2014 Social Responsibility & Sustainability Report Avianca Holdings S.A. Avianca Holdings Social Responsibility & Sustainability Committee Director Fabio Villegas Ramírez, Executive President and Chief Executive Officer (CEO) Coordinators Gilma Úsuga, Communications & Corporate Affairs Director for Colombia and Europe Claudia Arenas, International Communications and Corporate Affairs Director Permanent Participants Eduardo Asmar, Corporate Planning Vice-President Elisa Murgas, General Counsel Rosa Stella Patiño, Company and Corporate Affairs Legal Manager Consuelo González, Industrial Safety, Occupational Health and Environmental Care Manager María Andrea Ramírez, Business Analyst Manager of the CEO 2014 Social Responsibility & Sustainability Report Editorial Coordination: Communications & Corporate Affairs Directorate Asessment and Production: CREO Constructores de Responsabilidad y Ética Organizacional Scope and Coverage: This report corresponds to the management of Avianca Holdings S.A. during the 2014 fiscal period. Table of Contents 1. Avianca Holdings S.A. Profile ......................................................................................... 3 2. Letter from the CEO ...................................................................................................... 9 3. About this Report ..........................................................................................................10 4. Avianca Holdings’ Commitment to its Shareholders.....................................................12 5. Avianca Holdings’ Commitment to Generating Value ...................................................18 6. Avianca Holdings’ Commitment to Its Strategic Partners .............................................32 7. Avianca Holdings’ Commitment to the Environment ................................................... 36 8. Avianca Holdings’ Commitment to Its Employees ....................................................... 52 9. Avianca Holdings’ Commitment to Social Development .............................................. 76 10. GRI Key Indicators G4 ................................................................................................. 87 1. Avianca Holdings S.A. Profile Avianca Holdings S.A. (hereinafter “the Holding Company”) is a company incorporated in Panama, comprised of, among other companies, several air transportation companies that operate domestic and international flights: Aerovías del Continente Americano S.A. Avianca and Tampa Cargo S.A.S. incorporated in Colombia, Aerolíneas Galápagos S.A AeroGal incorporated in Ecuador, and the Grupo TACA companies: TACA International Airlines S.A. incorporated in El Salvador, Líneas Aéreas Costarricenses S.A. (LACSA) incorporated in Costa Rica, TransAmerican Airlines S.A. (formerly TACA Perú) incorporated in Peru, Servicios Aéreos Nacionales S.A. (SANSA) incorporated in Costa Rica, Aerotaxis La Costeña S.A. incorporated in Nicaragua, Isleña de Inversiones C.A. de C.V. (ISLEÑA) incorporated in Honduras, and Aviateca S.A. incorporated in Guatemala. The Holding Company’s main investments include passenger, cargo and courier air transportation companies and other companies that carry out activities related to air transportation services, such as tourist services, engineering services, maintenance services, training services, and specialized services for air transportation company operations. In this report, the word “Holding Company” refers solely to Avianca Holdings S.A., as the controlling, investing company. The word “Company” refers to Avianca Holdings S.A. and its subsidiaries, especially for the description of company practices and programs that are used by the controlling, investing company as well as by the companies that operate the Holding Company’s lines of business. In the event that the report refers to actions carried out by any one (1) or more of the subsidiaries, the company that carried out such actions will be specifically mentioned by name. And when the report refers to “the subsidiaries”, “the Avianca Holdings’ companies”, “the operating companies”, “the affiliates”, or “the Holding Company’s subsidiaries”, it will be understood that the actions were carried out by each and every one of them or have been implemented for them. The passenger airlines and the cargo airlines under the Holding Company met the company goals in 2014, thanks to: - A 169-aircraft operating fleet for passenger transportation and 5 aircraft exclusively for cargo transportation - 3 passenger hubs located in Bogotá, San Salvador, and Lima enabling fast connections among domestic flights and international flights, and cargo operating centers in Miami and in Quito - Direct operation to 106 cities in the Americas and in Europe, plus more than 1,300 destinations worldwide, connected through codeshare and interline alliances with Star Alliance member airlines - A work force comprising more than 20,000 direct hire and indirectly contracted employees, duly trained to perform the different jobs related to their commercial activities and to airline services in general in a safe, effective manner - The LifeMiles reward program, with more than 5.8 million members who have many opportunities to accrue and redeem their miles in flights, hotels, products and services around the world - More than 26 million passengers transported in 2014. Strategic Focus The Holding Company is the Strategic North that guides the subsidiaries’ activities and, as the controlling company, governs their administrative management. Mission We fly and serve with passion to earn your loyalty Vision To be the leading Latin American Airline preferred around the world. - The best place to work - The best option for customers - Exceptional value for shareholders Values - Safety - Honesty - Passion and Warmth - One team - Excellence Corporate Goals 2015 The 2010-2015 corporate goals set by the Holding Company are: - Profitability: To improve EBIT1 and diversify the business units to enhance profitability. - Strategic Positioning: To strengthen and optimize the hubs and route networks throughout the domestic markets in Colombia, Central America, Peru, and Ecuador. To increase operating productivity by simplifying and integrating operations under legal and regulatory requirements. - Customers: To consolidate customer service, offering differentiation through our service based on Latin American Excellence and acting as one sole company for our customers. - Employees: To make Avianca the best place to work. To do so, the Company seeks to adopt the Company values as our work pillars. The final goal is to consolidate an in-house culture focused on customer needs. 1 EBIT: Earnings before Interests and Taxes Awards and Acknowledgements Awards The frequent flyer program of the Avianca Holdings S.A. member airlines received the LifeMiles: ”Best top award for the functionality of the Freddie Awards Mile Redemption LifeMiles mile redemption process, as well as in the Americas” for the many options that the program offers for redeeming miles for trips, hotels, products and services around the world. Passengers acknowledged the excellence and Best Airline and professionalism of Avianca employees with Skytrax Best Service Staff the Skytrax Awards for Central America and the Caribbean. The Leading This award acknowledges companies in the e- Airline in Tourism e-Commerce Award commerce sector and their work in e-commerce in empowering the digital economy. Colombia Latin Music Marketing The Best Tour Fonseca Concert at 30,000 Feet Awards Sponsorship Highlights Avianca’s baggage processing in Avianca in the Star Alliance the Bogotá Hub with the Star Alliance Priority Bogotá Hub Baggage Delivery Regional Award Avianca received this award for having one of Avianca in the the best, fastest, most secure online “Best e- Premios Colombia en transaction websites. The Avianca website commerce Línea was said to have some of the best content, Initiative” interaction, design and functionality in the category country. This award was given to the airline for showing its support through tangible Teletón El Salvador Avianca Corporate Social Responsibility (CSR) activities. Cámara Colombiana de Informática y Telecomunicaciones Best e-commerce initiative in Colombia for (CCIT) (Colombian IT and Avianca having one of the best, fastest, most secure Telecommunications online transaction websites. Chamber) Premios Colombia en Línea Member of the Avianca Holdings S.A. Board of Directors, Mr. Roberto Kriete received the Colombian Ministry of 2014 National Tourism Award for his Avianca Holdings Tourism. 2014 National invaluable contribution to aviation in El S.A. Tourism Award. Salvador and to the development of flight connectivity, hence driving the tourism industry in the country and in the region. Passengers rated Avianca employee’s Premiación customer service skills at 10 airports. The Fundamentos del evaluation criteria were based on the Avianca Servicio customer service standards that comprise Colombia. Modelo CEL -Constructores de Excelencia Latina (Latin Excellence Builder Model). Acknowledgements Avianca is continuously improving its Aviateca received IOSA Avianca processes, reaching higher quality and re-certification operational safety standards. Acknowledgement for Acknowledgement to the design and precise best A320 aircraft Avianca execution of technical processes in the technical reliability in Avianca fleet. the Americas The 100 Colombian Avianca Holdings companies with the best Acknowledgment to Avianca’s highly trained held sixth