKL 60 37

34,083 22,682 36,176 29.9% 82.3% 35.4% 16.8% 61.6% 41.6% 3,663 2,692 9,831 1,929 1,059 2009 4.5% 99% 546 499 358 698 514 2008 2008 22,33 67 1 ** group KLM 21.66 65 3.8% 5.3% 0.2% 41 12 1.5% 6.1% 0.1% N.A. N.A. 96% N.A. N.A. 0,07 N.A. N.A. 0.12 755 3 166

0 0 1 0 18,053,671 18,053,671 60,847,429 60,847,429 30,266 28,390 18,700 100% 82.9% 34.4% 42.5% 60.7% 15.0% 2008 29.1% 8,794 2,772 1,359 1,114 4.3% 2,500 2,500 2,143 483 200 295 202 961 2009 2009 824 141 10,34 3.6% 5.8% 4.9% 0.2% from which KL which from 1.5% 43 30 73 0.1% 97% 0,16 0.19 252 149 713 5.4 76 0 0 3 6

28,700 27,700 17,668 82.3% 64.5% 28.6% 42.0% 36.7% 16.7% 100% 8,325 2,707 1,089 1,328 2009 4.2% 09/08 09/08 662 326 184 169 189 129% 34 50 89 58% 12 -6% -8% -5% -5% N.C. N.C. N.C. N.C. 3 0% 0% 0%

53 INDICATORS AND METHODS ONE OF THE STATUTORY AUDITORS’ REPORT ON A SELECTION OF ENVIRONMENTAL AND SOCIAL INDICATORS OF AIR FRANCE-KLM GROUP FOR YEAR ENDED DECEMBER 31, 2009

In accordance with the assignment entrusted to us and in our the requirements for French companies to establish their social capacity as statutory auditors of Air France-KLM Group, we annual reports (“Bilans Sociaux”) and their annual greenhouse performed a review which enables us to provide: gases national inventories as of December 31 of each year whilst • a reasonable assurance on the indicator related to fuel the Group’s financial information is prepared as of and for the

consumption and resulting CO2 emissions from the year ended March 31 of each year. Air France‑KLM Group flight operations during the year ended • The Group continued to improve the reliability of the data December 31, 2009. Such indicators are identified by the reporting process in 2009. KLM report from now on information sign √ √. related to training and Air France developed a more reliable 2 • a limited assurance on the environmental and social indicators calculation method regarding flight emissions (HC and NOX). (“the data”) selected by the Air France-KLM Group and identified • The Group used an automated reporting tool to collect and by the sign √ for the year ended December 31, 2009. consolidate the social and environmental data of the Group, Such data are disclosed in the table entitled “environmental and enhancing the reliability and the consistency of the data social information of Air France-KLM Group” both in the 2009- collected. The functionalities in terms of controls of the reporting 10 Reference Document and in the 2009-10 Corporate Social tool should nevertheless be further developed, especially in Responsibility Report. relation to the consolidation phase. The conclusions presented below relate solely to these data We have the following matters to report regarding the procedures and not to the Corporate Social Responsibility Report taken as related to reporting protocols for the verified environmental data: a whole. • During our review at entity level, we observed that the protocols The data have been prepared under the responsibility of the CSR had been properly understood and applied. However : Department of the Air France-KLM Group, in accordance with the - Internal control procedures regarding the reported data should internal environmental and social reporting protocols of the Group be implemented more stringently, especially for indicators (“the protocols”), available at Air France-KLM headquarters. related to ground emissions; It is our responsibility to express an opinion on these indicators, - Procedures to determine the reporting scope should be based on our review. followed more stringently in order to ensure that the reporting scope is updated prior to the reporting campaign. KLM Nature and Scope of the Review subsidiaries Martinair and Transavia in particular should be We conducted our review in compliance with the professional included in the reporting scope for ground operations and air standards applicable in France. operations. We performed a review to provide the assurance that the selected We have the following matters to report regarding the procedures data are free of material misstatement. The work performed on related to reporting protocols for the verified social data: the data identified by the sign √ enables us to provide a limited • Due to different legal framework, certain social indicators level of assurance. The work performed on the data identified for Air France and KLM are presented individually and their by the sign √√ is more extensive and enables us to provide a definitions cannot be compared. 54 reasonable level of assurance. • During our review at entity level, we observed that protocols • We assessed the protocols relevance, reliability, neutrality, had been properly understood and applied. However : understandability and completeness. - The calculation methods for indicators related to safety might • We interviewed the people in charge of the reporting process be improved even further; the corresponding definitions in the at the parent company level as well as at the selected entities1 protocols would benefit from further clarification; level. - The reliability of the reporting process at entity level could be • We carried out detailed test work at the selected entities. improved with higher involvement of the management team in Such selected entities represent from 48 to 100% of the validating the reported data. consolidated environmental data and 83% of the Group total headcount for social indicators. For the selected entities, we Conclusion ensured that the protocols were understood and implemented; Reasonable assurance on a sample basis, we verified the calculations, performed Based on the procedures carried out both at Air France and KLM consistency checks and reconciled the data with the supporting headquarters, we consider that our test work on the calculation

documentation. of fuel consumption and resulting CO2 emissions from flight

• We audited the source data used in the calculation of CO2 operations of the Air France-KLM Group gives a reasonable basis emissions from the Group’s flight operations. for the following opinion.

• We verified that the data used in the calculation2 ofCO In our opinion, the data identified by the sign √ √ has, in all emissions from flight operations were properly derived from Air material respects, been prepared in accordance with the above- France and KLM information systems. mentioned protocols. • We also verified, on a sample basis, the calculations and the Limited assurance consolidation of the data at Air France-KLM Group level. Based on our review, nothing has come to our attention that When carrying out our procedures, we used the assistance of our causes us to believe that the environmental and social data Environment and Sustainable Development experts. identified by the sign √ have not, in all material respects, been prepared in accordance with the above-mentioned protocols. Comments relating to the reporting procedures of the Group and their implementation • Both environmental and social protocols of the Air France-KLM Group are prepared on a calendar year basis, consistently with Paris La Défense, May 27, 2010

KPMG Audit Département de KPMG S.A. Valérie Besson, Partner Michel Piette, Partner

1 Environment: Direction Générale Industrielle Air France (Roissy and Orly), Direction Générale de l’Exploitation Air France (Roissy and Orly), Air France Cargo Roissy, Direction du Siège Air France (Roissy, Vilgénis), Servair (Servair 1, Acna Roissy), KLM Schiphol for ground operations. Air France and its affiliates (CityJet, BritAir, Regional), KLM and KLM CityHopperfor flight operations. Social: Air France in France, Servair S.A., KLM, Transavia, Martinair. 2 Hydrocarbons. GLOBAL COMPACT ON COMMUNICATION ON PROGRESS

Air France-KLM established a Corporate Social Responsibility Statement which covers the ten principles of the United Nations Global Compact. Below an overview of where the information can be found in the report regarding these principles and where additional information can be found.

GLOBAL COMPACT PRINCIPLE PAGES EXTRA INFORMATION AVAILABLE OUTSIDE THE CSR REPORT SOURCE

Human Rights (1&2) 12,15,16,38 Air France-KLM Social and Ethics Charter In-house documents, Contract clause on labour protection, and Sustainability Air France and KLM websites Charter for suppliers

Labour Law (3,4,5 & 6) 38-42 Air France: Charters for the prevention of harassment at In-house documents, the workplace, for Occupational Safety and Accident pre- Air France and KLM websites vention, Agreement on psychological and social risks, etc. Air France-KLM 2009-10 KLM: preamble of the Collective Labor Agreement, Reference Document Occupational Health & Safety Policy Statement. (pages 64-70)

Environment (7,8 & 9) 20-31 GEP Code for Good Environmental Practices In-house documents, Environmental protection clause for suppliers Air France and KLM websites Air France-KLM 2009-10 Reference Document (pages 84-87) Fight against Corruption 10-11,15 Air France-KLM Financial Code of Ethics In-house documents, KLM Code of Conduct, Whistle blower procedures, Air France and KLM websites purchasing Code of Ethics for Employees signed by Air France-KLM 2009-10 Air France and KLM buyers Reference Document

GRI CORRESPONDENCE TABLE

GRI 3 principles and recommendations were taken into account for the writing of this report. GRI has performed the Application Level Check to show to which extent the GRI guidelines have been utilized in the report. The check confirmed the A Level. The complete GRI indicators table can be found on the Air France and KLM website.

GRI PRINCIPES INDICATORS AND METHODS

Pages Main chapters of the report of the report 55 Strategy Strategy Analysis and Organizational profile Report Parameters Commitments Governance, and Engagement Economic performance indicators Environmental performance indicators & Practices Labor Social; work Decent Human Rights performance indicators Society performance indi - cators Product reponsibility performance indicators Sector supplement indicators

Profile and Summary 2-3 ✗ ✗ ✗ ✗ Foreword 4-5 ✗ ✗ Understanding the sector and the group 6-11 ✗ ✗ ✗ ✗ ✗ Our CSR approach 12-17 ✗ ✗ ✗ ✗ ✗ Combating climate change 20-25 ✗ ✗ ✗ ✗ Minimizing our environmental impacts 26-31 ✗ ✗ ✗ ✗ Building a sustainable relationships with 32-37 ✗ ✗ ✗ our customers Promoting a responsible human resources policy 38-43 ✗ ✗ ✗ ✗ Driving local development 44-49 ✗ ✗ ✗ Annexes 50-55 ✗ ✗ ✗ ✗

List of main abbreviations

AEA Association of European Airlines GRI Global Reporting Initiative CCAR Consultative Commission ICAO International Civil Aviation Organization for Aid to Local Residents IATA International Air Transport Association CCE Environmental Advisory Committees NOx Nitrogen oxide QSE Quality, Safety and Environment CO2 Carbon dioxide DJSI Dow Jones Sustainability Index Roissy-CDG Roissy-Charles de Gaulle airport ETS Emission Trading Scheme SESAR Single European Sky ATM Research Document produced by

Air France KLM Royal Dutch Airlines Environment and CSR Division CSR Office 45, Rue de Paris Postbus 7700 95747 Roissy CDG Cedex 1117 ZL Schiphol France The Netherlands

Contacts [email protected] and [email protected]

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