Yearbook 2000

Association of European Airlines Association of European Airlines . Avenue Louise 350 B - 1050 Brussels Tel. +32 (0)2 639 89 89 Fax 639 89 99 E-mail [email protected]

July 2000

Dear Reader of the AEA Yearbook, _____

This year sees a change in the ‘look’ negotiating Ð or should we say non- of the AEA Yearbook. I hope it negotiating Ð position, in the Air meets with your approval. Much of Traffic Control debate. No change the content follows the tried and in the way we do business, they tested format: a commentary on say, or safety will be compromised. last year, and a review of the main issues which the airlines address We Ð the airlines Ð have through their Association. You will commercialised in recent years, find, however, significant ‘added embracing competition, cutting back value’ in our Airline Profiles section. ruthlessly on costs and abandoning the lifebelt of State ownership. And Here, however, I would like to touch we have continued to improve our on a subject which is not extensively safety record. It is no accident, if covered in the Yearbook: Safety. you will pardon the pun, that the Or, to be more precise, what I might areas of the world with the best call the Politics of Safety. safety records are those where liberalisation is most advanced. In 1999, AEA brokered an agreement on what will become an Air Traffic Control keeps aircraft industry standard on Working Time, apart from each other. Other to ensure occupational health and professionals keep them in the air. safety for air crews. This rounded- No single sector of the industry has off a long dialogue which became a monopoly on safety; it is the very difficult at times because the priority of each and every one of us interests of some circles were often in this business wherever we work. hidden behind alleged safety concerns – and playing this ‘safety card’ proved quite effective: safety is simply not negotiable in aviation.

Right now, we are seeing other interested circles using a similar K-H Neumeister

Adria Airways, Aer Lingus, Air France, Air Malta, Alitalia, Austrian Airlines, Balkan, British Airways, British Midland, Cargolux, Croatia Airlines, CSA, Cyprus Airways, Finnair, Iberia, Icelandair, JAT, KLM, Lufthansa, Luxair, Malev, Olympic Airways, Sabena, SAS, Swissair, TAP Air Portugal, Turkish Airlines. CONTENTS

SECTION I - AEA AIRLINES’ PERFORMANCE 1999 I-1

1999 At a Glance I-3 Traffic & Capacity - Overview I-4 Traffic & Capacity - Europe I-5 Traffic Trends - North Atlantic I-7 Traffic & Capacity - Asia I-9 Air Cargo I-10 Punctuality Performance - Overview I-11 Punctuality Performance - Airports I-12 Punctuality Performance - Air Traffic Control I-13 Alliances I-15 Fleet Development I-16 Operating Results I-17

SECTION II - TOPICS II-1

Airline Delays - The consumer deserves better! II-2 Congestion and Delay - What next? II-3 Air Traffic Control - The debate continues II-5 Aircraft Noise - The hushkit debate II-6 Aircraft Emissions - Combatting global warming II-7 Aviation Fuel Tax - A blunt weapon II-8 A Transatlantic Free-Trade Area for Aviation II-9 A Commitment to the Consumer II-10

SECTION III - SPOTLIGHT ON THE AEA III-1

AEA Highlights of 1999 III-3 Mission Statement III-5 Membership Criteria III-5 Structure of the AEA III-7 Airline Profiles & 1999 Review III-8

SECTION IV - KEY STATISTICS IV-1

Key Statistics - Total AEA IV-2 AEA Fast Facts IV-4 Key Statistics - By Carrier IV-5 What do we mean by…? IV-13

I - 1 AEA AIRLINES' TRAFFIC CAPACITY AND YIELD 1997 1998 1999 % change International Routes per Calendar Year 99/98

Passengers (000) 164,246 174,960 184,933 5.7 Passenger Kilometres (mill) 452,620 485,354 516,046 6.3 Seat Kilometres (mill) 625,566 674,027 723,216 7.3 Passenger Load Factor % 72.4 72.0 71.4 -0.6 pt Passenger Yield (current US cent/RPK) 10.2 9.9 9.1 -8.1

Average N¼ of Seats per Aircraft 207.5 212.2 214.8 1.2 Average Stage Distance (Kms) 1,505 1,549 1,565 1.0

Freight Tonne-Kilometres (mill) 26,882 26,906 27,936 3.8 % Freight on Freighter Services 57.8 57.2 57.3 0.1 pt Freight Yield (current US cent/RFTK) 30.8 29.9 27.1 -9.4

AEA AIRLINES' OPERATING RESULT % change International Routes per Financial Year 1997 1998 1999 est. 99/98

Overall Load Factor % 68.9 68.6 67.9 -0.7 pt Break-even Load Factor % 65.2 64.0 67.2 3.2 pt

Yield (current US cent/RTK) 76.9 73.7 68.5 -7.0 Unit Cost (current US cent/ATK) 49.4 47.2 46.4 -2.4

Operating Ratio before Interest 106.8 107.2 103.5 -3.7 pt Net Interest Rate % 2.3 2.6 2.5 -0.1 pt Operating Ratio after Interest 104.5 104.4 103.5 -0.9 pt

Profit/Loss after Interest (current US$ mill) 2,333 2,276 619

TRAFFIC AND CAPACITY GROWTH IN 1999

20%

20% 10

10 0 20% -1.5 0 62.3 1.1 10 20% 77.0 20 % 20% 10 0 2.4 0 20% growth 99/98 10 10 67.2 2.1 R 10 A 76.4 P S 0 0 K 0 K -3.5 -1.5 73.1 73.3 + pt 99/98 - % load factor

I - 2 1999 AT A GLANCE

1999 was a year when delays went off EUROPEAN DEPARTURE DELAYS the scale. 35% flights delayed more than 15 minutes

For fuller details, including where and 30 why, turn to page I-11. 25

10 7 month moving average

5 87 88 89 90 91 92 93 94 95 96 97 98 99 00

Once again, the industry felt the shock of WORLD CRUDE OIL PRICES Source: EIA rocketing oil prices. 40 current US$ per barrel

The impact on their fuel bills, and their 35 bottom line, is assessed on page I-18. 30

5 74 76 78 80 82 84 86 88 90 92 94 96 98 00

The AEA airlines in 1999 managed to OPERATING PROFIT/LOSS - Int'l routes break even, but not much more. 2.5 billion current US$ after interest

2.0 To relate ‘profit’ to ‘profitability’, there is a wealth of analysis on page I-17. 1.5 1.0 est. 0.5

-0.5

-1.0

-1.5

-2.0

-2.5 88 89 90 91 92 93 94 95 96 97 98 99

I - 3 TRAFFIC & CAPACITY - OVERVIEW

1999 saw a divergence in the growth 1999 load factors were generally down trends for the AEA airlines’ three main on the previous year’s level, although the operating regions, which had followed a Total International figure of 71.4% was similar pattern to each other for much of still within a percentage point of the all- the decade. time high, recorded in 1997.

On Far East/Australasia, the increase of Substantial extra capacity was added on 2.6% was virtually unchanged from the North Atlantic routes, amounting to very low level recorded in 1998. Two 12.4% over the year. The result was and a half years on from the start of the that, despite the strong traffic growth, ‘Asian crisis’, there is still little sign of a load factors decreased slightly, from 77% revitalisation of the market. to 75.9%.

In Europe, the growth rate tumbled to To the Far East, capacity was actually 1.7%, although this figure was influenced slightly reduced, by 0.2%, with the result by the circumstance that one airline that load factors were boosted by 2.1 (Finnair) re-classified its substantial points to 76.4%. leisure-market product from scheduled to charter. European load factors were depressed by the very low level of traffic growth, Discounting the effect of this change, the despite capacity being held at a modest underlying growth rate would have been plus 4.2%. about 3.8% - in any case, still the lowest annual figure since the 1991 Gulf War In the less heavily-travelled regions, shock. there was very strong traffic growth on North African (+24.6%) and Middle On the North Atlantic, in contrast, the Eastern (+14.0%) services, and on South growth rate for the year reached 10.8%. Atlantic routes, which grew 12.8%. This was the highest annual figure since Growth rates on the Mid Atlantic and to the 1992 recovery from the Gulf War the rest of Africa were more modest. slump.

GROWTH RATES IN REVENUE PASSENGER KILOMETRES

20% growth in RPK's

North Atlantic 10

Europe 5 Far East

0 1992 1993 1994 1995 1996 1997 1998 1999

I - 4 TRAFFIC & CAPACITY - EUROPE

The 1.7% increase in passenger- Traffic decreases were posted by Turkey kilometres on intra-European routes in (-7%), in the aftermath of the August 1999 translated into a growth in earthquake, and Norway (-1%). passenger numbers of 4.5%. In the larger markets, above-average 25% growth growth was recorded in Germany, Slovenia France, Netherlands and Spain, all of TRAFFIC DEVELOPMENT which grew 7%, and Switzerland with a % GROWTH plus 6%. Italy and the UK had rather 1999 OVER 1998 lower growth, at plus 4%. 20 AEA scheduled international passengers These figures, of course, refer only to between 'AEA countries' AEA member airlines’ traffic. While traffic Average increase 4.5% figures for other segments of the industry are unavailable, capacity shares can be 15 determined from published schedule information. Iceland Hungary Czech Republic In the Summer 1999 timetable, AEA Ireland airlines performed 68.3% of all cross- Luxembourg 10 border seat-km in Europe. Of the rest, by Portugal Belgium Netherlands Germany far the largest proportion (18.1%) was Spain France operated by those essentially charter Switzerland Austria airlines which choose to publish their Malta Cyprus schedules and sell to seat-only 5 Finland Croatia customers. Great Britain Italy Greece Sweden Bulgaria Only 3.9% of the total capacity was offered by the so-called ‘low-fare’ Denmark 0 carriers. The remaining 9.7% was a Norway mixture of non-AEA national and other trunkline carriers, and regional airlines. SUMMER 1999 Intra-European market shares -5 Others Low-fare Turkey carriers 9.7% 3.9% AEA As is usual, the extremes of fluctuation 18.1% Leisure occurred away from the dense markets at carriers the centre of Europe. Highest growth, of 68.3% 24%, was in Slovenia, while increases in excess of 10% were recorded in Iceland, Hungary, the Czech Republic and Ireland. % scheduled seat kilometres

I - 5 At the end of 1999, the total number of The low-fare segment continues to be a scheduled passenger airlines in Europe focus of attention, and despite its (the Single Market of the EU15 plus relatively small scale, is growing rapidly. Norway and Iceland) stood at 137, the same figure as at the end of 1998. Summer 1999 seats for the five major players (measured in June) were 15.7% N¼ OF SCHEDULED PASSENGER AIRLINES up on the previous year, despite much of AT 12/1999 (with net change over 1998) Virgin Express’ output being marketed as a product of its partner Sabena. United Kingdom 19 (-2) Subsequently, the smallest of the five, Germany 18 (+1) Debonair, disappeared from the scene, Italy 17 (+1) along with two smaller carriers: AB France 13 (-3) Airlines (UK), which had been associated Sweden 12 (+1) with Debonair, and Colour Air (Norway). Netherlands 9 unchanged Spain 7 (-1) Debonair’s place has effectively been Norway 7 (-1) taken by Buzz, wholly owned by KLM, whose London Stansted-based network Austria 6 (+1) includes several routes transferred from Denmark 6 (+1) KLM uk (formerly Air UK). Greece 5 (+3) Portugal 5 (+1) With a major expansion planned for Ireland 4 unchanged Summer 2000 by all the main Belgium 4 unchanged participants, the number of seats offered has doubled in the space of only two Finland 2 (-1) years. Iceland 2 (-1) Luxembourg 1 unchanged The latest round of growth has brought a number of new markets online, for Turnover during the year was brisk: 20 example Helsinki, Prague and Reykjavik. airlines entered the market and 20 exited, There is also more service in leisure including three of the year’s new markets hitherto served almost entrants. exclusively by charter carriers.

LOW-FARE CARRIERS' WEEKLY SEATS Source: OAG 600 seats (000)

500 Buzz GO 400 Debonair

300 Easyjet Virgin Express 200 Ryanair

100

0 Summer Summer Summer Summer Summer Summer Summer 1994 1995 1996 1997 1998 1999 2000

I - 6 TRAFFIC TRENDS Ð NORTH ATLANTIC

For AEA airlines, the North Atlantic, In the Summer schedule, Delta remained encompassing services to the US and the largest of the US transatlantic carriers Canada, represents the largest single with 25% of total US seats, although their operating region in terms of passenger- modest capacity growth rate of 5.6% km, with 29.5% of total scheduled traffic. caused them to lose ground to American (+13.8%) and especially United (+23.8%) In contrast to the other main regions, and Continental (+29.4%). AEA members’ traffic on North Atlantic routes experienced a period of high TWA’s reversal continued with a 12.5% growth in 1999, with passenger-km up capacity decrease. They now have only 10.8%. 3.6% of the US total seats, down from 20% as recently as 1992. To a large extent, the growth was undoubtedly driven by substantial EUROPEAN CARRIERS' SHARE OF capacity increases, with AEA seat-km up EUROPE-US CAPACITY 12.4% for the year.

Other The provision of extra capacity was not British Airways confined to the AEA airlines. Weekly Europe-US seats in June, as representative of the Summer timetable, 55.6% were up 12.1% for European carriers Alitalia Lufthansa (AEA and non-AEA) and 14.3% for US airlines. Swissair Virgin Atlantic KLM

Consequently, the European share of Air France Europe-US capacity fell slightly from % available seats 56.1% to 55.6%. Nevertheless, it remains substantially higher than the The seven US majors Ð and two much figures of less than 50% which were smaller US airlines Ð contest the market recorded in the early 1990s. with 30 European scheduled carriers.

EUROPEAN CARRIERS' CAPACITY SHARE OF US CARRIERS' SHARE OF RD TH EUROPE-US 3 /4 FREEDOM EUROPE-US CAPACITY 58% seats Other TWA

56 US Airways Northwest Delta 54 44.4%

Continental American Airlines

United Airlines 48 92 93 94 95 96 97 98 99 % available seats Source: OAG

I - 7 In terms of destinations, AEA’s Less than 2% of AEA North Atlantic transatlantic flights are dominated by passengers travelled first class in 1999, New York (JFK plus Newark), with 7.2 and less than 12% in business. million passenger journeys in 1999, more than 5 million ahead of second-placed Compared to 1998, high-yield traffic (first Chicago. and business) posted a healthy growth rate of 8.9%. However, the very high These are followed in order by Los overall increase was basically generated Angeles, Boston, Miami and San in the economy cabin, where passenger Francisco, which all rank ahead of the numbers grew by 16.4%. two principal Canadian gateways, Toronto and Montreal. Growth of this magnitude would not normally be associated with normal Over the five years 1994-9, AEA market trends, and is likely to have been passengers to/from the US and Canada the result of heavy discounting as a have increased by an average of 10.3% consequence of very large capacity annually. To the main destinations, this increases. figure was exceeded at Boston, San Francisco and Chicago, and equalled at This substantial change in the traffic mix New York. was an undoubted contributory factor to a large drop in yield (revenue per Much lower growth was recorded to passenger-km), from US¢ 7.2 in 1998 to Montreal and Toronto. 6.6¢ last year Ð a fall of 8.3%.

7.500 passengers (000) avg % The fall in yield was the largest since growth New York 10.3 1993, and the 1999 yield figure itself was the lowest on record since the mid- 'TOP 8' AEA 1980s; in real terms, of course, the cost NORTH AMERICAN of flying has never been cheaper. DESTINATIONS NORTH ATLANTIC YIELDS

9.0 current Us cents per passenger kilometre

5.500 8.5

8.0

New York 4.500 7.5 2.000 Chicago 12.3 Los Angeles 5.5 Boston 17.1 7.0 1.500 Miami 8.2 Los Angeles S. Francisco 13.2 Chicago Toronto 1.5 Toronto 6.5 Miami Montreal 5.0 Montreal Boston S. Francisco 500 6.0 1994 1999 90 91 92 93 94 95 96 97 98 99

I - 8 TRAFFIC & CAPACITY - ASIA

While the Asia/Pacific economies have, The fastest-growing market was to/from broadly, recovered from the upheavals of China, which has doubled in three years, 1998, the travel market to and from the to just short of a million passengers. region remains rather fragile. Traffic losses were sustained on Hong GDP GROWTH RATE IN ASIA Kong Ð for the second successive year Ð and Australia, as well as the much Japan smaller flows to Pakistan, Indonesia and 98/97 Malaysia.

Hong Kong 3000 passengers (000) 99/98 estimate % 1998 1999 change Indonesia Japan Japan 2.6

Korea India 12.2

Malaysia

India Thailand 1500 % GDP growth -15 -12 -9 -6 -3 0 3 6 9

Source: IMF & Asian Development Fund MARKET GROWTH IN THE FAR EAST Operations to the Asia/Pacific region accounted for 18.4% of AEA members’ passenger traffic (RPKs) in 1999.

The annual increase was only 2.6%, a Hong Kong Thailand 3.8 substantially below-average growth rate 1000 Hong Kong -1.9 Thailand China 38.3 for the second successive year.

The market remained consistently weak Singapore 15.6 throughout the year. A brief revival in Singapore June/July, and another in October/ China November, failed to be sustained.

In terms of country flows, the market is Australia Australia -2.1 dominated by Japan, with 2.8 million AEA 500 passengers in 1999 Ð more than any other long-haul destination apart from the On the positive side, the traffic growth USA. Passengers on Japanese routes was accommodated with no increase in were up only 2.6% in 1999. capacity; in fact, seat-km decreased marginally, by 0.2%. In second place is the substantial Indian market which, unlike many of its Consequently, load factors remained neighbours to the East, continues to post high, up by 2.1 percentage points over solid growth. 1998, to 76.4%.

I - 9 AIR CARGO

AEA members’ airfreight traffic increased On Far Eastern routes, freight tonne-kms by 3.8% in 1999, a figure substantially increased by 6.5%, having registered a lower than in the passenger market. decrease in 1998.

Three-quarters of the AEA freight EUROPE - ASIA FREIGHT TRAFFIC carriage took place in the North Atlantic and Far East markets, the former being 20% growth in tonnes transported slightly the larger in terms of tonnage, while the latter has a slightly larger 15 tonne-kilometre count. 10 Asian economic recovery On North Atlantic routes, a measure of 5 1998 1999 growth was restored. 1998 had been a 0 year of flat AEA traffic in the face of heavy competition from US carriers, -5 Asian switching capacity from the Far East. economic -10 crisis

Much of the 1999 growth can be credited -15 to the exchange-rate effect making To Asia European exports more competitively -20 From Asia priced in the US market. Westbound traffic from Europe to North America -25 accounted for 54% of the route total, compared with 51% in 1998. In this market, European exports to Asia had been very badly hit during the 1998 EUROPE - N. AMERICA FREIGHT TRAFFIC economic crisis in the region, although traffic inbound to Europe had fared rather 20% growth in tonnes transported better.

15 Through 1999, the two segments of the market experienced very similar growth rates. 10 Increased US Euro collapses competition vs US$ All-cargo aircraft carry a significantly 5 higher portion of Far Eastern traffic: in 1999 the figure was 57.1%, up three 1998 1999 percentage points over 1998. 0 On the revenue side in 1999, both major -5 freight markets suffered a substantial To N. America deterioration in yields. From N. America -10 In the case of Far Eastern routes, yields were down 6.3% to 28.9 cents per tonne- 32.9% of AEA North Atlantic freight was km. On the North Atlantic the drop was carried on all-cargo aircraft, compared to significantly worse, down 10.7% to 21.1 36.1% in 1998. cents.

I - 10 PUNCTUALITY PERFORMANCE - OVERVIEW

1999 was, quite simply, the worst year on The ‘Kosovo effect’ was felt essentially in record for delay. Every single month the March-June period. Nevertheless, produced a worst-ever statistic for that even during the last four months of the month. year, the delay rate was consistently between one and 2.5 percentage points The figure of 30% of intra-European worse than in the corresponding months departures delayed by more than 15 of 1998. minutes, which had only once been surpassed in AEA records (June 1989 Ð 30.8%) was exceeded for five months in REASONS FOR EUROPEAN succession, from March through July, DEPARTURE DELAYS IN 1999 and again in September. The worst Handling, Operations & figure, in June, reached the astonishing Technical Airports & figure of 37.5%. ATC 7.2 Two particular events influenced the 22.0 figures. The first was a significant Weather 30.4% reorganisation of Air Traffic Control 1.2 (ATC) procedures in Switzerland and France which caused disruptions mostly through March and April. Although signalled in advance to the airlines, who cut back some services in anticipation, the impact was much more severe, and % flights delayed more than 15 mins of longer duration, than expected. Of the delays for which a primary cause The other major event was the Kosovo was identified, 72.4% were attributed to crisis, which removed significant blocks airport/ATC reasons, with by far the of airspace from civilian use, as well as greatest portion being so-called ATC slot generating a certain amount of extra delay Ð i.e. when a requested departure military flying in civilian areas and at clearance is not granted. The civilian airports. corresponding figure in 1998 was 63.6%.

REASONS FOR EUROPEAN DEPARTURE DELAYS

40% flights delayed more than 15 minutes

30 Handling, Operations & Weather Technical 25

10 Airport & ATC 5

0 1998 1999

I - 11 PUNCTUALITY PERFORMANCE - AIRPORTS

In 1999 AEA took the initiative to begin nearby areas during the Kosovo conflict. publishing punctuality data in much more By the fourth quarter, its delay rate had detail than had formerly been available. dropped to about one-third and its position in the ranking table had This information took the form of airline improved to fifth. performance at individual airports. This format was chosen to give the best Next highest delay was recorded at possible quality of consumer information, Madrid and Barcelona, with just under reflecting the realities of operating in half of all departures delayed in 1999. Europe. They were followed by Rome, Munich and Athens. The exercise has resulted in a much clearer picture than before as to where Only four airports posted delay rates the delay bottlenecks in Europe are most below 20%: Copenhagen, Stockholm, severe; it must be emphasised that the Helsinki and Dublin. To put the 1999 relative position of any particular airport situation in perspective, the performance is heavily influenced by the performance at these four, in the 18-19% range, would of the ATC regions which surround it. have equated to the total industry performance in the years 1996-97, years Out of the 27 major airports in the AEA which, until the record books were re- survey, Milan-Malpensa was by a written last year, would have been substantial margin the source of most regarded as at crisis levels. departure delay in 1999, with 54% of flights delayed more than 15 minutes. Milan-MXP 54.0 Madrid 48.4 As well as well-publicised teething Barcelona 47.9 troubles following its opening in late Rome-FCO 37.4 1998, the airport was badly affected by Munich 36.7 airspace closure and military activity in Athens 36.6 Paris-CDG 36.4 Lisbon 36.3 Brussels 35.4 Geneva 33.7 Frankfurt 33.5 Zurich 32.5 % FLIGHT DEPARTURES DELAYED Milan-LIN 31.2 MORE THAN 15 MINUTES Paris-ORY 30.8 IN 1999 Amsterdam 30.3 Istanbul 30.0

Manchester 27.2 % flights London-LHR 25.7 Larnaca 24.8 _> 40 Dusseldorf 23.6 Vienna 23.4 Oslo 22.3 30 to 39 London-LGW 20.9

20 to 29 Dublin 19.8 Helsinki 18.9 < 20 Stockholm 18.5 Copenhagen 18.3

I - 12 PUNCTUALITY PERFORMANCE Ð AIR TRAFFIC CONTROL

Delay data published by Eurocontrol for With the early part of 1999 providing no 1999 merely served to confirm what the benchmark for current performance, it is airlines and their customers already knew striking to note that figures for the first Ð that the situation was a worst-ever one. four months of 2000 have varied between 60% and 90% higher than they were in The Eurocontrol figures measure so- 1998. called slot delay, which is defined as: ‘resulting from [the Central Flow The Eurocontrol figures also give specific Management Unit’s] management of information as to where the capacity capacity restrictions imposed on behalf of restrictions originate. During 1999, four the national ATS providers’. countries appeared in the top 5 National Systems in terms of imposed delay in Eurocontrol’s figures are normally every single month: France, Switzerland, expressed in average minutes per Spain and Italy. movement Ð a statistic which can result 'Top 5' National Systems in terms in very serious delay situations being of imposed ATFM delay in 1999 reduced to very small numbers. 12345

Nevertheless, the 1999 figures clearly Jan show that the year began with a near- Feb doubling of slot delay, which had become Mar a trebling by March. This situation Apr continued throughout the first part of the year, and only from August onward did May delay levels stabilise at figures Jun comparable to, but still appreciably Jul higher than, 1998 levels. Aug Sep AVERAGE ATFM DELAY PER MOVEMENT Oct 10 minutes average delay Nov

2000 Dec Source: CODA 8 1999 The appearance of Germany as the next 1998 most penalising system relates Kosovo crisis essentially to the area in the South-west 6 ARN V.3 of the country bordering France and Switzerland and adding to the ‘critical

4 mass’ of problem airspace in Europe’s core area.

2 Although the UK and Greece both made an appearance in the top 5 delay- producing countries during the year, both 0 in fact achieved a significant reduction in Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec their contribution to the overall delay Source: CODA picture compared to 1998.

I - 13 1998 % share 19931997 1998 1999 2000 Pax of world (mill) market

United Airlines 86.8 Air Canada 16.2 LUFTHANSA 38.5 SAS 21.5 AUSTRIAN AIRLINES GROUP 5.9 BRITISH MIDLAND 6.0 Singapore Airlines 12.3 19.1 All Nippon Airways 41.5 Thai Airways International 15.0 Air New Zealand 6.4 Ansett Australia 12.0 Varig 11.2 Mexicana Airlines 7.1

19931997 1998 1999 2000

American Airlines 81.5 Canadian Airlines 8.2 BRITISH AIRWAYS 36.6 IBERIA 22.3 FINNAIR 6.8 13.0 AER LINGUS 5.5 Qantas 16.4 Cathay Pacific 10.3 LanChile 3.0

19931997 1998 1999 2000

DW RL I O D Northwest 50.5 E W NORTHWEST Y R KLM 15.0 T E I 8.9 L L ALITALIA 24.2 I A B I Continental 41.3

19931997 1998 1999 2000

SWISSAIR 11.9 SABENA 8.7 TURKISH AIRLINES 9.9 AUSTRIAN AIRLINES GROUP TAP AIR PORTUGAL 4.7 AOM 2.9 3.1 LOT 2.1 Crossair 2.2 Portugalia 1.2 Air Littoral 0.9 Air Europe 0.9 Volare Airlines 0.5

19931997 1998 1999 2000

Delta 105.3 AIR FRANCE 33.5 10.0 AeroMéxico 7.8

~ Source: AEA, ICAO, IATA WORLD TOTAL SCHEDULED TRAFFIC 1,471 = 100%

I - 14 ALLIANCES

1999 was one of the busiest years to purchase, in 1999, of 51% of Virgin date in terms of alliance activity, Atlantic. illustrating that equilibrium within and between the various groupings is as The year 2000 has brought with it a new remote as ever. crop of changes and surprises. On the European side, the main news has been The year began with the formal launch of the dissolution of the KLM/Alitalia the KLM/Alitalia partnership, which partnership, followed by merger industry observers characterised as discussions between KLM and British approaching a full-blown merger. Airways.

Oneworld gained Finnair and Iberia Meanwhile, Swissair has signalled its during the year, and announced that Aer intention to increase its stake in Sabena Lingus and LanChile would join in the to a majority holding, conditional on course of 2000. However, it is losing Switzerland joining the Single Market for Canadian Airlines, as a consequence of air transport the latter’s take-over by Star member Air Canada. US developments, too, have a direct impact on European globalisation The year’s most noteworthy development strategies. United Airlines’ plan to occurred when Air France announced absorb the previously unaligned US that it was ready to paint itself into the Airways has triggered approaches from global alliance picture, and after some American Airlines to both Northwest and deliberation chose Delta as its US Delta, in what could prove to be a further partner. round of rationalisation of the US industry. This set off a chain reaction in which Delta’s main European partner, Swissair, aligned itself more closely with Oneworld US MAJOR INTERNATIONAL AIRLINES member American, while Austrian (world ranking - 1998 passenger numbers) Airlines moved from the Swissair-centred Qualiflyer camp to the Star Alliance, DELTA (1) is talking to taking with it its Tyrolean and Lauda Air affiliates. AMERICAN (3) who is also talking to

The Qualiflyer group, meanwhile was reinforced by Swissair’s acquisition of NORTHWEST (5) who partly owns stakes in the Polish flag-carrier LOT (previously linked with Oneworld) as well CONTINENTAL (7) while, as Portugalia and Italian carriers Air Europe and Volare. A 20% position was also taken by Swissair in South African UNITED (2) seeks approval to take over Airways. US AIRWAYS (4) and that still leaves... A major new member for the Star Alliance in 2000 is Singapore Airlines, which itself made an unexpected TWA (13)

I - 15 FLEET DEVELOPMENT

After a record shopping spree in 1998, There were 2095 aircraft in service with orders placed by AEA members during the AEA member airlines at the end of 1999 amounted to a more modest total of 1999, an increase of 126 over the 1998 66 aircraft. figure.

ORDERS PLACED FOR JET AIRCRAFT A large part of the increase was in the BY AEA AIRLINES Source: Avmark Airbus fleet, which grew by 86 units to

66 517, mostly through deliveries of aircraft 1999 in the narrowbodied A319/20/21 family. 334 1998 Boeing-built aircraft increased by only 22 128 1997 units, but still provide the major component of the AEA fleet, with a total 68 1996 of 850.

164 1995 An increase of 34 in the number of new- 14 generation B737s in 1999 was offset by 1994 N¼ of aircraft orders placed an almost identical decrease in older 0 50 100 150 200 250 300 350 models. Focus was mainly on smaller aircraft. Of the total orders, 48 were for AEA AIRLINES' narrowbodies, including two substantial FLEET COMPOSITION transactions for the new, smallest Other member of the Airbus family, the A318. Airbus 16% This helped to give Airbus a substantial McDonnell 25% advantage over Boeing for the year, with Douglas sales of 52 and 13 units respectively. In 17% terms of the total outstanding orderbook, Airbus lead Boeing by 356 to 125.

42% Boeing AEA AIRLINES' AIRCRAFT ON ORDER

Other 2095 aircraft end 1999

McDonnell 20% Douglas Among the long-haul fleets, there was a 1% Airbus reduction in the numbers of B747s, 59% DC10s and MD11s, offset by increases in

20% B777s, A330s and A340s.

Boeing This heavy activity in the process of fleet renewal has resulted in an AEA passenger jet fleet which is on average 9 604 aircraft on order end 1999 years, 5 months old.

I - 16 OPERATING RESULTS

Note: Data referred to in this section Looking back over the 1990s, this last have been aggregated from poor result has ensured that the net members’ financial year results surplus of the second half of the decade and may differ slightly from the has failed to wipe out the accumulated calendar year figures elsewhere in losses of the period 1990-1994, with a the document. Figures refer to shortfall of just over $ 1 billion. international scheduled services, except where specified. Figures Most of the main factors influencing for 1999 are estimates. profitability were unfavourable in 1999. Overall load factor fell by 0.7 percentage AEA members’ consolidated financial points to 67.9%, and while unit costs results took a severe downturn in 1999, were down 2.4% (albeit in inflated dollar under the twin influences of strongly- terms), yields fell by a massive 7%, declining yields and massively-increasing causing the break-even load factor to fuel costs. jump from 64.0% to 67.2%.

Preliminary data indicates that the FACTORS AFFECTING operating result after interest remained OPERATING RATIO positive for the fifth consecutive year, but 1999 compared with 1998 the aggregate profit was sharply down, to 1998 1999 US$ 619 million, from $ 2.3 billion in 1998. Operating ratio after interest 104.4 101.0

Expressed as operating ratio (total Points change in operating ratio as a result of: revenues as a percentage of total cost), Change in load factor -0.60 the 1999 result was down to 101.0, down + about 3.5 points from the level of the last Cost development vs -2.85 two years, and far below what the revenue development industry, and its investors, would regard + as a reasonable rate of return. Change in net interest rates +0.05

OPERATING RATIOS = 105 International routes after interest Total changes -3.40 104 103 This latter effect, of the yield deterioration 102 est. outstripping the fall in costs, was 101 responsible for by far the greatest part of 100 the drop in operating ratio, although the 99 load factor decrease also contributed 98 significantly. 97 96 A very small gain was contributed by a marginal decrease in net interest rate 95 from 2.6% of total operating costs to 94 90 91 92 93 94 95 96 97 98 99 2.5%.

I - 17 On the cost side, by far the most Realistically, about half the absolute fuel- important development was a massive price effect can be assumed to appear on rise in the cost of jet fuel. the industry’s bottom line. In the case of the 1999 experience, this indicates a From a low of just over 30 cents per worsening in the net result of US$ 1.1 gallon at the end of 1998, the price billion Ð in other words, two-thirds of the rocketed to almost 80 cents by total deterioration in profit between 1998 December 1999, and even higher at the and 1999 beginning of the year 2000. While the fuel price effect was preventing This meant that the average price of jet the realisation of a substantial reduction fuel on the spot market, weighted by AEA in unit costs, 1999 saw no brake on monthly output, was 60 cents per gallon declining yields. in 1999, compared with 37.5 cents in 1998 Ð an increase of more than 40%. As well as the 7.7% drop in overall revenue per tonne-km, passenger yields ROTTERDAM SPOT PRICES FOR JET FUEL were consistently down, by 7.3% in total and ranging from 3.4% to the Far East 90 US cents per US gallon and 5.5% in Europe to minus 8.3% on North Atlantic routes and even higher to 80 Latin America

70 A major contributory factor was a substantial weakening in high-yield traffic 60 in many major markets.

50 Within Europe, business-class traffic grew only 0.4%, while economy was up 40 6.7%. To the USA, where overall growth was much higher, business class travel 30 was up 9.6%, but economy grew a 1995 1996 1997 1998 1999 2000 massive 17.9%. Source: EIA, US DoE Increases of this magnitude cannot be LOW YIELD, HIGH GROWTH expected to carry through directly to the % total % growth carriers’ profit margins. 98/99 INTRA-EUROPEAN Fuel is bought at pre-negotiated contract Business Class 22.6 +0.4 prices, and in any case the airlines are Economy Class 77.4 +6.7 experts at hedging against strong price fluctuations. EUROPE-USA First Class 1.9 +5.8 There is also a technology-driven upward trend in fuel efficiency related to the use Business Class 12.1 +9.6 of more modern aircraft. Economy Class 86.0 +17.9

I - 18 CONTENTS

SECTION I - AEA AIRLINES’ PERFORMANCE 1999 I-1

SECTION II - TOPICS II-1

SECTION III - SPOTLIGHT ON THE AEA III-1

AEA Highlights of 1999 III-3 Mission Statement III-5 Membership Criteria III-5 Structure of the AEA III-7 Airline Profiles & 1999 Review III-8

SECTION IV - KEY STATISTICS IV-1

Key Statistics - Total AEA IV-2 AEA Fast Facts IV-4 Key Statistics - By Carrier IV-5 What do we mean by…? IV-13

II - 1 THE CONSUMER DESERVES BETTER!

Association of European Airlines

Airline Delays:

The 27 airlines which make up the Association of European Airlines have campaigned for years to improve the quality of Air Traffic Control (ATC) in Europe.

A multitude of national ATC systems, each one jealously guarding its independence from its neighbours, is the root cause of a chronic inefficiency which delays flights, increases costs, and damages the environment.

The European ATC agency, Eurocontrol, is powerless to fix the problem, since it is owned and administered by the same national systems who individually are responsible for the poor quality of service.

Meanwhile, Europe’s highly-skilled and highly-trained air traffic controllers have to shoul- der the burden of coping with a system which is working far below its potential.

• Regulatory power should reside with the European institutions: Commission, Parliament, Council • Eurocontrol should act as the expert body rgolux for the EU Regulator ca • The job of National Authorities should be to apply the EU regulator’s decisions • National ATC Service Providers should be separate from their National Authorities • Heads of State should review what the real needs are of civil and military users in terms of access to airspace in today’s world • In peacetime access to airspace should be administered by civil authorities, as is the case in the U.S.

These 27 airlines call upon Transport Ministers to support the initia- tives of European Commissioner Vice-President de Palacio, to pave the way for a Single Sky over Europe. CONGESTION AND DELAY Ð WHAT NEXT?

The descent of European Air Traffic will continue to be severe capacity Control (ATC) into crisis has been clearly shortfalls in the medium term. documented on page I-13 of this Yearbook, but the really important The latest simulation shows that, in 2005, question is: what happens next? there continues to be a serious undercapacity problem in the arc Reproduced opposite is a concise between the Barcelona and Padua statement of what the AEA would like to control regions, which are exactly the happen next Ð new thinking, new ideas, areas which caused most of the new directions. problems in 1999.

The ATC establishment, however Ð In other words, given the information individual States and individual systems, supplied by its members, Eurocontrol can loosely grouped together in Eurocontrol Ð to predict the problem areas of the future, is fiercely conservative, and continues but in the absence of a commitment by about its business in the assumption that its members, it is powerless to bring the status quo will prevail. about an improvement.

Eurocontrol’s own planning process Maintaining the institutional status quo reveals that, even with currently-planned means maintaing it also in today’s capacity enhancements in place, there unacceptably low levels of performance. TOO MUCH OF A GOOD THING...

'Mode S' radar coverage in Benelux, France, Germany and the UK (258 radars)

Source: Eurocontrol

II - 4 AIR TRAFFIC CONTROL Ð THE DEBATE CONTINUES

While it was the delay statistics which Other developments within the ATC were making the news in 1999 and early institutional structure have been less 2000, behind-the-scenes activity in the positive. In January 2000, a meeting ATC field was busy too. took place of European ministers responsible for ATC, the 6th in a series The catalyst was the new European which, since it was set up after the 1989 Commission which was put in place in delay crisis, has been the source of mid-year. The new President highlighted virtually all institutional developments in delay as an action item, a cause taken up European ATC. strongly by Vice-President De Palacio, who also took over the Transport It might be argued that the so-called portfolio. MATSE process has simply led the industry from one crisis to another. Vice-President de Palacio is currently chairing a High Level Group whose brief Within such gatherings at least, the is to develop solutions for a single establishment’s commitment to the status European sky. quo is as strong as ever.

The initiative has been reinforced by a The map below shows, in a nutshell, recent confirmation by the EU Heads of what is wrong with European ATC. The States of the priority to be given to ATC: map opposite shows one of the consequences of a patchwork approach, in which civil and military needs are not “…regarding the use and properly coordinated.. management of airspace…The aim is to achieve a fully operational The European Commission is determined internal market…” to rationalise ATC, and has the full support of the airline community. It European Council Decision remains to be seen whether it can March 2000 mobilise support from the Ministers and Heads of State.

EUROPEAN ATC IS FRAGMENTED

49 European ATC centres 31 National systems 18 Suppliers of hardware 22 Operating systems 30 Programming languages

Source: Eurocontrol

II - 5 AIRCRAFT NOISE - THE HUSHKIT DEBATE

1999 saw a very public dispute between technology aircraft are beating those the US and the EU over so-called standards by a substantial margin. ‘hushkitted’ aircraft. These are modified to comply with latest noise certification rules (which nonetheless date back to OLDER AIRCRAFT TYPES* IN AEA FLEET 1976!), to allow them to continue flying.

To date, the internationally-agreed noise- 1994 1999 reduction effort, pursued within ICAO, has followed a process of non-addition (i.e. affected aircraft may not be added to Boeing 737-200 111 54 national registers), followed eventually by non-operation. This 20-year process has Boeing 727 43 31 seen restrictions placed initially on first- generation (‘Uncertified’) and now on McDonnell Douglas DC9 105 48 second-generation (‘Chapter 2’) jets. Since end 1999 in the USA, and from 1st April 2002 in Europe, all aircraft will * to be 'hushkitted' or retired by 1/4/2002 conform to ‘Chapter 3’ standards.

The proposal would not permit such aircraft to be added to the EU register, while for non-EU carriers, their use at EU airports would be limited to current fleets.

This has provoked an extremely robust response from the US, which views it as a direct attack on its own interests, firstly, since hushkits are made in the US, and the market for fitting them to aircraft not currently equipped is diminished.

Secondly, some 1,730 hushkitted aircraft now flying with US airlines cannot be sold to EU carriers, or carriers intending to operate them to the EU. This, it is claimed, will badly affect the saleability of the aircraft, thereby reducing their asset value on company balance sheets.

For airlines in Europe, however, In the absence of an agreement to struggling with a complex of local noise formulate a further step in the process rules at individual airports, agreement at (‘Chapter 4’), the EU has proposed, as a regional level is better than no an interim step, a non-addition regime for agreement at all - which is the prospect if hushkitted aircraft, which only just meet the current impasse within ICAO is not Chapter 3 standards. Meanwhile, latest- resolved.

II - 6 AIRCRAFT EMISSIONS Ð COMBATTING GLOBAL WARMING

Aircraft consume kerosene and, in doing growth effect. A priority is to find other so, produce carbon dioxide (CO2 ) the ways to mitigate greenhouse emissions, most important of the ‘greenhouse gases’ while protecting the ability to grow. identified in the 1997 Kyoto Protocol. As well as operational improvements, the In global terms, the amount is very small industry is pressing for an international indeed, about 3% of the world total of system of emissions trading, allowing man-made CO2. airlines to earn and trade credits. In this way airlines, who have no alternate form Nevertheless, the industry recognises of energy, could financially support other that it is faced with a dilemma: how to sectors which are not in a growth phase, reconcile growth in demand for air travel or which can more easily cut back on (implying fossil-fuel use) with the CO2 their own energy use or emissions. reduction efforts taking place in other industrial sectors. One obvious area of potential improvement is in reducing the impact on It is estimated that, by pursuing a emissions of ATC inefficiencies. rigorous fleet-renewal programme, taking advantage of latest technology advances, An American FAA study has shown that the AEA fleet will be 22.4% more fuel-, improvements in US air traffic and hence CO2- efficient, in 2012, at the management could bring dramatic end of the Kyoto timeframe, than it was in reductions, not only in fuel burn and 1990, which is the Kyoto base year. related CO 2 production, but in other emissions as well.

FUEL EFFICIENCY OF AEA ENVIRONMENTAL BENEFITS PASSENGER JET FLEET OF ATC RATIONALISATION

- US Domestic & Oceanic Airspace -

Carbon Dioxide 6% -22.4%

Fuel burned (and hence CO2 emitted) per passenger - km Oxides of Nitrogen 10%

C6H6 Carbon Monoxide 12% 1,840 aircraft replaced 1990 2012 Unburned Hydrocarbons 18%

By that time, almost 1,500 aircraft will AEA is pressing for an extension of this have been replaced by more modern exercise to Europe, where previous variants. studies have pointed to a potential to

reduce CO 2 production through airspace This 22.4% improvement, however, and ATC improvements of between 6 would only partially offset the market and 12 percent.

II - 7 AVIATION FUEL TAX Ð A BLUNT WEAPON

Throughout the greenhouse-gas debate, would require a lengthy and cumbersome the topic of using a tax on aviation fuel in precess of renegotiation of international order to control traffic demand has Air Service Agreements. constantly been raised. As can be seen from the figures, A 1998 study undertaken for the however, all options carry with them very European Commission evaluated the high financial penalties for the EU airlines impact of five different application Ð in some cases offset by benefits to their scenarios at three different levels of tax. non-European competitors Ð while at the same time delivering minutely small

The conclusions were not made public at reductions in terms of CO2 production. the time, presumably because they gave little support to the idea. Despite all the evidence, the Communication nevertheless urged However, some of the study’s findings Member States to impose a tax on have surfaced in a Commission domestic flights (the consequences of Communication on Taxation published in which can be seen in column 5), and also March 2000, specifically referring to two to conclude bilateral agreements with possible applications at the higher tax each other to apply a tax on flights rate. between themselves.

These are shown in columns (1) and (4) Apart from the obvious anachronism of in the table below, namely a tax on all introducing bilateral agreements into the flights to and from the Community Single Market, the proposals give no operated by all carriers, and on intra- suggestion that a fuel tax will be anything Community flights operated by other than deeply damaging to the Community carriers. industry, while contributing next to nothing to the environment. For an The second option would clearly damage industry which has gone from regulation the competitiveness of EU carriers vis-à- to liberalisation, the concept of ‘managed vis their international rivals. The first growth’ would be a backward step.

IMPACT OF EU FUEL TAX Effect in one year (2005) of a tax of ECU 245 per 1,000 litres

All routes EU routes All routes EU routes EU Domestic All carriers All carriers EU carriers EU carriers routes (1) (2) (3) (4) (5)

Cost to EU airlines in ECU (mill) 530.9 259.0 2,703.3 424.3 99.0 non-EU carriers will gain Cost to non-EU airlines in ECU (mill) 339.1 14.9 market share and revenue 0 Cost to EU airlines in jobs 48,240 18,720 48,960 19,440 7,200

Reduction in total EU CO2% 0.34 0.07 0.16 0.06 0.02

Reduction in total world CO2% 0.00476 0.00098 0.00224 0.00084 0.00028

this equates to one molecule less out of every .. molecules: 21,008102,041 44,643 119,048 357,143

II - 8 A TRANSATLANTIC FREE-TRADE AREA FOR AVIATION?

The European Single Aviation Market is differ from one country to another. This unique in the highly-regulated world of is particularly true of proposed alliances aviation. Within it, there are no bilateral between European and US partners, agreements, no distinctions between whose respective competition authorities international and domestic services. For have treated them in very different ways. practical purposes, airlines do not have a nationality, other than ‘European’. The Nevertheless, it is not a precondition for a market works well, delivering clear common trading area that all the rules be benefits to both consumers and airlines. harmonised at the outset. In some cases this may be so and it is up to the Attention is turning to the huge Europe- respective parties to identify them. In US market. For some time, the US has other cases, differences can be been seeking so-called ‘open skies’ deals accommodated within an agreed with its European partners Ð, while the framework, while in other areas jointly- European Commission has been seeking agreed rules are not necessary at all. a mandate to negotiate with the US on behalf of all the EU states collectively. To carry the TCAA concept to its logical conclusion, some issues will arise which Unfortunately, progress on this issue had so far have been firmly off the agenda. by mid-1999 become virtually stalled, For example, it does not make sense in a with legal arguments between the liberalised market for foreign-ownership Commission and the EU Member States. limits (currently 25% US, 50% EU) to As a contribution to freeing the log-jam, differ, but it is questionable whether, the AEA in late 1999 produced its own within a TCAA, any limits are needed. blueprint for a ‘Transatlantic Common Aviation Area’ (TCAA). This initiative has Similarly, the notion of domestic rights for been enthusiastically endorsed by the foreign carriers has always aroused new Commission Vice-President. fierce US resistance, but European liberalisation has shown that such rights, In substance, the AEA position is that a inasmuch as they are taken up at all, modern, global industry cannot operate represent opportunities rather than fully effectively within trading rules that threats to the carriers involved.

3 REGIONS... 3 REGULATORY REGIMES... 1 MARKET??

62% of total world passengers EUROPE MULTILATERAL REGULATION TRANSATLANTIC BILATERAL REGULATION USA NATIONAL REGULATION

II - 9 A COMMITMENT TO THE CONSUMER

The European airlines, committed as international carriers are concerned, they are to maintaining and improving the passengers expect, and hopefully quality of service they offer to their receive, a high level of service. If their customers, are working with the expectations are not fulfilled, in today’s European Commission to develop a deregulated environment there is an package of passenger rights. extremely high likelihood that they can switch to a competing service the next As a first step, AEA will help the time they fly. Commission to inform the public of the substantial rights that passengers already Nevertheless, there are a number of enjoy, in terms of denied boarding, areas in which the airlines believe they accident compensation, lost baggage can make firm undertakings without and disclosure of information. undermining their ability to compete fairly, such as disclosure of information; Going much further, AEA intends to build baggage delivery and liability; complaints upon this solid basis of statutory and refunds; assistance to disabled responsibilities with an ‘Airline Passenger passengers, young travellers and Commitment’, representing a voluntary customers suffering long delays. agreement that member airlines would subscribe to. The Airline Passenger Commitment has been developed to mirror similar moves Each airline would establish an individual in the United States, where a voluntary Passenger Service Plan, to be submitted agreement, with statutory back-up, has to its National Authority and to the been accepted as the appropriate means European Commission. Service Plans to secure consumer protection without would be published, and enforceable. resorting to heavy-handed and unnecessary legislation. The airlines believe very firmly that passenger service, in the broadest As such, harmonised rules on either side sense, is first and foremost a legitimate of the Atlantic would fit neatly into the competitive tool. As far as the major proposals for a TCAA (see p. II-9).

TODAY... TOMORROW... NO NEED FOR...

PASSENGER FURTHER RIGHTS Association of European Airlines LEGISLATION AIRLINE PASSENGER COMMITMENT

II - 10 CONTENTS

SECTION I - AEA AIRLINES’ PERFORMANCE 1999 I-1

SECTION II - TOPICS II-1

SECTION III - SPOTLIGHT ON THE AEA III-1

AEA Highlights of 1999 III-3 Mission Statement III-5 Membership Criteria III-5 Structure of the AEA III-7 Airline Profiles & 1999 Review III-8

SECTION IV - KEY STATISTICS IV-1

Key Statistics - Total AEA IV-2 AEA Fast Facts IV-4 Key Statistics - By Carrier IV-5 What do we mean by…? IV-13

III - 1 1

III - 2 AEA HIGHLIGHTS OF 1999

Elected for a period of one year, Mr Fausto Cereti of Alitalia presided as AEA Chairman during 1999. Establishing and maintaining good relationships with ECAC/Eurocontrol, manufacturer AECMA and the ‘Voice of Europe’s airports’ ACI/Europe ranked high on the agenda of the new Chairman. With the latter, two joint resolutions where concluded: ‘A strategy to reduce air traffic delays in Europe’ and ‘A strategy on environmental restrictions with regard to capacity expansion’. Photo Gallery

As airline punctuality and ATC delays reached critical 1. Twice a year the Presidents and levels in 1999, AEA repeatedly campaigned for the representatives of the twenty-seven creation of a ‘Single Sky over the Single Market’, member airlines of the AEA gather to discuss the state of the industry. The highlighted by keynote addresses made by both the 1999 Autumn Assembly was held in Chairman and Secretary General of the AEA and Rome, in the conference room of the echoed by incoming Commission members, Mr Excelsior Hotel, pictured here. Romano Prodi and Mrs Loyola de Palacio. The AEA 2. The assembled delegates of the also launched an industry first Ð the voluntary President’s Assembly, with the 1999 publication of punctuality statistics by airline/airport. Chairman of the AEA, Mr Fausto Cereti - President of Alitalia and host for the Assembly - and his wife, pictured in To help meet the environmental targets of the Kyoto front of the Palazzo Pallavicini- conference, the European aviation industry, AEA and Rospigliosi, Rome. AECMA, are prepared to enter into a voluntary 3. Taken at the MATSE/6 Air Traffic agreement. Emission control for a growth industry Management briefing session held with no alternative fuel source, must come from fleet between the AEA President’s Committee and ECAC/Eurocontrol, on renewal, new technology and improvements in ATC. 12th January 2000, from left to right, Mr Ole Asmussen, Director General of the AEA is a strong supporter of the regulation of safety Civil Aviation Administration of Denmark and President of the issues, such as licensing, certification, operations, Eurocontrol Provisional Council; Mr and maintenance, by an EU-sponsored European Yves Lambert, Director General of Aviation Safety Authority (EASA). In this context, the Eurocontrol; Mr André Auer, Directeur of the Swiss Federal Office for Civil signing of the ‘Working time agreement for mobile Aviation and President of ECAC and Mr staff in the aviation sector’ is a clear indication of the Raymond Benjamin, Executive industry’s concern for both safety and social issues. Secretary of ECAC. 4. At that same meeting, The AEA has also called for the development of a representatives of the AEA pictured: Mr new and modern regulatory framework for the Xabier de Irala, Chairman & Chief Executive Officer of Iberia, and Europe/US air transport market, with the formulation Chairman of the AEA for year 2000; Mr of a policy statement on a ‘Transatlantic Common Karl-Heinz Neumeister, Secretary Aviation Area.’ General of the AEA and Mr Mario Rehulka, Joint President of Austrian Airlines. Other President’s Committee In January 2000, Mr Xabier de Irala of Iberia members present were: Mr Robert succeeded Mr Cereti as AEA Chairman. Ayling, former Chief Executive of British Airways; Mr Jürgen Weber, Chairman and CEO of Lufthansa; Mr Jean-Cyril More details about the activities of the AEA can be Spinetta, Chairman of Air France and found under ‘Press Releases’ on www.aea.be. Mr Fausto Cereti, Chairman of Alitalia.

III - 3 5

III - 4 MISSION STATEMENT

The Association of European Airlines shall in general serve the common interests of the members of the Association.

It shall represent the interests of its members to the institutions of the European Union, to the European Civil Aviation Conference, to any other institutional organisations or association involved in or likely to be Photo Gallery involved in issues of interest to AEA members and, 5. Mrs Loyola de Palacio, Vice- as appropriate, to individual governments. President of the European Commission and guest at the Autumn President s Assembly in Rome with Mr Fausto It shall advance the co-operation amongst its Cereti, Chairman of Alitalia and members on any matter likely to be of interest to the Chairman of the AEA for year 1999. membership as a whole and permitted by the laws of 6. From left to right, Mr Louis Grech, the countries in which they operate, whilst respecting Chairman of Air Malta; Mr Larry the independence of action of its members Stanley, Group Chief Executive of Aer individually. Lingus; Mr Keijo Suila, President & CEO of Finnair, at the President s Assembly. The committee structure of the AEA Secretariat can be found overleaf. 7. At the conference table of the Assembly, from left to right, Dr. Karl- Friedrich Rausch, Chief Operating .. Officer of Lufthansa; Mr Jurgen Weber, MEMBERSHIP CRITERIA Chairman and CEO of Lufthansa and Mr Heiner Wilkens, President & CEO of Cargolux. A new member of the AEA shall be registered in, licensed by, and with principal place of business in On page III - 6, overleaf: an eligible European country, as listed in the AEA 8. Mr Jean-Cyril Spinetta, Chairman of statutes. Air France (left) and Sir Michael Bishop, Chairman of British Midland A new member should have been engaged in (right). passenger or cargo air transport operations in the 9. Mr Karl-Heinz Neumeister, Secretary last three years. Membership is open to all airlines: General of the AEA. international, domestic, scheduled and charter 10. On the occasion of the signing of passenger operators and all-cargo operators. the working time agreement for mobile staff in the aviation sector , 22nd March 2000 in Brussels, are pictured, from left The size of a member s operations shall be to right, Mr Alan Brown of the charter significant. When determining size of operations a airline association IACA; Mr Marc number of criteria can be used but one guiding factor Frisque, Director General of IACA; Mr Mike Ambrose, Director General of the is number of aircraft seats operated, which shall be regional association ERA and Mr Karl- of the order of 3,000 minimum or for all-cargo Heinz Neumeister, Secretary General operators a minimum payload of approximately 500 of AEA. Other associations party to the agreement were: European Transport metric tonnes. If such criteria are not met by the Workers Federation (ETF) and the major airline in a country, exemption from the above European Cockpit Association (ECA). is possible. 11. Taking the word at the Assembly, Mr Leo van Wijk, President & CEO of New membership is subject to acceptance by the KLM (left) and Mr Jean-Donat Calmes, AEA Assembly of Presidents. President & CEO of Luxair (right).

III - 5 8

10 9

III - 6 ASSEMBLY OF PRESIDENTS Chairman: Xabier de Irala (IB)

PRESIDENTS' COMMITTEE Jean-Cyril Spinetta (AF), Fausto Cereti (AZ), Mario Rehulka (OS), Sir Michael Bishop (BD) Jürgen Weber (LH), Leo van Wijk (KL), Philippe Bruggisser (SR)

SECRETARY GENERAL Karl-Heinz Neumeister Executive Assistant Association of European Airlines Doreen Blow

IEC PPC INFRASTRUCTURE & PUBLIC POLICY COMMITTEE ENVIRONMENT COMMITTEE

General Manager Deputy Secretary General Le Thi Mai Kees Veenstra Senior Secretary Senior Secretary Yvonne Hopkins Yvonne Hopkins LEGAL MATTERS

SAC SOCIAL AFFAIRS TOC COMMITTEE TECHNICAL & OPERATIONS COMMITTEE General Manager Sefik B. Yüksel General Manager Senior Secretary Peter Malanik Miriam Swan Manager Operations & ATM Vincent De Vroey TPC Assistant Technical Affairs TRADE PRACTICES & Hanna Tiainen STANDARDS COMMITTEE Senior Secretary Ann Flynn

RESEARCH & INFORMATION PUBLIC RELATIONS Manager Research & Statistics Manager Information Susan J. Lockey David Henderson Research Analyst Press Secretary Dario Spila Anne-Marie Weirauch

ADMINISTRATION Senior Manager Finance & Admin. TECHNICAL SUPPORT Seya T. Immonen Manager EDP Senior Secretary Mario De Smedt Nathalie Mulleners Desktop Publishing Printer Didier Poriau Jozef Swalus

IN MEMORIAM

Göran G.R. Staël von Holstein 1943 - 2000

III - 7 Adria Airways^ Kuzmiceva 7 61000 Ljubljana Slovenia

Tel +386 61 13 62 499 Fax. +386 61 13 69 233 [email protected] www.adria.si

Review of 1999 ^ Peter Grasek, President * 780 thousand passengers transported, 71% on scheduled services within Europe, 29% on charter services. * 4147 tonnes of freight carried on passenger services. 18 Scheduled Destinations * 578 employees worldwide. 1 within Slovenia 16 rest of Europe Adria Airways, national airline of Slovenia, reported positive 1 beyond Europe financial results in the preceding financial year, 1998. Results for calendar year 1999, although still positive, were negatively 7 Aircraft in Fleet impacted by external events, as described below. 3 Airbus A320 4 Canadair CRJ-200 NATO air strikes and an escalating Kosovo crisis led to the temporary cancellation of Adria Airways flights from its home 0 Aircraft on Order base Ljubljana to Yugoslavia and surrounding countries, including Split in Croatia, the Bosnian capital Sarajevo, Tirana Information on destinations and fleet st in Albania and Ohrid and Skopje in Macedonia. As with other reflect status at 31 December 1999. carriers in the region, the war, which lasted from March to June, brought extraordinary expenses and a loss of traffic for Adria. Owned by 91% Development Corporation of In October, Adria Airways announced the opening of a regular Slovenia daily route between Ljubljana and Pristina, Yugoslavia. Adria 9% Nova Ljubljanska Banka Airways flew to Pristina in the 1980s, but the connection to the provincial capital of Kosovo had not been operated over the last Owner of decade. -

In December Adria commenced code-share flights with Air Major partnerships France between Ljubljana and Paris. Code-share agreements: Air France, Lufthansa.

Financial Results US$ mill 1999 1998 Turnover 99.5 96.6 Operating profit/loss 5.0 1.1

Net profit/loss 0.7 3.4 ^ Peter Grasek President

III - 8 Aer Lingus Dublin Airport Dublin Ireland

Tel. +353 1 886 2222 Fax. +353 1 886 3832 www.aerlingus.ie

Bernie Cahill, Chairman Review of 1999 Larry Stanley, Group Chief Executive * 6.5 million passengers transported, 96% on scheduled 35 Scheduled Destinations services, of which: 74% within 5 within Ireland Europe, 14% on the North 25 rest of Europe Atlantic and 8% on Domestic 5 beyond Europe Irish routes. * 37 thousand tonnes of freight 40 Aircraft in Fleet carried, mostly on passenger 5 Airbus A330-300 services. 1 Airbus A330-200 * 5635 employees worldwide. 6 Airbus A321-200 8 Boeing 737-500 Aer Lingus became the ninth 6 Boeing 737-400 member of the global airline alliance - Oneworld. Oneworld 7 BAe 146-300 members are American Airlines, British Airways, Cathay Pacific, 3 BAe 146-200 Finnair, Iberia, Qantas and LanChile. Aer Lingus will formally 4 Fokker 50 commence offering Oneworld services and benefits from 1st June 2000. 9 Aircraft on Order 1 Airbus A330-200 Mr Gary Cullen left the position of Group Chief Executive; Mr 6 Airbus A320-200 Larry Stanley was appointed his successor. 2 BAe 146-300 Summer 1999 schedule brought a fifth US gateway city to Aer Information on destinations and fleet Lingus, with the new direct service to Los Angeles. A long- reflect status at 31st December 1999. range Airbus A330 was added to the fleet to operate the US West coast route. The new timetable presented a significant increase in overall capacity across the Atlantic. Owned by 95% State ownership A new strategy for London routes saw the concentration of 5% Aer Lingus employees services on three airports: Heathrow, London City Airport and Gatwick, the latter substituting for former Stansted operations. Owner of 100% Aer Lingus Commuter The fleet saw the addition of three A321 aircraft, brining total in 85% Futura the fleet to six, as well as the A330 mentioned above, of which there are now five. One Boeing 737-500 and two Fokker 50s Major partnerships left the fleet. Orders for six A320s and more British Aerospace Member of Oneworld alliance. 146 passenger jets were carried over from previous year. Financial Results Aer Lingus Group results: mill 1998 1997 Turnover 1144.6 1018.7 Operating profit/loss 57.7 50.1 Net profit/loss 68.2 -58.3

Bernie Cahill Larry Stanley Chairman Group Chief Executive

III - 9 Air France 45 rue de Paris 95747 Roissy CDG Cedex France

Tel. +33 1 41 56 78 00 Fax. +33 1 41 56 70 29 www.airfrance.fr

Jean-Cyril Spinetta, Chairman Pierre-Henri Gourgeon, CEO Review of 1999

* 37.1 million passengers transported on scheduled services, of 273 Scheduled Destinations which: 44% on French Domestic routes, 30% within Europe, 38 within France 14% across the Atlantic, 7% to the African continent and the 65 rest of Europe Middle East and 5% to the Far East. 170 beyond Europe * 642 thousand tonnes of freight carried, 54% on all-cargo services. 219 Aircraft in Fleet 5 Concorde * 48921 employees worldwide. 18 Airbus A340-300

nd 13 Airbus A321 On 22 February 1999 Air France was partially privatised, as 58 Airbus A320-200/100 20% of the capital was floated on the Paris stock market. To 17 Airbus A319 date, the French Government retains a 57% stake in the airline; 10 Airbus A310-300/200 other shareholders include Air France employees (11%) and 10 Boeing 777-200 private and institutional investors (32%). 5 Boeing 767-300 13 Boeing 747-400 A major reshuffle of alliance partners took place in June, when 15 Boeing 747-300/200/100 11 Boeing 747F Air France announced the signing of a 10-year exclusive 30 Boeing 737-500/300 partnership with Delta Airlines. The move ended Delta’s 14 Boeing 737-200 partnership with Atlantic Excellence members Swissair, Sabena and Austrian Airlines Group. Air France also has a code-share 40 Aircraft on Order agreement with another US carrier, Continental Airlines. The 2 Airbus A340-300 new partners were joined later in the year by AeroMexico. 3 Airbus A321-200 14 Airbus A319-100 Air France-Delta Airlines also joined forces with Korean Air to 15 Airbus A318 create a major air cargo alliance, with an estimated global 6 Boeing 777-200 market share of 20%. Information on destinations and fleet reflect status at 31st December 1999. Steps were made towards closer co-operation with carriers around the world, including Brazil’s TAM (Transportes Aereos Owned by Meridionais), Middle East Airlines and China Eastern Airlines. 57% State ownership 32% Private and Institutional investors The second wing of the terminal expansion at Charles de 11% Air France employees Gaulle airport, Hall F, opened for use in May, accomodating flights and operators to and from Far Eastern destinations. Owner of 70% Regional Airlines via 100% owned Air France Finance Air France’s Concorde operations celebrated a landmark. 50% Soci t d Exploitation Inaugurated in 1977, the supersonic Paris-New York service A ropostale has now carried in excess 36% Air Austral via 100% owned Air of one million passengers. France Finance

Air France placed an order Major partnerships for fifteen Airbus A318 and Air France-Delta-AeroMexico alliance. announced plans to order Code-share agreements: Continental eight 219-seater Airbus Airlines, Japan Airlines, Eurowings, TAM, MEA, China Eastern Airlines. A330-200s in the new year, Franchise partners: Brit Air, Gill with options on a further Airways, Jersey European, Proteus, five, to replace the long- CityJet. haul Airbus A310s and Boeing 767-300s currently Financial Results in the fleet. Group Results. Year ending 31st March mill 1999/00 1998/99 Turnover 10324 9100 Jean-Cyril Spinetta Operating profit/loss 358 267 Chairman Net profit/loss 354 249

III - 10 Air Malta Head Office Luqa LQA05 Malta

Tel. +356 22 9990 Fax. +356 673241 [email protected] www.airmalta.com Review of 1999 Louis Grech, Chairman * 1.53 million passengers transported, 78% on scheduled services, of which: 70% within Europe, 4% on North Africa and 53 Scheduled Destinations 4% on the Middle East. 2 on Malta * 7589 tonnes of freight carried, 12% on all-cargo flights. 39 rest of Europe * 1883 employees worldwide. 12 beyond Europe Air Malta recorded significant and positive results for the 11 Aircraft in Fleet financial year up to March 1999, reversing the fortunes of the 2 Airbus A320-200 previous two years and giving the Maltese national airline even 1 Boeing 737-400 more reason to celebrate the 25th anniversary of its operations 6 Boeing 737-300 that year. The carrier's strategy included the rationalisation of its 2 Boeing 737-200A aircraft fleet and route network resulting in higher aircraft utilisation, a reduction in unit and overhead costs, as well as an 0 Aircraft on Order improvement in load factor. Information on destinations and fleet Air Malta's core business is the generation of tourism to Malta, reflect status at 31st December 1999. which is one of the important pillars of the Maltese economy. During the period under review, Air Malta carried more than 1.5 million passengers, mainly on its 53 scheduled routes Owned by… throughout Europe, North Africa and the Middle East. 96.4% State ownership 3.6% Private shareholders Air Malta's network in Great Britain, which already included regular scheduled services to London's Heathrow and Gatwick Owner of… airports, Manchester, Birmingham and Glasgow, saw the 100% Malta Air Charter Co Ltd addition of Stansted airport as a scheduled destination. 49% AZZURRA Air

Air Malta expanded its scheduled services to Eastern Europe Major partnerships by introducing services to Moscow and Prague in a bid to - develop tourism to the island from that region. The Malta- Prague route is code-shared with CSA Czech Airlines. Over the Financial Results st past three years Air Malta has been operating seasonal Group results. Year ending 31 March scheduled flights between Malta and Budapest and charter Lm000 1998/99 1997/98 flights between Malta and Moscow, St Petersburg, Kiev, Prague Turnover 107930 101419 and Brno. Operating profit/loss 6803 6021 Net profit/loss 4440 38 Flights to Tripoli and Benghazi were also resumed in April 1999, following the lifting of United Nations sanctions on Libya. The Libya service was one of Air Malta's most profitable operations until the sanctions were imposed in 1992.

Louis Grech Chairman

III - 11 Alitalia Ð Linee Aeree Italiane Spa Viale Alessandro Marchetti 111 00148 Roma Italy

Tel. +39 06 65621 www.alitalia.it

Fausto Cereti, Chairman Domenico Cempella, Managing Review of 1999 Director & CEO * 24.4 million passengers transported, mostly on scheduled services, of which: 55% on Domestic Italian routes, 30% within 141 Scheduled Destinations Europe, 7% across the Atlantic, 5% to the African continent and 23 within Italy the Middle East and 3% to the Far East. 67 rest of Europe * 241 thousand tonnes of freight carried, 44% on all-cargo 51 beyond Europe services. * 19140 employees worldwide. 155 Aircraft in Fleet 22 Airbus A321 In May, Alitalia, KLM and Northwest, filed for, and were granted, 2 Airbus A320 anti-trust immunity by the US Government. The three airlines 9 Boeing 767-300 signed a Commercial Co-operation & Integration Agreement 8 Boeing 747-200 and an Alliance Co-ordination Agreement, which would allow 3 Boeing 747-200F the carriers to co-ordinate their trans-Atlantic route networks 89 MD82 and rationalise operations and service to the public. In August 8 MD11 the alliance members opened a joint office in Beijing. 7 ATR 72 7 ATR 42 On 1st November, the Alitalia-KLM Master Co-operation Agreement, signed one year earlier, became effective. The 26 Aircraft on Order agreement was set to bring financial and operational alignment 3 Airbus A321 between the two companies until, in April 2000, the sudden 17 Airbus A320 termination of the co-operation was announced. The de- 6 Embraer RJ-145 merging process is scheduled to be finalised by the end of August 2000. Information on destinations and fleet reflect status at 31st December 1999. Considered of strategic importance to Alitalia's Restructuring and Development Plan, the completion of the new airport and Owned by… infrastructure at Milan's Malpensa, and planned transfer of 53% State-owned holding company: international services from Linate, continued to be problematic. IRI 27% Private investors The route network saw the addition of new destination San 20% Alitalia Personnel Francisco, served from Milan as well as Milan-Toronto, Rome- Dublin and Rome-Djerba routes. Owner of… Alitalia fleet saw the addition of the carrier's first two Airbus 100% Alitalia Team A320 of an order of 19 aircraft. The A320 is for use on 100% Alitalia Express European, Mediterranean and Middle Eastern routes. Alitalia 45% Eurofly already has twenty-two A321s in the fleet. Major partnerships Continental Airlines: comprehensive co-operation agreement. AZZURRA Air and Minerva Airlines: franchising agreements.

Financial Results Alitalia Group results: LIT bn 1998 1997 Turnover 8947 8584 Operating profit/loss 643 346 Net profit/loss 408 438

Fausto Cereti Chairman

III - 12 Austrian Airlines Fontanastrasse 1 P.O. Box 50 1107 Vienna Austria

Tel. +43 1 1766 Fax. +43 1 688 55 05 www.aua.com Review of 1999 Herbert Bammer, Joint President Mario Rehulka, Joint President * 3.5 million passengers transported on scheduled services, of which: 72% within 125 Scheduled Destinations Europe, 9% on the North 6 within Austria Atlantic, 9% on Middle East and 76 rest of Europe North Africa; 7% to the Far East 43 beyond Europe and 3% to Sub-Saharan Africa. * 55 thousand tonnes of freight 37 Aircraft in Fleet carried on passenger services. 2 Airbus A340-300 * 4824 employees worldwide. 2 Airbus A340-200 4 Airbus A330-200 The Austrian government 2 Airbus A321-200 relinquished its majority holding in Austrian Airlines, by not 3 Airbus A321-100 subscribing to the increase in share capital. The state still 4 Airbus A320 remains the largest single shareholder: its stake was reduced 2 Airbus A310 from 51.9% to 39.7%. The percentage of free float increased to 5 MD87 30.7%. Japan's All Nippon Airways sold its 9% stake in Austrian 2 MD83 Airlines to two Austrian banks. 5 MD82 6 Fokker 70 The Austrian Airlines Group, comprising Austrian Airlines, Lauda Air and Tyrolean Airways, announced it would leave the 9 Aircraft on Order Qualiflyer Group to join the Star Alliance by March 26, 2000. 2 Airbus A321 The Star Alliance also includes: Lufthansa, SAS, Air Canada, 7 Airbus A320 United Airlines, Varig, Thai, Air New Zealand, Ansett Australia, ANA, Singapore Airlines, British Midland and Mexicana. Information on destinations and fleet reflect status at 31st December 1999. The Group introduced several new services to Eastern Europe and the CIS states, to Central Asia and to China, strengthening its position as an East-West hub. Owned by… 39.7% State ownership A daily non-stop Vienna-Atlanta service was included in the 28.5% Private investors network. Following the lift of the UN-boycott on Libya, services 18.1% Austrian institutions & investors to Tripoli were resumed. 10% SAirLines 2.2% Austrian Bank AUA implemented expanded e-commerce applications for 1.5% Air France internet users with a joint online booking service. Owner of… 100% Tyrolean Airways 80% Austrian Airtransport 35.9% Lauda Air 25% Ukraine International Airlines (with Swissair) via UI Holding

Major partnerships Member of the Star Alliance.

Financial Results Austrian Airlines Group results: ATS mill 1998 1997 Turnover 20463 19480 Operating profit/loss 1072 499 Herbert Bammer Mario Rehulka Net profit/loss 189 133 Joint President Joint President

III - 13 Balkan Bulgarian Airlines Sofia Airport 1540 Sofia Bulgaria

Tel. +359 2 98 448 1 Fax. +359 2 79 12 06 [email protected] www.balkan.com Review of 1999 Barouh Chakarov, Vice Chairman of the Board of Directors and Procurator * 1 million passengers transported, 64% on scheduled services, Andrew Gray, Chief Executive Officer of which: 41% within Europe, 6% on Domestic routes,10% to the African continent and Middle East, 7% to the Far East. * 8 thousand tonnes of freight carried on passenger services. 32 Scheduled Destinations * 3115 employees worldwide. 2 within Bulgaria 24 rest of Europe Balkan Bulgarian Airlines announced an improved financial 6 beyond Europe performance in the 1998 accounting year, compared to 1997. Losses were substantially reduced, following buoyant growth in 20 Aircraft in Fleet passenger traffic. 3 Boeing 737-500 2 Boeing 737-300 The Bulgarian government initiated the privatisation of the 8 Tupolev TU-154 national carrier. Seventy-five percent of Balkan's shares were 3 Antonov AN-24 sold to a division of the Zeevi Group, Balkan Airlines Holdings 4 Antonov AN-12 B.V., registered in the Netherlands. 2 Aircraft on Order Mr Andrew Gray took up the post of Chief Executive Officer 2 ATR-42-300 within the new management structure of the carrier. The new owners committed to investing approximately 100 million US$ in Information on destinations and fleet the carrier over the next five years, whilst the Bulgarian reflect status at 31st December 1999. government agreed a contribution from the state to ease the companies debts. Owned by… An ambitious program for changing the image of the national 75% Balkan Airlines Holdings carrier was implemented, symbolised by the new company logo. 25% Republic of Bulgaria Attention will also be focused on upgrading and improving the quality of services provided by Balkan, including newly Owner of… decorated aircraft interiors. -

The anticipated expansion and renewal of the fleet started Major partnerships towards the end of the year. Two Boeing 737s, leased from - General Electric, and painted in the company's new livery, were taken into service to operate on European routes. Two ATR-42 Financial Results aircraft are currently on order for delivery from April 2000. US$ mill 1998 1997 These regional aircraft will replace the Antonov 24 aircraft Turnover -- currently in the fleet. Operating profit/loss - - Net profit/loss -15.5 -40.2

Andrew Gray Chief Executive Officer

III - 14 British Airways plc Waterside P.O. Box 365 Harmondsworth UB7 0GB Great Britain

Tel. +44 20 8759 5511 Fax +44 20 8562 5557 www.british-airways.com

Rod Eddington, Chief Executive Review of 1999

*37 million passengers 166 Scheduled Destinations transported, 99% on scheduled 15 within Great Britain services, of which: 17% on 60 rest of Europe Domestic routes, 45% in 91 beyond Europe Europe, 22% across the Atlantic, 7% to the African 286 Aircraft in Fleet continent and the Middle East, 7 Concorde 10 Airbus A320 8% to the Far East. 4 Airbus A319 * 702 tonnes of freight carried, 29 Boeing 777 9% on all-cargo services. 28 Boeing 767-300 * 70000 employees worldwide. 51 Boeing 757-200 57 Boeing 747-400 On February 1st 1999, American Airlines, British Airways, 16 Boeing 747-200 Cathay Pacific Airways and Qantas Airways implemented their 6 Boeing 747-100 Oneworld global alliance, followed later in the year by Iberia 34 Boeing 737-400 and Finnair. LanChile and Aer Lingus's membership has been 7 Boeing 737-300 17 Boeing 737-200 accepted, and will become effective in the course of 2000. 2 BAe ATP 2 Dash-7 British Airways announced closer commercial links with partner 16 Dash-8 Oneworld members American Airlines, Aer Lingus and Iberia, acquiring a 9% stake in the latter. 83 Aircraft on Order 20 Airbus A320 After 20 years of joint cargo operations, British Airways and 35 Airbus A319 Japan Airlines announced the expansion of their co-operation to 12 Airbus A318 passenger services. British Airways strengthened its presence 16 Boeing 777 in Central Europe with the extension of code-share agreements Information on destinations and fleet with LOT Polish Airlines. reflect status at 31st December 1999.

British Airways acquired Gatwick-based CityFlyer Express. Owned by… Base Airlines of the Netherlands became the newest franchise 100% Publicly quoted company. partner, operating in BA livery and with BA flight code prefix. Owner of… British Airways' fleet developments reflected the new business 100% Deutsche BA strategy aimed at attracting premium passengers onto smaller, 100% Brymon Airways more efficient aircraft, as Boeing 757s were replaced by 777s. 100% Go Fly 100% CityFlyer Express British Airways also took delivery of its first Airbus A319s, part 25% Qantas of a large order from the 18.3% Comair (South Africa) A320 family. Twelve of the 9% Iberia new 100-seater Airbus A318s are also on order. Major partnerships Member of the Oneworld alliance. In May 1999, British Co-operation agreements: Emirates, Airways inaugurated its new Malev, LOT, America West Airlines. World Cargocentre at Franchisees: Base Airlines, British Mediterranean, British Regional, Heathrow, doubling its Brymon, Comair, GB Airways, Loganair, cargo capacity. Maersk Air, SunAir (Scandinavia).

Speedwing - independent Financial Results consultancy division of BA - Group results. year ending 31st March: was contracted to manage £ mill 1998/97 1997/96 Turnover 8642 8359 the turnaround of Olympic Rod Eddington Airways. Operating profit/loss 504 546 Chief Executive Net profit/loss 460 553

III - 15 British Midland Donington Hall Castle Donington Derby East Midlands DE74 2SB Great Britain

Tel. +44 1332 854 000 Fax. +44 1332 854 662 www.britishmidland.com Review of 1999 Sir Michael Bishop CBE, Chairman * 6.7 million passengers Austin Reid, Chief Executive Officer transported, 97% on scheduled services, of which: 53% within Europe and 44% on Domestic 29 Scheduled Destinations routes in Great Britain. 11 within Great Britain * 13 thousand tonnes of freight 18 rest of Europe carried on passenger services. 0 beyond Europe * 6400 employees worldwide. 53 Aircraft in Fleet British Midland announced its 7 Airbus A321 highest turnover and record 2 Airbus A320 passenger numbers for 1998. 12 Boeing 737-500 4 Boeing 737-400 The airline was awarded route licences by the Civil Aviation 7 Boeing 737-300 Authority to serve New York, Washington, Boston and Miami 6 Fokker 100 from London's Heathrow airport, although the restrictive US-UK 3 Fokker 70 air service agreement prevented the airline from flying the 9 Saab 340 routes. The 'Make the Air Fair' campaign was launched to 3 Embraer RJ-145 highlight the situation. 32 Aircraft on Order The airline was also awarded route licences by the CAA to 12 Airbus A330 serve New York, Los Angeles, Boston and Washington from 13 Airbus A321/320 Manchester airport. 7 Embraer RJ-145 A daily direct scheduled service from London Heathrow to Information on destinations and fleet Budapest in Hungary was launched. reflect status at 31st December 1999. British Midland appointed a new Chief Operating Officer - James Hogan - made key director appointments and Owned by… announced the re-integration of its engineering and handling 100% British Midland plc, divisions into day-to-day operations, all with the specific owned by… objective of structuring the airline for future expansion. The 40% SAS airline also opened its new training centre at Stockley Close. Owner of… In November, the future ownership structure of the airline was - decided. SAS, owner of a 40% equity stake in the British carrier since 1992, agreed to sell Major partnerships half - 20% - to Star Alliance Member of the Star Alliance. partner, Lufthansa. British Code-share partners: Air Canada, Air Midland joins the Star France, Air Lanka, Air New Zealand, Alliance on 1st July 2000. Alitalia, Austrian Airlines, Continental, Gulf Air, Icelandair, Lufthansa, The airline took delivery of Malaysian Airlines, Royal Brunei, SAS, another five Airbus single- South African Airways, TAP Air aisle aircraft (two A320, Portugal, United Airlines, Virgin Atlantic. three A321) from an order of 22 placed in 1997. In Financial Results addition, the first of an order £ mill 1998 1997 of 10 Embraer jets were Turnover 558.8 529.3 delivered from the Brazilian Operating profit/loss - - Net profit/loss 11.0 17.3 manufacturer, to serve Sir Michael Bishop short-haul and regional Chairman routes.

III - 16 Cargolux Airlines International Luxembourg Airport L-2990 Luxembourg Grand Duchy of Luxembourg

Tel. +352 4211 1 Fax +352 43 54 46 cargolux www.cargolux.com

Heiner Wilkens, President & CEO Review of 1999

* 304 thousand tonnes freight transported, 93% on scheduled 42 Scheduled Destinations services of which 37% to the Far East, 28% on the North 1 within Luxembourg Atlantic, 16% on the South & Mid Atlantic, 8% to Africa, 3% to 4 rest of Europe the Middle East. * 1234 employees worldwide. 37 beyond Europe Cargolux commenced a new service from Luxembourg to 10 Aircraft in Fleet Shanghai, following a route alliance agreement between the 10 Boeing 747-400F Luxembourg-based carrier and China Eastern Airlines. Shanghai, in China, established itself as a focus for new 2 Aircraft on Order services in 1999. 2 Boeing 747-400F The South American network saw the addition of a Information on destinations and fleet Luxembourg-Caracas service, to meet the demand for oil reflect status at 31st December 1999. exploration/production equipment from Europe. Caracas is added to the list of South American points already served including Brazil, Argentina, Colombia, Chile and Uruguay. Owned by… 34.9% Luxair Services to Australia and New Zealand were introduced. The 33.7% SAirLogistics, 100% owned Cargolux B747-400F will fly a circular routeing, from Europe via by SAirGroup Middle East and the Far East to Melbourne, Auckland, Los 31.1% Luxembourg financial Angeles and Portland in the US and back to Luxembourg. institutions 0.3% others Cargolux deployed modern temperature controlled Boeing 747- 400Fs on its Africa service bound for Johannesburg via Nairobi, Owner of… operated in co-operation with Fast Airways of Kenya. During the - season, North bound shipments consist of perishable load of fruit, vegetables and flowers. In Africa Cargolux also serves the Major partnerships Ivory Coast, Ghana and Togo. SAirLogistics, Swisscargo China Eastern Airlines (P.R.China) Swisscargo, the SAirLogistics cargo unit, and holder of a 33.7% China Airlines (Taiwan) financial stake, reinforced its co-operation with Cargolux, when Aeromexpress (Mexico) it became the carriers' cargo sales agent for Switzerland, Air New Zealand agreeing to buy capacity equivalent to the annual production of one B747-400F. Financial Results US$ mill 1999 1998 Cargolux set up its first consolidation centre. Helsingborg, in Turnover 644.0 578.4 Sweden, operates as a sub- Operating profit/loss 10.0 38.5 hub for Scandinavian Net profit/loss 30.2 92.1 imports and exports. Cargo from the catchment area covering Sweden, Norway, Finland and Copenhagen, is now palletised at Helsingborg for shipment overseas.

In December, Cargolux took delivery of its tenth B747- 400F, making Cargolux the owner of the largest fleet of B747-400 freighters in the Heiner Wilkens world. Two more B747- President & CEO 400Fs are on order.

III - 17 Croatia Airlines Savska 41 10000 Zagreb Croatia

Tel. +385 1 616 0066 Fax. +356 1 617 6845 [email protected] www.ctn.tel.hr/ctn

Review of 1999 ^ Ivan Misetic,’ President & CEO * 900 thousand passengers transported, 90% on scheduled services, of which: 60% within Europe, 29% on Domestic routes 22 Scheduled Destinations and 1% on Middle East route area. 5 within Croatia * 2952 tonnes of freight carried on passenger services. * 842 employees worldwide. 16 rest of Europe 1 beyond Europe In 1999 Croatia Airlines celebrated its 10th anniversary. The Croatian airline company was founded in 1989 under the name 8 Aircraft in Fleet of Zagal. A year later the name was changed to Croatia 2 Airbus A320-200 Airlines. In 1998 Croatia Airlines became the 27 th member 3 Airbus A319-100 airline of the AEA. 3 ATR 42-300

Croatia Airlines is likely to report a negative financial result in 2 Aircraft on Order 1999 as a result of the Kosovo crisis. The conflict - which 1 Airbus A320-200 lasted from March to June - brought additional expense and a 1 Airbus A319-100 loss of traffic. Information on destinations and fleet st Croatia Airlines and Lufthansa introduced an agreement reflect status at 31 December 1999. involving joint code operations between Zagreb/Split and Frankfurt/Munich. Owned by 90.6% State ownership Croatia Airlines also extended its existing code-share 3.41% State agency agreement with Iberia, to cover a new route launched from 2.61% Croatian Privatisation Fund Zagreb to Barcelona. 3.37% Other shareholders

The carrier also introduced two reciprocal code-sharing Owner of agreements with CSA of the Czech Republic and Air Bosna of - Bosnia and Herzegovina. Major partnerships At the beginning of the 1999 tourist season, Croatia Airlines Code-share agreements with Air took delivery of one Airbus A319 and one A320. Towards the France, Alitalia, Iberia, Lufthansa. end of the year all five Boeing 737-200s in the fleet were sold off. At year-end the modern, new fleet counted three A319, two Financial Results A320 and three ATR 42s. US$ 000 1999 1998 Turnover 111320 123051 Operating profit/loss 3222

Net profit/loss -12046 -1028 ^ Ivan Misetic’ President & CEO

III - 18 Czech Airlines Head Office Airport Ruzyne 160 08 Prague 6 Czech Republic

Tel. +420 2 2011 1111 Fax. +420 2 2056 2266 [email protected] www.csa.cz Review of 1999

Miroslav Kula, President * 2.1 million passengers transported, 89% on scheduled services, of which: 74% in Europe, 8% to the Middle East and

North Africa, 6% on the North Atlantic, 1% to the Far East. 60 Scheduled Destinations * 10743 tonnes of freight carried on passenger services. 4 within the Czech Republic * 3930 employees worldwide. 43 rest of Europe

13 beyond Europe In October 1998, CSA celebrated its 75th year of operations.

Founded in 1923 by the Czech Ministry of Public Works as CSA – Czechoslovak State Airlines – the company’s first flight 28 Aircraft in Fleet operated with an Aero A-14 Brandenburg bi-plane on the 2 Airbus A310-300 Prague-Bratislava route. 10 Boeing 737-500 5 Boeing 737-400 In 1930 CSA introduced its first cross-border flight, to Zagreb. 4 ATR-72 CSA currently serves 43 destinations in Europe. One quarter of 4 ATR-42 those destinations are in Central and Eastern Europe, reflecting 3 Tupolev TU-154 the geographic location of the home carrier. In the rest of Europe, Germany with eight cities, and Italy with three, are the 2 Aircraft on Order most densely served. The network beyond Europe is dominated 2 Boeing 737-400 by routes to the Middle East, but also features points in North Information on destinations and fleet America and Bangkok in the Far East. st reflect status at 31 December 1999. In 1999 CSA’s timetable offered new code-share flights to Frankfurt with Lufthansa, and to Paris in conjunction with Air Owned by… France. Co-operation with Continental Airlines remains Czech National Property Fund important to the Czech carrier, enlarging the network by twenty- Czech Consolidation Bank five US destinations. Other new agreements formed in 1999 Czech institutions & investors include co-operation with Air Baltic and Croatia Airlines, joining established partner airlines: Air Ostrava, Alitalia, Austrian Owner of… Airlines, KLM, LOT, Malev and Swissair. -

In 1957 CSA introduced the Tupolev TU-104A jet aircraft into its Major partnerships fleet. For several decades CSA’s fleet contain only Russian built Code-share agreements: Air Baltic, Air planes, such as Tupolev, Jakovlev and Ilyushin. In the early France, Air Ostrava, Alitalia, Austrian 1990s the company initiated a radical renewal of its fleet, taking Airlines, CSA, Continental Airlines, delivery of its first Western built aircraft Ð an Airbus A310-300 Ð Croatia Airlines, KLM, Lufthansa, LOT, in 1991. Today, CSA’s regular fleet consists of three types of Malev, Swissair. aircraft. Long -haul destinations are served with Financial Results 207-seater A310-300. The CZK mill 1998 1997 smaller Boeing 737 operate Turnover 11983 10857 on Europe and Middle East Operating profit/loss 485 36 routes. The turboprop ATR Net profit/loss 414 89 aircraft fly on short-haul and regional routes. During the year, CSA took delivery of two additional Boeing 737- 400s and two ATR-42, whilst in early January 2000, the last Tupolev and Russian built aircraft were retired from the fleet. Miroslav Kula President

III - 19 Cyprus Airways Ltd 21 Alkeou Street 2404 Engomi P.O. Box 21903 1514 Nicosia Cyprus

Tel. +357 2 663 054 Fax +357 2 663 167 www.cyprusair.com.cy Review of 1999 Haris A. Loizides, Chairman * 1.3 million passengers transported, 99% on scheduled Demetris Pantazis, Group Chief Executive services, of which: 85% in Europe, 13% on the Middle East and 1% on North Africa. * 17 thousand tonnes of freight carried, all on passengers 34 Scheduled Destinations services. 2 within Cyprus * 1999 employees worldwide. 22 rest of Europe 10 beyond Europe Cyprus Airways announced that its profits for 1998 had reached record levels after a two-year period in the red. According to the 9 Aircraft in Fleet airline's financial statements, pre-tax profit reached CY£ 10 5 Airbus A320-200 million. This compares with a CY£ 3.2 million loss reported for 4 Airbus A310-200 the previous year. After tax or net results increased from a loss of almost CY£ 3 million, to a profit in excess of CY£ 8 million. 0 Aircraft on Order The company signed a partner agreement with Northwest Information on destinations and fleet Airlines, covering code-share service and frequent flyer co- reflect status at 31st December 1999. operation. The agreement will feature convenient connections at Amsterdam's Schiphol Airport from Northwest's US- originating flights to Cyprus Airways's services to Larnaca and Owned by… Paphos. Cyprus Airways currently operates code-share 80.46% State ownership services with KLM between Cypriot destinations and 19.54% Private Shareholders Amsterdam. Northwest and KLM are also established in a comprehensive partnership. Owner of… 100% Eurocypria Airlines Cyprus Airways signed a code-sharing agreement with El Al Israel Airlines, under which the two companies operate jointly Major partnerships between Larnaca and Paphos in Cyprus and Tel Aviv's Ben Code-share agreements: Alitalia, El Al, Gurion airport. Gulf Air, KLM.

In November the chairman of three years, Mr Takis Kyriakides Financial Results tendered his resignation. Mr Haris Loizides, who had been Cyprus Airways Group results: serving on the Board of Directors of Cyprus Airways since 1993, CY£ (000) 1998 1997 was appointed his successor. Turnover 146208 135180 Operating profit/loss 12664 4250 Net profit/loss 8383 -2612

Haris A. Loizides Chairman

III - 20 Finnair Oy P.O. Box 15 01053 Helsinki Finland

Tel. +358 9 818 81 Fax. + 358 9 818 4401 www.finnair.fi

Keijo Suila, President & CEO Review of 1999

* 7.4 million passengers 66 Scheduled Destinations transported, 81% on scheduled 21 within Finland services, of which: 39% within 36 rest of Europe Europe, 36% on Domestic 9 beyond Europe routes within Finland, 3% on the North Atlantic and 3% to the 55 Aircraft in Fleet Far East. 2 Airbus A321 * 63 thousand tonnes of freight 2 Airbus A319 carried, 22% on all-cargo 5 Beoing 757-200 services. 3 MD87 * 9210 employees worldwide. 21 MD82/83 4 MD11 At the end of 1998 Finnair celebrated its 75th anniversary. 9 Douglas DC9-51 Founded on November 1st 1923, the company flew its inaugural 9 ATR-72 flight on the Helsinki to Tallinn route. Finnair is currently the world’s sixth oldest airline still flying. 9 Aircraft on Order 2 Airbus A321 Finnair was accepted as a member of the global Oneworld 3 Airbus A320 alliance. Oneworld members are American Airlines, British 4 Airbus A319 Airways, Cathay Pacific, Qantas, LanChile, Iberia and Aer Lingus. Canadian Airlines has announced its withdrawal from Information on destinations and fleet the alliance on June 1st, 2000. reflect status at 31st December 1999. In February-March 1999, air traffic control staff employed by the Finnish Civil Aviation Administration staged a six week strike. Owned by Finnair traffic was affected, predominantly on domestic routes. 58.4% State ownership 25.9% Financial institutions, insurance The WAP reservations service, applying Wireless Application companies. Protocol and providing flight information services for a new 8.6% Registered in nominee name generation of WAP mobile phones, was introduced in the 7% Private individuals Spring and became available to the general public at the beginning of November. Owner of - Finnair took delivery of its first aircraft from the Airbus A320 family, marking the start of the carrier’s single-aisle fleet Major partnerships: renewal program. At year-end the fleet contained two A319s Member of the Oneworld alliance. and two A321s. A further Code-share agreements with: Aer nine aircraft are on firm Lingus, American Airlines, Deutsche order, and will be used on BA, LOT, Swissair, Air China, Austrian Finnair’s European routes. Airlines, El Al, Luxair, Tyrolean, Alitalia, British Airways, Iberia, Sabena, Finnair also acquired a Lithuanian Airlines. A320 flight simulator for its Flight Training Centre in Financial Results Helsinki. Finnair Group results Year ending 31st March Update: In June 2000, as mill 1999/98 1998/97 this Yearbook went to print, Turnover 1494.1 1445.3 Finnair introduced a new Operating profit/loss 1520.6 1476.0 company logo. At the top of Net profit/loss 57.7 85.7 this page are the old (left) Keijo Suila and the new (right). President & CEO

III - 21 Lineas’ Aereas’ de Espa a SA Calle Velazquez 130 28006 Madrid Spain

Tel. +34 91 587 87 87 [email protected] www.iberia.com

Xabier de Irala, Chairman & CEO; 2000 Chairman of the AEA Review of 1999

* 21.9 million passengers 98 Scheduled Destinations transported, mostly on 34 within Spain scheduled services, of which: 30 rest of Europe 59% on Domestic routes, 29% 34 beyond Europe within Europe, 11% across the Atlantic and 1% to the African 154 Aircraft in Fleet continent. 9 Airbus A340 2 Airbus A321-200 * 189 thousand tonnes of 32 Airbus A320-200 freight carried, 16% on all-cargo 1 Airbus A319-100 services. 6 Airbus A300 * 29079 employees worldwide. 15 Boeing 757 7 Boeing 747 On September 1st, 1999, Iberia became a full partner in the 23 Boeing 727 Oneworld alliance along with American Airlines, British Airways, 13 MD88 Cathay Pacific, Qantas, LanChile, Finnair and Aer Lingus. 24 MD87 6 Douglas DC10 16 Douglas DC9 On the same day, the absorption of Aviaco, a subsidiary of Iberia, was completed. By year-end Iberia had also agreed to 71 Aircraft on Order sell its regional airline subsidiary Binter Canarias, with 14 Airbus A340 headquarters in the Canary Islands, to various private investors. 45 Airbus A320 4 Airbus A319 The first step in Iberia’s privatisation was taken. British Airways, 8 Boeing 757 American Airlines, Banco Bilbao Vizcaya, Caja Madrid, Logista, ’ ’ Information on destinations and fleet Ahorro Corporacion and El Corte Ingles now own 40% of the st Spanish airline. reflect status at 31 December 1999. Owned by Iberia’s membership of Oneworld brings the alliance a major 54% State-owned holding company hub in Southern Europe, with connecting flights to and from SEPI Latin America. Iberia implemented a 30% increase in its 9% British Airways transatlantic schedule for 1999, through increased frequencies 1% American Airlines and more direct flights. Other network developments included 30% Banks and various companies the introduction of direct services from Barcelona to New York’s 6% Iberia employees John F. Kennedy airport. Owner of Iberia celebrated the 25th anniversary of its Shuttle Service from 100% Binter Canarias 100% Binter Mediterraneo Madrid to Barcelona. More than 2.5 million passengers flew on 70% Aerolineas Argentinas this service in 1999. 1.3% Royal Air Maroc

Iberia’s fleet renewal and Major partnerships expansion plan which called Member of the OneWorld alliance. for seventy-six new short- Code-share agreements: Aerolineas and medium haul aircraft Argentinas, American Airlines, continued in 1999, with the Austrian, Balkan, British Airways, delivery of several aircraft Deutsche BA, CSA, Croatia Airlines, El Al, Finnair, LOT, Malev, Royal Air from the A320 family. The Maroc, Royal Jordanian, Syrian older DC9, DC10 and Arab, Tarom, Ukraine International. Boeing 727 aircraft will be phased out. Financial Results Iberia Group results: ESP mill 1999 1998 Turnover 646325 665334 Xabier de Irala Operating profit/loss 22964 49696 Chairman & CEO Net profit/loss 31082* 53025 * before taxes

III - 22 Icelandair Reykjavik Airport 101 Reykjavik Iceland

Tel. +354 5050 300 Fax. +354 5050 350 [email protected] www.icelandair.net Review of 1999 Sigurdur Helgason, President & CEO * 1.35 million passengers transported, 98% on scheduled services, of which: 67% within Europe and 31% on the North 29 Scheduled Destinations Atlantic routes. 9 within Iceland * 24 thousand tonnes of freight carried, 41% on all-cargo 14 rest of Europe services. 6 beyond Europe * 1846 employees worldwide. 14 Aircraft in Fleet Icelandair introduced a new look - and new logo - to symbolise 6 Boeing 757-200 the completion of the company’s decade-long transformation. 1 Boeing 757-200F The company has been restructured, its fleet of aircraft 3 Boeing 737-400 renewed and a new route structure established based on a hub 1 Boeing 737-300F and spoke system. 3 Fokker 50 SAS and Icelandair signed an agreement to start code-sharing 4 Aircraft on Order on routes between Scandinavia and the United States operated 2 Boeing 757-300 by Icelandair, and routes operated by SAS from Scandinavia 2 Boeing 757-200 onwards to several destinations in Europe. Information on destinations and fleet Icelandair ceased its passenger operations between reflect status at 31st December 1999. Luxembourg and New York - a service now included in Luxair s Summer timetable - but introduced new daily services to Boston and Minneapolis/St. Paul. Icelandair also serves Baltimore- Owned by Washington, New York’s John F. Kennedy airport, Orlando and 100% Fully Privatised Halifax in Canada, with non-stop flights to Reykjavik and Major shareholders: onward connections to Europe. 46.2% Various Companies 18.4% Individual Investors Towards the end of the year, Icelandair formed its cargo 12.4% Pension Funds division into an independent company. Icelandair Cargo, due to 12.4% Investment Funds become fully operational by April 1st 2000, will sell freight space 6.2% Insurance Companies on Icelandair’s passenger planes and in three rented freight 4.2% Banks planes. The carrier replaced its Cologne freighter service by a new route between Liege, in Belgium, to Reykjavik, and Owner of onwards to New York. Cargo will consist of fresh consumer 96.0% Air Iceland goods and express deliveries from TNT postal service. A new air cargo terminal is planned for Reykjavik, for use from 2001. Major partnerships Commercial agreements: SAS, TWA During the course of 1999, Code-share agreements: SAS, British Icelandair took delivery of Midland. one additional Boeing 757- 200 and one 757 Freighter. Financial Results Four 757 passenger aircraft ISK mill 1999 1998 are on order - two each of Turnover 23468 22498 the -200 and -300 variants - Operating profit/loss 466 615 with options for a further Net profit/loss 1515 151 four 757-200 aircraft. The new aircraft will replace the 737-400s currently operated, to become the standard aircraft type for Icelandair’s international fleet. Sigurdur Helgason President & CEO

III - 23 Jugoslovenski Aerotransport 16 Bulevar umetnosti 11070 Novi Beograd Yugoslavia

Tel. +381 11 311 4 22 Fax. +381 11 311 2 853 [email protected] www.jat.com Review of 1999 24 Scheduled Destinations * 341 thousand passengers transported, 94% on scheduled 3 within Yugoslavia services, of which: 66% on Domestic routes, 16% within 14 rest of Europe Europe, 9% to North Africa and the Middle East region, 4% to 7 beyond Europe the Far East. * 961 tonnes of freight carried, all on passenger services. 30 Aircraft in Fleet * 4437 employees worldwide. 9 Boeing 737-300 8 Boeing 727-200 1999 has been a turbulent year for the national airline of 1 Douglas DC10 Yugoslavia. In September 1998, the EU imposed a Kosovo- 9 Douglas DC9 related flight ban on traffic between Yugoslavia and West 3 ATR-72 European destinations. Initially only directed at JAT, the ban was extended to all European carriers in May 1999, and 8 Aircraft on Order remained in place until March 2000. Prior to the ban, JAT 8 Airbus A319-100 served a schedule including fifty destinations of which three- quarters to points within Europe and five Domestic routes. Information on destinations and fleet Points served beyond Europe which were not affected by the reflect status at 31st December 1999. ban, are located principally in the Middle East - including Beirut, Cairo, Tel Aviv and Tunis - and Beijing in China. Owned by… JAT maintains a fleet of thirty aircraft, including Boeing 737s 100% State ownership of Republic and 727s, DC9s and ATR-72. With the onset of NATO air of Serbia. strikes (24th March - 10 th June), JAT moved some of its planes abroad for safekeeping. JAT was also successful in leasing Owner of… several aircraft to overseas companies. Fleet renewal plans - include the delivery of the companies' first Airbus - an A319 - expected in 2000. Major partnerships

- ^ Update: On 25th April 2000, Mr Zika Petrovic,' President of JAT since 1992, was assassinated in Belgrade. At time of Financial Results publication a successor had not yet been named. USD mill 1999 1998 Turnover - - Operating profit/loss - - Net profit/loss - -

III-24 KLM P.O. Box 7700 Schiphol Airport 1117ZL The Netherlands

Tel. +31 20 649 9123 Fax. +31 20 649 3113 www.klm.nl

Leo M. van Wijk, President & CEO Review of 1999

* 15.5 million passengers 162 Scheduled Destinations transported on scheduled LDW 4 within the Netherlands services, of which: 55% within R I 81 rest of Europe Europe, 18% on the North O D 77 beyond Europe Atlantic and 6% on the Mid and E South Atlantic, 10% to the W 119 Aircraft in Fleet African continent and the NORTHWEST 11 Boeing 767-300 R 5 Boeing 747-400 Middle East, 11% on Far East Y routes. E 15 Boeing 747-400 Combi L T 3 Boeing 747-300 * 528 thousand tonnes of I I A B I L 8 Boeing 747-300 Combi freight carried, 13% carried on 2 Boeing 747-300F all-cargo services. 4 Boeing 737-800 * 25800 employees worldwide. 19 Boeing 737-400 17 Boeing 737-300 Founded in 1919, and the oldest scheduled airline still operating 10 MD11 under its original name, KLM entered its 80 th year in 1999. 12 Fokker 70 13 Fokker 50 On November 1st, the KLM and Alitalia alliance, agreed one year prior, became effective. The partnership was set to bring 28 Aircraft on Order 1 Boeing 767-300 extensive co-operation between the two airlines, including the 4 Boeing 747-400 Combi full integration of route networks, revolving around the three 5 Boeing 747-300 Combi hubs of Amsterdam, Milan Malpensa and Rome, until, in April 4 Boeing 737-900 2000, the termination of the alliance was announced. 14 Boeing 737-800

KLM alps became the fourth KLM partner airline, joining KLM Information on destinations and fleet cityhopper, KLM exel and KLM uk. Bringing together the Swiss reflect status at 31st December 1999. Air Engiadina and Air Alps Aviation of Austria, the company will operate its Fairchild Dornier aircraft in KLM partner livery. Owned by 100% Publicly quoted company KLM Cargo and Malaysia Airlines Cargo extended their joint venture to cover all flights between Europe and South-East Owner of Asia, and added a new European hub to their network: Hahn in 100% KLM cityhopper Germany. In a separate move, KLM added Shanghai, China to 100% KLM uk its network of scheduled cargo and passenger services. 80% Transavia Airlines 50% Martinair KLM announced the launch of a new low cost airline called 30% Braathens Buzz. Based at London’s 26% Kenya Airways Stansted airport the new carrier started operations Major partnerships: with its BAe 146 aircraft to KLM-Northwest alliance. seven European cities in Co-operation agreement with KLM early January 2000. cityhopper, KLM uk, KLM exel, KLM alps, Alitalia, Braathens (Scandinavia), KLM placed orders with Eurowings (Germany), Regional Boeing for four 747-400 Airlines, Maersk Airlines, Kenya combi aircraft for long-haul Airways. operations, and for five next-generation 737-800s, Financial Results to repalce 737-400s on Year ending 31st March KLM’s European services. mill 1998/99 1997/98 Turnover 6047 6064 Leo M. van Wijk Operating profit/loss 193 368 President & CEO Net profit/loss 207 275

III - 25 Deutsche Lufthansa AG 2-6 Von-Gablenz-Strasse 50679 Cologne Federal Republic of Germany Tel. +49 221 8260 Fax. +49 221 826 3818 www.lufthansa.com Jürgen Weber, Chairman & CEO Karl-Friedrich Rausch, COO Review of 1999 350 Scheduled Destinations * 42 million passengers 26 within Germany transported, mostly on 128 rest of Europe 196 beyond Europe scheduled services, of which: 34% on Domestic routes, 45% 303 Aircraft in Fleet within Europe, 11% across the 16 Airbus A340-300 Atlantic, 4% to the African 6 Airbus A340-200 continent and the Middle East 21 Airbus A321 and 6% to the Far East. 33 Airbus A320 * 1113 thousand tonnes of 20 Airbus A319 5 Airbus A310-300 freight carried, 58% on all-cargo 13 Airbus A300-600 services. 25 Boeing 747-400 * 36343 employees worldwide. 8 Boeing 747-200 9 Boeing 747-200F Membership of the Star Alliance grew rapidly in 1999. Founder 30 Boeing 737-500 members Lufthansa, SAS, Air Canada, United Airlines, Varig 39 Boeing 737-300 and Thai were joined by Air New Zealand, Ansett Australia and 7 Boeing 737-300QC All Nippon Airways, followed in early 2000 by Austrian Airlines, 8 MD11F Tyrolean Airways, Lauda Air and Singapore Airlines. 11 Fokker 50 34 CL600-Canadair Regional Jet Membership will expand further with the addition of Mexicana 18 Avro RJ85 and British Midland later in the year. 125 Aircraft on Order Lufthansa is set to acquire a 20% stake in British Midland, half 10/16 Airbus A340-600/-300 of the shareholding currently held by fellow alliance member 5 Airbus A321 SAS. Lufthansa also purchased 26% of the share capital of 3 Airbus A320 regional airline Air Dolomiti, based in Trieste, Italy. 5 Boeing 747-400 6 MD11F 60 Fairchild/Dornier 728 Lufthansa and Spanair expand their co-operation, opening 10/10 CRJ-700/-200 possibilities for code-share operations on flights between Germany and Spain, on some Spanish domestic routes and on Information on destinations and fleet flights from Spain to major European destinations. reflect status at 31st December 1999. Owned by… Lufthansa, SAS and Singapore Airlines announced plans for 89.95% Free float closer co-operation in their air cargo business with the signing 10.05% Public sector of a Memorandum of Understanding. Owner of… Lufthansa Cargo acquired a 29% stake in a joint venture with 100% Lufthansa Cargo local investors set up to 100% Lufthansa CityLine operate the cargo terminal 26% Air Dolomiti 20% Lauda Air at Shanghai's new 13% Luxair international airport. 10% Condor

Lufthansa placed an order Major partnerships for sixty new twin-engined Member of the Star Alliance. Fairchild/Dornier 728 jets, World partners: Adria Airways, Air with options for a further Baltic, Air Dolomiti, Augsburg Airways, sixty aircraft. The new Cimber Air, Contact Air, Croatia Airlines, aircraft will replace and CSA, Luxair, Maersk Air, Qatar Airways, Rheintalflug, South African, Spanair. augment the fleet currently used on short and medium Financial Results haul routes and, in Lufthansa Group results: particular, feeder services Jürgen Weber DEM mill 1999 1998 onto long-haul services out Chairman & CEO Turnover 25024 22955 of Munich and Frankfurt. Operating profit/loss 1980 2845 Net profit/loss 1233 1431

III - 26 Luxair Luxembourg Airport 2987 Luxembourg

Tel. +352 4798 4281 Fax. +352 4798 4289 [email protected] www.luxair.lu

Jean-Donat Calmes, President & CEO Review of 1999

* 1.35 million passengers transported, 81% on scheduled 45 Scheduled Destinations services, of which: 78% within Europe and 3% on the North 1 within Luxembourg Atlantic services of the Summer timetable. 40 rest of Europe * 1.6 thousand tonnes of freight carried on passenger services. 4 beyond Europe * 2026 employees worldwide. 15 Aircraft in Fleet Luxair announced exceptional results for book-year 1998. Net 4 Boeing 737-500 profit increased by 85% over 1997 to reach 845 million 2 Boeing 737-400 Luxembourg francs, outperforming all previous years in financial 4 Fokker 50 terms since the creation of the company in 1962. Growth in 5 Embraer RJ-145 passenger traffic was healthy, due in part to the optimisation of the route network through code-share agreements with other 2 Aircraft on Order airlines and an intensification of co-operation with Luxair 2 Embraer RJ-145 shareholder, Lufthansa. Information on destinations and fleet In 1999, Luxair continued to record good growth, and marked reflect status at 31st December 1999. another first in its history as it passed the cap of one million passengers transported. Owned by Cargo handling has been a particularly buoyant branch of 37.3% Private Companies activity at Luxembourg airport in recent years. The recently 23.1% State ownership expanded freight distribution centre, Luxair’s Cargocenter, can 13.4% State-owned bank cope with an annual 500,000 tons and all types of air freight in 13.2% Luxair Group and others its 24-hours-a-day facility. Luxembourg is home to AEA’s only 13.0% Lufthansa all-cargo airline member, Cargolux. Owner of On the route network, Luxair introduced some new services for 34.88% Cargolux the Summer 1999 schedule. These included another historic first: direct flights from Luxembourg to New York’s Newark Major partnerships International Airport, as well as Reykjavik, Marseille and Co-operation agreement with Lufthansa. Montpellier. Night-stops were introduced to Copenhagen and Code-sharing agreements: Air France, Stockholm, allowing the possibility for a day-return to the Finnair. Scandinavian cities. Five new charter destinations were also added: Cagliari, Palermo, Minorca, Kos, Corfu and Reus. Financial Results LUF mill 1998 1997 During 1999 Brazilian manufacturer Embraer delivered three Turnover 9884 9091 new-generation RJ-145 to Operating profit/loss 1042 793 Luxair, bringing the total Net profit/loss 845 457 number of this aircraft type in the fleet to five. The aircraft, dubbed ’Eurojet’ by Luxair, are 49-seaters, with a range near 3000 kilometres, and will replace the Fokker 50 aircraft in the fleet. A further two aircraft are on order. By the end of the year Luxair’s fleet consisted of two Boeing 737-400s, four 737-500, four Fokker 50 and five Jean-Donat Calmes Eurojets. President & CEO

III - 27 Malev Hungarian Airlines Roosevelt t r 2 1051 Budapest V Hungary

Tel. +36 1 235 3535 Fax. +36 1 266 2685 [email protected] www.malev.hu Review of 1999 Csaba Sikl s, Chairman of the Board Ferenc Kovacs, Chief Executive Officer * 2.2 million passengers transported, 88% on scheduled services, of which: 77% within Europe, 6% to North Africa and the Middle East, 3% on the North Atlantic and 2% on Far 47 Scheduled Destinations Eastern routes. 1 within Hungary * 13 thousand tonnes of freight carried on passenger services. 37 rest of Europe * 3162 employees worldwide. 9 beyond Europe Following an extraordinary shareholders meeting, the 25 Aircraft in Fleet Hungarian state raised its stake in Malev, from 61.8% to 96.8%. 2 Boeing 767-200 The state privatisation and assets handling company APV 2 Boeing 737-500 purchased the 35% stake held by Air Invest, a company formed 2 Boeing 737-400 by two Hungarian banks to temporarily hold the stake of former 4 Boeing 737-300 shareholder Alitalia. The share purchase is in preparation of the 3 Boeing 737-200 anticipated privatisation process. 6 Tupolev TU-154 6 Fokker 70 In October, Dr Ferenc Kovacs, former deputy Chief Executive of Malev took up the post of Chief Executive Officer, replacing 0 Aircraft on Order Antal Pongracz.’ Csaba Siklos’ is Malev’s Chairman of the Board (pictured below). Information on destinations and fleet reflect status at 31st December 1999. In 1999 Malev passed the peak of 2 million passengers transported for the first time in its history. Owned by Several new destinations were added to Malev’s network in 96.8% State privatisation and assets 1999. European points include Dublin, Oslo, Sarajevo (in code- handling company share with Air Bosna), Skopje in Macedonia, Riga in Latvia 1.8% Municipalities (block-space arrangement with Air Baltic). Toronto became the 1.4% Private shareholders and other fourth long-haul destination to be served, next to New York, organisations Bangkok and Beijing. Following the lifting of the UN embargo on Libya, flights to Tripoli were also resumed. Owner of - The airline’s fleet saw the addition of two Boeing 737-500 aircraft. The fleet now consists of two long-haul Boeing 767s, Major partnerships eleven short/medium haul Boeing 737s , six Russian built Code-share agreements: British Tupolev 154 and six Fokker 70. Airways, Alitalia, Air France, Swissair, Austrian Airlines, CSA, Delta Airlines, Balkan, Air Bosna, Air Baltic.

Financial Results HUF mill 1998 1997 Turnover 80907 72608 Operating profit/loss -1803 -2535 Net profit/loss -646 -2515

Csaba Sikl s Chairman of the Board

III - 28 Olympic Airways 96-100 Syngrou Avenue Athens 11741 Greece

Tel. +30 1 9269 111 Fax. +30 1 9267 154 www.olympic-airways.gr

Dionysios Kalofonos, Chairman & CEO Review of 1999

* 6.4 million passengers transported, mostly on scheduled 81 Scheduled Destinations services, of which: 57% on Greek Domestic routes, 31% within 36 within Greece Europe, 4% on the North Atlantic and 6% to the African 26 rest of Europe continent and the Middle East, 1% to the Far East. 19 beyond Europe * 44 thousand tonnes of freight carried on passenger services. * 6946 employees worldwide. 49 Aircraft in Fleet In June 1999, British Airways subsidiary Speedwing was 4 Airbus A340-300 contracted for a period of thirty months to manage the financial 3 Airbus A300-600 turnaround of Olympic Airways. By June 2000, it was 13 Boeing 737-400 announced that, by mutual agreement with the Greek 1 Boeing 737-300 Government the contract was to be prematurely terminated. 11 Boeing 737-200 British Airways will now not take up the option of a 20% equity 7 ATR-72 stake in the Greek carrier. 4 ATR-42 6 Fairchild Dornier 228 Work continues on Athens' new international airport, being built fifty kilometres East of the capital at Spata. The official opening 17 Aircraft on Order of the airport is scheduled for March 2001. 4 Boeing 737-800 11 Boeing 737-700 Olympic Airways signed a commercial agreement with Kuwait 2 Boeing 717 Airways which links Athens and Kuwait twice weekly. The Information on destinations and fleet company also entered into a code-share agreement on services st to Prague with CSA Czech Airlines. reflect status at 31 December 1999.

Olympic Airways took delivery of two long-range Airbus A340- Owned by… 300. The aircraft, which replaced the older Boeing 747-200s, 100% State ownership operate services to North America, Australia, the Far East and South Africa. Owner of… 100% Olympic Aviation At the beginning of January 2000 Olympic took delivery of two 99.9% Macedonian Airlines leased Boeing 717s, to become the first operator of the twin- engine jetliners in Europe. The 100-seater aircraft will be put Major partnerships into service by daughter company Olympic Aviation, to operate Code-share agreements: CSA, Kuwait regional services. Airways. Financial Results GRD mill 1999* 1998 Turnover 278145 271760 Operating profit/loss -5.20% 0.60% Net profit/loss -14333 1556 * 1999 figures are estimates

Dionysios Kalofonos Chairman & CEO

III - 29 Sabena Sabena House Brussels Airport 1930 Zaventem Belgium

Tel. +32 2 723 3111 Fax. +32 2 772 8708 [email protected] www.sabena.com

Review of 1999 Paul Reutlinger, CEO

* 10 million passengers transported on scheduled 108 Scheduled Destinations services, of which: 81% within 1 within Belgium Europe, 9% on the North 79 rest of Europe Atlantic, 8% to the African 28 beyond Europe continent and 2% to the East. 81 Aircraft in Fleet * No information on freight 2 Airbus A340-300 carried known. 2 Airbus A340-200 * 9860 employees worldwide. 4 Airbus A330-300 4 Airbus A330-200 The Qualiflyer Group (QFG) of 3 Airbus A321 which Sabena is a founding 2 Airbus A320 member, saw changes in membership. Air Europe, LOT Polish 6 Airbus A319 Airlines, Portugalia and Italy’s Volare Airlines joined Sabena, 6 Boeing 737-500 Swissair, Crossair, AOM and Air Littoral of France, Turkish 3 Boeing 737-400 6 Boeing 737-300 Airlines and TAP Air Portugal in the alliance, whilst Austrian 4 Boeing 737-200 Airlines, Tyrolean and Lauda Air departed to the Star group. 2 MD11 12 Avro RJ-100 In October, Sabena started its collaboration with American 14 Avro RJ-85 Airlines, flying in code-share to Boston, Chicago and 6 BAe 146 Washington. By August 2000 this collaboration will become fully 2 ATR 72-200 operational adding 90 connecting destinations. 3 Dash-8

Sabena Group departments began operations as separate 27 Aircraft on Order 2 Airbus A340-300 business units. In addition Sabena Technics and the Sabena 2 Airbus A330-200 Flight Academy became separate legal entities. SFA brings 3 Airbus A320 together the Belgian Aviation School and the Sabena Training 20 Airbus A319 Centre. Sabena engine department was integrated in a joint venture with Snecma to become Snecma Sabena Engine Information on destinations and fleet Services. The information systems department now operates as reflect status at 31st December 1999. Atraxis Belgium, a separate company, set to become a joint venture with Atraxis International in 2000. Owned by 49.5% Swissair 22.0% FIM (investment company) The commercial departments of Sabena and Swissair 16.5% Zephyr-Fin (financial holding) established an Airline Management Partnership, to work on the 11.8% State ownership integration of network, sales, marketing and product 0.2% others development and for the passengers, aligned Owner of schedules. 99.9% DAT 72.4% Sobelair Sabena took delivery of its 11.2% City Bird first eleven aircraft from the A320 family, and three Major partnerships Member of the Qualiflyer alliance. additional A330-200s, as Co-operation agreement with Sabena, the last of Sabena’s Boeing Swissair and American Airlines. 747s were retired from the Commercial agreement: City Bird, Virgin fleet. Sabena, with its Express, VLM (Belgium). regional operator DAT, is also Europe’s biggest Avro Financial Results RJ customer, with a total of mill 1999 1998 Turnover 1908 1992 26 aircraft in the fleet, Paul Reutlinger including the three RJ100s Operating profit/loss -41 58 CEO Net profit/loss 99 31 delivered in 1999.

III - 30 SAS Frösundaviks Allé 1 19587 Stockholm Sweden

Tel. +46 8 797 0000 Fax. +46 8 797 1515 www.scandinavian.net

Jan Stenberg, President & CEO Review of 1999 105 Scheduled Destinations * 22.2 million passengers 40 within Scandinavia transported, mostly on 56 rest of Europe scheduled services, of which: 9 beyond Europe 51% within Europe, 43% on Domestic routes within each of 190 Aircraft in Fleet the three countries Norway, 14 Boeing 767-300 1 Boeing 737-700 Sweden and Denmark, 3% on 29 Boeing 737-600 the North Atlantic and 2% to the 8 MD90-30 Far East. 18 MD87 * 144 thousand tonnes of 2 MD83 freight carried, 10% on all-cargo 28 MD82 services 19 MD81 * 25754 employees worldwide. 8 DC-9-81 20 DC-9-41 The Star Alliance - 'The alliance network for Earth' - of which 4 DC-9-21 22 Fokker 50 SAS is a member with Lufthansa, Air Canada, United Airlines, 11 Fokker F-28 Varig and Thai, were joined in 1999 by Air New Zealand, Ansett 5 Saab 2000 Australia, All Nippon Airways, followed in early 2000 by Austrian 1 Saab 340 Airlines, Tyrolean Airways, Lauda Air and Singapore Airlines. Membership is set to expand further by the addition of 70 Aircraft on Order Mexicana and British Midland later in the year. SAS will sell half 10 Airbus A340/330-300 of its current 40% shareholding in British Midland to Lufthansa, 12 Airbus A321-100 following the signing of a joint venture agreement between the 13 Boeing 737-800 three Star alliance members in November 1999. 5 Boeing 737-700 8 Boeing 737-600 22 deHavilland Q400 SAS, Lufthansa and Singapore Airlines signed a Memorandum of Understanding to investigate the possibilities for co-operation Information on destinations and fleet and development of synergies in their air cargo businesses. reflect status at 31st December 1999.

Star Alliance members signed a joint document known as the Owned by… Environmental Commitment Statement, describing its 3/7 or 42.86% SAS Sverige AB undertakings in the environmental field. SAS is a forerunner in 2/7 or 28.57% SAS Danmark A/S the integration of environmental awareness into business goals. 2/7 or 28.57% SAS Norge ASA Each of the above national airlines is, in turn, 50% owned by their respective On the route network, Europe saw significant restructuring with governments, 50% by private interests. modest expansion; SAS's long haul route to Hong Kong closed. Owner of… SAS placed its first orders 100% Air Botnia (Finland) for Airbus aircraft in 1999. 63.2% Wideroe’s Flyveselskap(Norway) Four Airbus A330 and six 49% Spanair A340 will replace the 40% British Midland Boeing 767s currently used 37.5% Gronlandsfly (Greenland) on long-haul routes. 34.2% Air Baltic Another Airbus order - for 26% Cimber Air (Denmark) 25% Skywoays (Sweden) twelve A321 - was made, for use to destinations in Major partnerships Europe and Scandinavia, Member of the Star Alliance. with delivery from 2001. An additional five turboprop Financial Results aircraft - deHavilland Q400- SAS Group results: SEK mill 1999 1998 were ordered, with orders Jan Stenberg now totaling twenty-two. Turnover 41508 40496 President & CEO Operating profit/loss 2765 4115 Profit before taxes 1846 2857

III - 31 Swissair AG P.O. Box 8058 Zurich Airport Switzerland

Tel. +41 1 812 1212 Fax. +41 1 810 8046 www.swissair.com

Philippe Bruggisser, Chairman of Board Review of 1999 Jeffrey G. Katz, President & CEO

* 13.6 million passengers transported, 98% on scheduled 168 Scheduled Destinations services, of which: 63% within 2 within Switzerland Europe, 7% on Swiss Domestic 72 rest of Europe routes, 13% across the Atlantic, 94 beyond Europe 8% to the African continent and the Middle East and 7% to the 75 Aircraft in Fleet Far East. 13 Airbus A330-200 * 326 thousand tonnes of 12 Airbus A321 freight carried, 7.5% on all- 20 Airbus A320 cargo services. 9 Airbus A319 * 7688 employees worldwide. 2 Boeing 747-300 19 MD11 American Airlines became Swissair and Sabena’s new North American partner. The three carriers filed for anti-trust immunity 12 Aircraft on Order with the United States Government. Co-operation with Delta Air 9 Airbus A340-600 Lines, former Atlantic Excellence partner, will be phased out. 3 Airbus A330-200

Air Littoral, Air Europe, Italy’s Volare and Portugalia joined the Information on destinations and fleet st Qualiflyer Group. Austrian Airlines Group members announced reflect status at 31 December 1999. their departure. SAirGroup’s European alliance strategy was further enhanced through the acquisition of equity in AOM, Owned by Portugalia and LOT Polish Airlines. SAirGroup’s presence in 100% SAirGroup Africa expanded through the acquisition of a 20% stake in of which South African Airways. 13.5% State and Public Institutuions 4.6% Delta Air Lines Swissair and Sabena set up an Airline Management 2.7% Singapore Airlines Partnership (AMP) to run sales, marketing, the network and Owner of information technology for both carriers under one roof. 100% Swissair 69.2% Crossair Swissair’s fleet continued its renewal. The last A310 left the 49.9% LTU (Germany) fleet; several long-haul A330-200s were added. In early 2000, 49.5% Sabena the last Boeings were also retired from the fleet. New routes 49% Air Littoral opened in 1999: Miami, Washington DC, Tripoli and Benghazi. 49% AOM 45% Air Europe (Italy) The people of canton Zurich voted for the privatisation of 42% Portugalia Zurich airport. Building of a new midfield terminal was started. 37.6% LOT Polish Airlines 34% Cargolux 34% Volare 34% TAP (subject to approval) 20% South African Airways 0.6% Singapore Airlines

Major partnerships Member of the Qualiflyer Group. Code-sharing: American Airlines

Financial Results SAirGroup results: CHF mill 1999 1998 Philippe Bruggisser Jeffrey G. Katz Turnover 13002 11297 Chairman of the Board President & CEO Operating profit/loss 643 700 Net profit/loss 273 361

III - 32 TAP Air Portugal Apartado 50194 1704-801 Lisbon Portugal

Tel. +351 1 841 5000 Fax. +351 1 841 5095 www.tap.pt

Norberto Pilar, Chairman Review of 1999

* 4.9 million passengers 48 Scheduled Destinations transported, 99% on scheduled 7 within Portugal services, of which: 50% within 22 rest of Europe Europe, 33% on Portugese 19 beyond Europe Domestic routes, 4% on the North Atlantic, 7% on Mid and 31 Aircraft in Fleet South Atlantic routes, 5% to 4 Airbus A340-300 Sub-Saharan Africa. 7 Airbus A320-200 * 58 thousand tonnes of freight 14 Airbus A319-100 carried on passenger services. 5 Airbus A310-300 * 8873 employees worldwide. 1 Boeing B737-300 The Portugese government announced the privatisation of the company. Pending EU approval, SAirGroup will acquire a 34% 7 Aircraft on Order stake in Holding TAP, to become effective in 2000. 2 Airbus A321-200 4 Airbus A320-200 At its Annual General Meeting, the Board for 1999-2001 was 1 Airbus A319-100 elected. Norberto Pilar was appointed as new chairman of TAP. Information on destinations and fleet st TAP formulated new strategic guidelines for future development reflect status at 31 December 1999. under the name: Modernization & Recuperation of TAP. 1999 saw the migration to a new Reservations system PARS and Owned by further developments on the Revenue Management system. 100% State ownership Meanwhile, the use of electronic ticketing advanced. SAirGroup is acquiring a 34% equity stake in TAP, pending approval. Within the under-one-roof philosophy of the Qualiflyer Group (QFG), TAP began representing its partner airlines in its ticket- Owner of offices in Portugal. The QFG consists of Sabena, Swissair, 40% Air Sao Tome e Principe Crossair, AOM, Air Littoral of France, Turkish Airlines and TAP, 15% Air Macau via SEAP holding joined in 1999 by new members Air Europe, LOT Polish company. Airlines, Italy’s Volare Airlines, and Portugalia. Alliance members benefit from integrated frequent flyer programmes, Major partnerships expanded and co-ordinated network and a broader range of Member of the Qualiflyer Group. services. Commercial agreement with LAM (Linhas Aereas de Mocambique). In March, TAP started operations to its sixth destination in Brazil, Natal. Code-shared Financial Results operations increased with a PTE mill 1999 1998 number of partner airlines, Turnover 200434 215987 to widen and diversify the Operating profit/loss -14435 7963 range of destinations Net profit/loss -19931 1652 served. A comprehensive partnership agreement was formed with LAM of Mozambique, to be developed in the near future.

The TAP fleet renewal progressed. Six new Airbus A319 and one A320 were Norberto Pilar added, for operation on Chairman medium haul routes.

III - 33 T rk Hava Yollari A.O. Genel M d rl k Binasi Atat rk Havalimani 34830 Yesilk y Istanbul Turkey

Tel. +90 212 663 63 00 Fax. +90 212 663 47 44 or 49 04 www.turkishairlines.com Review of 1999 Yusuf Bolayirli, President * 10.4 million passengers Cem Kozlu, Chairman of the Board transported, 97% on scheduled services, of which: 58% within Turkey, 29% within Europe, 2% 108 Scheduled Destinations on the North Atlantic, 5% to 35 within Turkey North Africa and the Middle 42 rest of Europe East, 3% to the Far East. 31 beyond Europe * 110 thousand tonnes of freight carried, 11% on all-cargo 75 Aircraft in Fleet services. 6 Airbus A340-300 * 9527 employees worldwide. 7 Airbus A310-300 6 Airbus A310-200 The Qualiflyer Group - ’Flying European style’ - of which Turkish 15 Boeing 737-800 Airlines is a founding member, saw changes in membership. Air 2 Boeing 737-500 Europe, LOT Polish Airlines, Portugalia and Italy’s Volare 23 Boeing 737-400 Airlines joined Sabena, Swissair, Crossair, AOM and Air Littoral 3 Boeing 727F of France, Turkish Airlines and TAP Air Portugal in the alliance, 9 Avro RJ-100 whilst Austrian Airlines, Tyrolean and Lauda Air announced 4 Avro RJ-70 their departure to the Star group.

On August 17 th the Turkish town of Izmut was hit by a 8 Aircraft on Order devastating earthquake. In the wake of the disaster, Turkish 1 Airbus A340-300 Airlines was instrumental in transporting emergency supplies to 7 Boeing 737-800 the affected region on relief charters and scheduled services. Information on destinations and fleet st The route network was expanded in 1999, with the start-up of reflect status at 31 December 1999. flights from Istanbul to Beijing and Shanghai, in China and a service to Kuala Lumpur in Malaysia, in addition to Far East Owned by points already served: Bangkok, Singapore, Tokyo and Osaka. 98.2% State-owned Privatisation A third destination in the US followed - Miami - to join New York Administration and Chicago. Other additions included Barcelona, Simferopol in 1.8% Private investors the Ukraine, resumed flights to Algiers and new domestic destination Nevsehir. Owner of 50% KTHY-Cyprus Turkish Airlines During the year Turkish Airlines took delivery of nine Boeing 50% Sun Express 737-800 aircraft, which will be deployed on European routes. More of the same are on Major partnerships order. At year-end the fleet Member of the Qualiflyer Group. consisted of Boeing 737 Code-sharing agreements: Swissair, passenger aircraft of the - JAL, Austrian Airlines, Croatia Airlines 400, -500 and -800 and Malaysian Airlines. variants, as well as two 727-200 freighters. Turkish Financial Results Airlines was one of the first TRL bn 1998 1997 airlines in the world to Turnover 378387 219993 operate the Airbus A340, Operating profit/loss 11019 8808 and the carrier today uses a Net profit/loss 5462 2837 mixed fleet of A340s and A310s. Regional services are operated with Avro RJ- 100s and -70s. Yusuf Bolayirli President

III - 34 CONTENTS

SECTION I - AEA AIRLINES’ PERFORMANCE 1999 I-1

SECTION II - TOPICS II-1

SECTION III - SPOTLIGHT ON THE AEA III-1

AEA Highlights of 1999 III-3 Mission Statement III-5 Membership Criteria III-5 Structure of the AEA III-7 Airline Profiles & 1999 Review III-8

SECTION IV - KEY STATISTICS IV-1

Key Statistics - Total AEA IV-2 AEA Fast Facts IV-4 Key Statistics - By Carrier IV-5 What do we mean by…? IV-13

IV - 1 KEY STATISTICS - TOTAL AEA

1997 1998 1999 99/98

EUROPE

Passengers (000) 113958.5 121208.1 126623.4 4.5 % Passenger Kilometres (mill) 111581.6 119888.6 121883.4 1.7 % Seat Kilometres (mill) 176216.9 187891.6 195711.1 4.2 % Passenger Load Factor % 63.3 63.8 62.3 -1.5 pt Average Seats per Aircraft 122 126 126 Average Stage Distance (km) 855 870 860

Total Freight Tonne-Kilometres (mill) 1007.82 948.19 935.75 -1.3 % % Freight on Passenger Services 81.4 82.8 80.1

Total Revenue Tonne-Kilometres (mill) 11397.7 12085.6 12377.0 2.4 % Available Tonne-Kilometres (mill) 20732.2 22246.8 22981.8 3.3 % Overall Load Factor % 55.0 54.3 53.9 -0.4 pt

1997 1998 1999 99/98

NORTH ATLANTIC

Passengers (000) 20675.0 22499.6 24667.9 9.6 % Passenger Kilometres (mill) 138536.9 150190.0 166373.6 10.8 % Seat Kilometres (mill) 176653.8 195038.9 219235.4 12.4 % Passenger Load Factor % 78.4 77.0 75.9 -1.1 pt Average Seats per Aircraft 287 292 293 Average Stage Distance (km) 5807 5895 6134

Total Freight Tonne-Kilometres (mill) 9269.18 9282.82 9616.21 3.6% % Freight on Passenger Services 63.8 63.9 67.1

Total Revenue Tonne-Kilometres (mill) 22602.7 23750.0 25695.2 8.2 % Available Tonne-Kilometres (mill) 30342.6 32789.7 35896.7 9.5 % Overall Load Factor % 74.5 72.4 71.6 -0.8 pt

For area/route definitions see ‘What do we mean by…?’ on Page IV-13

IV - 2

1997 1998 1999 99/98

FAR EAST / AUSTRALASIA

Passengers (000) 11544.7 11793.6 12128.5 2.8 % Passenger Kilometres (mill) 98335.3 100830.5 103421.7 2.6 % Seat Kilometres (mill) 132275.3 135627.4 135407.1 -0.2 % Passenger Load Factor % 74.3 74.3 76.4 2.1 pt Average Seats per Aircraft 309 309 313 Average Stage Distance (km) 6551 6566 6802

Total Freight Tonne-Kilometres (mill) 10601.11 10538.43 11220.56 6.5 % % Freight on Passenger Services 47.5 45.9 42.9

Total Revenue Tonne-Kilometres (mill) 20169.1 20336.3 21310.5 4.8 % Available Tonne-Kilometres (mill) 27297.8 28196.3 28171.5 -0.1 % Overall Load Factor % 73.9 72.1 75.6 3.5 pt

1997 1998 1999 99/98

TOTAL SCHEDULED (including Domestic)

Passengers (000) 245185.2 265025.6 276790.3 4.4 % Passenger Kilometres (mill) 494465.8 531686.9 563375.2 6.0 % Seat Kilometres (mill) 687270.0 743213.7 795678.1 7.1 % Passenger Load Factor % 71.9 71.5 70.8 -0.7 pt Average Seats per Aircraft 198 201 204 Average Stage Distance (km) 1161 1165 1180

Total Freight Tonne-Kilometres (mill) 27082.96 27085.34 28110.05 3.8 % % Freight on Passenger Services 57.9 57.4 57.5

Total Revenue Tonne-Kilometres (mill) 74276.7 77791.8 82082.7 5.5 % Available Tonne-Kilometres (mill) 108696.2 116313.0 122195.3 5.1 % Overall Load Factor % 68.3 66.9 67.2 0.3 pt

For area/route definitions see ‘What do we mean by…?’ on Page IV-13

IV - 3 Association of European Airlines

27 member airlines 350,000 employees 2095 aircraft in the fleet

150 countries worldwide 391 cities in Europe 190 cities beyond Europe

277 million passengers 5 million tonnes of freight 1 take-off every 10 seconds 250 times around the world every day

The data tables in Section IV are derived from the Statistical Appendices to the Yearbook. For more information, visit the AEA Website at www.aea.be or contact [email protected].

IV - 4 KEY STATISTICS - BY CARRIER

PASSENGERS (000) 1997 1998 1999 % 99/98 rank 1999 EUROPE Adria Airways 403.8 459.9 555.5 20.8 23 Aer Lingus 3858.8 4246.2 4818.0 13.5 10 Air France 10628.5 9646.6 11059.7 14.6 4 Air Malta 966.2 1040.2 1072.5 3.1 20 Alitalia 7770.0 7351.2 7320.1 -0.4 8 Austrian Airlines 2287.0 2579.6 2507.9 -2.8 14 Balkan 439.3 496.5 447.8 -9.8 25 British Airways 15809.5 16955.4 16720.1 -1.4 2 British Midland 3137.7 3194.6 3587.0 12.3 11 Cargolux - - - Croatia Airlines 441.1 512.0 547.6 7.0 24 CSA 1160.4 1312.5 1534.3 16.9 18 Cyprus Airways 1088.0 1150.5 1142.7 -0.7 19 Finnair 3146.2 3468.3 2923.9 -15.7 13 Iberia 5525.8 6191.6 6277.1 1.4 9 Icelandair 696.6 807.1 909.5 12.7 21 JAT 517.7 428.7 54.8 -87.2 26 KLM 7703.9 8096.5 8498.1 5.0 6 Lufthansa 15480.2 17450.7 18785.7 7.7 1 Luxair 680.5 701.4 812.0 15.8 22 Malev 1442.3 1538.4 1692.8 10.0 17 Olympic Airways 2132.0 1953.0 1939.8 -0.7 16 Sabena 5752.5 7165.0 8103.5 13.1 7 SAS 10881.6 11332.5 11267.3 -0.6 3 Swissair 6826.0 7665.2 8546.7 11.5 5 TAP Air Portugal 2269.8 2394.2 2439.8 1.9 15 Turkish Airlines 2913.3 3070.3 3059.3 -0.4 12 Total AEA 113958.5 121208.1 126623.4 4.5

TOTAL SCHEDULED (including Domestic) Adria Airways 403.8 459.9 555.5 20.8 25 Aer Lingus 5010.6 5506.1 6274.2 13.9 12 Air France 32697.8 33474.7 37048.6 10.7 2 Air Malta 1066.1 1159.4 1191.5 2.8 21 Alitalia 24551.6 24178.4 24177.8 0.0 4 Austrian Airlines 3006.5 3423.3 3474.0 1.5 16 Balkan 721.7 827.7 695.4 -16.0 24 British Airways 34184.2 36592.7 36609.2 0.0 3 British Midland 5683.4 5974.6 6547.5 9.6 11 Cargolux - - - Croatia Airlines 744.9 807.8 813.5 0.7 23 CSA 1447.8 1606.2 1852.6 15.3 18 Cyprus Airways 1278.1 1346.5 1336.7 -0.7 19 Finnair 6092.3 6770.9 6050.0 -10.6 14 Iberia 15425.8 21752.5 21877.1 0.6 6 Icelandair 1189.9 1298.4 1326.9 2.2 20 JAT 858.3 824.9 322.1 -61.0 26 KLM 14445.6 14991.0 15452.6 3.1 7 Lufthansa 35293.4 38502.5 41903.3 8.8 1 Luxair 680.5 701.4 842.7 20.1 22 Malev 1634.7 1749.2 1943.5 11.1 17 Olympic Airways 7060.8 6403.4 6267.2 -2.1 13 Sabena 6872.1 8748.5 9965.1 13.9 10 SAS 20606.7 21498.6 21991.2 2.3 5 Swissair 10694.7 11940.0 13333.8 11.7 8 TAP Air Portugal 4166.3 4537.8 4841.0 6.7 15 Turkish Airlines 9367.5 9949.3 10097.3 1.5 9 Total AEA 245185.2 265025.6 276790.3 4.4

IV - 5 PASSENGER KILOMETRES (mill) 1997 1998 1999 % 99/98 rank 1999 EUROPE Adria Airways 374.9 411.4 514.7 25.1 24 Aer Lingus 2197.4 2413.8 2749.8 13.9 14 Air France 7871.7 8033.4 9381.7 16.8 3 Air Malta 1658.4 1663.7 1726.5 3.8 20 Alitalia 7898.2 7447.6 7291.0 -2.1 7 Austrian Airlines 2184.6 2595.5 2571.0 -0.9 15 Balkan 676.4 771.4 706.7 -8.4 22 British Airways 15617.8 17157.0 16782.0 -2.2 1 British Midland 1746.4 1785.7 2055.2 15.1 17 Cargolux - - - Croatia Airlines 377.4 445.8 464.3 4.1 25 CSA 1046.7 1200.9 1374.4 14.4 21 Cyprus Airways 2533.3 2442.9 2347.9 -3.9 16 Finnair 5124.4 5957.9 3423.7 -8.4 12 Iberia 6824.4 7523.0 7413.4 7.6 6 Icelandair 1343.1 1572.1 1815.6 15.5 18 JAT 634.3 506.1 67.2 -86.7 26 KLM 6517.2 6984.2 7445.8 6.6 5 Lufthansa 14029.6 15610.9 16732.7 7.2 2 Luxair 446.6 453.9 552.1 21.6 23 Malev 1505.6 1618.9 1742.6 7.6 19 Olympic Airways 3536.5 3268.6 3245.8 -0.7 13 Sabena 4524.0 5676.3 6513.2 14.7 9 SAS 8535.9 8774.1 8744.9 -0.3 4 Swissair 5566.3 6354.2 7042.3 10.8 8 TAP Air Portugal 3339.2 3481.1 3502.9 0.6 11 Turkish Airlines 5471.4 5738.1 5676.2 -1.1 10 Total AEA 111581.6 119888.6 121883.4 1.7

TOTAL SCHEDULED (including Domestic) Adria Airways 374.9 411.4 514.7 25.1 25 Aer Lingus 5892.5 6466.4 7601.9 17.6 15 Air France 69988.6 74546.5 83822.5 12.4 3 Air Malta 1949.3 1918.2 1978.3 3.1 21 Alitalia 35992.3 35561.0 36690.0 3.2 5 Austrian Airlines 6229.6 7283.5 7890.8 8.3 13 Balkan 1796.2 2025.8 1486.2 -26.6 22 British Airways 105701.2 116000.5 118015.6 1.7 1 British Midland 2976.0 3070.4 3400.5 10.8 17 Cargolux - - - Croatia Airlines 466.1 544.5 559.8 2.8 24 CSA 2441.7 2637.2 2870.5 8.8 18 Cyprus Airways 2657.4 2710.7 2687.4 -0.9 20 Finnair 9628.8 10713.7 7802.5 -27.2 14 Iberia 27633.9 32520.7 34606.8 6.4 6 Icelandair 3184.9 3711.8 3657.6 -1.5 16 JAT 782.1 730.7 268.6 -63.2 26 KLM 55387.8 57278.8 58112.5 1.5 4 Lufthansa 71353.0 75437.9 86153.7 14.2 2 Luxair 446.6 453.9 738.2 62.6 23 Malev 2345.5 2509.5 2861.4 14.0 19 Olympic Airways 9260.6 8561.2 8305.5 -3.0 12 Sabena 11273.6 15338.5 17693.0 15.4 9 SAS 20330.6 20821.2 21160.0 1.6 8 Swissair 25253.1 28044.3 31767.1 13.3 7 TAP Air Portugal 8772.6 9355.9 9379.8 0.3 11 Turkish Airlines 12347.2 13032.7 13350.3 2.4 10 Total AEA 494465.8 531686.9 563375.2 6.0

IV - 6 SEAT KILOMETRES (mill) 1997 1998 1999 % 99/98 rank 1999 EUROPE Adria Airways 830.2 856.4 934.6 9.1 25 Aer Lingus 2935.5 3221.5 3729.0 15.8 15 Air France 12557.4 12507.9 14112.1 12.8 4 Air Malta 2304.1 2643.4 2474.2 -6.4 20 Alitalia 12708.8 12606.3 12216.7 -3.1 5 Austrian Airlines 3681.4 3990.7 4036.4 1.1 14 Balkan 1328.2 1422.7 1305.4 -8.2 22 British Airways 23665.7 26599.1 26770.8 0.6 1 British Midland 2713.1 2852.8 3293.7 15.5 17 Cargolux - - - Croatia Airlines 791.0 937.7 967.3 3.2 24 CSA 1819.7 2058.7 2381.2 15.7 21 Cyprus Airways 3595.2 3603.0 3637.9 1.0 16 Finnair 7807.9 8732.6 6162.2 -29.4 11 Iberia 9986.0 11028.5 11202.0 1.6 7 Icelandair 1930.9 2183.7 2546.8 16.6 19 JAT 1198.9 1004.7 152.7 -84.8 26 KLM 9266.1 10104.4 10870.5 7.6 8 Lufthansa 22970.7 24577.6 26672.6 8.5 2 Luxair 788.5 831.0 1117.7 34.5 23 Malev 2696.4 2719.0 2965.2 9.1 18 Olympic Airways 5586.8 5268.9 5806.4 10.2 12 Sabena 7803.7 9080.0 10613.8 16.9 9 SAS 14830.6 14903.0 15037.1 0.9 3 Swissair 9366.4 10136.3 11701.3 15.4 6 TAP Air Portugal 4912.3 5240.7 5608.9 7.0 13 Turkish Airlines 8141.3 8780.8 9394.7 7.0 10 Total AEA 176216.9 187891.6 195711.1 4.2

TOTAL SCHEDULED (including Domestic) Adria Airways 830.2 856.4 934.6 9.1 25 Aer Lingus 7809.9 8787.3 10286.9 17.1 15 Air France 93244.8 98888.8 110040.0 11.3 3 Air Malta 2773.2 3077.6 2931.4 -4.8 21 Alitalia 50171.4 51611.3 54437.0 5.5 5 Austrian Airlines 9534.5 10660.4 11929.5 11.9 14 Balkan 3096.9 3362.4 2568.1 -23.6 22 British Airways 146674.4 163486.4 168259.7 2.9 1 British Midland 4553.1 4980.6 5437.8 9.2 16 Cargolux - - - Croatia Airlines 935.5 1110.0 1127.4 1.6 24 CSA 3763.0 4051.6 4437.8 9.5 19 Cyprus Airways 3847.3 3868.2 3891.9 0.6 20 Finnair 14250.9 15530.6 12608.0 -18.8 13 Iberia 37741.4 45516.7 50232.3 10.4 6 Icelandair 4363.0 5027.8 5120.9 1.9 17 JAT 1457.4 1478.4 541.3 -63.4 26 KLM 70482.5 74029.4 75143.4 1.5 4 Lufthansa 98433.1 102111.3 116213.7 13.8 2 Luxair 788.5 831.0 1485.1 78.7 23 Malev 3966.0 3942.2 4511.2 14.4 18 Olympic Airways 13588.7 13184.7 13401.3 1.6 12 Sabena 17197.8 22778.2 26949.6 18.3 9 SAS 31324.2 31704.9 33204.7 4.7 8 Swissair 35790.8 38720.0 43894.5 13.4 7 TAP Air Portugal 12358.9 13315.3 13842.0 4.0 11 Turkish Airlines 18292.6 20302.3 22248.2 9.6 10 Total AEA 687270.0 743213.7 795678.1 7.1

IV - 7 PASSENGER LOAD FACTOR % 1997 1998 1999 pts 99/98 rank 1999 EUROPE Adria Airways 45.2 48.0 55.1 7.1 22 Aer Lingus 74.9 74.9 73.7 -1.2 1 Air France 62.7 64.2 66.5 2.3 6 Air Malta 72.0 62.9 69.8 6.9 4 Alitalia 62.1 59.1 59.7 0.6 15 Austrian Airlines 59.3 61.2 58.2 -3.0 17 Balkan 50.9 54.2 54.1 -0.1 23 British Airways 66.0 64.5 62.7 -1.8 8 British Midland 64.4 62.6 62.4 -0.2 11 Cargolux - - - Croatia Airlines 47.7 47.5 48.0 0.5 25 CSA 57.5 58.3 57.7 -0.6 19 Cyprus Airways 70.5 72.0 70.7 -1.3 3 Finnair 65.6 68.2 55.6 -12.6 21 Iberia 68.3 68.2 66.2 -2.0 7 Icelandair 69.6 72.0 71.3 -0.7 2 JAT 52.9 50.4 44.0 -6.4 26 KLM 70.3 69.1 68.5 -0.6 5 Lufthansa 61.1 63.5 62.7 -0.8 9 Luxair 56.6 54.6 49.4 -5.2 24 Malev 55.8 59.5 58.8 -0.7 16 Olympic Airways 63.3 62.0 55.9 -6.1 20 Sabena 58.0 62.5 61.4 -1.1 12 SAS 57.6 58.9 58.2 -0.7 18 Swissair 59.4 62.7 60.2 -2.5 14 TAP Air Portugal 68.0 66.4 62.5 -3.9 10 Turkish Airlines 67.2 65.3 60.4 -4.9 13 Total AEA 63.3 63.8 62.3 -1.5

TOTAL SCHEDULED (including Domestic) Adria Airways 45.2 48.0 55.1 7.1 23 Aer Lingus 75.4 73.6 73.9 0.3 4 Air France 75.1 75.4 76.2 0.8 2 Air Malta 70.3 62.3 67.5 5.2 11 Alitalia 71.7 68.9 67.4 -1.5 12 Austrian Airlines 65.3 68.3 66.1 -2.2 13 Balkan 58.0 60.2 57.9 -2.3 22 British Airways 72.1 71.0 70.1 -0.9 7 British Midland 65.4 61.6 62.5 0.9 18 Cargolux - - - Croatia Airlines 49.8 49.1 49.7 0.6 24 CSA 64.9 65.1 64.7 -0.4 15 Cyprus Airways 69.1 70.1 69.1 -1.0 8 Finnair 67.6 69.0 61.9 -7.1 20 Iberia 73.2 71.4 68.9 -2.5 9 Icelandair 73.0 73.8 71.4 -2.4 6 JAT 53.7 49.4 49.6 0.2 26 KLM 78.6 77.4 77.3 -0.1 1 Lufthansa 72.5 73.9 74.1 0.2 3 Luxair 56.6 54.6 49.7 -4.9 25 Malev 59.1 63.7 63.4 -0.3 17 Olympic Airways 68.1 64.9 62.0 -2.9 19 Sabena 65.6 67.3 65.7 -1.6 14 SAS 64.9 65.7 63.7 -2.0 16 Swissair 70.6 72.4 72.4 0.0 5 TAP Air Portugal 71.0 70.3 67.8 -2.5 10 Turkish Airlines 67.5 64.2 60.0 -4.2 21 Total AEA 71.9 71.5 70.8 -0.7

IV - 8 FREIGHT TONNE-KILOMETRES (mill) - Passenger & All-Cargo Services 1997 1998 1999 % 99/98 rank 1999 TOTAL LONG-HAUL Adria Airways--- Aer Lingus 115.85 122.35 130.84 6.9 14 Air France 4768.02 4454.92 4615.11 3.6 2 Air Malta - - - Alitalia 1368.86 1426.82 1556.08 9.1 7 Austrian Airlines 137.87 133.87 190.92 42.6 12 Balkan 23.59 20.31 4.30 -78.8 20 British Airways 3546.33 3598.17 3788.14 5.3 3 British Midland - - - Cargolux 2154.35 2219.75 2375.12 7.0 5 Croatia Airlines - - - CSA 15.47 15.35 15.89 3.5 18 Cyprus Airways--- Finnair 248.63 238.96 218.85 -8.4 10 Iberia 595.49 641.24 649.51 1.3 8 Icelandair 36.25 35.30 43.95 24.5 16 JAT - 0.78 0.37 -52.6 21 KLM 3475.80 3463.51 3570.04 3.1 4 Lufthansa 5490.83 5560.63 5942.98 6.9 1 Luxair - - 5.76 - 19 Malev 24.57 27.39 33.18 21.1 17 Olympic Airways 69.23 65.93 61.74 -6.4 15 Sabena - - - SAS 635.06 699.16 645.38 -7.7 9 Swissair 1713.06 1782.74 1619.13 -9.2 6 TAP Air Portugal 174.62 173.78 159.89 -8.0 13 Turkish Airlines 118.68 141.22 196.92 39.4 11 Total AEA 24711.62 24822.18 25824.10 4.0

TOTAL SCHEDULED (including Domestic) Adria Airways 3.57 3.46 3.74 8.1 24 Aer Lingus 122.11 129.65 138.00 6.4 14 Air France 4944.59 4595.04 4732.08 3.0 2 Air Malta 10.88 11.18 12.55 12.3 20 Alitalia 1440.44 1487.03 1611.42 8.4 7 Austrian Airlines 164.95 160.22 220.85 37.8 12 Balkan 31.55 30.37 12.39 -59.2 21 British Airways 3914.26 4047.22 4249.01 5.0 3 British Midland 5.41 5.55 7.04 26.8 22 Cargolux 2241.56 2245.18 2405.49 7.1 5 Croatia Airlines 2.02 1.98 1.99 0.5 25 CSA 23.08 24.69 26.15 5.9 19 Cyprus Airways 35.67 38.07 40.69 6.9 18 Finnair 293.96 283.86 251.95 -11.2 11 Iberia 722.60 754.49 773.61 2.5 8 Icelandair 55.84 58.67 74.39 26.8 16 JAT 4.84 5.28 1.16 -78.0 26 KLM 3733.81 3708.77 3806.17 2.6 4 Lufthansa 6163.66 6221.22 6602.89 6.1 1 Luxair 0.46 0.28 6.10 - 23 Malev 34.93 37.17 43.32 16.5 17 Olympic Airways 129.10 112.62 103.24 -8.3 15 Sabena - - - SAS 696.68 755.16 693.22 -8.2 9 Swissair 1830.61 1894.95 1775.94 -6.3 6 TAP Air Portugal 234.79 229.97 203.60 -11.5 13 Turkish Airlines 241.62 243.26 313.07 28.7 10 Total AEA 27082.96 27085.34 28110.05 3.8

IV - 9 TOTAL REVENUE TONNE-KILOMETRES (mill) - Passenger & All-Cargo Services 1997 1998 1999 % 99/98 rank 1999 TOTAL LONG-HAUL Adria Airways--- Aer Lingus 444.5 484.0 563.6 16.4 13 Air France 9474.4 9589.9 10359.0 8.0 3 Air Malta - - - Alitalia 3329.8 3383.2 3588.9 6.1 6 Austrian Airlines 482.1 551.8 703.6 27.5 11 Balkan 109.0 114.2 56.7 -50.4 20 British Airways 11108.1 11920.6 12265.8 2.9 1 British Midland - - - Cargolux 2154.4 2219.8 2375.1 7.0 7 Croatia Airlines - - - CSA 111.0 110.7 109.2 -1.4 18 Cyprus Airways--- Finnair 557.6 555.8 514.0 -7.5 15 Iberia 1953.4 2093.7 2297.3 9.7 8 Icelandair 202.6 244.3 225.0 -7.9 17 JAT - 5.5 10.0 81.8 21 KLM 8163.2 8316.1 8442.3 1.5 4 Lufthansa 10672.0 10909.2 12165.3 11.5 2 Luxair - - - Malev 80.1 84.8 109.1 28.7 19 Olympic Airways 466.6 443.7 411.1 -7.3 16 Sabena 573.3 828.3 961.2 16.0 10 SAS 1352.4 1411.9 1426.2 1.0 9 Swissair 3574.9 3833.9 3927.6 2.4 5 TAP Air Portugal 559.4 583.0 583.9 0.2 12 Turkish Airlines 421.5 444.4 534.3 20.2 14 Total AEA 55790.2 58128.8 61651.8 6.1

TOTAL SCHEDULED (including Domestic) Adria Airways 37.3 40.5 50.1 23.7 26 Aer Lingus 644.1 703.2 811.3 15.4 16 Air France 11414.8 11495.2 12464.0 8.4 3 Air Malta 169.8 174.1 192.0 10.3 22 Alitalia 5033.3 5042.3 5269.1 4.5 5 Austrian Airlines 767.0 866.2 1063.2 22.7 13 Balkan 194.4 213.7 146.9 -31.3 23 British Airways 13593.4 14658.4 15018.3 2.5 2 British Midland 267.8 287.0 292.6 2.0 19 Cargolux 2241.6 2245.2 2405.5 7.1 9 Croatia Airlines 44.9 51.8 53.2 2.7 25 CSA 244.3 263.7 286.5 8.6 20 Cyprus Airways 277.5 284.4 285.4 0.4 21 Finnair 1169.5 1259.8 969.4 -23.1 14 Iberia 3245.7 3720.3 3944.1 6.0 7 Icelandair 348.4 422.1 434.5 2.9 17 JAT 76.1 72.3 26.3 -63.6 27 KLM 9374.7 9606.9 9792.4 1.9 4 Lufthansa 13469.2 13910.7 15377.1 10.5 1 Luxair 40.9 41.4 72.8 75.8 24 Malev 249.5 267.2 304.8 14.1 18 Olympic Airways 1012.8 936.3 899.2 -4.0 15 Sabena 1014.6 1380.5 1592.4 15.3 10 SAS 2580.4 2679.4 2802.6 4.6 8 Swissair 4367.5 4706.0 4950.2 5.2 6 TAP Air Portugal 1040.8 1087.0 1064.2 -2.1 12 Turkish Airlines 1356.3 1376.2 1514.4 10.0 11 Total AEA 74276.7 77791.8 82082.7 5.5

IV - 10 AVAILABLE TONNE-KILOMETRES (mill) - Passenger & All-Cargo Services 1997 1998 1999 % 99/98 rank 1999 TOTAL LONG-HAUL Adria Airways--- Aer Lingus 607.4 697.6 805.5 15.5 15 Air France 12672.8 13404.7 14126.2 5.4 3 Air Malta - - - Alitalia 4379.7 4575.5 5085.8 11.2 6 Austrian Airlines 699.7 803.3 970.9 20.9 13 Balkan 226.2 230.0 113.0 -50.9 20 British Airways 16185.9 17851.8 18693.3 4.7 1 British Midland - - - Cargolux 2813.8 2551.8 2733.6 7.1 8 Croatia Airlines - - - CSA 184.9 182.7 179.0 -2.0 19 Cyprus Airways--- Finnair 842.7 873.0 813.1 -6.9 14 Iberia 2899.5 3311.4 3946.6 19.2 7 Icelandair 285.5 341.9 331.9 -2.9 17 JAT - 13.6 26.9 97.8 22 KLM 10300.8 10776.2 10736.3 -0.4 4 Lufthansa 13896.2 14510.6 15817.0 9.0 2 Luxair - - 54.0 21 Malev 194.2 172.4 216.6 25.6 18 Olympic Airways 890.1 908.3 801.7 -11.7 16 Sabena 793.8 1173.2 1408.0 20.0 10 SAS 1832.4 1965.1 1782.0 -9.3 9 Swissair 4651.0 5115.5 5099.2 -0.3 5 TAP Air Portugal 832.5 914.9 979.1 7.0 11 Turkish Airlines 859.0 891.9 974.8 9.3 12 Total AEA 76048.1 81265.5 85694.2 5.4

TOTAL SCHEDULED (including Domestic) Adria Airways 95.1 101.5 107.7 6.1 26 Aer Lingus 911.2 1027.4 1181.2 15.0 16 Air France 15724.6 16489.5 17451.2 5.8 3 Air Malta 325.0 352.8 294.8 -16.4 23 Alitalia 7038.2 7269.4 7800.4 7.3 5 Austrian Airlines 1260.8 1420.0 1592.5 12.1 15 Balkan 442.2 472.2 335.8 -28.9 22 British Airways 20889.5 23278.3 24242.8 4.1 1 British Midland 414.3 530.4 596.6 12.5 19 Cargolux 2926.4 2582.5 2768.9 7.2 10 Croatia Airlines 107.4 123.1 123.8 0.6 25 CSA 441.9 471.9 514.4 9.0 20 Cyprus Airways 453.0 455.4 465.6 2.2 21 Finnair 2012.6 2184.9 1828.6 -16.3 13 Iberia 5485.7 6238.9 6979.7 11.9 6 Icelandair 536.9 627.4 667.7 6.4 17 JAT 158.1 167.5 67.1 -59.9 27 KLM 12095.7 12744.3 12802.8 0.5 4 Lufthansa 18716.0 19568.8 21220.5 8.4 2 Luxair 77.3 81.2 162.3 99.9 24 Malev 590.3 571.6 644.4 12.7 18 Olympic Airways 1849.9 1805.6 1790.4 -0.8 14 Sabena 1547.8 2050.0 2425.5 18.3 11 SAS 4295.9 4444.1 4361.4 -1.9 8 Swissair 6034.1 6625.5 6898.2 4.1 7 TAP Air Portugal 1663.1 1800.7 1859.9 3.3 12 Turkish Airlines 2603.1 2828.1 3011.1 6.5 9 Total AEA 108696.2 116313.0 122195.3 5.1

IV - 11 OVERALL LOAD FACTOR % - Passenger & All-Cargo Services 1997 1998 1999 pts 99/98 rank 1999 TOTAL LONG-HAUL Adria Airways--- Aer Lingus 73.2 69.4 70.0 0.6 9 Air France 74.8 71.5 73.3 1.8 6 Air Malta - - - Alitalia 76.0 73.9 70.6 -3.3 8 Austrian Airlines 68.9 68.7 72.5 3.8 7 Balkan 48.2 49.6 50.2 0.6 20 British Airways 68.6 66.8 65.6 -1.2 12 British Midland - - - Cargolux 76.6 87.0 86.9 -0.1 1 Croatia Airlines - - - CSA 60.0 60.6 61.0 0.4 14 Cyprus Airways--- Finnair 66.2 63.7 63.2 -0.5 13 Iberia 67.4 63.2 58.2 -5.0 16 Icelandair 71.0 71.4 67.8 -3.6 11 JAT - 40.8 37.3 -3.5 22 KLM 79.2 77.2 78.6 1.4 3 Lufthansa 76.8 75.2 76.9 1.7 5 Luxair - - 41.7 21 Malev 41.2 49.2 50.4 1.2 19 Olympic Airways 52.4 48.9 51.3 2.4 18 Sabena 72.2 70.6 68.3 -2.3 10 SAS 73.8 71.8 80.0 8.2 2 Swissair 76.9 74.9 77.0 2.1 4 TAP Air Portugal 67.2 63.7 59.6 -4.1 15 Turkish Airlines 49.1 49.8 54.8 5.0 17 Total AEA 73.4 71.5 71.9 0.4

TOTAL SCHEDULED (including Domestic) Adria Airways 39.2 39.9 46.5 6.6 23 Aer Lingus 70.7 68.4 68.7 0.3 6 Air France 72.6 69.7 71.4 1.7 5 Air Malta 52.3 49.3 65.1 15.8 10 Alitalia 71.5 69.4 67.5 -1.9 7 Austrian Airlines 60.8 61.0 66.8 5.8 8 Balkan 44.0 45.3 43.8 -1.5 25 British Airways 65.1 63.0 61.9 -1.1 13 British Midland 64.6 54.1 49.0 -5.1 21 Cargolux 76.6 86.9 86.9 0.0 1 Croatia Airlines 41.8 42.1 42.9 0.8 26 CSA 55.3 55.9 55.7 -0.2 17 Cyprus Airways 61.3 62.5 61.3 -1.2 14 Finnair 58.1 57.7 53.0 -4.7 18 Iberia 59.2 59.6 56.5 -3.1 16 Icelandair 64.9 67.3 65.1 -2.2 11 JAT 48.2 43.2 39.2 -4.0 27 KLM 77.5 75.4 76.5 1.1 2 Lufthansa 72.0 71.1 72.5 1.4 3 Luxair 52.9 51.1 44.9 -6.2 24 Malev 42.3 46.7 47.3 0.6 22 Olympic Airways 54.8 51.9 50.2 -1.7 20 Sabena 65.6 67.3 65.7 -1.6 9 SAS 60.1 60.3 64.3 4.0 12 Swissair 72.4 71.0 71.8 0.8 4 TAP Air Portugal 62.6 60.4 57.2 -3.2 15 Turkish Airlines 52.1 48.7 50.3 1.6 19 Total AEA 68.3 66.9 67.2 0.3

IV - 12 WHAT DO WE MEAN BY … ?

MEMBERS OF THE AEA Mid Atlantic: scheduled services between Europe and the Americas via gateways in the Caribbean (plus JP Adria Airways Bermuda), Central America or the South American EI Aer Lingus mainland north of Brazil. AF Air France KM Air Malta South Atlantic: scheduled services between Europe AZ Alitalia and the Americas via gateways in, or south of, Brazil. OS Austrian Airlines LZ Balkan Bulgarian Airlines Europe-Sub Saharan Africa: scheduled services BA British Airways between Europe and Africa, excluding those countries BD British Midland Airways classed as North Africa (see above). CV Cargolux Airlines International OU Croatia Airlines Europe-Far East and Australasia: scheduled services OK CSA Czech Airlines between Europe and points east of the Middle East CY Cyprus Airways region, including trans-Polar and trans-Siberian flights. AY Finnair IB Iberia Total Long-haul: the sum of North, Mid- and South FI Icelandair Atlantic, Sub-Saharan Africa, Far East/Australasia and JU JAT Yugoslav Airlines other long-haul routes not covered above. KL KLM LH Lufthansa Total International: the sum of International LG Luxair Short/Medium Haul and Total Long-haul. MA Malev Hungarian Airlines OA Olympic Airways Domestic & Territorial: scheduled services SN Sabena commencing and terminating within the boundries of a SK SAS State by an air carrier whose principal place of SR Swissair business is in that State, or on routes between a State TP TAP Air Portugal and territories belonging to it, or between two such TK Turkish Airlines territories even tough a stage may cross international waters or over the territory of another State and carry international traffic on intermediate stages. In the case AREA/ROUTE DEFINITIONS of multinational airlines owned by partner States, traffic within each partner State is reported as Domestic and The data refer to the scheduled operations of AEA all other traffic as international. member airlines, broken down between the following groups of routes. It should be noted that each route is Total Scheduled Traffic: Total International scheduled allocated in its entirety to one region from station of traffic plus Domestic & Territorial. origin to final destination, except for the Atlantic where first point of entry determines the route allocation. Systemwide: Total Scheduled and Charter traffic.

Geographical Europe (European): includes all scheduled international routes originating and STATISTICAL DEFINITIONS terminating within the region comprising geographical Europe and European Russia up to the Urals Reporting Methodology: For the statistical data (longitude 55°E), including Iceland, Turkey, Azores, included in the data tables in Section IV of this Canary Islands, Madeira and Cyprus. Yearbook, the reporting guideline is as follows: Each

carrier should report all traffic carried on their flight Europe-North Africa: scheduled services between number (carrier designator) and at their own risk. Thus, Europe and Algeria, Egypt, Libya, Morocco, Sudan and in the case of code-share operations, each carrier Tunisia. reports its share of traffic and capacity, with the

operating carrier responsible for reporting all Europe-Middle East: scheduled terminating services operational data for the flights in question (hours, between Europe and Bahrain, Iran, Iraq, Israel, Jordan, kilometres, landings). Kuwait, Lebanon, Muscat, Oman, Qatar, Saudi Arabia, Syria, UAE, Republic of Yemen. For individual carriers, the following data is covered:

AF data includes former Air France Europe (Air Inter), International Short/Medium Haul: the sum of but no franchise partners; BA data includes Brymon, Geographical Europe, North Africa and Middle East. but no franchisees; KL data includes City Hopper, but

not KLM uk, KLM exel, ..; LH data includes LH City North Atlantic: scheduled services between Europe Line and LH Cargo; SR data includes Balair/CTA, but and the Americas via gateways in Continental USA and not Crossair. Data on freight carried on Sabena, as Canada. marketed by Swisscargo, is not available.

IV - 13

Scheduled Services: Flights scheduled and performed Yield: The average amount of revenue received per according to a published timetable, or so regular or revenue tonne-kilometre. Passenger yield: passenger frequent as to constitute a recognisably systematic revenue per RPK. service, which are open to use by the public on an individually ticketed basis; extra flights occasioned by Unit Cost: The average operating cost incurred per overflow traffic from scheduled flights; and preparatory available tonne-kilometre. revenue flights on planned air services. This definition includes, inter alia: part charters, blocked space Operating Ratio: The relationship between operating purchased for charter traffic, inaugural flights, extra revenues and operating expenses. The latter may be sections, special flights operated on rare occasions, inclusive or exclusive of net interest. e.g. special scheduled services to an annual trade fair. Breakeven Load Factor: The load factor at which Revenue Passengers Carried: All passengers operating revenues will cover operating costs. Unit counted on a point-to-point basis (On-Flight Origin- cost divided by yield. Destination), carried at 25% or more of the normal applicable fare for the journey. AIR FREEDOM RIGHTS Revenue Freight: All freight counted on a point-to- point basis (in metric tonnes) covered by air waybills for 1st freedom: to overfly one country en-route to which remuneration is received. Freight carried on another. trucking services is not included. 2nd freedom: to make a technical stop in another Distances: Airport-to-Airport great circle distances are country. used. 3rd freedom: to carry passengers from the home Revenue Passenger-Kilometres (RPK): One fare- country to another country. paying passenger transported one kilometre. RPK's are computed by multiplying the number of revenue 4th freedom: to carry passengers to the home country passengers by the kilometres they are flown. from another country.

Available Seat-Kilometres (ASK): The total number of 5th freedom: to carry passengers between two seats available for the transportation of revenue countries by an airline of a third on a route with passengers multiplied by the number of kilometres origin/destination in its home country. which those seats are flown. 6th freedom: to carry passengers between two Passenger Load Factor %: The percentage of seating countries by an airline of a third on two routes capacity which is actually sold and utilised. Computed connecting in its home country. by dividing revenue passenger-kilometres flown by available seat-kilometres flown on revenue passenger 7th freedom: to carry passengers between two services. countries by an airline of a third on a route outside its home country. Revenue Tonne-Kilometres (RTK): One tonne of revenue traffic transported one kilometre. Revenue 8th freedom or cabotage: to carry passengers within tonne-kilometres are computed by multiplying metric a country by an airline of another country on a route tonnes of revenue traffic (passenger, freight and mail) with origin/destination in its home country. by the kilometres which this traffic is flown. Passenger tonne-kilometres are calculated using standard weights 9th freedom or Stand-Alone cabotage: to carry (including baggage) which may differ between airlines passengers within a country by an airline of another and between domestic/short/long-haul. country.

Available Tonne-Kilometres (ATK): The total number True domestic: to carry passengers by an airline in its of metric tonnes available for the transportation of home country. passengers, freight and mail multiplied by the number of kilometres which this capacity is flown. ABBREVIATIONS Overall Load Factor %: The percentage of total capacity available for passengers, freight and mail AAPA: Association of Asia Pacific Airlines, with which is actually sold and utilised. Computed by headquarters in Kuala Lumpur. dividing total revenue tonne-kilometres actually flown by total available tonne-kilometres. ATC: Air Traffic Control

CAA: Civil Aviation Authority.

IV - 14

CFMU: Central Flow Management Unit, of Eurocontrol.

CODA: Central Office for Delay Analysis.

DGCA: Directorate General of Civil Aviation.

ECAC: European Civil Aviation Conference, with headquarters in Paris.

EGNOS: European Geostationary Navigation Overlay Service.

EIA: Energy Information Administration of the US governments’s Department of Energy.

EU: European Union: (from 1958) Belgium, France, Germany (west), Italy, Luxembourg, Netherlands, (from 1973) Denmark, Ireland, United Kingdom, (from 1981), Greece, (from 1986) Portugal, Spain, (from 1995) Austria, Finland and Sweden.

Eurocontrol: European Organisation for the Safety of Air Navigation.

IACA: International Air Carrier Association: worldwide membership of charter air carriers.

IATA: International Air Transport Association, with headqarters in Geneva and Montreal.

ICAO: International Civil Aviation Organisation, with headquarters in Montreal, Canada.

MATSE: Meeting of ECAC Ministers on the Air Traffic System in Europe

OAG: Official Airline Guide, of the Reed Elsevier plc Group.

DIRECTORATE GENERALS OF THE EUROPEAN COMMISSION

Agriculture Competition Economic and Financial Affairs Education and Culture Employment and Social Affairs Energy and Transport Enterprise Environment Fisheries Health and Consumer Protection Information Society Internal Market Joint Research Centre Justice and Home Affairs Regional Policy Research Taxation and Customs Union

IV - 15 cargolux

Association of European Airlines Avenue Louise 350 1050 Brussels, Belgium Tel. + 32 (0)2 639 89 89 Fax + 32 (0)2 639 89 99 E-mail [email protected] Internet: www.aea.be