Air France-KLM
Investor Day
NOVEMBER 5TH 2019 1 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Agenda 12:10 11:40 11:20 11:00 9:30 8:30 13:00 Lunch Q&A Reaching Leading European performance Air KLM Strategy Building Registration France A European Champion Strategy & Breakfast Anne PieterElbers, ChiefExecutive Officer, KLM Frederic Benjamin Smith, ChiefExecutive Officer, Air France KLM Frederic Anne PieterElbers, ChiefExecutive Officer, KLM Benjamin Smith, ChiefExecutive Officer, Air France KLM Rigail Rigail Gagey Gagey , ChiefExecutive Officer, Air France , ChiefExecutive Officer, Air France , ChiefFinancialOfficer, Air France KLM , ChiefFinancialOfficer, Air France KLM 2 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Based on a New Value Building A European Champion Air France KLM Chief Executive Officer Benjamin Smith - Focused Model 3 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 EmployeesAre Air France all Air France - KLM's Asset#1 Thank you to - KLM Group employees! 4 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Our Business RevolvesOur Business Around Our Customers Our goalis to exceedexpectationsthe customersof our attouchpoints all 5 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 A New Value Leading Leading Net Employee Promotor Promoter Leading Leading Score Score Be the the BestPlace toBe - ExceedCustomer Focused Modelfor AllStakeholders Employees Customers Expectations Work Commitment to Global Environmental Sustainability Performance ReachTop Financial Shareholders Medium Term (2024) Improvement Operating of Group Margin Strong 6 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air France Consolidation Leverage OperatingModel Optimizeour - KLM a is BuildingNew Value Commitment to Global Environmental Sustainability European - Focused Model Cargo,E&M and Data,Blue, Flying Develop PassengerRevenue GrowProfitable Customer 7 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Becominga European Champion 2020 Optimize our Operating Model DevelopCustomer Data, Flying Blue, Cargo, andEngineering & Maintenance Commitment to Global Environmental Sustainability 2021 LeverageEuropean Consolidation Grow Profitable Passenger Revenue 2022 2023 2024 8 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air France ThreePowerful BRANDS France - KLM Has NumerousStrengths Unique : #1 InboundDestination in the World Our Unique Competitive Advantages Professional 85 000 85 Engaged PEOPLE Our Core Assets and and Schiphol European : Best Complementary - Hub In - Class Class Extensive and NETWORKS and Joint Revenue Production Commercial Teams Powerful PARTNERSHIPS 9 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 From Brand PortfolioSimplified around Three Master Brands Unclear Value Proposition… …to Three Master Brands, Targeting Right the CustomersRight the Brandwith Making Low CostMaking Feel Good InnovativeStrong BrandGlobal Worldthe theFranceShowcasing Best of Around 10 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Clear Roadmap For Each Airline Continueto develop current successful business model business Commitment to Global Environmental Sustainability one one stepat a time successful model, successfulmodel, Leverage unique assets to build a Fully leverage brand power andnew flexibility 11 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Operating Model Optimizing Our 12 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 SuccessfulModel Business KLM: Ongoing Simplification Effort Focusing on 5 Pillars Successful Initiatives Since 2014, With Strong Results • • • • • • Innovation & Sustainability People andOrganization Operational Excellence Network & Fleet Customer & Product operational efficiency Significant decreaseof structural cost and increased Continueto Develop Current 13 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019
Long Haul Medium Haul Regional KLM KLM Fleet WillBe Current Passenger 777 A330 E175/190 /800/900 787 747 737 - - Fleet 300ER 200ER - 9/10 - - - - 400 200 700 300 787 - 2 772 700 175 Simplified - - 3 9 10 13 14 77W 800 190 29 rating pilot type Common 49 - 900 51 and 5 cockpits Optimized FutureFleet 777 E175/190/ /800/900 787 737 - - 195 200ER 300ER - 9/10 - 700 - E2 Target Target 772 787 700 175 TargetRegional Fleet: - Narrowbody 9 77W - Widebody 10 800 190 rating pilot type Common Fleet: Fleet: 900 195 3 cockpits - E2 52 71 52 - - - 54aircraft 73aircraft 54aircraft 14 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 KLM KLM Will Continueto Support Future Growth At Schiphol currentcappingat Schiphol Aircraft movement reaching Aircraftmovementat Schiphol 360,000 390,000 420,000 450,000 480,000 510,000 2007 2009 2011 2013 2015 2017 2019 2021 for KLM Naturalposition leading +30 destinations +6m customers in 2014 in 2014 28m 141 in 2018 in 2019 34m 171 Looking ahead… artificial futurecapacity growth atbeyond Schiphol Align with external stakeholders entrants given slot constraints environment:for limitedopportunities new Optimize Adapt Fleet: • • reduction inCO Reducedenvironmental impactthrough termShort growthvia capof 500,000 revenue in a capacitya in 2 and and emissionsnoise movements larger - constrained aircraftgauge to enable 15 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 For the Next Generation of Travelers Maintain the Powerof theKLM Brand 16 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 a Successful Model,One Step at a Time Air France: Major cost transformation program started Focus on operational robustness ground) to ensure bestposition for future success Step by step evolution of each group contract A New Social Contract Leverage AssetsUnique to Build significantly increased (pilot, cabin, 17 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Four New Underlying Values Creating Win Confidentiality Transparency Respect Trust - Win Partnershipswith Employees 18 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Increased Flexibilityin Commercial andFleet Strategy Air France Signed a New Pilot based on based on three metrics: growth of Air France in relationto KLM, withAir France regulatingpilots the Previously,an agreement was in place • • • Number Block Hours Capacity (ASK) of Long Haul Aircraft Agreement punitive fleet & product decisions This metric has no direct link with pilot activity directly affectpilot employment, theASK While Block Hours and number of aircraft • • • (Air France:(Air 296 +35% Same Same KPI ASK block time: time: block aircraft Example: Paris/Amsterdam Permitting forced Air France to forKLM : Boeing 777 Boeing : seats 12 due to hours | KLM: 408 seats)408 KLM: - cabin 300ER 30 minutes 30 configuration make financially - Singapore 19 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 BetweenAir France and SNPL Pilots A New, More Flexible Agreement Has Signed Been France (TO) have lifted been number ofaircraft Restrictions regarding Capacity KPI based onMaximum Seating ASK metric is replaced by a of aircraft at Transavia maximum new to optimal fleetand product decisions Air France is now able to make extract maximum value and profit , 20 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 59 2014 Illustrationon Boeing 777 Premium Cabin Reduction: to Comply With ASK Production Rule Previously, Air France Was Forced toReduce Premium Cabin Size areproduced by an - 77 PremiumSeats77 (First Prem.Business / / 3 - 13 Premium Seats - 4x more Economyseat Up to - ASKs 200ER vs. a Econ .) Business seatBusiness 52 2018 - 64 PremiumSeats64 Premium ASK From Paris IndustryLong Haul Margin PremiumSegment Impact: 2014 +9% DecreasedFootprint on High 2019 VS Long ASK Haul Air France Premium 2014 - 4% 2019 - 21 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019
Long Haul Medium Haul Regional Air France Fleet WillBe Current Passenger CRJ 777 A318/319 700 E170 A350 A340 A330 /320/321 ATR - - Fleet 200 300ER /1000 787 A380 E145 /190 72 - - - 900 300 200 ER - - 6 9 700 170 1 3 4 4 18 772 1000 9 10 13 15 190 24 319 29 77W rating pilot type Common Simplified 320 68 9 cockpits 321 114 and FutureFleet Optimized CRJ A220 A320/321 777 700 A350 A330 E170/190 - - 300ER 200ER - - /1000 787 500(?) 300 TBD - - 900 200 - 9 Target 700 170 Future Replacement Target 772 1000 320 190 TargetRegional Fleet: Narrowbody Widebody 77W 321 Rating TypePilot Common Fleet: Fleet: Future Options 5 Type Rating Pilot Common Potential - 7 cockpits 118 110 50 - - 123 aircraft 123 115 aircraft 115 - 60aircraft 22 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Multiple Benefits of A380Replacement aircraft Opportunistic pricing smaller gauge aircraft increased with frequencies Better fit with market needs, moreefficient & sustainable replacementaircraft reduced environmental footprint Increased operational reliability and overhaulengine refurbishmentmaintenance necessary and & + € 400m 400m CAPEX avoidance forreplacement forcabin through with with 23 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Beyond2024 New Air France Fleet WillYield Strong Economic Benefits • • EBITDAIncrease + € € PerAircraft € 6m Cabin 6m Fuel 6.5m 12.5m Airbus A350 Widebody Fleet: Ordered Aircraft 28 - 900 + Total EBITDA € A350 Impact 350m - 900 EBITDAIncrease + PerAircraft € 1.3m Narrowbody Airbus A220 Ordered Aircraft 60 Fleet: - 300 Total EBITDA + A220 € Impact 75m - 300 24 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Configuration Leading Industry CurrentBoeing 787 CabinOptimization (LOPA) Potential: - Future LOPAs Have Will Built Business Business - 9 Illustration Illustration Pureof Optimization Potential: Prem Prem Econ Econ - in in Flexibility Aided by New Agreements With Cabin Crew Economy Economy 298 276 Total For Illustrative Purposes Only Business 30 30 # Seats Economy Premium 21 21 efficient Economy 9% less9% Avg Avg 247 225 Pitch:31' Pitch:31' 25 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Note: Note: OwnershipCost Increased Fleet UtilizationReduce Will FleetUtilization (hours) Oct18 8.2 - Sep19 8.3 8.7 Narrowbody 9.2 9.2 model withhigh seasonality Low Cost: 9.3 point 9.4 - to - point 13.7 Widebody 14.0 14.1 15.4 utilization Air France fleet Through improved ownership cost of upto 10 Potential reduction - 20% 20% in 26 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 2. 1. Response to Estimated forCASK Paris Includes First, and Business Premium Economy New Benchmark: Airbus A350New Benchmark:Airbus Dense Boeing 777Boeing Dense A330 Airbus Current Benchmark: Ex: Fort Ex: sensitive markets CurrentAir France productprice on - de - France, R é union - Antilles route - 300ER: Date has toolhas toto respond thiscompetition, andwill continueto monitormarket evolution - 900 to Long - 200 - - Haul Low - Cost Competition seats, seats, including full Future A350 Further planned efficiencies: 468 411 314 and even lower CASK Total - 1000 will 1000 have - flat Business seat Premium # Seats 46 35 21 480 472 1 seats seats Economy 422 376 293 <5 <4 <5 CASK € ct/km € € € ct ct ct 2 27 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: 2017 employer Source: 2017 benchmark, costsAir France taxation: Noise 1. Paris EnvironmentBusiness Air France Will Lobby for aMore CompetitiveFrench Airline Other • • • • Taxes chargesand in • CDG Express CDG Express Eco AviationCivil Other uniquetaxes SolidarityTax - - CDG CDG more expensive contribution specific specific French taxes € 18m, Corsica: 18m, (starting 2024) (starting 2020) CDG 1 vs vs Amsterdam Schiphol € 3m than Schiphol - KLM KLM internal data + + € € > 270m 300m € € € € € 108m 20m 20m 60m 62m France has the Highest Social Taxation in Europe Illustration of employer cost for a gross wage at100 28 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 FullyLeverage Brand Powerand New Flexibility • • • and tertiaryand airports constrained,consider still Withdemand growing slots and Growseat capacity Remain slot Optimize &grow position in a - constrained market #1 lowcost#1 carrier Netherlands The in throughfleet renewal flying from secondary • • • Leverage Diversifygrow and network Strengthen New base opening in terms of aircraftbased Become the #1 Montpellier April 2020: removalaircraftthe 40 of cappilotflexibility & coremarkets LCC < in France in 29 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019
Medium Haul Transavia Current Passenger Fleet Will 737 - 700/800 Fleet 700 Grow 800 1 cockpit 79 FutureFleet 737 - 800 TransaviaFleet Growth Target: 800 +5 - 6 aircraft 6 aircraft per annum 1 cockpit 30 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Further Further Leveraging Group Efficiencies ContinuedCost Synergies Ongoing Commercial, Distribution and E&M IT Efficiency Alliances and Cargo BetterFocuson Strategic GroupLevers StrategicGroup Levers DigitalData& Management Purchasing& Procurement ResourcesHuman CommercialAlliances& Fleet& Network 31 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Passenger Revenue Growing Profitable 32 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: Source: Further Further Leveraged Complementary GroupNetwork to be OAG Destinations British Airways to/fromLondon Destinations , Full 2019 Full , Year KLM to/fromKLM Amsterdam 224 171 Daily Frequencies Daily Frequencies 455 347 VS Air Franceto/fromParis (CDG/ORY) Destinations Destinations Lufthansa Lufthansa to/fromFrankfurt 200 194 Daily Frequencies Daily Frequencies 423 444 • ‘Dual Hub’ ModelHub’‘Dual GroupStrongAFKL 33 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Note: Premium includes First, Business and Economy PremiumBusinessand First, includes PremiumNote: Air France and KLMWillGrow Their Strongest Segments Revenue Strategy KLM CurrentSegmentStrengthKLM per Long Medium Domestic position as position forward: Going Haul Haul Strengthening best connection carrier to/frombestcarrierEurope connection Growth possible on all all on Growthsegmentspossible Economy Premium Economy Premium Economy Premium Continue leadershipat Schiphol to Local grow , maintain leadership Connection Air FranceCurrentSegmentAirStrength per Main Main strength: Paris local and traffic high yield connections Long Medium Domestic addressed, enabling addressed,enabling a focus on Forward: Going H aul H aul airport Redesigning from Leveraging Economy Premium Economy Premium Economy Premium local local premiummarketand segments Previousstructural costdisadvantage been has Paris strength Orly strategy Local growing profitablegrowingsegments to extractto maximum value to strengthen at position Connection 34 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: World Tourism organization, organization, Albatross World Tourism Source: Internationaltourist arrivals in 2018,Top 10 France, most visitedcountry in the world Is a Major Asset for Air France Attractiveness of Paris& France 89M #1 83M #2 80M #3 62M #5 36M #10 Airlinemarket largely centralizedaround Paris Passengertraffic in 2018perairport city Paris x8 Nice Lyon Toulouse Marseille 35 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: Air France Source: Grow Profitable AirFrance Local Traffic Traffic hub per type Atlanta 28% 72% - KLM internal data data internal KLM StrongConnecting Frankfurt 32% 68% Airlines – From November 2017 to October 2018 October to 2017 November From Dubai 32% 68% Amsterdam 40% 60% Istanbul Connection 45% 55% fromMixed Traffic Airlines Airlines Benefiting Paris 49% 51% Local Hong Hong Kong 51% 49% op. profitop. + share shift: share shift: 1 pt € 30m Local London 61% 39% Airlines Airlines Maximizing Local Revenues Shanghai 76% 24% Sydney 78% 22% 36 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Note: Premium includes First & Business cabin Business& Firstincludes PremiumNote: Long haulpremium seat capacity from Paris Air France has recently been losing premium market share Positionon Premium Segment Opportunityto Strengthen Air France 2014 58% 42% 2019 54% 46% CDG & Orly Others 1 operating profit pt shareincrease: premiummarket + € 10m 10m line with customerwithline demand profitable premium segment, revenue mix Air Francecannowoptimize its relationshipwith addressedbeen Restrictive structural issues have strengthen its market position: Air France now has the means to towards the more throughnew labour partners in 37 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Cargo and E&M Data, Flying Blue, Develop Customer 38 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 and Loyalty Capabilities Growing Customer Data, Personalization Personalization 2017 Through Direct Sales & NDC Growing ShareBookings of 40% Share of direct Sales & 2018 43% NDC 2019 47% Ancillary Revenue Evolution € 515m 2016 € 575m 2017 € 650m 2018 € 2019F 730m sales sales and margin Increased contribution to Group Data, Personalization,Loyalty • • • Flying Flying Blue: Solid Foundation with Paymentin miles currency) (as New digital experience miles Sale of Room to Grow : creditcards,etc. services, 39 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 From Future Growth in MRO Market Air France Future Growing order book is solidbasis for E&M Dec. 2015 Dec. 8,412 Order ( Book Business Growth - * Annualized Growth* Annualized rate KLM +36% € m) Sept. 2019 Sept. 11,461 E&M is Strong and Well Positionedto Benefit has has become keya player growth engine, where Asia is the geographical Generation Products Strong position on the fastgrowing market Nextof 737 787 GEnx LEAP E&M Americas Europe RR PW XWB 15% GTF Middle East & Africa Middle & East 31% 13% 41% • Asia A320 A330 A350 40 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Contributionto Groupthe Air France Source: 2018 data 2018 Source: EuropeanTrucking Stations Global MarketGlobal Share Global CargoGlobal Carrier 3.8 % 135 # 5 - KLM Cargo ContinueWill to Maximize WeeklyFrequencies Flown Direct European #2 and #3 Connections Intercontinental 1.100 130+ Cargo Hubs Cargo Air France Freight € 3800+ 1.1 m 2.3bn FTEs Revenues Tons - KLM 41 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Consolidation Leverage European 42 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 ConsolidationOpportunities Pragmatically Evaluate Air France • • • KLM networks and robustness ofthe As a complement consolidation Active role Strict financial discipline - when andwhere KLM Will makes to the global reach sense Air Air France and 43 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Global EnvironmentalGlobal Commitment to Sustainability 44 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Recognition for Air France - KLM's our Leading Environmental Commitment to Global Environmental Sustainability Positionin the Stewardship DJSI Leading Airline Group #1 Rank: 45 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Impact Key Initiatives and 46 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 DecreasingCostUnit LeveragingAdditionalGroup Synergies Simplified Organization& Processes OperationalTransformation IncreasedAircraft Utilization More EfficientDomestic Network NextGeneration Aircraft Simplified Fleet More Flexible Currently Underway Summary ofKey Initiatives Labour Contracts Air France Air France Air France Air France Air France Air France Air France Group Transavia KLM KLM KLM KLM E&M Cargoand Flying & Blue Increased RevenueAncillary TransaviaGrowth Personalization& RevenueAncillary Revised Refocused MarketPositioning OptimizedNetwork & Aircraft Gauge HarmonizedProducts OptimizedInterior Configurations & ClarifiedBrand Strategy IncreasingRevenue Unit Orly Strategy Air France Air France Air France Air France Air France Air France Transavia Group Group Transavia KLM KLM KLM 47 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 OperatingModel Optimize our Estimated Operating Result Impact Summary ofKey InitiativesCurrently UnderwayAnd Synergies Leverage Renew Simplify and Airline Processes Optimize Fleet Flexibility Commercial & Increase Fleet € Group Internal 800 - 900m € € (accounted in € Prerequesite 400 400 300 airlineP&L) - - - 450m 475m 350m PassengerRevenue GrowProfitable Journeys PersonalizedTravel Implement Grow Segments on Revenue ProductPortfolio Cl Commitment to Global Environmental Sustainability arify Strongest Transavia Brand and Growth € 350 - 400m € ~ 75 € ~ 25 € ~ - € 100m 200m - 50m 50m Opportunities Consolidation PragmaticallyEvaluate Consolidation Leverage Notassessed; depends on marketconditions European Contribution Cargo:Maximize IndustryLeader E&M Platform LoyaltyLeading Flying Blue: Cargo, Develop : Remain € E&M 100 Data, Blue Flying - 150m Contribution € 50 ~ Positive - € 100m 50m 48 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Mid 2. Modelling assumptions: 2. Modelling consensus sourced 1. Company • • Excluding Fuel Price, Currency FX and Industry yield development effects yield Industry developmentand FX Price, Fuel Currency Excluding Objectives – – Air France 2020 price index Consumer Eurozone as annum, Inflation per per assumption of 1.5% Air France - Margin: Cycle Operating Margin Reaching 7 Result Consensus 2019 Operating 2019 Operating per airline are net amounts (including amounts (including airline per are net - KLM € 1,150m Group Available Seat Kilometer (ASK) growth assumption assumption mid growth (ASK) Available Group Seat Kilometer - KLM OperatingKLM Profit Evolution ( 4% as per 21 October 2019 October 21 as per + € - 900m € 900m offsetsbase against 900m for full year 2019 as published on for full 2019 year € m) - case price inflation price inflation case+ and + - € point of guidance range +2 to +3% per annum 2020 fromannum per to +3% +2 range ofpoint guidance 250m https://www.airfranceklm.com/en/finance/financial - 2024. Source: Oxford Economics, updated 2019 August updated Economics, Oxford Source: € 100m capacity growth). capacity 100m + € 100m - 8% Other Other Businesses Additional Additional Group - 2024 - Synergies and information/consensus + € 100m OperatingMargin: Target Mid Operating Result 2024 Target 2024 € 2,500m - Cycle 7 - 8% 49 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Strategy KLM Chief Executive Officer Pieter Elbers 50 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Where We’re ComingFrom and Where We’re Going remain remain todayvalid KLM’s 2015strategic review has provided a clear set of strategic choices that Our Strategy Build Up 2014 Where We’reComing From: Execution Coherence Choice Direction Financial, Financial, Operational and Customer Experience Improvement of all relevant Settingour Withthe Throughthe (‘Transformation Making strategic choices annual annual KLM Flight Plan goals integral KLM - 2018 - andour projects’) KPIs & purpose Transformation agenda initiatives : (with (andour ‘Compass’) KPIs ) Future strategy Where Innovation and Sustainability People and Organization Operational Excellence Network & Fleet Customer and Product We’re centred Going around 5 pillars: 51 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 5 Pillarsof Our Annual Flight Implementation PlanGuidethe A Strategy Without Execution is a Hallucination business business model Continueto develop • • • customer choice continue to evolve Leverage operational excellence Keep strengtheningleadershipatSchiphol connection carrier Further grow continuous focus on cost and global global brand strength and position as successful successful to/from Europe, to remain first best Excellence Operational Sustainability Innovationand Organization People and Fleet Network and Product Customerand Goals sustainability Goals scale goalsbusiness experiments 100% linked to even moreimportant objective Going forward, diversity becomes and in > Completion factor ICA:99.6% worldwide:86% A15 Destinations 168 > 34.5 > Customer satisfaction: 60% of all KLM KLM teamsall of 60% team engagement measurement dialogue. - up phase up m PAX > 2 initiatives2 in NPS NPS participated > 44 focus (longeron term) goalsbusiness maximizing learnings the experiments of Improve (radical)our innovation ecosystems by control, organization and information integrally reshaping products, all processes, effectively and atthe lowestintegral cost by Deliver our customeron promisesafely, simplifying and modernizing fleetour increasing the agility networkour of Strengthen hub our customer journey priorities customer intimacy by Win hearts customersthe our of and excel in KLM KLM Compass strategy execution and in line with acts the diverse and inclusive workforce themselves” by Empower employees be “the to best of creating an optimal, engaged, - and focusing on integral - spoke by model that fits and and that that 52 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Sub New topic section header WHERE WE STAND NOW - header placeholder 53 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Note: Transavia Transavia Cargo E&M investing Sustaining upward spiralof revenuegeneration to continue KLM is a Fit and FinanciallyHealthy Airline Cargo including898 M 0.9 1.3 E&M Creating Solid Revenues: E&M € internalrevenue 2018 Revenues2018 1.7 € 11bn Total11bn Revenue ( € Passenger m) 8.0 Passenger revenue € 11bn 11bn KLM RevenueKLM 2018 in 2018 Share2018 of KLM PassengerRevenue of Sale Point mix Traffic Economy Rest 45% 77% 5% 6% 23% 23% 7% 14% 23% 23% Business 14% Investments(CAPEX, Operatingmargin (%) Sustaining the Upward Spiral 2014 2014 1.8% 420 2015 2015 3.9% 465 2016 2016 6.9% € 756 m) 10.3% 1,012 2017 2017 1,290 2018 2018 9.8% 54 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 3. Period 2012 1. Operating incomeadjusted from operatingleases interests before 2017 2. Cash Flow displayedinpre 2019 YTD September KLM KPIs Significantly ImprovedSince 2012 4 2 2 comparability Adjusted for IFRS16 259 900 200 700
2012 2012 Operating 4 Financial 2 2 403 600 500 100 2013 Lease 2013 4 - 2 2 2018 yearover year EASK, based differenceson 2018 270 Net 400 2014 400 000 2014 2 2 4 504 100 500 600 2015 debt ( 2015 Income ( 1 2 822 4 753 896
2016 649 2016 1,079 3 1 1 280 339 941 €
2017 times before2017 Leasescapitalized 7 2017 m) 1,073 2 1 1 825 2018 064 761 2018 € YTD 1 714 2 m)¹ 767 YTD 686 2019 453 2019 — Yearto Date Figures Do Not ReflectYearFull Outlook - 2019 year over yeardifference ASK basedon (as EASK usage is comparability Adjusted for IFRS16 4.8 2,7% 2012 Operating
4.0 2012 Net debt / EBITDA 4,2%
4.3 2013
2014 2,8% 5,1%
3.6 2014 8,4% 2.9
2015 Margin (%) before2017 EBITDAR displayed Adjusted Net Debt / 2016 2016 1.6 10,3% - IFRS fashion(cash out r
1.3 2017
2018 9,8% YTD
1.3 2018 8.5% YTD 2019 2020 egarding operatingleases already deductedin operating cashflow/free cash flow, CAPEX no forlease creation/extension) terminated).Year overyear remain differences comparable. Investing Cash 3.1% 353 2012 2012 1.3% R/(E)ASK³ex 363 2013 2013 - 0.7% 420
2014 2014 (netCAPEX - 4.6% 465 2015 2015 756 - 2016 4.7% 2016 Flow Flow ( 1,012 2.5% ) - 2017 ROX 2017 1,290 3.8%
2018 2018 € - 1.2% YTD YTD m) 893 2019 2019 Adjusted Free Cash Flow² C/(E)ASK³ex ROX/Fuel - 0.5% 218 2012 2012 (profit (profit share included) - 2.0% 262 2013 2013 0.6% 83 2014 2014 - 1.0% 408 2015 2015 - 1.8% 378 2016 2016 0.2% 360 2017 2017 - 0.1% 320 2018 2018 1.4% YTD YTD 295 2019 2019 55 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Profitability ContinuedInvestment to Enhanced Fleet Innovation Digital and CSR Staff Operational Excellence + Cost and Costand € 60m + Renewal € Fleet 130m Optimization Revenue Mix + € 60m Result impact + Operating € 2024 250m 56 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: Source: AFKL Customer & InsightMarket 2017 figuresreport, global Our Our Customers’Most Important Decision Factors Why PeopleFly KLM Main Reasons for ... Flying KLM Pillar #1:Pillar Customer and Product Recommendation/ Benefits Benefits FFP and and service agreement reputation else chose else Corporate Someone Schedule Products Fare 1% 2% KL 6% 6% - 7% 7% Front 8% 12% 14% 15% 15% KL 18% - Rear 43% 46% …Creates Integratedan Approach Equipment Ground Crew & • • This way,This we canoptimallysatisfy needs theof our customers & fleetoperationsand We haveintegrated an N Commercial Planning, approachbetween commercial, network etwork Fleet Fleet and Maintenance & Info to Customers Flight Flight Crew 57 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 strongly increased NPS and customer recognition Targeted APEX Granting Us the Official Five Star Global Airline Rating We ContinuouslyImprove Customer Satisfaction & Brand Pillar #1:Pillar Customer and Product Investmentscustomerin the • • • • Net Promotor Score Integralcustomer journey New lounges Full Ontime performance 2014 36 - flat seatson aircraftall initiatives & 2015 38 2016 40 2017 39 investments have led to a 2018 42 2019 Futurepriorities 40 • • • • Disruption management Digital Customer journey Connectivity disruptions Decline inNPS mainly caused by unforeseen Non Non perceivedfailures NPS Impactopportunity NPS perexperienced failure Delay 8.6 28% 2016 55 Checked Luggage 4.9% 3.5 Catering 2.7% 1.6 Allocation 2.7% 1.5 Seat 2017 58 2.4% 0.9 IFE 2.2% 1.4 Seat Connection 2018 Missed 61 1.8 2% Cancellation 1.9% 1.5 Strength Luggage Hand 1.8% 2019YTD 1.0 62 Boarding Denied 0.4% 0.4 Downgrade Total NPSTotal fail 0.2% 0.2 potential impact impact - True True 62 22 58 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 and Costs FleetSimplifying to ReduceComplexity Sub Families Widebody Widebody fleet simplified to 2 families, ambition to reach 1 by 2025 Pillar #2:Pillar Network &Fleet - types 777 Pax A330 747 MD11 2005 767 /combi - 200ER 5 5 - - 400 200 777 777 Pax A330 747 MD11 2010 /combi - - 300ER 200ER 5 4 - - 400 200 777 777 Pax A330 A330 747 2015 787 /combi - - 300ER 200ER 6 3 - - - 400 300 200 - 9 777 777 787 A330 A330 2020 - - - 6 2 300ER 200ER 9 9 / - - 300 200 - 10 777 777 787 2025 - - - 4 1 300ER 200ER 9 9 / - 10 100 200 300 Total fleet evolution Group KLM 0 2012 747 MD - 11 2014 777 / / 787 777 A330 2016 2018 Regional Narrowbody 2025 59 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 2007 2019 figures:Actual Jan All figures:Otherexcluding (non recurring), Network performanceupdate/ October 2019 - 2016 arethis in versionhistoricreported figures. In the previousdeckslide2007 CapacityMedium ASK Haul (index= 2011)& Load factor (in %) CapacityLong ASK Haul (index= 2011)& Load factor (in %) Optimisation/Simplification ContinueGrowth and Fleet 2007 2007 Pillar #2:Pillar Network &Fleet 76% 85% 99 90 2008 2008 76% 84% 102 96 - Sep Forecastand Oct 2009 2009 74% 83% 96 92 2010 2010 77% 85% 92 94 IFRS 2011 2011 81% 87% 100 100 - Dec pensionadjustmentFull and Freighters 2012 2012 81% 87% 100 104 +34% ASK ASK +34% 2013 2013 82% 88% 104 107 2014 2014 81% 87% 111 108 (FC 2019 vs vs 2011) (FC 2019 2015 2015 82% 87% 113 110 - 2016 were partly 2016 2016 84% 88% 119 114 2017 2017 86% 89% 128 119 IFRS 2018 2018 86% 90% 131 123 restated 2019 2019 87% 90% Fcst Fcst 134 124 onwards positive operating results from 2016 The KLM medium haul network hasdelivered good connectivity destinations transfer traffic network KLM – witha smallhome market but large – traditionally with , requiring a high frequency strongly relies on broad portfolio of to provide 60 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 1. Six destinationsare2015 in opened and partof 141, fivedestinationsare closedin 2019 partand of171 W KLM Pillar #2:Pillar Network &Fleet ith H M as ultiple S KLM NetworkKLM in 2015 hown Total Destinations 141 N ew A 69Medium destinationsHaul 72Long destinationsHaul gility R oute a nd O penings H 46destinations opened 14destinations closed as been in D R 1 1 ynamic ecent KLM NetworkKLM in 2019 Y i ears n Total Destinations its 171 N etwork 78Medium destinationsHaul 93Long destinationsHaul 61 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 KLM KLM Group is Together Pillar #2:Pillar Network &Fleet KLM code KLM Total Code With - share destinations in2015 - sharedDestinations Able 631 Partners, KLM As Part of 133 Medium Medium Haul destinations 133 498 Long Long Haul destinations 498 to Grow an Industry Leading the KLM code KLM Air France Total Code - Network share destinations in2019 - sharedDestinations 694 - 161 Medium Medium Haul destinations 161 533 Long Long Haul destinations 533 62 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 KLM Passenger Business: Value Pillar #2:Pillar Network &Fleet • • • • • Through an Through E195 Upgauging Densification Standardization Utilization - E2 / 787 E2 / Fleet integral approach between these topics these between approach integral - 10 • • Partners Destinations Network , KLM positions itself for long term profitability, expansion and growth and expansion profitability, term long itself for positionsKLM , - Focused Model • • Build JVsBuild to Schiphol Connect Partners • • Lelystad GrowthSchiphol Airports Opening 63 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Notes: 1. For this presentation the months Jan Jan months the this presentation 1. For Notes: Yearly indexcount of scheduledflights yearsforbothIntercontinental as Europe flightsincreases of the over Number GrowthWith Increased Coupled Asset Utilization • 2014 Pillar #3:Pillar Operational excellence andIntercontinental respectively is 13% and9% on Europe / Regional The totalincrease the in last five years 2.1% 2015 Intercontinental - 0.3% - 0.1% 2016 2.4% 4.6% 2017 5.7% Europe Europe / Regional 1.2% – 2018 170 170 aircraft Jul are denoted as YTD Jul are denoted 3.5% 0.8% 2019 2.0% (%) 80 85 90 95 Booked load factor (BLF) is higher and results andload factoris higher higher in grows, ASK growthpassenger Although 2014 • KLM Significantpassenger increase over the 84.0% 91.9% network 83.6% 91.2% 2015 700 700 flights / day Intercontinental 87.2% 91.5% 2016 88.8% 93.0% 2017 Europe / Regional Europe 89.6% 93.8% 2018 90.4% 93.9% 2019 97,000 97,000 (h) 10.0 15.0 20.0 5.0 Yearly netfleetutilization per24h overthe years Averageflight aircraft time per increase • shown Regional fleetin 2016 The groundtime decrease of Europe / 8.5 pax Europe and Regional and Europe 8.5 2015 YTD 2015 YTD 2014 / day 8.8 +4.4% 9.1 9.2 9.2 2017 YTD 2017 YTD 2016 - 15.2 2017 is clearly 2017 15.6 Intercontinental • 15.5 2019 YTD 2019 YTD 2018 15.9 16.1 16.4 64 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019
ANSWER Transformation From Industrial Towards Digital Age in Aviation Pillar #4:Pillar People and Organization Frontline staff in airline StrategicWorkforce Transformation Planning industry Winning WayWinning Working of Moving your Worldyour Moving Hierarchical,linear, Culturalchange, Organisation family culture & Succession and Talentand Succession Controls andfocus on management Leadership Diversity WHAT Future proof social social Futureproof ( Social Social Dialogue CLA , Works council) dialogue Laws 2025 2018 2014
Next phase Transform: HPO 65 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Increases With improvedProductivity Numbers in theSameWhile Time EmployeePromoter Score Pillar #4:Pillar People and Organization 40 45 50 55 60 65 70 75 80 Employee Promoter Scorescore)(week EU EPS definition EPS EU 11 13 15 17 19 21 23 25 0 27 1 29 31 Detractors 2 33 35 3 37 39 4 41 43 5 45 6 47 Passives 49 7 51 1 8 3 Promotors 5 9 7 9 10 11 100 110 120 130 EASK,Revenue, 100 105 110 115 120 Productivity ( 90 95 2014 2014 Easkindex Revenue index PAXindex Revenue/FTE EASK/FTE index) 2015 2015 Pax and (index)and FTE 2016 2016 FTE index FTE 2017 2017 +10% +14% +24% +13% +17% 2018 2018 - 3% 66 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Talented AndDiverse Workforce KLM Is a Large And Mature Organisation With a Pillar #4:Pillar People and Organization Empower employees to be “the best of themselves” an by creatingthemselves” of best “the to be employees Empower 11 16 21 26 31 36 41 46 culture Create diverse workforce and inclusive Attract, retain and develop talent Headcountper years of service 6 <= 5 <= ------40 45 50 10 15 20 25 30 35 122 539 workforce workforce 1,311 1,922 2,870 that fits strategy execution and acts in line with the KLM Compass the KLM with line actsinand that fitsstrategy execution 3,530 3,575 4,173 4,537 4,797 women men Prepare Prepare workforce for digital transformation Develop leadership capabilities Gendermix 55 55 % 45 % optimal, engaged,optimal, diverse and inclusive Ground ops Ground Cabin Cabin crew Pilots Headcount per of type activity Passenger 19 10,130 6,600 2,900 630 Cargo 1,838 employment Improve sustainable 4,613 E&M subsidiaries 8,200 KLM 67 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Goal • • • • innovation vision of Apron KLM Embraer Joint innovation discovery with vehicles Experiment with autonomous Technical University Delft of Robotizing experiment with completed Technologyscanfor 2030 Apron RobotizationApron Pillar #5:Pillar Innovation and Sustainability : Co ApronRobotizing Key Achievements - create & executethe Services F ocuses Services Apron on R • • • AdditiveManufacturing Additivemanufacturing adical cabin parts & AM repairs Development for printed3D flights from plastic waste create First airline in the worldto throughout print offices local3D 6 Goal manufacturingin Key Achievements : Accelerate additive 3D printing material printing 3D E&M Maintenance Engineering & I nnovation hangars from our E&M the • • Goal Topics CargoVolume Scanning CargoVolume Scanning the the start Currently experimenting with enables accurate taxingvolume Accurate volume measurement - art Cargoart Volume Scanning Key Achievements : Co technology - - up develop astate Cargometer - of - componentstrading platform • • • transparentreducesand the influencepower of brokers parts parts stock broker fee saving toEnables on up 30% backlog resulted in MVP roadmap & Co TCS Workshops in cooperation with which makesits industry Components TradingComponents Componentstrading - creation with partners Goal Key Achievements resulted in strategy Platform platform : Co to monetizeto excess Maintenance Engineering & - develop a 68 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Adapt Connect Pioneer tomorrow. after Our day to changing society expectations & maintain a liveable planet. sustainable solutions. to new partners in sustainability. Fly Responsibly Horizon 2025 Sustainable operations CO2 Bio - fuel - compensation Horizon 2030 Substitution Fleet renewal Horizon 2050 Electric flights 69 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Schiphol Passenger and aircraftmovements 2005)inat(base 100 Schiphol For the coming years new growth initiativeswillbe undertaken Movements500,000 In Recent Years SchipholHas Grown to 100 120 140 160 180 80 2005 Aircraft movements per annum 2010 Passenger numbers per annum 2015 +23% +61% 2020 train via growth KLM room for growth creating expected In addition, years to expanded Schiphol movements Lelystad 540.000 substitution by additional airport in coming in possibly possibly is 70 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Transavia CooperationKLM #1 Transavia Pricing Pricing Management Commercial Capacity Network Other LCC Revenue NL & in theNetherlands • • • • • • • • • • • • • • • - : Sustainable PositionAs Transavia Coordinated(re)actions to the competition Network alignment& optimization Partneringbeyond slots Joint slot portfolio management Pricing Code share Jointroutes KLM engineshop andshared component buying Air France KLM InsuranceandHull Liability Hedging Fuel Flying Blue Distributionsynergy Jointproposition opportunities B2B Partners Holland intensifiedHolland Continuousfocus on low • • • • • • Creatingtravela experience Enforce a breakthroughin operationalperformance management Value driven processbusiness efficiency processesand increase Lean ops teamsto optimize CASK per aircraft and lower fleet Fleet strategy increaseto seats effectivity with integral planning Increased efficiency and Increase self Launch app mobile new Keyfor themes 2019 exceedingexpectations Transavia - service Holland - cost 1 2 2 … and remain#1 andthe… • • • • To • • • Healthy COImargin 7,5% of Revenue growth 7% of market constrained slot in a ASK 6% + level 3,36 of Sustain competitivea CASK Rotterdam Eindhoven Amsterdam in the Netherlandsin the continuesustainable growth… with aircraftwith 9 (+1) € with aircraftwith 8 (+1) with 28 aircraft with 28 ct (ex fuel) LCC 71 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Five Priorities KLM 2019/2020 for running the business Integral approach Technology People & on Schiphol on Schiphol Airport Sustainable growth Synergy Air France Health Financial - KLM 73 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air France Strategy Air France Chief Executive Officer Anne Rigail 73 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 CSR: A renewed environmental ambition 74 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Transformation transformation Air France End External Operations Optimized & culture - Talent Spend to Tech Diagnosis CSR Step#1 Q2 - 2019 End Transformation Launched at TRANSFORMATION 360 AIR FRANCE FRANCE AIR 360 Framing Step#2 Q3 2019 Implementation organization Simplified & Network enhancement Revenue experience Customer In progress In Step#3 Fleet Contributing to Group Goals Responsibility Corporate & Social recoveryFinancial satisfaction Customer engagement Employees 75 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Optimize our operating model Financial Recovery Launched Around Seven Clusters Simplified organization • • • • • • • Tech Transformation optimization partnership Business Efficiency IT delivery of automation standardizationIT and Redesign function IMO functions Mutualize support control Increase of span Reduce layers • • • • • • • • • • Transformation External Spend Productivity gains performancetime On and digitization simplification Process Channel cost and fee IT Training Marketing Catering E&M Operations Operations Optimized • • • • Network and Fleet redesign Domesticnetwork utilization Increase aircraft aircraft influx generationNew and densification Fleet simplification passenger revenue Grow profitable Revenue enhancement • • • • • Network and Fleet Ancillary Ancillary revenues Loyalty distribution Customer reach & oriented oriented cabin mix More Premium optimization CDG Network dynamic Networkdynamic P rojects throughout allAir 150+ France 76 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Strong increase of Air France operating result Structural Impact on Four Dimensions Simplification + € 400m Fleetrenewal + € 300m RevenueMix Optimization + € 200m operating result Impact Impact on 2024 + € 900m Engagement satisfaction Employee Customer Three success CSR reduction CO Promoter Score Employee NPS 2 emissions KPIs 77 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 measures Short • • • Discretionary prioritization Advertising Support Ambitious action plan hasalready started… 2019 Focus on Simplification - term functions emergency and and IT on on K costs eep track hiring costs reduction costs freeze 2020 OPERATIONS TRANSVERSAL Organization External • • • • • • • • simulators usage Optimize full flight Optimize fuel performance Improve operational Accelerate channel maintenance costs catering, outstations, Optimize marketing, training, review contractsof Enforce speed spends on and contracts Implement “Control overheads overheads and support functions (delayering, Simplify and focusbreak processesspecific with on silos, transformation Accelerate spend simplification consumption savings: implementation shift shift tower” tower” projects IT : • • • • • some … reduce costs customer Digitize Supply Chain program Launch successfullythe marketdelivery efficiency and totime innovation projectsfor Develop further agility in standardization Improve prioritization and of mutualization processes to enhance processesto enhance highlights experience and experience and ) until 2024 … And will of transformationof € 2020 80m ( after Operations Transformation Transversal streams Net impact € 2021 165m inflation) deliver steadily projects € 2022 260m € 2023 350m € 400m 2024 + Fleet Simplification and Renewal
NOVEMBER 2019 Long Haul fleet Medium Haul fleet –
• A350 ramp up • A220 ramp up • A380 replacement • ATR and ER4 phase out INVESTOR DAY Benefits • Targeting 2-3 cockpits • Scale savings A350-900 A220-300 • Unit costs • Simplified processes • Operations reliability • Enhanced inflight experience • CSR efficiency Cumulative operating result impact €300m €190m €95m €5m €10m
2020 2021 2022 2023 2024 78 79 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Source: Source: Network: Strong Positionin Paris, anAsset to On Build OAG London #1 Strong natural traffic in , internal AFKL data. Capacity share in ASK to/from Hub. North Atlantic JV partners ASK included in each Home Carrier shares Carrier Home each in included ASK partners JV Atlantic North to/from Hub. ASK shareCapacity in data. AFKL internal , Largest Truedestinations Paris #2 Amsterdam cities in Europe in cities #3 Paris Frankfurt Low Low Yield YieldHigh #4 Resilient, balanced, global network 30% 17% 14% ASK regionASK per 19% 2 0% Heathrow High High footprint in 45% opportunity to increase Capacity share per hub European CDG 54% Competition Amsterdam CDG 68% , with , with still Home CarrierHome Frankfurt 59% 80 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air France Hub WillBe Further Optimized Dynamic Network Management support support growth and enhance Leverage new airport infrastructure to French market flows Increase footprint on Premium local and profitable/dynamic loss Dynamic strategy • • • • • capacity for AF and CDG aircraft A380 replacedbysmaller, more efficient fleetchoices Increasedflexibilityto optimize cabin and Africa, etc. following local dynamics Adaptationsbetween Americas, Asia, periods of low businessdemand Redeployment - making/less dynamicareas making/less to Terminal4:Up to on to reallocatefleet from areas leisure destinations partners 40 M passengers experience in Improving Assetutilization Aircraft utilization improvement implemented on these 2 dimensions Further Load factor increase • • (+0:26) +3% vs (+1:07)2016 +12% MediumHaul 2014 82% on Long in 2019Haul vs 2016 improvement to be on 2018 85% CDG - Mediumin 2019Haul 2014 85% Long Haul 2018 88% Enhancing Enhancing CustomerExperience Operational performance Fleet and product improvement One unique brand: Air France • • • • • • linemaintenance Betterthankstopunctuality anticipation decreasingaircraft additional Improved completionfactor thanksto comfort Short/Medium fleetHaul Daily LaPremiere on serveddestinations Consistentproduct every day Full flat producton USA andAsia spare aircraft without in schedulethedesign utilization renewal: extra of 81 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Domestic AdaptFrench stationssize our operations Simplify for our Customers operationalperformance Improve productand to transversalroutes exposed Reduce face TGV competition Adjust low - Orly’s cost poor poor Network Restructuring Plan network to performing • • • • • • • • • • • Reduction averageof gauge increaseto factorsload Reduction frequenciesof in period weak routes making Closure loss of (Embraer 170/190, Implementation moreof qualitative aircraft Redesign schedule “la on 465 positions (out of 3200) on Volunteer on 3200) (out of positions 465 Departure to consolidate commercialour presence Development partnershipsof with other carriers Closure unprofitableof routes with limited footprintbusiness and and Embraer 145 Rationalize Hop fleet phase out : of ATR(2020) Simplify operating Hop (full model One unique unique brand: Air (2021) A220 France ) and ) and Cabin Business Navette ” routes ACMI ) - - 15% € 2018 189m and 2021 and between 2018 capacity(ASK) - 2021 € 90m 2023 82 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Orly Qualitynetwork tailored for customers business from for Air France Orly Design Targetdestinations with Take fulladvantage of our Paris airport business • • • journey B B B toEurope etter customer experience etter accessibility etter catchment area quality quality schedule Strategy StartingApril 2020 with : closer to Paris to fitbusinesscustomers needs strong business motive profile : wealthyand dynamic (1/2): : recentlyrefurbished andfaster customer Paris Towards - Orly to Madrid New Frontiers seasonality of French business ofFrenchseasonality demand business LeisureEuropean destinationsto adjust to leisure destinations,consistently with Redeploy domestic businessroutes (bank holidays,weekends, …) Adjustmore andmore to Profile of leisure and business demand during the week Monday capacity from Domestic business to Friday seasonality seasonality of demand Week Transavia - end to European offer on 83 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Potentialof Structural to Orly Strenghten Strategy (2/2): Grow constraints Removalof Removalof Removalof changes Transavia commercial & network narrowbody Transavia between HaveUnlocked Future #1 Position#1 France Transavia France fleet cap seat cap and Air France and Transavia France its leadershipits Transavia Innovative connecting experience International routes up to nautical 3000 • • • France willgrow in connectivity SmartConnect H F ocus on Leisure / VFR destinationsLeisure/ ocus on igh aircraftigh utilization on own on product: enhance self product: enhance Transavia Orly to strengthen network - miles 84 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 *YTD Sep. Sep. *YTD 2019 Air France Yearly NPS evolution NPS Growth Customer Experience 2016 17 2017 19 2018 12 Improvement Drives 2019 25 * Target 2020 28 Mid ambition 40 - term 15 15 pts visible: Action plan with 1 3 driversof same importance: 3 2 1 • • • • • • +3 +7 +5 Disruption handling Operational performance Products &services on disruption handling on operational performance on products & services 2019 2019 NPS improved by st results 85 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 In service Business Leading features cabin Upgraded - Flight Experience 100% 100% highest 80% 100% of meals meals of 100% Michelin chefs of of by by long haul long haul fleet at standard 2020 in 2022 Consistentproductbusiness by , WillReach TopIndustry Level 2020 domestic including routes all on Business cabin Flying FrenchFlying gastronomy as of of as 2025 equipped 45 Largerbins overhead % of Medium Medium of Haul fleet preselection Hot meal Hot in in 2021 , 100% by 2020 100% Personalized Connectivity of of fleet connected services in in Streaming Streaming Medium on Haul Entertainment Long on Haul hours 1400 Wines of excellence of Wines Entertainment of Inflight of 86 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 IntroductionClass ofon French Business Domestic Network Revenue Growth Strongeston Segments Targeted Launch: Q1 2020 Inflight experience Ground experience network, domesticincluding Consistent business product • • • • • (champagne, (champagne, wine, deluxe snacks) Food and beveragesdedicated offer Blocked seatmiddle Dedicated front cabin Lounge access Sky Priority access on Air Franceall 87 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 fluidity airport Increased upgrade Lounges Fluid andSereneGround Experience December July boarding process flights 100% : CDG Zone boarding , Terminal, Hall E : JFK with dinner with dinner JFK : handled handled with zone 2018 L service boarding 2020 End 2019: May January : baggage: : Washington: with dinner : pass - Lyon to Biometrics end end experimented drop 2019 facial - off off with recognition recognition biometric biometric service (USA) acceleratecustomer service Bots Massivetool rebooking Los Angeles, Los flights), January Disruption handling and and : Geneva, San Orly digital vouchersdigital CDG 2F (Schengen 2F CDG Hall 3 Hall 2020 (Long (Long Haul Francisco, to ) 88 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 2019 very are resultsencouraging Strong Q3 resultsQ3Strong benchmark industry Punctuality NPS Driver Operational Performance IsAnother Key FlightStats Completion factor Completion (%) Q3 17 Q3 97.8 consistent for Q3 18 Q3 98.3 ranking Europe) (A14, Q3 19 Q3 99.4 months, progressing Arrival %) punctuality (A14 Q3 17 Q3 72.3 • Q3 18 Q3 73.3 in Q3 19 Q3 79.3 Next steps ahead stepsNext Comprehensiveprogram Ambition: become #1 on completion#1Ambition:on become factor Go on with with on Go • • • • • • • Data driven Third involvement parties Digitization and tools optimizationProcess Adjustmentsizing of crew « monitoring of strategyNew formaintenance scheduling tight and Aircraftspares partnership withpartnership Delta • aircraft health forcontinuous improvement » 89 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Focus on digitization and newtechnologies An innovativeecosystem to reinventour air travel experience digitization and processefficiency Digital Factory crew pilots and iPads20,000 customerjourney personalized experienceall along the touchpoints more than 20for a Customer360 Transform our core experience forgroundstaff, cabin ° toaccelerate internal view connectedto Buildnew opportunities Alexa…) home,experience (WhatsApp,Google medias social Voice Platformsnewandfeatures on from Biometrics solutions service and and disruption handling service expertiseto Bots complementing our the the for customers boarding acceleratecustomer tocustomer enhance and and to security remove staff process hassle Invest innew technologies copiloting… maintenance, ground AI our customersour exchanges in travelthe industry for Blockchain board improvementof LiFi to build to build predictivenewfor tools to testto for opportunities an for futurethe to reinventto the Internet operations, speed on speed 90 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 People:a renewed dynamicswith ouremployees • • processredesign Staff involvement in categories all with staff 12in than less agreements 26signed Renewed social dialogue months • • • support FoundationAF project Culture Mission staff2,000 e.g Staffinitiatives. CSR engagement . . Citizen Days: Employee & Values statement, involved • • • • discrimination LGBT areas priority recruitmentesp Apprentices employment Disabled staff equality Gender Promoting diversity non . from. • • Transformation program Talent management empowerment functionality and Improve Culture cross - 91 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Reaching Leading Air France KLM Chief Frédéric Financial Gagey Officer European Performance 92 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Stand Where ? Do We photo 93 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 In In Net Debt/EBITDA trailing months 12 France Air Investment Leverage € bn (3) (2) (1) 2012 5.4 LufthansaGroupend Air P re (1) - France - IFRS16 IFRS16 KLM successfullydeleveragedKLM post - KLM and restatement as per 2013 4.2 (1) Successfully Taken Down IAG end of Juneof of G 2019 2014 2017, 2017, Adjusted 4.0 September 2019 (IAG Source: pressrelease 31 October2019) rade Like Level (1) Net 2015 3.4 Debt/EBITDAR, with (1) 2016 2.9 (1) Adjusted debtAdjusted net Net= Debt + - crisis years 2017 1.3 2018 1.5 7 7 times 30 Sep 2019 30 Sep y early early 1.5 to o perating lease lease costs Net Debt/EBITDA trailing months 12 France Air 1.2 IAG x (2) - KLM vs peersvs KLM Lufthansa Group 1.4 x ( 3 ) Air France- KLM 1.5 x (2) Investment indicator grade 1.5 x 94 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 (3) (2) (1) Productivity Strong Atconstant currency, fuel price CostsUnit 2016 FTE reductionpartlyincludesdisposalof Productivitymeasured as 1000 Seat AvailableKilometers / Average FTE TwelveRolling Months 2019, from 1 October 2018 till30 September 2019 -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 2012 - 0.7% Cumulative Cumulative sincechangeindex 2012 reduction evolutionreduction Focus 2013 - 1.9% 2014 0.0% on U Servair - 2015 0.6% 2016 - 1.0% nit cost Reduction 2017 0.1% 2018 0.6% 2019 RTM - 0.8% (1) 85 90 95 100 105 FTE reduction and productivity improvementproductivityandFTE reduction Average FTE Average 100,000 120,000 20,000 40,000 60,000 80,000 and I 0 2012 Productivity 1000ASK/FTE ncreasing 2013 2014 2015 2016 (3) 2017 2018 2019 RTM (1) Productivity 2.0 2.5 3.0 3.5 4.0 (2) 95 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 (3) (2) (1) Operatingresultevolution of Peers Though Improved Operating Performance In In € Air France https:// Company sourcedconsensusas per 21 October2019 yearfor 2019 full as published P re bn 2012 - IFRS16 IFRS16 restatement as per 2017, 0 (1) www.airfranceklm.com/en/finance/financial - KLM Group 2013 0.4 (1) operating Not Yetto Up LevelThe 2014 margin is adjustedforstrike impact 0.2 Operating result (1) 2015 1.1 - (1) information/consensus adjustedforthe interestportion(1/3) theof operatingleases 2016 1.4 (1) € 335m in 2018 2017 1.9 on 2018 1.3 2019 con. 2019 1.15 (2) Operatingmarginevolution Revenues in in Revenues 10 20 30 40 Source: Source: Companies published results margin Operating - -2% € 0.1% 0% bn 0.7% (1) 1.9% 2% 4% 6.2% 6% (3) versuspeers 2012 7.9% 8% 10% 2018 12% 14% 14.3% 16% 18% 96 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Past (3) (2) (1) Rolling P KLM operatingpositivemargin includedeffect of pensionadjustment forthe discountrate, dueto change IFRS in regulations re Operating margin % margin Operating OperatingKLM FrancemarginAir evolution andof 12.0% - -4.0% IFRS16 IFRS16 restatement as per 2017, Operating resultadjusted forthe interestportion(1/3) theof operating 0.0% 4.0% 8.0% Twelve Months 2019, from 1 October 2018 till30 September 2019 AchievementsSupporting Catch Thesis Up - - 2012 2.4% Including: Including: tax,and airport social charges in France; in Paris bases 2 0.5% Exogenousfactors explaining margin gap - 2.2% 2013 0.6% Air France Air France gggg - 2014 0.8% 1.6% KLM (2) 5.1% 2015 4.0% leases 8.4% th KLM KLM IFRS pensionadjusted isafter benefitdisappeared 2014 3.9% 2016 IFRS pension adjusted 10.4% 2017 5.5% (1) 2018 1.7% 9.8% RTM 2019 RTM 1.2% 7.4% (3) 97 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 (3) (2) (1) Divergence Gap RTM 2019 S RTM 2019 EquivalentFrance costtoday in Air KLM and salary Difference Evolution ofthe Rolling KLM operatingpositivemargin includedeffect of pensionadjustment forthe discountrate, dueto change IFRS in regulations KLM 2012 5 pt Salaries & relatedcost adjusted for positive Twelve Months 2019, from 1 October 2018 till30 September AnalysisPointing between Air France and KLM alaries & alaries related costs 2013 5 pt 29.5% AF 2014 salary costsalary 3pt in Revenue 2015 4pt Capital Utilization effectof pensionadjustment forthe discountrate, due to changein IFRS regulationsthisbenefitafter disappeared 2014 / Revenues gapbetween of of 2016 Salaries 1pt Salaries Salaries (1) 2019 & related Revenuescosts / 2017 1 to pt Air France and KLM FranceAir and 28.3% KL 2018 1pt RTM 2019 RTM 1pt (3) (2) th isafter benefitdisappeared 2014 EBITDA Margin Margin % EBITDA compared operatingto margin EBITDA Air of margin Main Average RTM2019 Average day per Hours 2012 8.5% 8.3% driver:Fleet 10.1% 10.6% 2013 Medium-haul hub Medium-haul Air France 9.1 (2) 2014 9.2% 9.2% 9.4 capital utilization Air France Air France 13.4% 12.8% 2015 KLM is nearerto KLM 16.4% 2016 14.2% KLM IFRS pension adjusted pension IFRS KLM 17.0% 19.8% 2017 14.0 K LM K Long-haul 13.1% 19.2% 2018 15.4 RTM 2019 RTM (2) 12.5% 17.2% (1) 98 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Full Full year 2018 Operating ProfitabilityLower Similar Limited gapbetween 0 0 margins per business unitbusinessper margins Results Maintenance Transavia Air France Air & KLM in E&M than KLM than KLM in and Significantgap between France Air & KLM 0 0 Leisure Medium Network Activity Long - , Air France haul - haul Short haul exposurehaul atShort France Air only 0 Revenueshare Short - haul 99 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 strategic framework New financial Build Value • • • Shareholderreturns KPI’sFinancial roadmapFinancial - Focused Model 100 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Mid Air France - • • • • assumptions: 2. Modelling consensus sourced 1. Company Cycle Operating Margin Reaching Air France 2020 price index Consumer Eurozone as annum, Inflation per per assumption of 1.5% Objectives effects yield Industry developmentand FX Price, Fuel Currency Excluding Margin: Result Consensus 2019 Operating € - 1,150m KLM operatingKLM profit evolution( Operating - KLM per airline are net amounts (including offsets (including base amounts net airline against per are Group Available Seat Kilometer (ASK) growth assumption assumption mid growth (ASK) Available Group Seat Kilometer 4% as per 21 October 2019 October 21 as per + € 900m for full year 2019 as published on for full 2019 year € m) + € 250m - case price inflation price inflation casegrowth). capacity and - point of guidance range +2 to +3% per annum 2020 fromannum per to +3% +2 range ofpoint guidance - 2024. https://www.airfranceklm.com/en/finance/financial Source: Oxford Economics, updated 2019 August updated Economics, Oxford Source: + € 100m 7 - 8 % Additional Additional Group other other businesses Synergies and + € 100m - 2024 - information/consensus OperatingMargin: Operating Result 2024 Target Mid € 2,500m Target - Cycle 7 - 8% 101 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Optimize our Air France Frenchdomestic restructuring Transversal (Organization, Externalspend, IT) Operationstransformation Simplification focus + € Turn Operating ퟒ ퟎퟎ m - Around Model – Priorities Operating Operating Fleet renewal A350/787 phase-in A220phase-in A380replacement + € result result + ퟑ ퟎퟎ m € 900M Grow Profitable Ancillary), Brand& productportfolio Revenue enhancement(including CRD, improvement) CDGhub consolidation (incl. cabinLOPA Revenuemix optimization + € Passenger ퟐ ퟎퟎ m Revenue 102 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air France % completion Timeline 100% 20% 40% 60% 80% 0% 2020 Simplificationfocus Turn - A round Revenue mixoptimization 2022 — Timeline Fleetrenewal 2024 100% + € 900m at 7 objective mid Operating margin profitable margin Deliver Medium - 7.5% to sufficient - term ensure growth - cycle objectives operating 103 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Optimize our KLM Strengthening of the Success operational excellence Focus Marginimprovement initiatives External spendmanagement Operational excellence on coston and + Operating € ퟔퟎ m Model Operating Operating Fleet renewal Long Haul optimization Long Haul fuel efficiency B737 replacement E195phase in + € result result + ퟏퟑퟎ m Model € 250M Grow Profitable – Priorities Priorities Reachand Distribution, Ancillary) Revenue enhancement(including Customer Revenue management Revenuemix optimization PassengerRevenue + € ퟔퟎ m 104 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Timeline KLM % completion Timeline 100 20 40 60 80 0 2020 Focuson costand operational excellence Strengthening of the 2022 Revenue mix optimization Success Success Model Fleet renewal 2024 100% + € - 250m at 9 objective mid Operating margin on including successful model, growFurther KLM's Objective medium term cost - 10 % continuous focus - cycle 105 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Improve OwnershipRatio Objective CAPEX 2020 Capex In In € bn Ground & innovation & IT Ground Modifications Aircraft growth third-party incl. Parts Spare Maintenance Capitalized Fleet Net 2019 3.3 investment 2020 to - 2024 Rejuvenate Fleet & - Average 2024 2020-24 ~ 4.0 fx positive result on Incl. fleet order hedge hedge of Underpinning € 400m - book book Capex 2020 • • ratio age & ownership I P mproved rofitabilityuplift fleet - 24: Air FranceAir Fleet 10 11 12 Improvement (1) Air France 9 In In 0.0 2.0 4.0 6.0 8.0 € bn rejuvenation - KLM KLM group fleet projection average of years ageof - KLM Group portionfleetof underversusoperational lease the total fleet 2019 2019 ownershipratio Lease debt Lease 2022 2022 Leased aircraft ratio aircraft Leased and lease lease debt 2024 Long 2024 - term objective reduction Leased ratio Leased 0% 33% 66% 106 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 - - (2) (1) Leverage ratio to remain Financial structure robustness Including foreseenIncludingnear Adjusted operatingfreecashflow = Operating freecash flowwithdeduction repaymentof leaseofdebt Sale ofAmadeus and Cargo claim(negative) (2020) Increasing Increasing CAPEXinvestment requirements 2020 0 • • • • Transformation New progressive AdjustedOperating Free Cash Flow turnspositive as foreseen Positive OperatingFree Cash Flow foreseen throughout2020 positive medium Adjusted Adjusted Operating Free Cash Flow Cash Free Operating Adjusted generation 2020 cash Servair - term incidentals OperatingFreeCash profitabilitymaterializesuplift (2) stakes (positive)(2020) generation by execution of strategic plans plans fleetand phase - term 2022 mid (1) - cycle - out Operating Free Cash Flow Cash Free Operating Flow - ~1.5x 24 A380 2024 - 24 lease lease debt and increased profitability Net debt evolution positively impacted by reduced portion of 2020 Net Progressive improvement foreseen • • 0.0 0.5 1.0 1.5 Lease Progressive profitabilitybyupliftexecution of strategicplans - Debt/EBITDAprojection 2024 Investment grade like 1.5x grade Investment debt Net debt / EBITDA 2020 repayments 2022 Net debt ~ 1.5x in Debt Debt to Equity ratio 2024 EBITDA 4,000 6,000 8,000 107 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 (1) In Available Seat Kilometers Passenger Network& Transavia Capacity Group KLM Actualgrowth 2019 evolution2020 will Capacity Evolution dependsloton growth opportunitiesthein Netherlands +2 to+2 p.a. +3% 2020 - 24 2022 2024 2019 Long 2019 Long 2019 100 - - 2019 2022 2022 100 - - haul capacity evolutioncapacity haul evolutioncapacity haul Fleetsize Fleet size Fleet 4pt 6pt impact Maintenance impact Maintenance 1pt 4pt (1) Aircraft utilization Aircraft utilization Aircraft 2pt 1pt 2022 Block-hour 2022 2022 Block-hour 2022 111 107 Gauge - 6pt Gauge 3pt 2022 Capacity 2022 2022 Capacity 2022 105 110 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 A to Deliver Unit Cost Reduction Strict Cost Control: Turn Net costRTM 2019 Net cost break 100% (2) (1) -20% 20% 40% 60% 80% 0% verage Inflation as perInflation Eurozone TwelveRolling Months 2019, from 1 October 2018 till30 September 2019 Salary cost Salary Depreciation cost Operating revenues Other (1) - down of Consumer priceindex Fuel cost Maintenance cost Other cost Commercial - 1% per 2020 - 2024. Source projects Transformation Wage inflation Price inflationPrice Fuel efficiencyFuel Productivity : OxfordEconomics,updated August Annum - Around Plans 2019 in pressure inflationary exceed targeted to Cost control Despiteupward an inflationary trend Unit costat constant fuel and currency costUnit objective 2020 Inflation 0% 1% 2% 3% 2019 2016 (2) 2017 2020 Average France 2018 - 1% 1% p.a. 2022 2019 The Netherlands - 24 2020 2024 2021 109 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 as turn around planmaterializes Shareholders Dividend Dividend policy - Dividendenvisaged Ordinary dividend payoutdividend policy: Ordinary Progressivestep Trigger,as: assoon • • 2020 Minimum of 25% underlying underlying Minimum 25% of Operating result> 2021 - up dividend envisageddividendup 2022 € + 1.9 bn 2023 after + - tax 2024 profit + beyond 2024 110 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 F Building a Value inancial Strategicinancial Framework Execution strategic Financial roadmap Capexinvestment 2020 • • • • • • (1) Develop other businesses Transavia KLM Air France Transformation plans A380 New generation fleet and phase Rolling TwelveRolling Months 2019, from 1 October 2018 till30 September 2019 - Focused plans 2020 - 2024 Model - 2024 - out Operating margin % margin Operating medium Operatingmarginatto 7 8 Profitability Reach top 2019 RTM 2019 4% - term mid (1) - cycle 0.0 0.5 1.0 1.5 Net Debt/EBITDA projection ~1.5x 2020 Financial Financial Investment grade like 1.5x grade Investment - 7 to 8% 2024 2024 2020 % Performance 0 2022 positive medium AdjustedOperating FreeCashFlow Cash generation 2020 Operating Free Flow Cash Operating Free Flow Cash Free Operating Adjusted - term mid 2024 2022 - cycle 2024 111 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Thank You 112 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Air FranceAir - KLM InvestorKLM Day Q&A 113 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Appendix photo 114 AIR FRANCE -KLM INVESTOR DAY – NOVEMBER 2019 Guidance Air France Objectives medium Guidance elements (period 2020 till2020 2024) elements (period Guidance - KLM Group - term(2024) Adjusted Operatingpositive FreeCash Flow Operating margin mid Netdebt/EBITDA Capex average~ Unit costaverage Capacity growth+2 Operating Operating Objectives margin mid margin mid € 4.0bn p.a. 4.0bn ~ - 1% p.a. 1% 1.5x to - - - cycleat +3% cycleat cycleat p.a . 7 9 7 and - - - 8 10 7.5% % %