COMBINED...targeting 100% of the fleet in 2021 21. ... Medium-haul domestic network impacted by the...

COMBINED

SHAREHOLDERS’

MEETING

MAY 28, 2019

OPENING

C O M B I N E D S H AR E H O L D E R S ’ M E E T I N G – M A Y 2 8 , 2 0 1 9

RESULTS OF THE PRE-SHAREHOLDERS’ MEETING SURVEY OF INDIVIDUAL SHAREHOLDERS

3

39%

27%

15%

Be informed of the Group’s strategic direction

Learn more about the market outlook

and the growth relays

Be informed of the risks and their management

Modernization of the fleet and products

Alliances and partnerships

in the Passenger business

Growth of Transavia

26%

15%

12%

WHAT DO YOU EXPECT OF THE 2019 SHAREHOLDERS’ MEETING?

TOP 3 OPERATIONAL THEMES74% say they are confident

of the Group’s future

Electronic survey

of Air France-KLM individual

shareholders realized

in May 2019

2,100Individual shareholders

received the pre-Shareholders’

Meeting questionnaire

STRATEGY


A POWERFUL GROUP LOOKING FORWARD

5

MORE THAN 80,000 DEDICATED

AND TALENTED EMPLOYEES

THREE ICONIC

AND POWERFUL BRANDS


TWO MAJOR EUROPEAN HUBS

6


Paris: 1st travel market in the world

7

AIR FRANCE-KLM GROUP HAS UNIQUE ASSETS

Two strong full service brands & one promising low cost brand

Joint network to conquer European and international markets

Amsterdam – Schiphol: best perforfming hub in the world

€26 billion

Strong joint sales and revenue production

101 million

PAX

Customer loyalty


EUROPEAN PILLAR OF A MAJOR INTERNATIONAL ALLIANCE

8

Air France-KLM Group is the European leader of an unprecedented international air transportation alliance


SIMPLIFY THE GROUP MANAGEMENT GOVERNANCE STRUCTURE

STABILISATION OF SOCIAL RELATIONS

AT AIR FRANCE

DEFINE STRATEGIC ORIENTATIONS

FOR THE GROUP

9

CLEAR PRIORITIES AS OF SEPTEMBER 2018


Support

the action plans

in the Group’s

companies

Internal

collaboration

the key to the

Group’s success

Encourage

employee

engagement

across

all the Group’s

companies

Improve strategic

cooperation within

the Group

and generate

more synergies

Improve

customer

satisfaction

in all the Group’s

companies

10

A NEW MANAGERIAL GOVERNANCE

CEO Committee

Led by Benjamin Smith – CEO of Air France-KLM

Anne Rigail (CEO Air France), Pieter Elbers (CEO KLM),

Frédéric Gagey (CFO Air France-KLM)

C O M B I N E D S H AR E H O L D E R S ’ M E E T I N G – M A Y 2 8 , 2 0 1 9 11

ONE AMBITION FOR THE GROUP

Become

the leading

European

airline Group


2004 2018

1 1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

10 10

-3

FEROCIOUS COMPETITION AND A GROUP THAT NEEDS TO TAKE ITS PLACE

IN 2004 WE WERE THE 1ST EUROPEAN GROUP, BEFORE LUFTHANSA AND IAG,

IN 2018 WE ARE BEHIND THESE COMPETITORS

12

Source: Annual Reports, Statista, CAPA, Flight Global


Respect

Confidentiality

Trust

Transparency

13

STRATEGIC DIRECTIONS FOR THE AIR FRANCE-KLM GROUP

> A powerful brand

> Numerous challenges ahead: simplification, asset optimization, domestic market, tax and fees environment

> Accelerate the transformation in business model

> A successful transformation within the Group

> A strong corporate culture

> Keep on developing an effective business model

Become

the leading

European

airline Group

> A successful and sustainable Low Cost model

> Brand synergies to explore for future growth


EMBRACING OUR SOCIAL AND ENVIRONMENTAL RESPONSIBILTY

14

The climate emergency: one of our priorities

A long-term commitment to reducing our environmental footprint

An international road map for the industry, with ambitious long-term targets

Remain a reference for the industry

> Leading the DJSI Work and Europe ranking for the 14th year


15 YEARS OF BUILDING TOGETHER

15

WITH YOU WE WILL CONTINUE TO GROW

FINANCIAL

RESULTS 2018


RECORD YEAR FOR AIR FRANCE-KLM TRAFFIC

17

More than 100 million passengers, +3%

European leader for long-haul

318 destinations

and 118 countries served


25.87 26.52

2017 2018

RESILIENT OPERATING PERFORMANCE DESPITE THE HEADWINDS

18

€bn

REVENUES OPERATING RESULT

déc

2017

1.92

1.33

2017 2018

163

409

2017 2018

NET RESULT

€bn €m


2017 Unit revenue Unit cost Fuel bill excludingcurrency

Currency effect 2018

OPERATING RESULT AT €1.3 BILLION DESPITE THE FUEL INCREASE

19

1,332

-133+ 353

1,923

-146

-665

In €m

+1.1%

Unit revenue

+0.6%

Unit cost


4.4

2018

1.5x

2018

6.36 6.16

2017 2018

STABLE FINANCIAL STRUCTURE

20

déc

2017

€bn

NET DEBT(1) DEBT RATIO(1)

€bn

LIQUIDITY SITUATION

(1) Following the adoption of IFRS 16 Leases, the 2017 data have been restated.


A MODERN FLEET

548 aircraft in total

Fleet renewal and modernization policy, for greater comfort and energy efficiency

> Average age: 11 years

> 9 new generation aircraft expected in the fleet during 2019

Inflight connectivity, targeting 100% of the fleet in 2021

21


PASSENGER NETWORK: TRAFFIC AND UNIT REVENUE GROWTH

Revenues up by 1.3%

Traffic +3%, load factor: 87%

Solid performance for the long-haul and medium-haul hub network

Medium-haul domestic network impacted by the high-speed rail competitive pressures

Worldwide presence of our partners:

> Delta Air Lines, China Eastern, Virgin Atlantic, China Southern, GOL, Kenya Airways, Air Côte d’Ivoire, etc.

22

Employees:

54,700

Aircraft:

474

85.6 million Number of passenger in 2018

€20.65 bn

Revenues in 2018


CARGO NETWORK: REVENUE INCREASE

23

Revenues up by +4%, load factor stable

A belly-dominant business model

> Tons carried: 81% in bellies and 19% in the 6 full-freighters

Paris-CDG and Amsterdam-Schiphol amongst the four largest European air freight hubs Employees:

3,900

Full-freighter aircraft:

6

1.14 million Tons of cargo in 2018

€2.29 bn

Revenues in 2018


TRANSAVIA: STRONG GROWTH AND A RECORD MARGIN

Revenues up by 12% and operating margin at 8.6%

Load factor: 92%

6 different bases offering a network of more than 225 routes: > Amsterdam, Rotterdam, Eindhoven, Paris-Orly,

Nantes and Lyon

Cost structure well aligned with the low-cost business model:> Maximizing use of aircraft

> Simplicity of the product and fares

> Outsourcing non-core activities

24

Aircraft:

74

15.8 million Number of passenger in 2018

€1.61 bn

Revenues in 2018

Employees:

3,000


MAINTENANCE: STRONG INCREASE IN THE ORDER BOOK

25

Revenues of €4.3 billion, €1.9 billion for third-party customers (+6.6%)

Order book increase of $600 million in 2018

New large contracts with third-party customers on components and new-generation engines

Contracts with airlines from all over the world:

> Air Asia, China Eastern, LATAM, Vietnam Airlines, etc.

Aircraft maintained:

2,000

200Airline customers in 2018

$11.5 bn

Order book at March 31, 2019

Employees:

13,500


HIGHLIGHTS OF THE FIRST QUARTER 2019

26

Growth in passenger numbers

> +3% to 22.7 million

First quarter results reflecting a challenging environment as anticipated

> Unit revenue pressure, declining by -1.9% due to Easter shift and a supply-demand imbalance in the industry

> Fuel expense increasing by 13%

> Operating result down by -€185 million

Net debt reduction of €400 million


SHAREHOLDERS AT MARCH 31, 2019

27

50.1%

Dutch State

Delta Air Lines, Inc.

Others

French State

Treasury stock

China Eastern Airlines

Employees

14.3%

14.0%

8.8%

8.8%

3.9%0.3%

European: 69%

Others: 31%

Breakdown by nationality:


AIR FRANCE-KLM SHARE PRICE ON 27 MAY 2019

2018 2019

BASE 100 AT MAY 15, 2018

Air France-KLM

CAC40

Lufthansa group

+9%

-31%

-4%

2018 2019

60

80

100

120

140

160

180

IAG -32%

28


PROACTIVE ENGAGEMENT WITH INDIVIDUAL SHAREHOLDERS

29

Shareholders’ Newsletters available on the www.airfranceklm.com website

Individual Shareholders’ Club

> New online platform

Comité consultatif des actionnaires individuels

> Renewal of the Committee: applications before June 15, [email protected]

Shareholders’ meetings in the regions

Award for the best digital communication

in the SBF120


GOVERNANCE


TRANSITIONAL GOVERNANCE:FIRST PHASE OF THE SEPARATION OF FUNCTIONS

31

Chairman of the Board of DirectorsAnne-Marie Couderc

Management CommitteeFrédéric Gagey, CEO of Air France-KLM

Franck Terner, CEO of Air France

Pieter Elbers, President and CEO of KLM

Search for a new Chief Executive Officer of the Group, alongside the Appointments and Governance Committee

Coordination of the Board and representation to the different stakeholders

Steering and coordination of the activities of the Group and the airlines

Missions Missions


CONFIRMATION OF THE SEPARATION OF FUNCTIONS

Mission entrusted to the Appointments and Governance Committee:recruit a Chief Executive Officer for the Air France-KLM Group, specialized in the airline industry

Chairman of the Board of Directors General Management

Steer and organize the work of the Board

Represent the Group with the public authorities and major customers

Define and implement the strategic direction for the Group and its airlines

Aims Aims


APPOINTMENT OF BENJAMIN SMITH ASCHIEF EXECUTIVE OFFICER OF AIR FRANCE-KLM

A recognized specialist in airline industry management at international level

Renewal of the employee dialogue at Air France

New managerial dynamic for the Air France-KLM Group

Strategic direction for the Air France-KLM Group, defined and shared with the Board of Directors

First results


NEW DYNAMIC INSIDE AIR FRANCE-KLM

MANAGEMENT DYNAMIC: CHOICE OF AIRLINE INDUSTRY PROFESSIONALS

Anne Rigail

appointed Chief Executive Officer of Air France

Pieter Elbersconfirmed as President

and Chief Executive Officer of KLM

DYNAMIC WITHIN THE BOARDS

Benjamin Smith

a member of the Boards of Air France-KLM, Air France and KLM


STRENGTHEN COLLABORATION WITHIN THE GROUP

CEO Committee

chaired by Benjamin Smith – Chief Executive Officer of Air France-KLM

Decide on the strategic direction of the Group’s operational divisions and airlines

Responsible for their performance

Leverage the Group’s existing strengths

Definition of the principles of managerial governance

Anne RigailChief Executive Officer

of Air France and

Deputy CEO of Air France-KLM

Frédéric GageyChief Financial Officer

of Air France-KLM

Pieter ElbersPresident and Chief Executive

Officer of KLM and Deputy CEO

of Air France-KLM

Missions


EVENTS IN 2019

Continue the simplification of the Group’s governance to support the strategic directions more effectively

Aims

The Dutch State acquires a 14% shareholding in Air France-KLM

The French and Dutch States are currently in consultation within a Working Group

announced on March 1, 2019


BALANCES AND DIVERSITY WITHIN THE BOARDON DECEMBER 31, 2018

37

41.2% women Board

directors**

6nationalities*

11

French

5

Dutch

1 US

1 Chinese

1 British-Canadian

Board competencies

Governance 17/19

General management 13/19

International 10/19

Public affairs 9/19

Transportation 9/19

Finance 8/19

Air transportation 5/19

HR 5/19

* Counting the dual nationalities

** Excluding the employee Board directors

19 members


COMPOSITION OF THE BOARD ON MAY 28, 2019

38

4 representatives

of the employees

and employee shareholders

Isabelle

BOUILLOT

Anne-Marie

COUDERCChairman

of the Board of Directors

Isabelle

PARIZE

Anne-Marie

IDRAC

Karim

BELABBASrepresenting the employees

Mathi

BOUTSrepresenting the employees

Paul

FARGESrepresenting the employee

shareholders

François

ROBARDETrepresenting the employee

shareholders

Leni

BOEREN

Alexander R.

WYNAENDTS

Jean-Dominique

COMOLLIas proposed

by the French State

Benjamin

SMITHChief ExecutiveOfficer

of Air France-KLM

DELTA AIR LINES, INC.

Represented by

George

MATTSONBoard director

Hans N. J.

SMITSFormer President

of the KLM Supervisory

Board

Bing

TANG As proposed

by China Eastern

Patrick

VIEUAs proposed

by the French State

Jaap

DE HOOP

SCHEFFERas proposed

by the Dutch State

Maryse

AULAGNON

French State

Dutch State

Delta Air Lines

China Eastern

7 non-independent

directors

7 independent

directors

KLM


AN INFORMED, COMMITTED AND DECISION-MAKING BOARD

19 meetings 91% attendance

Strategy seminar over 2 days

A very high level of mobilization A high attendance rate

Directly involved in defining and monitoring the Group’s strategy

An effective Board

39


PREPARATION OF THE BOARD’S WORK BY THE COMMITTEES (1/2)

AUDIT COMMITTEE

Maryse

AULAGNONChair

5 meetings in 2018

96% attendance

SUSTAINABLE DEVELOPMENT AND COMPLIANCE COMMITTEE

1stmeeting in 2019

Review of the financial statements and the budget

Monitoring of risk management and internal control

Review of the sustainable development and compliance policies of the Group

40

Anne-Marie

IDRACChair

Main missions Main missions


Proposals to the Board of Directors on the appointment and succession planfor the company officers

PREPARATION OF THE BOARD’S WORK BY THE COMMITTEES (2/2)

APPOINTMENTS AND

GOVERNANCE COMMITTEE

12 meetings in 2018

94% attendance

REMUNERATION COMMITTEE

6 meetings in 2018

94% attendance

Proposals to the Board of Directors on the amount and evaluation of the company officers’ remuneration

41

Jaap

DE HOOP SCHEFFER Chair

Anne-Marie

COUDERCChair

Main missions Main missions


APPOINTMENTS AND RE-APPOINTMENTS OF BOARD DIRECTORS

42

Board directors whose appointment or re-appointment is not submitted to the vote by the Shareholders’ Meeting


His contribution to the Board His key competencies

RE-APPOINTMENT OF MR. MATHI BOUTS

BOARD DIRECTOR REPRESENTING THE EMPLOYEES

43

Appointed by the European Works Council

Member of the Sustainable Development and Compliance Committee

Main activity: Senior Purser on KLM long-haul flights

His Dutch culture openness

His experience

as a KLM employee

Airline

Governance

Employee relations

Customer-oriented culture



RE-APPOINTMENT OF MR. KARIM BELABBAS

BOARD DIRECTOR REPRESENTING THE EMPLOYEES

44

Appointed by the Comité de Groupe Français

Member of the Sustainable Development and Compliance Committee

Main activity: Support Technician Weight and Balance, CDG Hub Ground Operations

His experience

as an Air France employee

His commitment to the Board

Airline

Governance

Employee relations


APPOINTMENTS AND RE-APPOINTMENTS OF BOARD DIRECTORS

45

Board directors whose appointment or re-appointment is submitted to the vote by the Shareholders’ Meeting


RATIFICATION OF THE COOPTATION AND RE-APPOINTMENT OF BENJAMIN SMITH (10TH AND 11TH RESOLUTIONS)

BOARD DIRECTOR

AND CHIEF EXECUTIVE OFFICER OF AIR FRANCE-KLM

46

Main activity: Chief Executive Officer of Air France-KLM,

Board director of Air France and member of the KLM Supervisory Board

As the Group’s Chief Executive Officer, he informs the Board

of the strategic priorities and presents the decisions to be taken



APPOINTMENT OF MS. ASTRID PANOSYAN (6TH RESOLUTION)

BOARD DIRECTOR

47

Elected by the Shareholders’ Meeting as proposed by the French State

replacing Patrick VIEU

Main activity: Managing Director of the Central Functions

of the Unibail-Rodamco-Westfield Group*, in charge of Human Resources, Organization,

Information Systems, Legal Affairs, Risks & Compliance

Her experience of organizational

transformation

At the service of long-term value

creation

Governance

General management

International

HR

* Listed company



RE-APPOINTMENT OF MR. JEAN-DOMINIQUE COMOLLI (7TH RESOLUTION)

BOARD DIRECTOR

48

Elected by the Shareholders’ Meeting as proposed by the French State

Member of the Remuneration Committee and of the Appointments

and Governance Committee

Main activity: Honorary Civil Administrator, former Commissioner for State Holdings

His competencies

in the finance field

His experience within the Board

His in-depth knowledge

of the Group

Governance

General management

International

Finance

Public affairs



RE-APPOINTMENT OF MR. JAAP DE HOOP SCHEFFER(8TH RESOLUTION)

BOARD DIRECTOR

49

Appointed as proposed by the Dutch State

Main activity: Professor of International Relations and Diplomacy in the Governance

and International Affairs faculty of Leiden University (Netherlands)

His European perspective

on international issues

His sensitivity to competition

and market issues

Governance

General management

International

Public affairs



APPOINTMENT OF MR. CEES’T HART (9TH RESOLUTION)

BOARD DIRECTOR

50

President of the KLM Supervisory Board

Main activity: Chief Executive Officer of Carlsberg Group, Denmark

His understanding of the new

customer expectations

His European and international

business experience

Governance

General management

International

Finance


COMPENSATION OF THE EXECUTIVE OFFICERS

51

In respect of the 2018 financial year (resolutions 12 to 15)


2018 COMPENSATION OF MR. JEAN-MARC JANAILLAC, CHAIRMAN AND CHIEF EXECUTIVE OFFICER UNTIL MAY 15, 2018 (12TH RESOLUTION)

52

2018 VARIABLE€63,000

(% of fixed compensation)

Target

(70%)

Maximum

(100%)

Achieved(28%)

Quantitative

performance

COI (Current Operating Income) 35% 50% 3%

Adjusted net debt 7% 10% 10%

Qualitative

performance

New strategic plan and reductionin unit costs

12% 17% 6%

Success of the new alliances 6% 9% 9%

Effectiveness of governance 10% 14% 0%

2018 FIXED

€225,000 APPLICATION OF A PRO RATA

TO THE FIXED AND VARIABLE

COMPENSATION

NO LONG-TERM VARIABLE

COMPENSATION OR

SEVERANCE PAYMENT


2018 COMPENSATION OF MS. ANNE-MARIE COUDERC, CHAIRMAN OF THE BOARD OF DIRECTORS AS FROM MAY 15, 2018 (13TH RESOLUTION)

53

FIXED

€125,000 APPLICATION OF A PRO RATA


APPLICATION OF A PRO RATA

FOR THE TRANSITION PERIOD

2018 COMPENSATION OF MR. FRÉDÉRIC GAGEY, CHIEF EXECUTIVE OFFICER FROM MAY 15 TO SEPTEMBER 17, 2018 (14TH RESOLUTION)

54

FIXED

€250,000


2018 COMPENSATION OF MR. BENJAMIN SMITH, CHIEF EXECUTIVE OFFICER FROM SEPTEMBER 17, 2018 (15TH RESOLUTION)

55

27%

38%

35%

Performance units

payable in 2021,

subject to a presence condition

€333,000

Not subject to performance

conditions

€366,667

ANNUAL VARIABLE

Application of a pro rata

temporis

Half of this amount was

reinvested in AF-KLM shares

€262,500

2018 FIXEDLONG-TERM VARIABLE


COMPENSATION OF THE COMPANY OFFICERS

56

Compensation policies for the company officersfor the 2019 financial year (resolutions 16 and 17)


2019 COMPENSATION FOR THE CHAIRMAN OF THE BOARD OF DIRECTORS (16TH RESOLUTION)

57

FIXED

€200,000 UNCHANGED

COMPARED WITH 2018

NO OTHER ELEMENTS OF COMPENSATION WILL BE GRANTED OR PAID TO MS. COUDERC

IN RESPECT OF THE 2019 FINANCIAL YEAR


22.5%

27.5%

50%

2019 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER(17TH RESOLUTION) (1/4)

58

25%

in shares

75%

in cash

Subject to performance

conditions

2 performance

unit plans evaluated

over 3 years, one of

which paid in shares

LONG-TERM VARIABLE

Subject to performance

conditions

ANNUAL VARIABLE

Unchanged relative to 2018

€900,000

2019 FIXED



59

VARIABLE

Criteria(% of fixed compensation)

Target

(122%)

Maximum

(150%)

Quantitative

performance

(60%)

Air France-KLM operating result(Current Operating Income)

61% 79%

Adjusted net debt 12% 16%

Qualitative

performance

(40%)

Employees: improvement in the employee satisfaction indicator

12% 15%

Customer engagement: improvement in the customersatisfaction indicator

12% 15%

Definition of the strategicorientations

13% 13%

Implementation of the managerialgovernance

12% 12%

QUANTITATIVE CRITERIA

ALIGNED WITH THE FINANCIAL

TARGETS

QUALITATIVE CRITERIA

PRIORITIZING MEASURABLE

INDICATORS



LONG-TERM VARIABLELong-term incentive plan: €1,000,000

Criteria Weigthting

TSR on Air France-KLM shares relative to the weighted TSR on the other sector companies

30%

Air France-KLM realized ROCE index relative to the budget

40%

Dow Jones Sustainability Index 30%

ANNUAL GRANT

OF PERFORMANCE UNITS

PAYABLE IN CASH AT THE END

OF A THREE-YEAR VESTING

PERIOD

SUJBECT TO PERFORMANCE

CONDITIONS EVALUATED

OVER THIS ENTIRE PERIOD

60



61

ALIGNED WITH THE TARGET

OF IMPROVEMENT

OF THE OPERATIONAL

PERFORMANCE

AND THE CSR PRIORITIES

SAME AWARD MODALITIES

AS THE LONG-TERM

INCENTIVE PLAN

PAYABLE IN AIR FRANCE-KLM

SHARES

LONG-TERM VARIABLESpecific long-term incentive plan: €1,000,000

Criteria Weighting

Air France-KLM relative COIReduction in the performance gap with IAG and Lufthansa Group in 3 years

80%

CSR performance targets 20%


STATUTORY AUDITORS’

REPORT


STATUTORY AUDITORS’ REPORTS

63

As regards the Ordinary Meeting of Shareholders

Reports on the financial statements

> Consolidated financial statements

> Annual financial statements

Report on regulated agreements and commitments

As regards the Extraordinary Meeting of Shareholders

3 reports related to capital operations


REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

64

Consolidatedfinancial statements

(pages 302 to 307of the 2018 Registration Document)

Unqualified opinion on the fair presentation and consistency of the financial statements, with an emphasis on the first application of the following standards:

> IFRS16 “Leases” which results in the capitalization of leases, in particular those related to aircrafts, meeting the criteria;

> IFRS 15 “Revenue from contracts with customers” on revenue recognition conditions,

> IFRS 9 “Financial instruments” regarding the classification and measurement of financial assets and hedge accounting.

Key Audit Matters

> Revenue recognition for issued but unused passenger tickets

> First-time adoption of IFRS 16 for aircraft leases

> Provisions for litigations and contingent liabilities

> Recognition of deferred tax assets

Specific verifications

> No observations on the information given in the management report and consistency of the information


REPORT ON THE ANNUAL FINANCIAL STATEMENTS

65

Unqualified opinion on the fair presentation and consistency of the financial statements

Key Audit Matters

> Valuation of equity interests

> Provisions for litigations and contingent liabilities

Specific verifications

> No observations on the information given in the management report and consistency of the information

Annual financialstatements

(pages 321 to 324of the 2018 Registration Document)


SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS

66

On regulated agreements and commitments

(pages 325 and 326of the 2018 Registration Document)

Agreements and commitments authorized during the year

Transatlantic partnership between Air France-KLM, Delta Air Lines and Virgin Atlantic

> The Board of Directors of AF-KLM authorized on March 14 and May 15, 2018 the signature of the following contracts:

• A Share Purchase Agreement allowing to acquire a 31% share in Virgin Atlantic for an amount of 220.100.000£;

• A Shareholders' Agreement to organize the shareholding in Virgin;

• A Put and Call Option Agreement on the shares of Virgin Atlantic;

• A commercial Joint-Venture agreement between AF-KLM, Delta, Virgin Atlantic Airways Limited, Air France and KLM as well as the relating bilateral Transition Agreement with Delta, and,

• An Implementation Agreement related to the transaction proposed.

> Justification of the interest of the agreement for the company are presentedon page 326 of the 2018 Registration Document


SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS

67

Severance pay granted to Benjamin Smith - Chief Executive Officer

of Air France-KLM

> On August 16, 2018, the Board of Directors of AF-KLM authorized the granting

of severance pay to Benjamin Smith, Chief Executive Officer of AF-KLM in case

of departure (in particular in the event of dismissal, non-renewal of his mandate

as Chief Executive Officer or forced resignation)

> Justification of the interest of the agreement for the company are presented

on page 326 of the 2018 Registration Document

Approved in previous financial years

> None

On regulated agreements and commitments

(pages 325 and 326of the 2018 Registration Document)


REPORTS IN RELATION WITH THE EXTRAORDINARY MEETING OF SHAREHOLDERS (1/3)

68

On the Issuance of Shares and Other Marketable Securities with or without Preferential Subscription Rights

(Resolutions n°19, 20, 21, 22, 23, 24, 26, 27, 28, 29, 30, 31 et 33)

Purpose

> Delegation of authority for a 26-month period with a defined limit, to decide to proceed to this type of operations

> Authorization to set the issue price within a limit not to exceed 10% of the share capital a year (in the framework of the utilization of delegations set out in resolutions 20, 21, 22, 27, 28 and 29)

> Delegation of authority for a 26-month period with a defined limit, to proceed to this type of operations to compensate in-kind contributions granted to the Company

> Opinion on the fairness of the quantitative information, on the proposed cancellation of preferential subscription rights and on other information

Procedures performed by the statutory auditors

> Verification of the content of the report of the Board of Directors related to this operation and of methods used to determine the issue price of equity securities.

Conclusion

> Subject to subsequent review of the conditions of each equity issuance decided, no comments to make on the methods used to determine the issue price of equity securities

> No opinion on the price and on the proposed cancellation of preferential subscription rights

> Additional report, where appropriate, when these delegations are used



69

On the authorization for the free existing shares allocation

(Resolution n°34)

Purpose

> Authorization to allocate existing shares for a period of 38 months with a limit of 2,5% of the Company’s share capital

> Inform you of our comments, if any, on the information given in the report from the Board of Directors

Procedures performed by the statutory auditors

> Verification of the content of report from the Board of Directors related to this operation and that the proposed terms and conditions comply with the provisions provided for by law

Conclusion

> No comments on the information given in the Board of Directors’ report



70

On the issuance of new shares or other securities granting rights to the share capital reserved for members of a company savings plan

(Resolution n°35)

Purpose> Delegation of authority to proceed to increases in share capital for a 26-month

period and limited to 2% of the Company’s share capital

> Opinion on the fairness of the quantitative information, on the proposed

cancellation of preferential subscription rights and on other information

Procedures performed by the statutory auditors> Verification of the content of the report of the Board of Directors related to this

operation and of methods used to determine the issue price of equity securities

Conclusion> Subject to subsequent review of the conditions of each equity issuance decided,

no comments to make on the methods used to determine the issue price

of equity securities

> No opinion on the price and on the proposed cancellation of preferential

subscription rights

> Additional report, where appropriate, when this delegation is used


COMBINED

SHAREHOLDERS’

MEETING

MAY 28, 2019

COMBINED...targeting 100% of the fleet in 2021 21. ... Medium-haul domestic network impacted by the...

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