Air France-KLM SA (EPA:AF)
France · Delayed Price · Currency is EUR 10.68
+0.37 (3.59%)
May 7, 2026, 5:15 PM CET
← View all transcripts
AGM 2021
May 26, 2021
Shareholders. Good afternoon, everybody. For the second time, it's in the digital format that we are meeting here again today for our Annual General Meeting because the violent crisis that's been impacting us for many, many months now obliges us to take restrictive health measures, and we unfortunately cannot host you today in the plenary room as we would have liked to do. I do regret that. Year.
As you know, this health crisis has been a real bombshell that hit the air transportation sector as a whole. The whole industry was impacted in 2020. This crisis set in sustainably all over the world. We had successive waves of COVID-nineteen. We had travel restrictions and health restrictive measures established by our different governments.
We've now seen the development of several effective vaccines, which was something that was on hope for at the start. And we can now contemplate more serenely future going forward, even though there is still quite a lot of uncertainties. Our group has held its own. It has combined its strengths and come to terms with the hardest months of its whole history by speeding up its transformation and reasserting its strategic role for France and the Netherlands. As of the very start of the crisis, We had to keep on adapting the whole time our business activities whilst guaranteeing the best level of flight security and a strict adherence to the health restrictions and instructions.
We had to enact difficult measures in terms of cost cutting so that in the short term, we could preserve our cash flow and our balance sheet and acquire the resources we need to be more competitive. Year. Over the months, it's been a huge community effort that's been put in and especially by all of our staff members in Air France KLM Under the impetus of Ben Smith and his management committee, I'd like here today to salute their exceptional commitment. In these unprecedented situations, which were so harsh, never seen before, our teams picked up challenges the whole time in all of the group's business areas, on the ground, on board our airplanes, all around the world. But crises reveal personalities and talents.
We wouldn't be here with you today, Ben, Frederic Gage, Peter Albert, Anne Sophie Glade and myself, if we haven't seen an exceptional mobilization by all of our teams without their know how, their unique and technology skills at the service of our clients, EU shareholders and at the service also of all of our partners. We wouldn't be here before you today either if we hadn't had the unfailing support of our main shareholders who supported us as of the very first day of the pandemic. Without them, our group would quite simply not have survived. The French and Dutch states supported us last year via direct loans but also with their securities 4 bank loans. A first step to strengthen our equity was implemented last month, In particular, via capital increase subscribed by the French state substantially for the Air France Group and also subscribed to by our partner, China Eastern Airlines.
Our partner, Delta, couldn't take part because of the regulations in the United States. The Dutch state is pursuing its discussions with European Commission. As we announced, other steps for recapitalization will be necessary still in the future so as to continue to strengthen our balance sheet. That's why we are putting to your vote here today resolutions that will enable our Board to implement them. I'd also like to salute the ongoing involvement of the members of our Board of Directors I'd like to thank them for being so available and for being so speedy in decision making, especially in terms of the transformation plans of Air France KLM and Air France KLM and also connected with the implementation by our shareholder states of the essential measures for the financial support of our group.
As you will have seen, it's all of the community of Air France KLM altogether that everybody was mobilized to take accounts of this crisis, our people, our partners, our shareholders and our board members. As a community, we've come out of this stronger. Together, our duty and our responsibility are to pursue this effort. I am deeply convinced that a new page of air transportation history is now being written respecting our planet and the environment. Air France KLM has an essential role to play in this context.
We kept on reinventing ourselves since our very inception as a company, and we will be a responsible and acknowledged in the sustainability transition. We will be able to be exemplary and will continue our task of Bringing people together, enabling people to open up to different cultures, giving an impetus to economic development in each country as well. Steershowlers, you can count on the mobilization of the people that are making this group live and its airlines and the personal and total commitment of the members of the Board of Directors At this point, I'd like to set up the committee of our AGM here today, and I myself will chair this session. We have Mr. Emmanuel Boissier for the Agence des Participacion de l'Etat in France and Ms.
Yan Li for Chinese Eastern Airlines who kindly accepted to be scrutineers. They're present in this room as the executive order that's enforceable recommends, and I'd like to thank them for being with us. Anne Sophie Lelet, who is our Corporate Secretary in our group, will be the secretary of the meeting. Because we're holding the meeting behind closed doors, The statutory auditors are not present in the room. Valerie Besson from KPMG firm will present in the video their reports on behalf of the panel of statutory auditors.
As is our want, we called upon the services of an officer of the court to make sure that this shareholders meeting is indeed duly convened and can act validly. I'll now give the floor to Anne Sophie Lely for the formalities. Anne Sophie, you have the floor. Thank you, Madam Chair. This general meeting is being held behind closed doors because further executive order enacted on the 2nd December 2020, I'd like to confirm that the legal formalities have been accomplished.
The notice of meeting and the continuing notice were published on the 21st April 10th May 2021. All of the documents provided for by law are available on our website. They were kept available to the shareholders since the convening notice to the meeting was sent out, and I would suggest we will not list of mouths here today. Also, all of our research shareholders received individually communication concerning the invitation to the meeting, the agenda of the meeting and the resolution For the question and answer session, since the 24th May 2021, we made available to you on our website a dialog box, which will remain accessible until the end of this meeting. We will be providing answers to your questions today or via our website later on.
In any case, the answers to the written questions raised before the meeting have already been published on our website. Also, I'd like to inform you that we didn't receive any request to put further resolutions or further points on the agenda other than those already there. As the meeting is being held behind closed doors, You'll have an opportunity to vote or give proxy by Internet or by postal voting. No voting process, no poll will be taken during the meeting itself. We will communicate the results of the polls for each resolution at the end of the session.
If we verify the attendance sheet, we see the final quorum is 61.75%. So we can say that we have the legal quorum now. That is onefour of the shares with voting rights. We have now reached the legal quorum. So the meeting is therefore duly convened and can act validly in terms of the ordinary business and the extraordinary business.
I'd like to give the floor back to Anne Marie Coudert for the next part of our session. Thank you, Anne Sophie. Concerning the agenda of our meeting, Anne Sophie Lely will recall the resolutions that will be put that were put to the vote. And our CFO, Frederic Gage, will then expand on the financial results for 2020. And our CEO, Ben Smith will present the strategic orientations of Air France KLM.
After their contributions, I will talk about the work done on the governance of the group. And Isabelle Bouillon, who is the Chair of the Remuneration Committee, We'll via video sum up on the compensation of the corporate officers. Alex Vinayz will also speak through a video as a member of the Committee for Appointments and Governance. The report of the statutory auditors will then be screened, and we will finally answer the main questions that You will be putting to us via the dialog box made available to you on our website before moving on to present The outcome of the poll on the resolutions. I'll therefore give the floor to answer Philippe, who will now sum up the resolutions that will be submitted to you for a vote.
Thank you, Madam Chair. I'll present therefore briefly the resolutions. The details Sure. In the convening notice made available to you on our website. Firstly, the ordinary business resolutions 1 to 3 concern the approval of the corporate accounts and the consolidated accounts for fiscal 2020 and the and commitments.
Resolutions 8 to 13 concern the appointments and reappointments of Board members. Resolutions 14 to 19 concern the ex post voting by the assembly on the compensation of the corporate officers for fiscal 2020 and the ex ante vote on the remuneration policy for 2021. Let's move on now to the extraordinary business resolutions. Resolutions 20 to 26 concern the proposed financial delegations of authority usable outside the periods of public offerings. Resolutions 27 to 33 concern the proposed financial delegations of authority usable in periods of public offerings, Resolution 3435 concern the proposed financial delegation capped at 10% of the registered capital, making it possible to have greater flexibility in the fixing of the issue price and those applicable in the case of corporate savings scheme or group savings scheme.
Number 36 concerns the modification of Article 26 of our articles of incorporation. So Resolution 36 in the event of the separation of functions Between the Chair and the CEO. Resolution 37 then is powers to accomplish formalities. Thank you. And Sophie?
Quarter. I
will now give the floor to Frederic Gaget, who is our CFO, for him to share with us 2019 earnings of the group and the outlook for 2021.
Thank you, Madam Chair. Ladies and gentlemen, shareholders, good day and welcome on board our 2021 general meeting. First of all, I'd like to thank you for attending this meeting, a second virtual year for our general meeting. Nevertheless, you are many to ask us questions about the situation and the future of Air France KLM And I will attempt to answer as best as I can through my presentation. As the chair stated, The COVID-nineteen pandemic, which started over a year ago, now continues to shake our lives day in and day out.
However, this crisis is also a major economic crisis for many industries that you know, such as the hospitality and the cultural industry. The airline business, such as your group, has not been spared. The 3 airlines of the group have attempted Throughout this period, to provide solutions to the hardships born out of the crisis. They carry tons of medical equipment, masks, vaccines and allowed thousands of fellow citizens around the globe To fly back home to join their family despite the epidemic. To convince ourselves of the violence of the crisis on our industry if that were necessary.
All it takes is to look at the KPIs of our income statement and of our balance sheet. On the revenues front, 2020, the reduction is very brutal, nearly 70%. That's a decrease of EUR 16 EUR 15,000,000,000. So the operating income, which you know is the difference between our revenues and our operating expenses was down by €6,000,000,000 to reach a loss of €4,500,000,000 a level never reached, of course, and the last 20 years. Lastly, the net income, which is actually a loss of EUR 7,000,000,000 And is the rise of the EUR 5,000,000,000 of the net debt throughout 2020 are the two latest figures that allow us to gauge The wide ranging crisis that your group has gone through.
It is key at this stage presentation to convince you properly that this crisis is a crisis of the industry. And the situation which I just Depicted is not specific to Air France and KLM. So let's focus on one element of comparison. The net debt of Air France KLM of €7,000,000,000 close to the Lufthansa Group, which loses €8,000,000,000 Hence, fairly similar to the IAG British Airways Group, which stands at €8,500,000,000 So as you see, this is a major and global crisis of the airline transport business, which we went through in 2020 and which we continue to go through. However, we were rather upbeat at the start of 2020.
January February turned out to be rather good. By the way, they were above our budget. But that was, of course, before the start of the pandemic, of the lockdown and of the sharp decline in demand. We noticed then a short parenthesis during the summer with a lifting of the restrictions and the hope of a pickup in the traffic. However, 2020 saw a last quarter with a new wave of the epidemic.
Given that context, our operational teams showed great and believable flexibility in managing our capacities To meet the demand that sometimes expressed itself on routes where traveling or health restrictions were less severe, Such as the French domestic market, the Caribbean networks or the African networks and the Air France and KLM's diversified networks spread over every continent were clearly a major trump card for us, which accounts for the fact Why the group was able to operate more capacity than many of its competitors. Also, it was important to convince, at the same time, our customers that they could standards that were the highest for our customers and for our people. And thanks to that, Air France and KLM both obtained 4 stars In the assessment by Skytrax in terms the food security, which is one of the best rates. Despite our efforts, the Air France KLM and our low cost Transavia passenger activity was Strongly impacted. Traffic down 69%, revenues down 68% after capacity adjustment at minus 54%.
The Air France and KLM maintenance business was also severely hit. Our customers had Fewer needs for our aircraft or pushback to operations for their aircraft, for their engines. The revenue for that business, therefore, was down by 42%, and the order book for maintenance diminished By €2,400,000,000 during 2020. However, it's reassuring to see that We are still at €9,000,000,000 which represents several years of revenues for the 3 business segments, which are The maintenance of plane cells, the maintenance of engines and support provided to equipment. Standing year in light of the crisis we're going through.
The group operates a fleet of 6 full freighters And a passenger long haul fleet, well adjusted to the cargo business because its bellies offer significant capacity. All in all, in 2020, the revenues of the cargo business were up by 19%, for traffic down 19%. It's the sharpest growth in the unit revenue and tariffs and prices that allowed this result, thanks to the expertise of our sales teams, Thanks to Air France, KLM Martine, Air Cargo, a brand which is well recognized in the market and thanks market which is driven more by demand than by capacity. The cargo teams were extremely very active To meet the rise in the demand of transport by operating full cargo aircraft without any passengers but with bellies and sometimes cabins full of cargo. And currently, we have about 100 flights per month to transport vaccines towards the Caribbeans, Africa or South America.
It's important to admit that such a wide ranging crisis could not have been overcome without exceptional mechanism And the involvement of the states. Such involvement took the form right from the beginning of the crisis Of shareholders' loans and of banking loans guaranteed by the governments, I'll come back to this in a few minutes. The support by the states in France in the Netherlands, which allowed to lighten up the expenses of employees. Such a massive support from our 2 shareholder States requires from us naturally great gratitude but also the responsibility of having to contribute through every possible means To saving our group. Management and all the teams have, therefore, worked Towards implementing exceptional steps, allowing to protect our cash position, speed up the transformation of the group And pursue the reduction of costs in order to be ever more competitive and pave the way for the future.
Over 200 projects We're launched about which we are working day in and day out in order to transform the group and make it more efficient. I can mention a few examples such as the restructuring of the French domestic network, the simplification of the organization or the launching of innovative commercial offers to prepare as best as we can when we break out of the crisis. To protect our cash situation. The group also negotiated extensions of charges, taxes and payments while focusing Greatly to the fact that the most fragile supplies have more leeway. 8,700 colleagues left the group in 2020 through the reduction of temporary contracts and the voluntary departure plans at Air France and KLM.
The number of employees of the group continues and will continue to decrease in the next few years. Over the medium term, every initiative that I've just mentioned will allow to save €2,000,000,000 and to break out of the crisis with Lower unit costs than those we had in 2019. You see, by the way, The first signs of this on the graph, which is on your screen, where you can see that between 2019 2020, if our revenues Which is a very good performance when you know the amounts of fixed cost of an airline company. What can we say about the development of the crisis since the beginning of 2020 and the forecast for the future? You will see on the graph on the screen The trend of capacity measured, you know this concept by but in the ASKs where you see also the trend of our revenues.
These two indicators have been through a low part in the Q2 of 2020 With a period of successive lockdowns around the globe. After that, capacity and revenue stabilized in the Q3 2020 until today with nearly €35,000,000 of available seat kilometer and revenue of about EUR 2,400,000,000. Obviously, such figures continue to lead results which are still very tough. This is what we see in the Q1 of 2021 with an operating result still negative At minus €1,200,000,000 The second quarter continues to be impacted through the traveling restrictions and the capacity that we operate will remain close to what we had initially in the year. However, we are forecasting an improvement for The summer of 2021, thanks in particularly to the rollout of the vaccination campaigns.
We will not immediately find again the level of profitability we had before the crisis, but that's an encouraging sign all the more so because the pickup in the traffic in the U. S. And in China Once kicked in, ramps up very quickly. Let me now mention the 2 financial major deals that the group carried out since the beginning of the pandemic. In 2020, the group benefited from the support of the French and Dutch states Through direct shareholders' loans and through guaranteed banking loans by these two states for a total of €10,400,000,000 Such helped us to avoid liquidity risk in your group at the end of 2020 This situation is not tenable over the long term.
And the recap, April 2021 operation is the first answer, which is based on 2 elements. The first element or chapter is a capital increase of €1,000,000,000 With significant stake, participation of Friendstate and of our strategic partner, China Eastern Airlines, on the other hand. The second part of the plan was the conversion of the direct loan of the French state for an amount of EUR 3,000,000,000, This action by the French state in favor of the group took place in line with European rules in what is called the temporary support framework for companies impacted by the COVID-nineteen crisis. This temporary framework requires counterparty, Includes, in the case that we are interested in, giving away 18 landing and takeoff slots at Orly for the Air France Group. Okay, let's take away that the Dutch state, which was not involved in this first transaction of recapitalization, Continues its discussions with the European Commission for a potential strengthening of KLM's equity.
The impact of the transactions I just described is significant, very significant. First of all, it allows but to a much lesser extent than in the past. These transactions diminish also our net debt by EUR 4,000,000,000 Finally, the capital increase also modified the structure of our group's of your group's shareholders. The French state holds now 28.6 percent China Eastern holds 9.6 percent the Dutch state, 9.3 percent And Delta Airlines holds 5.8 percent of the capital equity. But with these changes, the European shareholders Represent over 65% of our capital, which allows to fulfill widely Two additional measures will be necessary to strengthen on a long standing basis our balance sheet and reduce our gearing ratio and to be back On a sound financial trajectory, several financial resolutions that are extraordinary Shall be voted today in order to give your board greater flexibility and the necessary agility Such resolutions allow the Board of Directors to decide about equity reinforcement transactions up to 3x our share capital, for example, in the case of Resolution 2020 or up to 1x for Resolution 2021.
But such resolutions and the transactions that could flow from it are only one component for the To break out of the crisis that is unprecedented, it will have to be supplemented of all the transformation initiatives launched by Air France, KLM at Transavia with cost reduction schemes, a good management of the recovery to re position the group on a sound financial trajectory that I mentioned before and which, with a lower debt level, will give the group again access On the individual Shareholders Advisory Committee, the COVID crisis didn't allow us to convene physically for 1 year. We maintained our work meetings of our committee to continue to keep you posted even better than before about the developments of our group. For your information also that the individual shareholders committee shall be renewed this summer, and you can send You can apply now before 30th June to the address, which is shown on the screen. To conclude, Let me thank you for your attention and the support you are providing to your group. In the past few years, the airline business has become more democratic, has allowed rich cultural exchanges, family meetings and contributes to development of economies by reducing time and geographic barriers.
Air France KLM will continue to be one of the pioneers in terms of sustainable aviation. And on the 8th December, Air France KLM launched the first program of the SAF fuel On the 18th May, France KLM, as you know, with Total Airbus joined their efforts For a sustainable fuel produced infrastructure, we continue our efforts in order to reduce by 50% CO2 emissions by 2,030. To wrap it up, the airline business is a great industry and will continue to play a major role in the coming years. The challenges are multiple, and we'll continue to excite the future generation. Even though it is hard, this crisis will come to an end, and we are continuing to prepare the future.
I thank you very much for your attention.
Thank you very much, dear Frederic, for this presentation and more generally for all of the work you've put in and your financial teams, of course, too. Dear shareholders, I'd like to voice before you hear today. On behalf of the group and on my own personal behalf, My gratitude and my thanks to Frederic Gaget, who is going to leave the group in the near future, for his remarkable contribution to Air France KLM. Frederic has served our group with talent and devotion throughout the last 25 years in France and in the Netherlands, in group posts and also within the airlines. Apart from being a skilled person, I would Salutum as being a man of values and a man of culture at the service of Air Transport.
For all of these reasons, Frederic, we'd like to thank you. I think at this stage, we'll look at a short video on the reaction of our group to this crisis
Like the whole airline industry, Air France KLM has been left reeling by the COVID-nineteen pandemic.
While the
vaccine rollout is progressing and the recovery outlook is becoming clearer, our activity remains well below its precrisis level. We have demonstrated that Air France KLM is a strategic asset in France, Commercial flexibility to retain the confidence of our customers and the development of our cargo business. The renewed and unprecedented financial support from our main shareholders, the French and Dutch states, Has clearly been crucial and now enables us to face the future with more serenity. It also gives us a major responsibility. Profitability and meet its environmental commitments.
Air France, KLM, Transavia, all the group's airlines are engaged in in-depth and structural transformations. More than 200 efficiency And simplification projects have been carried out to improve our performance. Air France KLM is Fully mobilized around offering all its customers an increasingly responsible journey. We are continuing to For sustainable aviation fuel whose use we have already demonstrated on our flights, offsetting programs, the development of eco piloting, All of Air France KLM's employees are redoubling their efforts around these daily actions. Our commitments are clear.
By 2,030, the Air France KLM Group will have reduced its emissions per passenger per kilometer by 50% relative to 2,005. By 2,050, we will have achieved the objective of net 0 CO2 emissions for all the intra European Union flights and those on departure from the European Union. Airlines, The Air France KLM Group has Employees with an incredible level of commitment everywhere in the world: 3 powerful and recognized brands,
Well, this video illustrates the exceptional commitment of our teams and the management people in Air France KLM around our CEO, who is Ben Smith, To whom I will give the floor straight away.
Thank you, Madam Chair. Thank you, Anne Marie. Dear shareholders, as our Chair underlines as well as Frederic Gaget, 2020 was a very special year in many respects. Who would have imagined such a duration in the crisis, such an intensity? It's been the most severe crisis in the history of aviation.
It's been our resilience, our commitment and dedication, our ability to adapt, Which has been tested. In this crisis, it is a united group pulling together, which showed the best of itself,
which give you a perspective of the challenges of our industry. This first graph shows you the evolution of the group's capacity over time. The pandemic has triggered a Series of lockdown and travel restrictions across the world, including in our 2 home markets, resulting in a continuous impact on both Air France and KLM. Capacity collapsed in March 2020 when Europe was hit by the first wave of COVID-nineteen. But our challenge throughout this rapidly challenging crisis has been to adapt as quickly as we can.
We managed to increase capacity in summer 2020, And we seized another opportunity to increase it during the Christmas period and recently again in May. It has been an ongoing challenge to maximize flexibility While reacting as quickly as possible by tightly managing our network and fleet availability. The second takeaway is that Although constraints have been strong throughout the year, the underlying demand for travel has remained strong. As soon as our customers perceived The travel restrictions might be lifted, bookings swiftly increased. Passengers remain cautious overall, and such bookings are not immediate, But there is definitely a strong willingness to travel again.
This is what you can see in this graph. For this summer, as travel restrictions loosen, we are preparing to raise L'France KLM Group's capacity above 50% And to resist any potential lasting impact from the pandemic would not have been possible without the dedication and professionalism of all our employees From everywhere around the globe, both on the ground and in the air. The crisis has put tremendous Pressure on all employees of the Air France KLM Group, both personally and professionally, and they have all reacted with admirable courage and tenacity. I would like to thank them deeply for this. Employees from all business units Have also demonstrated incredible crisis management capabilities and displayed unparalleled professionalism to cope with the crisis.
Both KLM and Air France repatriated over 500,000 EU citizens from all around the world, While the highest levels of health and safety measures have been deployed on all flights to protect and serve our customers. On the ground, similar measures have been put in place to reach best in class standards. In managing the business, our colleagues Have focused relentlessly on optimizing the fleet and network to an ever changing reality so as to maximize revenues And reduce costs wherever possible. Fortunately, we were able to rely on the support from our primary shareholders who maintain trust And our ability to overcome this crisis and who unlock the necessary means for the Alphonse KLM Group to maintain operations and pursue a necessary transformation. As previously outlined by Frederic, both the French and Dutch states have provided extensive financial support to the group through various schemes in both 2020 2021.
This aid came with specific conditions described in this slide. We consider these conditions to be positive incentives to continue our path towards success. It is our responsibility to recognize The significance of the support we have received. In return, we will demonstrate to all our stakeholders, Including the citizens of both the Netherlands and France, that Air France KLM will adapt to current challenges while continuing to structurally transform itself in order to be more competitive and an unrivaled leader in a sustainable aviation. I must also acknowledge the support of Other important shareholders, for instance, China Eastern, which showed us tremendous support through their participation in our recent capital increase.
Our efforts during these difficult times would also not have been possible without the loyalty and support of our customers. We maintain a consistent dialogue with our customers to stay close to their needs and serve them the best we could given the challenging circumstances. We also listened to our larger industry customers and completely reshaped our cargo product To meet the growing demands for critical cross border freight during these turbulent times. For our maintenance customers, Air France KLM Engineering and Maintenance has continuously supported them to adapt to the crisis and lower their maintenance costs. This global effort resulted in encouraging performance indicators in a very difficult environment.
Makes us cautiously optimistic for the future. Air France, KLM and Transavia All scored major improvements in their respective Net Promoter Scores, or NPS, which measures the satisfaction of our customers And their willingness to recommend us. Seeing this Net Promoter Score improving throughout this unprecedented crisis is a strong testimony To our dedication and professionalism and a very promising sign for the upcoming recovery phase. Over the past year, we continued to improve and adapt our portfolio of products and services to enrich relationship and stay close to customers' needs. To start with, the crisis has triggered our immediate response In terms of ensuring a safe trip for all our customers, for instance, through Air France's PROTECT program, which has been labeled as one of the best in the industry.
Overall, both Air France and KLM have been recognized extensively for demonstrating the highest safety and hygiene protocols That we introduced to enhance our customers' and staff's safety. Flying Blue, our loyalty program, has been lifted to new heights with more features experience throughout the digital and physical journeys. We improved our onboard customer experience, starting with the renewal of our fleet And the modernization of our cabins through upgraded seats, onboard technology and best in class in flight connectivity. In the meantime, we also upgraded our customer experience on the ground through the redesign and enhanced comfort of many of our airport lounges And the continuous improvement of our mobile apps. Such periods of disruption and crisis Have also triggered fundamental changes in customer behavior across all three businesses: passenger, cargo and maintenance.
Most of these changes are here to stay. There is a shift towards more spontaneity in last minute booking choices and new travel decisions driven by new ways of working and growing appetite for more sustainability and responsible travel. The freight business is also evolving fast, with the need to adapt capacity, products and services to the evolution of e commerce and potential relocation of manufacturing hubs. The crisis has also accelerated our program of adapting our aircraft fleet And which will require a deep evolution of our maintenance business and expertise. We had anticipated those trends well before the pandemic.
We had started a vast transformation program to build a more flexible, agile and efficient group. We will continue to accelerate this transformation and move ahead during the recovery. You may recall that this transformation program is based on 6 fundamental pillars with the objectives of restoring our competitive growth while reinforcing our leadership and sustainability. In brief, those 6 action pillars are: keep building a strong culture and transparent dialogue with all our colleagues All Air France KLM teams make up the core strength of the group, and it is fundamental to ensure a collective relationship built on a foundation of trust, Respect and transparency is maintained. Continue to optimize our operating model to generate cost savings.
Focus on developing profitable growth for passenger revenue with targeted actions for all three companies Maximize the synergies within the group for increased efficiency and simplicity modernize our fleet And maintain industry leading customer services and products. And to conclude, embed in all those action points a permanent focus for a positive environmental impact We started to execute on this transformation road map, and it led to tangible results. Above all, we have created positive partnerships With our employees, we have started to modernize our fleet with new modern aircraft providing a much improved environmental impact. We've reached important sustainability milestones with our Fly Responsibly initiative and our voluntary full offset of French domestic market CO2 emissions. We have unlocked growth potential at Transavia France with new agreements on fleet size and the lifting of other restrictions.
And we have achieved ambitious synergies with the simplification of our brand portfolio and the harmonization of our cabins. All combined, the disciplined execution of these first steps of our transformation program Had led to an increase in group revenues with significant improvement in our cost performance, both in 2019 And in early 2020, with a decrease in unit cost of minus 0.9% and minus 1.6%, respectively. I'm pleased to note that our group had already started to show its ability to adapt, transform and change even before the crisis began. This has been a remarkable achievement. The transformation process At Alfons KLM was not slowed down by the onset of the pandemic, but on the contrary.
It highlighted even more that this structural transformation by over €1,700,000,000 in 2020 and by structurally downsizing and adapting L'France's domestic network to the new reality. Our much improved relationships with our employees enabled us to collectively implement a series of voluntary departure plans, Leading to a reduction of approximately 8,700 full time equivalents in 2020. In 2021, more voluntary departures will take place. Many outstanding colleagues are leaving our group after many years of hard work, energy and commitment. All of us are immensely grateful and thankful to all of them.
The unleashed potential of Transavia France has now begun, and we expect a strong and exciting future for this brand. We maintained our fleet modernization programs to improve customer service. We pursued our simplification efforts With extensive OEM contract renegotiations, expanded digitalization of our cargo processes and further streamlined our worldwide commercial setup. Finally, and this is very important for the sustainable future of our industry, we have relentlessly continued to work And invest in more environmentally friendly technology and innovations. Let me now focus Our value proposition in terms of efficiency, comfort and optimization.
It is also Essential to improve our environmental impact through the reduced carbon emissions and enhanced fuel efficiency of each new aircraft. For the regional fleets, we have completely phased out 2 aircraft types from our France hops fleet, the Embraer E145s and the ATR-72s. The CRJ-1000s and the CRJ-seven hundred fleets will soon follow, leaving both Air France Hoppe And KLM Cityhopper with only Embraer full size regional aircraft. We'll be replacing some KLM Cityhopper and some KLM mainline aircraft With newly ordered next generation Embraer E195 E2s. We have also started to modernize our medium haul fleets.
The introduction later this year of the new state of the art Airbus A220 at Air France will dramatically improve Air France's environmental footprint, customer experience, operational performance and cost efficiency. The simplification and modernization of our long haul fleets continue. We have now completely phased out all Airbus A380s and all Airbus A340s at Air France. Air France continues to replace its older Boeing 777-200ERs with new efficient Airbus A350-nine 100 aircraft. At KLM, the final passenger Boeing 747 has now exited the fleet.
KLM continues moving forward To the introduction of additional 787s to ensure a fully efficient fleet of Boeing 777s And Boeing 787s taking advantage of the option of a dual pilot cockpit rating. Sustainable growth is indeed a key component of our strategy going forward. It is not an add on, But at the heart of everything we do and an integral part of our structural transformation plan, our goal is to lead the way for responsible and sustainable aviation. The road map to reducing our environmental footprint relies on a series of tangible structural actions Staged in different phases for the short, medium and long term. In the short term, our primary lever is the in-depth transformation of our fleet, which will gradually but significantly contribute to reducing our carbon footprint with new innovative and greener aircraft.
We will also seize every opportunity to enhance our sustainability with operational measures, developing new innovative initiatives in all business units, from the development of new digital services to the design of new in flight products and services and the continued use and expansion of eco piloting measures. In addition, we are implementing carbon offsetting measures in all our businesses, Not simply through mandatory actions, such as ETS and Corcia mechanisms, but also by launching voluntary actions, Such as our TRIP and TREE and CO2 0 programs, which can further attract collective efforts towards our common objectives. The medium term will see the full deployment of critical innovation in the field of biofuels or sustainable aviation fuels For lower consuming and further decarbonized air transportation. The launch of the first long haul flight Powered by sustainable aviation fuel produced in France is an important milestone using innovative biofuel with leading industrial partners. In the medium term, operational measures must also be raised to a new level with, for instance, the development of collaborative intermodality With Railways, which is a work in progress.
For the longer term, new sources of energy and additional technological disruptions We'll add a significant contribution to decarbonization efforts, leading to a wide spectrum of opportunities to reach full carbon neutrality. Alphonse KLM understands the levers of carbon reduction and embraces the European Union pathway towards carbon neutrality, To significantly reduce our environmental footprint. By 2024, a 50% reduction CO2 emissions in the French domestic market of Air France. These are associated with departures to and from all the airport And between the French regions. By 2,030, a reduction of 50% of CO2 emissions per passenger kilometer for all airlines And carbon neutrality for ground operations.
By 2,050, full alignment with industry targets of a 50% reduction in CO2 emissions Compared to 2,005 and a net 0 emissions target for flights into Europe and for flights departing from the European Union. We are pulling on multiple levers to reach these targets throughout different steps in our overall strategic timeline, as shown in this graph. It's well worth mentioning that we have already taken a head start with the renewal of our fleet. And as you can see on the graph, sustainable aviation fuels are a key component strategic time line with a growing share in the medium and long term. Our main achievements regarding biofuels includes the world's 1st passenger flight powered by sustainable synthetic kerosene and operated by KLM.
L'France's first long haul flight operated with 16% SAF Produced in France and the launch of the world's first SAF corporate program and SAF program for the airfreight industry. Overall, we are fully supporting the emergence of an economically viable aviation biofuel industry for all the parties involved. Of course, the environmental standpoint of sustainability is not our only focus. We have been committing to the United Nations Sustainable Development Goals work for years. We are actively contributing to 7 of these goals with strong commitments to give you 2 concrete examples.
I can read these out here. Number 1, ensuring health and safety for our colleagues and our customers as we have shown throughout the crisis. And 2, promoting diversity and inclusion, which are inherent values of our group. And as a sign of this, I'm pleased to see that today, We have gender parity around the table. With vaccination campaigns well underway and better products or prospects on a recovery, the Air France KLM Group has a number of strengths to regain its position amongst the leaders in the airline industry.
Remarkable employees committed to serving our customers in the best possible way strong and iconic brands, which
to build on their
heritage of excellence while continuing to adapt to the new needs of customers, an extensive and unique network around the world, Which makes our group a key global player in the air transport industry, solid strategic partnerships that reinforce the strength of our network And offer a unique customer experience, the competitive advantage of a unique combination of hubs at Schiphol and Huasi Salta Gold,
As you can see, we accelerated the transformation of our group, which was initiated in 2018. I'm convinced that we will come out of the crisis Even stronger. The group has unique assets and real competitive advantages, which are critical to make sure that our group Restores its position of leadership. Every day, we demonstrate our ability to transform and to build a responsible group, the leaders in sustainable aviation. I would like now to concur with Almeri to warmly thank Frederic Gaget.
Frederic has been one of the builders Of the Air France KLM Group. He relentlessly grew and developed and strengthened the group. I also want to Thank you, Henri Gall, Peter Helberts and all executive committee members of the group for their relentless commitment and dedication right from the beginning of this crisis. You can count on us, All of us, we are totally engaged and mobilized to build the Air France KLM Group of tomorrow. Thank you very much.
Thank you, Ben, for this presentation and this summary of all of the action undertaken by yourself and all of our team and also our challenges. I propose at this point that we should move on to the governance sequence. As of March 2020, Your Board of Directors was very available and very much engaged with the corporate management to come to terms with the crisis. Our objective was 2 fold: to secure the cash flow of the group, survive the crisis and preserve our competitiveness in the medium and long terms. The board mobilized its efforts and its people, 17 meetings in 2020, including 11 extraordinary meetings with an average attendance ratio of 97%.
Our committees also played a active and valuable role in the preparation of the sessions of the Board. Onto the impetus of their chairs, they stepped up the pace of their work with an attendance rate that was more than 93%. The audit committee, for a start, chaired by Marie O'Lagnon, made up of 8 members. It issued recommendations for each decision making process, cyclical and structural. And I'd like to thank that committee for the work put in.
Their recommendations were many. March 2020, emergency measures to reduce all of our costs, April to May 2020, the setting up of a guaranteed loan and a direct loan from the French state for a total amount of €7,000,000,000 June 2020, approval of the transformation plan of Air France July 2020, review of the strategic challenges of the shared activities of the group, that is commercial activity, sales and marketing maintenance, cargo, IT, human resources and sustainable development. The objective was to revisit the consistency between the short term demands we had to meet and the medium- to long term challenges. September 2020, the setting up of a guaranteed loan, an indirect loan by the Dutch state for €3,400,000,000 and approval Of the transformation plan of KLM, October 2020, review of the key investments, in particular the fleet December 2020 approval of an ambitious budget for 2021 in the context of the health crisis, which was becoming even harsher for the air transportation industry. In 2020, the Sustainable Development and Compliance Committee came forth with proposals for the Board Just in terms of CO2 reduction, in particular, I'd like to thank it for its work.
These are ambitious objectives that are important for our customers, our stakeholders and our shareholder states. Our state shareholders vis a vis whom we've given commitments, the committee also revisited the non financial risk in coordination with the audit committee. And they are the ones, of course, in charge of monitoring financial risks. We want to move forward in France and in the Netherlands, as Ben has explained a short while ago, with the production value chain. We're also selecting projects for offsetting that are the most relevant, and we have revisited also the non financial risk, as I said, in coordination with the order committee that monitors the financial risk.
I'd really like To thank Ms. Idrath and all of that committee for investing the time and effort that they invested. Then we have the remuneration committee Chaired by Isabel Bouillot, made up of 6 members. It defined the compensation policies and made recommendations, too, in a very constrained context, of course. I'd like to particularly thank you all for all of the work you put in year.
Concerning the compensation of the corporate officers in 2020, the board saluted the efforts in terms of reduction made by your CEO, in particular. The board also decided to reduce the payment of its members. I'll give the floor now to Isabelle Buyo so that she can give you the details concerning the items put to the vote.
Annual review of the transaction.
14 to 2019. Thank you very much, Isabelle, for the clarity of this presentation. Also, as Frederic Gage and Ben Smith have already said, the board initiated as of autumn 2020 thinking process on the plan to recapitalize the group. And the first step for Air France was finalized in April 2021 after the agreement of the European Commission. The French state played a major role by transforming its €3,000,000,000 loan into equity.
It also took part, as Frederic said earlier, quite substantially in the capital increase That China Eastern Airlines also subscribed to. Talks are continuing for KLM with the Dutch state and the European Commission. In the coming few months, thanks to vaccines, we hope to see a recovery of air traffic, And your Board will be particularly mobilized to Attend the seminar in July, for a start, centered on the recovery of business activity and the medium term strategy of the group and of our airlines. Also, the trajectory of our transformation plans, also the respecting of the commitments given by the group and the airlines vis a vis the States and the European Commission. The Board of Directors is made up of 19 members with a great diversity of skills, experience, nationality, stakeholders and a good male female balance, too, which enables us to listen to many and varied points of view and have very rich debates and constructive debates on the group corporate strategy.
Our 4 main shareholders, the French state, the China Eastern Airlines company, the Dutch State and Delta Airlines are represented. The Board comprises also 7 independent Board members, including 6 women, French and Dutch profiles that reflect the components of our group and give us a very complementary vision. We also have 4 representatives of the employees and the employee shareholders whose knowledge of our business lines is a major asset for our board, especially during this period of crisis. Subjects of balance, diversity and independence within the board have been monitored by the Appointments and Governance Committee, which also reviewed for the managerial bodies the policy concerning diversity of profiles and the diversity objectives. The committee also pursued an evaluation of the functioning of the board itself and of its committees for the 2020 year.
I'd like to thank everybody for fitting into that work. The committee at the honor of presiding is made up of 3 independent board members and met very, very regularly. Let's move on now to the changes in the Board. The Board has proposed a renewal of 3 Independent Lady Board members: Lainie Boren, Isabelle Bullo and Anne Marie Idrach. Lainie was appointed Board member of the group for the first time in 2017 2018 2017, sorry.
She is also a member of the Audit Committee and the Committee on Sustainable Development and compliance. Isabelle Bullo was appointed Board member for the first time in 2013. She's also chair of the remuneration committee since October 2019. She's a member of the audage committee as well. Annemarie Idrek Became a board member of the group for the first time in 2017.
She's also Chair of the Sustainable Development and Compliance Committee since its inception in December of 2018. The board also proposed the appointment of a new independent lady board member that is Guenail Avic Ue. Guenail has spent many years with the ENGIE Group, especially as Deputy CEO of the group in charge of renewable energy sources and also CEO of ENGIE in North America. She joined the Schneider Electric Group in the United States in March 2021 to take charge of strategic projects on the energy transition. Gwenael is to replace Maurice O'Lagnon, who is leaving our Board after 10 years of unfailing commitment at the service of the interest of Air France KLM.
And she, up to now, was in charge of the audit committee. I'd like Thank Marie, really heartily for her time and effort put in, especially being the Chair of the Audit Committee in circumstances that were very often complex, especially in the last few months. For Delta Airlines, You have given your opinion about the reappointment of the legal entity. Delta is represented in the Board by Alain Del Mar since the 16th February 2021. This is the date when he replaced George Matsen, whom I'd like to thank for his participation since his appointment.
Alain Belmar is the Executive Vice President and the International President of Delta Air Lines since January 2021. Previously, he was CEO of Bombardier between 2015 2020. For China Eastern Airlines, the Board proposed the reappointment of James Wang, General Secretary of China Eastern Airlines and Chair of the Board of Directors of Eastern Airlines Industry Investment Company. Year. James joined the Board in July of 2019.
I'd also like to inform you about the reelection of 2 Board members representing employees. That's Matti Boots, appointed on the 13th April last by the European Works Council and Karim Belabas on the 19th May appointed by the Comitee de Grand Francais. That's the French group works committee. These reappointments do not have to be put to the vote of the general meeting. Karim Belivas was appointed for the first time in 2017, and Matti Boots joined the Board in October of 2017.
I would suggest now we view a film on the Board members who are being appointed or reappointed in which they'll tell us about their vision of Air France KLM Group The last subject put to the vote today is the amendment of the Article of Incorporation to prolong the age limit of the chair of the board. I'll give the floor to Alex Faines, who is a member of the Appointments and Governance Committee that I have the honor of chairing. He will now give you the reasons for this.
Merci, madame la Presidente, and good afternoon, ladies and gentlemen. As we're all well aware, the global airline sector as well as our group is going through an unprecedented crisis. In this situation, the continuity of the governance structure of Air France KLM It's of critical importance to ensure that the leadership of the company is able to focus all of its efforts on the day to day operational management While preparing the business for the recovery phase. This is why the Board of Directors is today proposing a vote on the amendment of Article 26 of your group's article of incorporation, increasing the age limit for the Chair of the Board of Directors, which is currently set at 70 years to 72 years. This increase is applicable in the case that the functions of Chair and Chief Executive Officer are separated.
I would like to stipulate that when the Chair of the Board of Directors also exercised the duties of Chief Executive Officer, the age limit remains 70 years. This amendment is fully in line with prevailing practices of listed companies. This is the purpose of Resolution 36, which is submitted to your vote. If you vote in favor of this resolution, The Board has decided to prolong the duties of Anna Marie Coudair until the shareholdings meeting convened to approve the financial statements for the 2022 financial year. And I would like to add that the role and duties of the chair as defined in the articles of incorporation remain unchanged.
In the name of the Board of Directors, I thank you for your attention.
Thank you very much, Alex, for this presentation. Thank you especially for all Of your participation in the work we've been doing mainly on governance, but very important work for the group. Thank you once again. Dear shareholders, to conclude this governance sequence, I'd like to just touch on our intent to define the purpose, the raison d'etre, as we call it in French, of our group. This is a very engaging exercise for our people, for our teams.
It enables us to work on voicing the fundamentals of our business activities. The first work has already been done and chaired with the committee responsible for appointments and governance and also with the Sustainable Development Committee. The work will continue at Board level, Which will have to give its opinion on the raison d'etre, the purpose in the coming few months. I'd like to thank you, dear shareholders, for Paying attention to this long governance sequence and now propose we move on to look at the theme of security and safety. Our group, as Ben has said, puts in center stage all the time security and safety, flight security, health security and safety.
The health issues. Issues have always, of course, been a concern for our group, but the COVID-nineteen epidemic has required us to enact a lot of initiatives to guarantee the health safety of our crews, all of our staff and of our customers, of course. I suggest we should look at a brief video On this topic, which is an absolute first off priority for Air France KLM.
Flight and Health, safety.
Flight security A safety culture means everyone's commitment in the air with the flight crews, on the ground, in the hangars, maintenance workshops, cargo terminals And in every station, on the runway and, of course, in the offices and support services. Every day and unrelentingly, The group's employees are totally committed to flight safety. They implement procedures which meet the highest standards in the airline industry. They automatically contribute their ideas on possible improvements, thus enabling our airlines to make further progress. Our people have exceptional know how and experience reinforced by the sharing of analytics and diagnostics and the permanent sharing of best practices: Air France, KLM, Transavia, Hop and CityHopper cooperate on a daily basis in Paris, Amsterdam and all our stations to ensure the optimum protection of all our flights.
This is our first priority that we And progressive recovery in our activities. The return to operational service of our aircraft follows a very rigorous protocol. We are all taking the safety management system to its highest level. And for the past year, this imperative has been And staff has always been at the heart of our actions. With the pandemic, Air France KLM has adopted the strictest health protocols And set the highest possible standards to protect their health and guarantee them optimum health measures before, During and after their journeys, the wearing of a mask is mandatory throughout the journey, whether on the ground with the regular The optimum protection from COVID-nineteen.
Both Air France and KLM have achieved the highest levels of certification for health safety. All the group's people across all the businesses remain fully mobilized around guaranteeing our customers a journey with the highest levels of flight
At this stage, I'd like to propose that we move on to the reading of the report from our statutory auditors. As you know, because of the meeting taking place behind closed doors. The statutory auditors cannot join us in the room, so I suggest we look at a video in which Valerie Besson, on behalf of our panel statutory auditors, Thank you very much, Valerie, for this presentation of all of your reports. And I'd like to particularly thank The panel of statutory auditors for the work they've done over this very particular year we've had. So we will now move on to the question and answer session.
I'll give the floor to Anne Sophie Leule, Thank you, Madam Chair. As our shareholders' meeting is taking place behind closed doors today, a lot of you asked questions via our dialog box, and I'd like to thank you For that, we're going to answer some of them. And for the others, the answers will be posted on our website. Quarter. I'll start off with the first question for Ben Smith.
Do you already anticipate a deep change in customer behavior post COVID? And how is the group preparing? And more particularly, how does Air France KLM intend to react if the business segment, historically crucial for the group, does not recover.
Melfi and Sophie. So I'm happy to report that since the announcement of the lifting of travel restrictions in France, we've already seen very encouraging signs of New bookings, increased bookings. We witnessed the same trend last summer and as well during the winter break. It's clear our customers want to travel again. And definitely, they are looking to reconnect with their relatives.
We know leisure And VFR, or visiting friends and relatives, traffic will recover first, much faster than business travel. What our customers are telling us is that after a year of lockdown, it's very, very clear to them and to us that travel Will not disappear and will remain an essential part of everyone's daily life throughout each month and throughout each year. Post COVID travel will definitely evolve, perhaps with longer trips, perhaps combining business and leisure. Flying back and forth for a 2 hour meeting may not come back. But as I said, travel will remain essential to lead an international team Or to meet partners.
We're definitely convinced of this. We already have the means to address an uneven recovery amongst our segments On some of our long haul aircrafts, one third of the Air France long haul fleet, we can reduce the business cabin by up to 50% in less than 24 hours. The long haul fleet of KLM has relatively small business class cabins, These are the other major carriers in Europe. On the medium and short haul, we have different sizes of aircraft From 70 seats up to 212 seats, which gives us an enormous flexibility and the ability to increase or decrease The offer depending on the exact situation. It's also interesting to note that while business travelers were And our significant part of our business, more than 50% of the customer is traveling in the premium cabins at Air France.
So business, Ola Premier. These customers are traveling for leisure purposes prior to the crisis, and we expect this same phenomenon to continue as we come out of this crisis. Finally, beyond economic concerns, our corporate customers just like ourselves We'll have increased sustainability commitments in the post COVID world. We believe in the future that passengers, including corporate travelers, We'll choose their airlines based on its environmental commitments. This obviously is another reason why we must maintain and strive to become leaders in sustainability.
Thank you very much, Ben. Another question For Air France and KLM, so I'll ask it to Ann Rygai and Pedro Albers. What is the status of vaccination of your staff? Yes, Cezanne Regaille.
Thank you,
Anne Sophie. Hello, everybody. I think it's good to recall, For a start, the vaccination is something voluntary. It's something voluntary. So it's a voluntary and confidential process.
But In December, we asked for priority access to vaccination for frontline staff. And vaccination has been possible on flights Two countries with variance since May 3 for long haul flight attendants and since May 10 for medium haul flight attendants based in Paris. In addition, occupational medicine there France is currently offering vaccination to employees over 55 years of age as part of the national vaccination campaign. And we're preparing also to offer vaccination to all of our employees in the next few days subject to authorization.
Thank you. Anne, the situation in the Netherlands is that there's no specific priority or no specific position when it comes to vaccination for airline staff. So we follow at KLM, we follow the national vaccination campaign. And as the national vaccination campaign is progressively Going forward and progressively picking up speed, it means that an increasing number of KLM staff will be vaccinated in the weeks to come.
Thank you very much, Anne and Peter. 3rd question, Concerning a more financial topic, why limit the capital increase to €1,000,000,000 and not opt immediately for a larger capital increase? And what is the timing of the next steps in the recapitalization? This is for Frederic Gaget. I think you'll answer this one.
Yes, indeed. Thank you, Anne Sophie. Well, two points. First, I was very clear, I think, and it was said on many occasions that the first Capital increase transaction is not enough per se, and we'll need to keep restoring the balance sheet of the group. There are 2 ways of doing this: Improving operating results and performance, which will be the case when we exit a crisis and then consider other transactions.
Why didn't we do this in one go? Well, We didn't want to excessively dilute the existing shareholders. Imagine we indicate EUR 10,000,000,000 capital increase, then the share and portion of existing shareholders, pre Cabello increase would be diluted. So we need to strike the right balance between the transaction we do when the stock Price is affected by crisis versus future transactions that we'll be able to do. When the stock price keeps Appreciating post COVID, basically anticipating improvements in the earnings of airlines And of the Air France KLM Group, of course.
By giving this guidance, basically, I'm indicating the time line. The time line will Get clearer as we see visible signs of recovery, of reconstruction of air traffic and demand of passengers and positive economic and financial performance. This will enable us to envisage a recovery of the like the issuance of convertible securities, when the stock price and the economic situation gives us better visibility than today.
Thank you very much, Frederic. Ben, another question for you about the counterparts requested by fiscal year? Are these counterparts, requests by Brussels, a handicap in the implementation of your strategy?
The conditions in questions that were imposed by the European Commission in exchange for the support of the French government's investment and support in Air France and Air France KLM was key to ensure that the group has a solid foundation to move forward during this period and as we come out of this year through the recovery. The conditions include the relinquishment of 18 slots at Palaioli Airport That must be given back to this law coordinator. This is not expected to hamper our strategy To overhaul the French domestic market, we were assured that the remedies requested will not jeopardize the development of Transavia France, Which is the cornerstone of our growth there. Very, very grateful to the French government for supporting Air France To ensure that there were careful measures put in place to protect the group's interest in these negotiations by insisting on the need for fair competition to ensure that any of the airlines that take up these slots must abide by those rules that they will be attaching 2 of the slots that we'll be relinquishing. On that particular point, we have been heard by the European Commission on the need for increased vigilance in the face Of the dumping practices of certain low cost airlines.
Thank you
very much, Ben. Quarter. Question now for Peter Albers concerning KLM. What is the status of the negotiations with the judge state in the context of their financial support 2 ks LMO.
Well, the negotiations between the Dutch State and Brussels are in progress. It was already addressed in the presentation by Frederic Assier earlier today. The discussions Are taking a while, but both KLM with the Dutch government and the Dutch government with Brussels are still making progress in these talks, but they have not been finalized yet.
Thank you very much, Peter. Ben, in Nouvelle Christian, Caixaon.
Year. Ben, another question for yourself. Our relations with Delta Airlines. And the next question, the transatlantic joint venture, has it evolved fiscal year, will it evolve in the near future?
The current transatlantic joint venture between the group and Delta Has been evolving over the last few years. On December 31, 2019, our former transatlantic joint venture That was at that time composed of Air France KLM, Delta and Alitalia was terminated. There's a new joint venture that was put in place In January of 2020, and this now composes Alfons KLM, Delta and Virgin Atlantic Airways. This, we call the enhanced joint venture. Before COVID-nineteen, Air France KLM, Delta and Virgin We're operating up to 3 40 daily transatlantic flights, making it the largest transatlantic joint venture to and from the United States.
It's an extremely strong and powerful asset, and we want to leverage it as much as possible throughout the recovery. Where do we stand with our relationship with Delta? Delta has been a key strategic partner of Air France KLM for many years. They are also an important shareholder. They have a seat on our Board of Directors, and we're very happy to welcome Alain Del Mar, Who is the new representative, Delta, who you saw on the screen previously, has enormous experience in our market, And we're very pleased to see that he has been chosen by Delta to join our Board.
Recently, because of legal restrictions, Delta Airlines were not able to participate in our capital increase.
Thank you
very much, Ben. A question now particularly concerning the Air France Group, so I'll ask it Of Enrica, what is the evolution of Transavia in France and in Europe? Yes, says Enrica. You know In the transformation of the Air France group, we're pursuing our restructuring of our domestic network, especially the fact that Transavia France is developing domestic routes from Orly as well as routes between French regions. At the same time, Transavia France is pursuing its international development.
This Orly to Beer Ritz route, for example, started November of last year. And it's continuing through the summertime with Orly Brest, Orly 2 Launch, other domestic routes like that. And in parallel, as I was saying, it's developing internationally. It's pursuing its international development path out of Orly and its principal basis. Its principal basis, I mean, in the provinces, Nant Lyon and Montpellier.
And it's the Air France Group's tool for competing with other low cost carriers on the French market.
Q and A.
Thank you very much, Jan. So the next question is for Frederic Gaget. When do you expect the group to stop burning cash, as they say?
Yes, burning cash is typical of what we've been seeing since the beginning of the crisis even and our EBITDA is negative, which is a sign That operating cash, therefore, the cash that comes out of your operations is negative. With the scenario that we have in mind, which indicated in my presentation, that There's an improvement at the end of the second quarter and the beginning of a recovery that would be more satisfactory as from the summer. In our current forecast, we have EBITDA that are positive as from the Q3 of 2021. So the tragic situation of cash loss quarter after quarter should terminate as from the summer 2021.
Merci beaucoup, Frederic. Thank you very much, Frederic.
I'll answer the next question myself. It concerns the duration of the restriction measures on executive pay imposed by the European Commission. Now indeed, as Frederic and Bren have said already, on the 5th April, When the commission approved the first step of recapitalization, given the participation of The French state with the quasi equity and the fact that there's a capital increase for Air France and Air France KLM, the European Commission made a decision. The state aid is subject to compliance with certain conditions imposed by the European Commission under the temporary framework set up for the state and that member states, therefore, can provide to companies badly affected by the COVID crisis. So We've just heard about the slots, but also the decision concerns The payment of dividends and also concerns the compensation of the members of the management of the companies benefiting from the recapitalization measures, Air France's Excom and that of the group.
The remuneration of these 2 executive committees may not exceed the fixed portion of the remuneration at December 31, 2019. And the variable components of the remuneration cannot be paid on to that. At least 75% of the recapitalization measures have been actually repaid. So we'll move on now to the next question, Which concerns Air France and KLM. What are your next improvements in terms of customer and product experience for the coming months?
Net improvements in terms of customer and product experience for the coming months. Anne A. Peter?
Anne first and then Peter, you don't mind in that order. Thank you, Anne. Anne, yes, indeed, we are planning to make a lot of progress in terms of customer experience onboard after adaptations linked to the crisis, a return to our nominal service and business from next July onwards. Secondly, On board by the end of 2021, we will have completed the revamping of our cabins on our 7 77 leisure aircraft. 7 have already been reconfigured, and the work will be finalized by next December on the entire fleet of 12 aircraft.
And Then we'll have 12 777s, 77742Js, as we call them in our jargon, that remains to be modified. And this will be done in 2022. Then The installation of Wi Fi onboard is continuing with 92% of the fleet equipped by the end of 2021 onboard. As Ben said, we'll have the pleasure of having this year available. We'll be able to welcome into our fleet the new Airbus 220s to our medium haul fleet.
That will happen in October. And these are 148 seat aircraft, which will bring the customer experience of our medium haul travel to a new level, thanks to wider seats made By the fiber breast configuration, more legroom, a very comfortable seat, larger baggage racks that will solve the problems of space for cabin luggage and also increased light in the coming into the cabin. And on the ground, too, in the very short term, we'll be offering an essential improvement for our short and medium haul customers Passing through Rossi, thanks to the opening in mid July of our brand new Schengen launch in Terminal 2F, designed by the architects Joao at Montco. This lounge with a very French kind of design will offer 3,400 square meters dedicated to the well-being of our customers with a magnificent glass roof over the runway that will provide plenty of light, a staircase that will be the talk of the town and wellness area with Clarins, Spa and Charles. So we're expecting a lot of that to come out of that.
And in spite of the crisis, you see all of these novel features being brought to our customers.
There's a lot of similarities actually between the programs we're at Air France and KLM in order to reassure the confidence of our customers to travel with us. It has been mentioned already in the earlier presentations, but I think it's good to mention Again, we're extremely grateful not only to our shareholders and employees, but also to our customers for choosing us and flying with us, especially in these trying times. For KLM, the next couple of months, 1st and foremost, it's hygiene. We're very proud and actually glad that we have been recognized and awarded by the Apex Diamond status, which is the highest level of hygiene for our customers. In order to reassure travel for them, it's very important that we have this.
So that's going to be the number one priority for the next couple of months. After that, we continue to work on many of the product improvements throughout the entire customer journey, both on the hardware as well as on the software. So we continue with our efforts to have all our business class With Direct Aisle, we will introduce at KLM Premium Comfort. We continue to build on the Wi On the medium haul network, the long haul network has been done already. We have upgraded our launches, and they will gradually reopen in order to welcome our customers back.
So First was hygiene. 2nd is our product hardware and software. And thirdly, I would mention here the flexibility for our customers. As we see an increasing trend of people starting to book again and have confidence to travel, we know there's still a lot of uncertainties out there And our customers need flexibility. And our commercial terms are as such that they'll have the flexibility to travel and to change their tickets going forward.
Last but not least, I would like to mention the subject of sustainability, which is increasingly important also for our customers. And therefore, We're upgrading our abilities and our opportunities for our customers to offset their flying as part of our commercial proposition.
Thank you, Peter.
Thank you, Peter. Thank you, Anne. I'd like to avail up the opportunity and to ask you another question. People. So we've read in the press that the labor negotiations at Air France, particularly on salary cuts, have not been successful.
Can you explain the reasons for this failure? Annemarie. Well, this information is incorrect because we can announce that on Tuesday 25th, yesterday and this morning, Wednesday 26th May, We succeeded in concluding 3 majority category agreements with cabin crew, staff and pilots as well as pay agreement under the national pay talks for the years 2021 2022. So these agreements will obviously enable Air France to make the significant savings the company needs to face the crisis while having a limited impact on employees. In a few words, they'll make it possible to go beyond the salary moderation measures already in place.
That is no general and no individual increases. We'll be able to prorate the 13 month for cabin crew and ground staff from the long term parcel activity rate. And also, we'll be able to reduce leave in 20 21 for cabin crew and ground staff and the number of rest days for pilots. So it's good news. It shows that we've, as a community, all mobilized your efforts to come to terms with the crisis And Kamaltevitch.
Thank you, Anne, says Anne Sophie. Well, maybe we'll take one last question then for Ben. Will the sustainable development measures being implemented by the group have an impact ticket prices and its financial trajectory. For example, we've heard that sustainable aviation fuel is much more expensive than traditional aviation fuel. Will this be reflected in your fares?
Merci, Anne Sophie. Just to add to and response to the questions surrounding the negotiations with the Alfres employees. There was a very important agreement that was signed a few weeks ago at Air France Hop surrounding a PDV, PayAssur agreement. Very happy to say that, that also did pass. And of course, extremely key in all the secondary regions in France.
So that was a Big collective effort on the part of many people, and it is extremely positive for the group that, that is now behind us. Regarding sustainability efforts, obviously, these are not new for our group. We've been working on reducing our environmental footprint for many, many years. And sustainability is definitely an integral part of our strategy. New Sustainable Aviation Fuels or SAF, as they are sometimes called, are now a critical component of our future road map.
Along with fleet renewal, SAF are the main levers to reach our target reductions of CO2 emissions. For now, the absence of large scale production facility makes biofuels 3 to 5 times more expensive compared to today's conventional kerosene. The increasing incorporation of SAF over the next few years is a challenge for the entire aviation value chain to overcome. So we're working very hard with all our partners to viably implement a large scale use of SAFT as quickly as possible.
Thank you to everybody for taking part in this Q and A session. And I'll once again give the photo to Anne Sophie Le Lena so that she can present the outcome of the polls on the resolutions. Thank you very much, Anne Marie. The definitive quorum is 61.75%, I recall. And because of the health crisis and the organization of the meeting behind closed doors, the voting process was closed yesterday at 3 p.
M. Paris Time. So there will be no voting in the session in the meeting. And I'd like to directly present the outcome of the polls. I'll read, 1st of all, each of the resolutions.
Firstly, the ordinary business. We'll start off with the first resolution Concerning the approval of the statutory financial statements and transactions for the financial year ended December 31, 2020, showing a net loss of €66,000,000 The motion is passed, 99.82 percent in favor. Second resolution. Approval of the consolidated financial statements and transactions for the financial year ended December 31, 2020, posting net income group share negative by €7,000,000,000 This motion is approved 99.82 percent in favor. 3rd resolution, allocation of the net result for the financial year ended December 31, 2020.
It's proposed that the losses of the fiscal year should be put into the retained earnings account. This motion is approved by 99 point 9.6% of people voting. 4th resolution, approval of the related party agreements in accordance With article L22538 of the French Commercial Code relating to the conclusion of a loan agreement guaranteed by the French state and the granting of a shareholder loan by the French state. This motion stands approved 99.93 percent in favor. 5th resolution, approval of a related party agreement related to the conclusion of a framework agreement between Air France KLM, KLM and the Dutch state.
This resolution is approved 99.95 percent in favor. 6th resolutions, approval of a related party agreement related to the adjustment of the financial provisions of the partnerships entered into with Delta Airlines Inc. And Virgin Atlantic Airways Limited because of the pandemic. This motion is also passed. 99.95 percent of votes in favor.
Let's move on to Resolution 7, approval of a related party agreement related to the adjustment of the financial provisions Of the partnerships entered into with China Eastern Airlines Company Limited for 2020, This motion is approved. 99.94 percent of votes in favor. 8th resolution, the reappointment of Ms. Lenny Boron as a Board Director for a term of 4 years. This motion is passed.
99.89 percent in favor. Resolution number 9, reappointment of Ms. Isabelle Bullo as a Board member for a term of 4 years. This motion is approved, 99.81 percent in favor. 10th resolution, the reappointment of Delta Airlines Inc.
As a Board member for a term of 4 years. This motion is passed. 96.10 percent in favor. 11th resolution, the reappointment of Ms. Anne Marie Idrak as a Board member for a term of 4 years, independent board member.
This motion is approved, 99.85% in favor. 12th resolution, the reappointment of Mr. Jian Wang as Board Director for a term of 4 years. Motion approved, 99.23 percent in favor. 13th resolution, the appointment of Ms.
Gwenael Abisuet as Board member for a term of 4 years. This motion is approved 99.89 percent of votes in favor. Now the resolutions on remuneration. 14th resolution, approval of the information on the compensation of each of the company officers for 2020. This resolution is approved 99.87% in favor.
15th resolution, approval of the fixed variable and extraordinary components of Ms. Annemarie Coudert as Chair of the Board of Directors for 2020. Approved 99.88 percent of votes in favor. Resolution number 16, approval of the fixed very blend, extraordinary components of the total compensation and benefits of any kind paid during the 2020 financial year Granted in respect of this financial year to Mr. Benjamin Smith as Chief Executive Officer.
This motion is passed, 77 point 2 8% in favor. 17th resolution, approval of the 2021 compensation policy For the non executive company officers, this motion is approved 99.89 percent in favor. 18th resolution. Approval of the 2021 compensation policy for the Chair of the Board of Directors. This motion is approved 99.87 percent in favor.
2019 resolution approval of the 2021 compensation policy for the Chief Executive Officer. This motion is approved, 77.82 percent in favor. Quarter. Now we'll move on to the resolutions that are part of the extraordinary business at this meeting. Firstly, number 20, delegation of authority granted to the Board of Directors outside of a period of public offerings.
So delegation of authority outside of a period of public offerings granted to the Board of Directors for a 26 month term for the purpose of issuing ordinary company shares and securities granting access to other company capital securities to be issued or granting the right
to the allocation of debt
securities while maintaining preference subscription rights, 97.77 percent in favor. 21st resolution, delegation of authority granted to the Board of Directors to exceed a nominal amount of €643,000,000 This motion is approved, 97 0.37% in favor. 22nd resolution, delegation of authority granted to the Board of Directors for the purpose of issuing ordinary company shares and bioweave public offerings nominal amount of €129,000,000 This resolution stands approved 77.91 percent in favor. 23rd resolution, delegation of authority granted to the Board of Directors for the purpose of issuing ordinary company shares and securities granting access to other company capital securities to be issued or granting the right to the allocation of debt securities within the limit not to Nominal amount of €129,000,000 by private placement, 77.91 percent in favor. The motion is passed.
Number 24, delegation of authority granted the Board of Directors to increase the number of shares to be issued in the event of a capital increase with or without shareholders' preferential subscription rights Within the limit not to exceed 15% of the amount of the initial issuance. This motion is carried 99.6% 6.6% in favor, 99.66% in favor. 21st resolution, delegation of power granted to the Board of Directors for the purpose of increasing the share capital within a limit not to exceed 10% of the share capital in order to compensate contribution in kind granted to the company in composite capital securities securities granting access to the share capital. This resolution has approved 99.93% of votes in favor. 26 resolution, delegation of authority granted to the Board of Directors for the purpose of increasing the share capital via capitalization of reserves, profits, premiums or other amounts eligible for capitalization within the limit not to exceed a nominal amount of €322,000,000 This motion is approved.
99.94 percent of votes in favor. Resolutions 27 to 33, our delegations of financial authority of the same nature as the ones we've just gone through but used in periods in the context of a public offering period with caps lower than or equivalent to what was proposed in 2020. 27th resolution, delegation of authority granted to the Board of Directors for the purpose of issuing ordinary company shares and securities, While maintaining shareholders' preference subscription rights within the limit not to exceed the nominal amount of €161,000,000 This motion is approved to the tune of 96.53%. 28th resolution. Delegation of authority granted to the Board of Directors for the purpose of issuing ordinary company shares and securities without shareholders preferential subscription rights but with a mandatory subscription period and within the limit not to exceed a nominal amount of €161,000,000 This resolution is approved 96.13 percent in favor.
29th resolution, delegation of authority for the purpose of issuing ordinary company shares without shareholders' preferential subscription rights and with an optional priority subscription period within the limit not to exceed a nominal amount of €65,000,000 This motion is passed. 74.73 percent of votes in February 30th resolution to allocation of authority granted to the Board of Directors for the purpose of issuing ordinary company shares and securities granting access to other company capital securities to be assured you're granting the right to the allocation of debt securities without shareholders' preference of friffin rights, not to exceed nominal amount of €65,000,000 by private placement, 74.73% in favor. 31st resolution delegation, but 30 quenched on the Board of Directors. For the purpose of increasing the number of securities to be issued in the event of a capital increase with or without shareholders' preferential subscription rights within the limit not to exceed 15% of the amount of the initial issuance. This motion is carried.
96.48 percent of votes in favor. 32nd resolution, delegation of power granted to the Board of Directors for the purpose of increasing the share capital by an not to exceed a nominal amount of €33,000,000 in order to compensate contributions in kind granted to the company and comprised of capital securities or securities granting access to the share capital. This resolution is adopted 75.14 percent of votes in favor. Resolution 33, delegation of authority for the purpose of increasing the share capital by capitalization of reserves, Profits, premiums or other amounts eligible for capitalization within a limit not to exceed a nominal amount of €161,000,000 This resolution has carried 99.01 percent of votes in favor. 34th resolution, delegation of authority granted to the Board of Directors for the purpose of determining the issue price of ordinary company's shares within the limit not to exceed 10% of the share capital per year within the framework of a capital increase by way of public offerings without subscription shareholders' preferential subscription rights.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] This motion is also carried 75.06 percent in favor. 35th resolution, delegation of authority for the purpose of carrying out capital increases reserved to members of a company or group savings scheme without shareholders preferential subscription rights within a limit not to exceed 2% of the share capital. This motion is carried. 99.61 percent of votes in favor. The 36th resolution is next amendment of Article 26 of the Archivist Corporation related to the age limit for company officers.
In order to extend the age limit of the Chair of the Board in the event of separation of the functions of Chairperson and CEO. This motion is carried 99.87 percent in favor. And finally, the last resolution, number 37, power to accomplish formalities. And this resolution is also carried, 99.96% of votes in favor. Thank you very much, Anne Sophie.
We are now nearing the end of this shareholders' meeting. I'd like to thank all of the contributors and all of the shareholders out there present in front of your screens. I'd like to also round it off by sharing with you a conviction I have. Beyond the short term difficulty that we've got to overcome And the responsibility is to be assumed, we believe, in the future of Air Transport. Yes, we've got to continue to Let children's dreams come true.
They want to fly. They want to go out and discover the world and other people, and we will do this responsibly. The Air France KLM Group has always been listening to society around us and the societal challenges. Our history is made of innovation and transformations. We want to build up responsible and sustainable air transportation.
That's what we're currently building up. You have in front of you 6 senior managers of the group, including 3 women. It's also the hallmark of our Concrete commitments to make sure we have a more inclusive society. All around the world, in all of our business lines, our 76,000 staff members embody every single day our values, which are to do with openness, diversity. That's our DNA, And that's the DNA of our brand names, too, of our airlines.
You can rely on us to give you our total commitment to pick up the challenges out there and build up