Air France-KLM SA (EPA:AF)

AGM 2020

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May 26, 2020

Shareholder. Dear shareholders. Good afternoon. This general meeting in many ways is a very unique one. It is unique due its digital form, We thank the teams who allow you to, follow it under these new conditions. You had a possibility to ask the questions on your group on what it goes through and on its future, we'll answer later on. It is special because it's taking place during a period that Air France KLM Group has never experienced. For several weeks, Air France and KLM operated only 5 or 10% of their operations before the crisis. The other group's airlines are totally on stop for more than 2 months. Since the very start of this crisis, the group's teams have played a major role by repatriating 1000 of French citizens, as well as Dutch citizens from around the world. Our cargo teams are widely been involved in the supply of medical equipment of our 2 countries. Our maintenance teams have taken up the challenge with our crews to maintain the absolutely essential, connections for life while preparing the kickoff of the economies. This general meeting is very special due to the analysis and proposals that we will be sharing with you through our CEO, Ben Smith, surrounded by his CEO committee, Frederic Hajjie and Peter Elbers. I'd like to thank them. And all the group's teams who are facing this crisis with commitment, courage and a very, Special determination. I'd like to thank also the members of your board of directors for the very strong involvement whilst, constantly every week have them on board since the beginning of the crisis, I think, again, our 4 main stockholders, Delta, China Eastern. And more particularly, the French state, the Dutch state for their trust and their financial support that has been exceptional finalized for 1, the 1, and being finalized for the other. It's thanks to them that we can weather this crisis and continue to write history of the Air France KLM Group. We are aware of our collective responsibility and will be up to the task. Air France KLM has proven its resilience capacity in the past few months our teams have adjusted very quickly to a situation that no one would have imagined. We owe this resilience to the cultural transformation ability of our group whose history has been going through 1 Century for KLM and more than 86 years for Air France, we are drawing from our DNA, especially in unique strength that we can use So we have in front of us huge challenges in the short term, an operational challenge. We are gradually restarting our operations. This is totally unheard of. The challenge then is to be back on track for a performance up to the financial support that is provided by our 2, shareholding states and our banking partners in the world and in economies, which remain shaky for many months, this will require significant efforts. These first two challenges will have to include the new challenges of the post COVID 19 world, some of them exist already, but they will take a new dimension. Have in mind our environmental responsibility and the sustainable transition of the Air France scale and group, we will speed up our ambitions for our clean future and for the future of the industry as a whole. I also believe that we have increased responsibility when it comes to health safety. This is an absolute priority for all our employees and for will take even further forward the conditions of air travel. And we already had to adapt to this, for the past 20 years, with the new safety rules in regard to terrorist attacks. We know these challenges, and I know that our group has available all the human assets the operational and technological qualities in order to take this up. This crisis has helped to prove what is perhaps the most important we are a strategic trump card for France and for the Netherlands. We have been among the first companies to be helped We have the trust of our covenants. This is not by chance. We were able to gauge our role and the Air France KLM actions in the situation of a crisis, we are a central asset for many economic sectors. We've always been at the heart of influence of France and the Netherlands. We've seen our colored fly around the world each company, each citizen in France or in the Netherlands is connected to the whole world, thanks to our 2 SIP Hole and WACCE hubs. This is a strategic advantage and should become even more a competitive advantage. Finally, we are a robust group rooted in the European history and culture and strong, thanks to our global partnerships. It is also through the airline industry that Europe has materialized and that manufacturers such as Airbus, but also the constitution of a group like ours has been in existence I'm convinced that we'll be able to meet the challenges that we're facing through an unflinching European solidarity. At the moment, when the world is being hit hard by this pandemic, we are asking the question about formalizing our purpose today, for want of having finalized it, I can assure you that we can feel it very clearly living at the bottom of each one of us. We will be able to present it to you in a few months. To end. I'd like to express my total confidence in the leadership and the vision of the group CEO, Ben Smith, with his 30 year experience dedicated to the airline industry with his passion surrounded by the group's teams and of our companies with each man and each woman in every sector of operations, he'll be able to allow Air France KLM to overcome this crisis which is of such a scope that we could never imagine it just a few months ago. I'd like to thank you for your attention. I will now proceed with the appointment And so filolet, secretary general of the group, at Air France Guillain, and Frederic Gauge, CFO for Air France Guillain, have accepted to assume the roles of scrutineers in accordance with the applicable rules and so filoli shall be secretary of the meeting due to the fact that we are behind closed doors auditors will not be attending Frederic Hajde, the CFO for the group will be presenting the reports on behalf of the College of the auditors according to what is customary, we have called upon a Bayleaf to note the regularity of this general meeting. Well, I will now turn it over to Anso Filore for the formalities. Thank you very much for your attention. And Sophie. Thank you, Madam Chair. This general meeting is being held behind closed doors due to the health crisis situation in accordance with provisions of Article 4 of the government order of the 25th March 2020 regarding the adjustment of meeting rules and deliberations epidemic, I confirmed that the legal formalities have been accomplished. The notice of meeting and the call for convening were published on 17th April 8th May 2020. All documents provided for By law are available on our Internet site they were made available to the stockholders since the call to meet, and I suggest not to list them. In addition, every registered shareholder has received by post communication of the call of the agenda and of the resolutions. And finally, I inform you that we have not received any request for further resolutions or other items on the agenda. The general meeting is taking place behind closed doors. You had an opportunity to vote or give a proxy through the Internet or by post. No vote will take place during this general meeting. We shall disclose to you the result of the voting at the end of the session. The verification of the attendance register gives a final column of 66.25% acknowledging that the legal quorum, which is 1 quarter of shares with voting rights, has been fulfilled. The general meeting is therefore regularly formed and made now deliberately, deliberate, validly in its ordinary and extraordinary form. The chair, thank you very much, Anne Sophie. I now declare that the general meeting is regularly formed and may validly deliberate. I suggest not to fully read the report of the board of the resolutions and the reports of the auditors that were made available to you. When it comes to the agenda of our general meeting, and so Frito Lay will first of all, give you As a reminder of the resolutions to be voted on, our CFO, Frederic Hajier will now lay out the financial results for 2019, and the CEO, Ben Smith, will then present the strategic directions of Air France KLM. Both of them will come back, of course, on the crisis related to the COVID 19 and consequences following their presentations. I will present the main features of our governance. As I pointed out, the various reports by the auditors will be presented We will answer, finally, the main questions that you have posed to us before the general meeting, before moving to the presentation of the results of the voting of the resolutions, Isabelle Boulio, who's the chair of the compensation committee, will Then through a video, give you an update on the work of that committee, I will now yield to Anne Sophie who will now summarize the resolutions, which will be submitted to your vote. Thank you, Anne Marie. I will present quickly the resolutions the details of which are in the brochure made available on our Internet website. First of all, its ordinary form resolutions. 1, 2, 3 are about approving the statutory and consolidated accounts for 2019 and the allocation of the result resolution is about approving the regulated commitments. Resolution 5 to 8 aim at the nominations renewals and ratifying the co optation of directors, resolutions, 910, bear upon the renewal of, the auditors resolutions 11 to 16 are about the compensation of the executive directors corporate offices for 2019 2020 compensation policy. Resolution 17 is the authorization to be given to the board to operate on the shares of the company. Let's move on to the resolutions in its extraordinary form. Resolution 18 to 24 aim at the proposals for financial delegation usable outside of the, periods of public offer resolution 25 to 32 are about financial litigation proposals to be used during a public offer period resolution 32 to 20 33 aimed at giving a financial delegation, allowing to set the issuance price within the limit of 10% of the share capital as part of the capital increases through a tender to the public and the proposal of financial delegation as part of a corporate saving plan or, related to the group. And finally, Resolution 34, which is about the powers for the accomplishment of formalities. Thank you, Anne Sophie. I'll now turn it over to Fred De Igaje, our CFO, so that he can share with us the 2019 results of the group and the outlook for 2020 Frederick. Thank you, madam chair. Ladies and gentlemen, shareholders, good afternoon. As Anne Marie said, it's under unheard conditions that we are holding this 2020 general meeting. I would like to thank you as well for attending today. The COVID-nineteen outbreak is the biggest health crisis encountered by our industry, the air transport is hard hit with a level of operations very low in the world currently. And this situation has material consequences for our group, our employees, our customers, you, our shareholders and other stakeholders of Air France KLM. As shareholders, I imagine that you have numerous questions concerning the current situation and the future of your group and will attempt to answer as best as we can during this general meeting. To start the targets of 2019, first of all, let me talk about the past year during which we celebrated 2 anniversaries. 1st of all, the 100 years of KLM, the oldest airline in the world which has kept its, first name and over 1 year was a real pioneer of global aviation 2nd anniversary, our transatlantic joint venture between Air France, KLM, and Delta Airlines, which celebrated 10 years of remarkable cooperation. The 3 airlines have overcome together major steps opening up new routes between Europe, North America and by improving our service to our customers. Built around a network of 7 hubs, 5 in the USA and 2 in Europe. The partnership includes today, Canada, the United States, Mexico and Europe and allows Air France KLM to be in a position of strength on the most highly frequented routes in the world. Also, we achieved the financial goals in 2019. First of all, in terms of unit costs, unit costs of the group, excluding the ForEx and on a like for like fuel basis, were cut by 0.9%. Thanks mainly to the various projects undertaken within the airlines and the improvement of their operational performance. Now in terms of investments, they remained, checked at 1,000,000,000 in line with our commitments towards the market. Lastly, we reached the goal in terms or the net debt over EBITDA amounted to 1.5 at the end of 2019, a very satisfactory figure and very close to our main competitors. Let me now present show the impact of the projects undertaken by all the employees in the group in an economic context that was with whip sowing with commercial tensions of volatility of the oil price and the changes in the currency world. The revenues in the group benefited from the expertise of its operational and commercial teams and of its cruise people in the maintenance and in the cargo. All in all, revenues are up for every operation and especially sharply up, for Transavia And Maintenance. Our Euro Airlines Air France and CalAmp carried nearly 88,000,000 passengers and nearly 1,000,000 tons of cargo in our full freighters or in the bellies of our passenger aircraft Transavia also has continued its growth in a very quick way with over 16,000,000 customers on board of your low cost Lastly, the maintenance business has handled 3000 aircraft around the world and 200 airlines called upon its services. All in all, the Air France KLM group in 2019 transported centers and the group played fully its role as a union between the man, the cultures and the economies. Our offer and the optimization of our sales have allowed to capture better traffic and the number of passengers in the group has risen by nearly 3%. Regarding now, the operating income, which is a difference between our revenues and our operating expenses. The results for 2019 were impacted by 2 negatives. 1st of all, a fuel cost sharply higher over 1,000,000 higher than in 2018 and less favorable environment for our cargo business. All in all, with these various impacts, the operating result in 2019 amounted to 1,000,000,000 It is, however, down due to the low oil price by 1,000,000 versus 2018. When it comes to our net debt now, which equals all our debts minus our cash, it remains steady during the year. Despite the very high level of investment, and therefore, these are 7 consecutive years of lowering your debts for your company. Now our operations, let me start with the most significant one which is the passenger's transportation, the network business were 50 thousand people are working, which allows our customers to travel on Air France, on KLM and our 2 regional operators has strengthened its development, its development by starting new improvement approaches the customer offer benefits from numerous projects such as optimizing the use of their feet or improving operational performance, the simplification of, turnarounds and the improvement of our product. This network offer was built in order to fulfill the expectations of our customers, whether in the leisure business, in which require more and more new destinations and they are more and more demanding when it comes to the quality of our operations. From that standpoint, 2019 will have been a year where we, remarkably improved our satisfaction among customers. You can see it on what is presented on the screen with the striking turnaround of the Air France operational performance now ranked 7th when it comes to on time performance and also the Net Promoter Score, which collect the opinion of customers and has jumped as well in 2019 rewarding all the work accomplished at Air France. You will note, in addition, the O is still very high assessment at KLM's score of the NPSC 482, which is an excellent result within the industry. All in all, the revenues of our passenger business amounted to 1 1,000,000,000, they have risen by 3.6% between 2019 2019, thanks, mainly to the good performance of the medium haul routes Africa, the Middle East, the Caribbean, and the ocean, the Indian ocean, the traffic is up by 3.2% for capacity up by 2.5%. And so the load factor has improved and has reached more than 87%, which is a very an excellent performance within the airline industry. Let's therefore hail the expertise of our revenue management teams who are in charge of the price management of available seats on our aircrafts, which have allowed such a success. Coming now to our cargo business. That business is operated, thanks to our 6 full freighter fleet. And the passengers' aircraft bellies have also contributed to economic exchanges around the globe the latter were sharply lower in 2019 due to geopolitical uncertainties and trade tensions, especially between the USC and China. Some concrete examples can report about this crisis, demand from Asia or from the auto mobile industry, both of them sharply went down. Having said that, on the basis of our 2 hubs, Charles ago and Chippal as well as the expertise of its 4000 employees, the cargo business was quite resilient in terms of external pressures with a 10% market share, which is even slightly higher in 2019 compared to the previous year. Last year, to give you a rough estimate, nearly 80% of the goods were transported in the valleys of our passenger aircraft and the rest being operated in our full freighter Boeing 747s at KLM and Boeing 777s at Air France. The group is continuing the development and optimization of such important activity in order to adjust quickly to the current global Transavia and the low cost business, that business, again, so a noteworthy development in 2019. The revenue of our 2 subsidiaries Transavia Holland and Transavia France is up by 9 rising by 6.7% between 20182019 and a load factor which is at the record level, exceeding 90%. In terms of profitability, the margin of was established at 7.5%. So these are therefore very good results for your low cost carriers thanks to the 3000 employees that work there. Their commercial teams perfectly were able to leverage the very strong demand in the European markets around 6 Basis, Amsterdam, Rotterdam, Ahindhoven, Paris Our customers soon will be able to find again Transavia in Montpellier and in Brussels. The efficiency of Transavia is mainly relying on a service, which is appreciated by the customers on the basis of straightforward products and prices and the optimized use of 1 single type of aircraft. New agreements signed in 2019 and the obtaining of slots at Palioli shall enabled as Transavia France to speed up its growth starting from France, especially the maintenance business. Air France KLM is one of the global leaders when it comes to aircraft repair servicing engines and equipment. That activity includes 14,000 employees who are all aware of their pivotal role when it comes to safety for the airline transport business. Its revenue is significant. Amounting to 1000000000 generated through our external customers. Our maintenance business continues its strong growth and it is profitable with an Big efforts of our teams for reducing timelines, cost controls, the digitalization, have led to the improvement teams are continuing to innovate, I can mention, for example, the so called predictive maintenance, which allows to anticipate repairs and gain when it comes to efficiency on a daily basis, our expertise and the reputation that we have among other airlines and of aircraft lessons have helped us land new contracts and our book orders have reached at the end of 2019. $11,500,000,000, which represents several years, of course, of revenues. The maintenance activity has a global reach thanks to its partners and its numerous subsidiaries, for instance, in 2019, Air France KLM consolidated in global network by strengthening its presence in Asia, especially with its joint venture with Sabina and its equipment workshop, which is gradually being developed in Shanghai. Now our financial structure at the end of 2019 before this horrendous crisis that hit the current market, the gearing ratio of Air France KLM stood at 1.5. It's a beautiful example of our financial solidity. It's a very satisfactory ratio in the industry and very close to our main European competitors. The group had available in December 2019, of a cash of 1,000,000,000 added to this billion undrawn lines of credit for a situation, all in all, which would have been sufficient and even comfortable in order to face our financial commitments without the crisis of the COVID nineteen. And this is, by the way, the balance sheet situation that helped us in the past year to start investing for an amount of 1,000,000,000. A major share of such CapEx, as you know, was directed towards a renewal and modernization of the group's fleet with the reception of the Airbus A350 at Air France or of Boeing 787 at KLM and with the improvement of the less recent aircraft cabins like the Airbus A330 or the Boeing 777. Such CapEx has contributed to rejuvenating our feet, which is fairly young, with an average age of about 11 years, but also we're able to better satisfy the demand of our clients or contribute as well to cut our carbon footprint. The respect for the environment is, as you know, more than ever a priority for our group and for your group. So ladies and gentlemen, shareholders, what I wanted to share with you when it comes to Now let's speak about the first quarter 2020. When it comes to the outlook for the current year, we're published at the start of the month, our results for the first quarter, they showed a very promising early part of the year with, from January to February, a unit revenue and a traffic up despite the first signs of the COVID nineteen and unit costs, they were sharply lower. We're therefore able to note the first result of our strategic plan, which is entitled becoming a European champion, which we announced last November. Now the COVID-nineteen crisis which, 1st of all, impacted our network at the end of January and all the flights towards China were gradually suspended. Following this, the speeding up of the outbreak and the closure of the borders impacted very much so the month of March. And despite the good figures in January February, they led to results sharply lower for all our operations in the first quarter 2020, a decline of 20% of the number of passengers transported, revenues and an operating result for Air France and KLM, you know, in a free fall with a gearing ratio, which is started to deteriorate. The whole sector was incredibly hit by that unprecedented crisis the airlines, the manufacturers, their subcontractors are currently suffering. In the case of Air France Gallium, to counter that crisis in its effect very quickly. We grounded most of our fleet and then proved our ability to adjust with the implementation of quits and deep steps in order to protect our cash. We immediately cut our operational expenses, especially putting in place the part time work, allowing savings at about 1,000,000 per month in the second quarter, we cut most of our all of our fixed costs for 2020 which represents about 1,000,000. In addition, the drastic reduction of our capacity allowed us to reduce our cost by 50% thanks to variable costs. In addition, we all immediately negotiated the postponement of payments, of taxes of corporate taxes beyond 2020 for an amount to this will have an impact of 1,000,000. And additionally, some of our suppliers' invoices were postponed after negotiation with them. The French and that states, the airports, and the lessors immediately, cooperated, and I thank them for that. I also note a significant decrease in our investments at 1000000000 for 2020 a decline of 1,000,000,000 compared to our budget. And naturally, these are just estimates we already presented, the in the, the firm results. So the 1st quarter, we continued to improve those figures. The uncertainties remain with regard to the COVID 19, but we must be very cautious about our assumptions of a pickup in the next few months, the quick support by the French government and the discussions and the way with the Dutch government are essential for our group so that we can weather this major crisis and rebuild ourselves. This shows their trust in the future of our group. So the various financial transactions carried out since the beginning of the year by the Air France KLM group, Air France and KLM, will allow us to face our future obligations. As you will now to take up the biggest challenge that the airline industry is experiencing now, and we are determined to overcome this crisis and our actions and the expertise of our people allow us to see better days ahead, even though financially we are planning for 2020 and EBITDA sharply negative due to the COVID crisis, which had never been the case since the merger between Air France and KLM in 2004. Now in order to conclude the structure of our capital regarding the shareholders at the end of March, the French state and the Dutch state, still own each about 14% of the equity and our strategic partners Delta Airlines and China Eastern Airlines hold 8.8% each of the capital, the European shareholders, make up 58% of our capital group wise, which allows us to fulfill quite widely the European roles in terms of citizenship applicable to airline companies, especially British Institutions are dealt with as being non European. To wrap up this presentation I would like to thank you for your attention and for the support that you provide to Air France and KLM. We really appreciate our discussions between those who really love the airline industry, the members of the club, the committee of individual shareholders. And this committee, by the way, will be renewed next year in 2021. For the 2nd consecutive year, the Air France Scale Land Group has been awarded the SBF Twenty Digital Communication Top Ranked. It's a surprise. We are very proud of and shows the commitment of our team and the relations that we have with our investments, I'd like to thank you for that. The chair now, thank you very much, Frederic, I will now turn it over to Ben Smith, our chief executive, so that he can present the strategic directions of the group. Garcia? Thank you, Almarry. Dear shareholders, as was mentioned by our chair lady, this 2020 AGM is very special in many respects, as it is organized in the midst of the COVID-nineteen crisis, and it is impossible that we meet and hold this meeting in person as we used to do every year as it is in the midst of the hardest crisis, the aviation industry has faced up. We are experiencing personal and professional moments of great complexity in a global airline industry, almost in shutdown, hundreds of aircraft being grounded and thousands of employees under part time activity mechanism. We know that the rally of our business operations will be slow and very gradual We also know that we'll have to adjust to adapt to a new normal in which airline business operation will not resemble that it was, those it were, a few months ago. Since the very 1st days of the crisis with the CEO committee of the group, Peter Anne and Frederick jointly with the executive committee of the group and the airlines jointly with all of the management line and operating teams we did out, outmost, so that the Air France Kering group be on a par and adjust and adapt as quickly as possible to this unprecedented crisis. And I want to hail and command our 83,000 employees who did exceptional outstanding work since the beginning in of the outbreak in France in the Netherlands and around the world to remain at the service of our clients and to offer them solutions in very special and parallel situations. Thanks to them, your group repatriated more than 500,000 European citizens. Thanks to them, the Air France KLM Group was able to be present and to respond to the needs and requirements of our French and Dutch nations, respectively, this exceptional engagement and dedication of all our employees is one of our major strength in 2019, we also demonstrated our ability for cultural transformation by essential accomplishments for the future of our group, which will be a major asset of the Air France Kering Group. And on this basis, we will build up our, turnaround plan. I would start by talking about 2019. But the COVID-nineteen crisis that we are currently facing has disrupted our reality. The COVID-nineteen crisis has strongly challenged our industry, perhaps more than most. At first, the world assumed the novel coronavirus was to be regional. Contained in Asia and impacting our market there. However, the virus spread quickly across the globe. Travel bans and lockdowns followed, which had an unprecedented impact on worldwide air travel. For weeks, Elfrance and KLM were operating under 10% of their regularly scheduled capacity, while Transavia and HOP were forced to ground all flights. Even now, global airline capacity is only 20% compared to last year. 2019 was a strong year for Alfrance KLM. Last year, we set a goal for ourselves to focus on the basics. Ensuring we had a solid basis upon which we could build the foundations for our future success. I'm very pleased to note that we made great progress until the onset of COVID-nineteen, we were achieving very strong results. All major KPIs were in line with guidance showing each airline was on the right track before the COVID-nineteen crisis hit by way of example, aggregate unit costs were down 0.9%. Thanks to the collective hard work and dedication of all our employees, 2020 was set to become a banner year for the Alfons KLM Group, following a successful 2019 with dozens of new labor agreements signed that permit double digit increases in commercial flexibility going forward. 2019 was a successful year for the group as we progressed down the path of significant transformation. Over the past 20 months, we have worked hard with our labor partners basing our new relationship on trust, respect, and transparency. This is Born Fruit. We have been able to restore labor piece, unleash future growth at Transavia, and start work on harmonizing our fleets at KLM and El France. 2019 was also a very special year for KLM. As it was the 1st airline in the world still operating under its original name to turn 100 years old. I'm so proud of the achievements and contributions from all KLM employees over the past 100 years, and I know we'll see much more success and many more innovations at KLM over the century to come with Peter Elbers as its head. The LCOS KLM Group's 2019 financial results were positive with an operating profit of 1,000,000,000 admittedly below 2018 levels, though driven in part by significantly higher fuel costs. In November 2019, we presented our go forward plan for the next 5 years, including a significant transformation plan for El Paso. KLM already went through something similar a number of years ago. I'm pleased to note that the Alf Hans transformation program was already starting to yield positive results in 2019 with unit costs dropping by 1.8% in the fourth quarter of last year and a further 2.9% during the 1st 2 months of this year. This was made possible, thanks to the bold actions taken in 2019 including the early stage restructuring of the French domestic network, improved operational performance, strong control of discretionary spend any hiring freeze across management and support functions. On the commercial side, all around the world, our joint, Alfons KLM teams, delivered a successful 2019 and started 2020 on a positive note, seeing increased unit revenues of 0.8% in January February of this year. Customer satisfaction increased, thanks to an improved product and better operational performance leading to a boost in our MPS or net promoter scores of 10 points on our business to business and business to trade scorecards Internally, our Air France KLM IT team also made good progress on its transformation plan, most notably resulting in a unit cost reduction of 4% while meeting all 2019 KPIs. We are very pleased indeed to see such results. In our Engineering And Maintenance division, 2019 was the most successful year ever, with a total revenue up 6.2%. 3rd party revenues were up 11% responsible for around 50% of engineering and maintenance's activity and with a positive forward outlook, Overall, I'm quite pleased at the group's performance over 2019. And as I mentioned, the 1st 2 months of 2020 were also quite positive. The November plan was showing early results, but unfortunately, this is when COVID-nineteen hit. And since then, we've been doing everything we can to mitigate the damage caused by this crisis. The severity of the COVID 19 crisis is like nothing ever seen before. It is far from being comparable to September 11th, SARs, or even the global financial crisis of 2008. As a result, the Alfons KLM group took immediate action. Our first priority was to ensure the safety of our employees and our customers. As airlines, we have an important role in ensuring the safe and secure recovery of our industry. We equipped our employees with necessary supplies such as face masks and gloves to ensure a sanitary working environment for them and our customers. We are all proud to repatriate from all over the world. We reinforced sanitary measures for customers, including obligatory face masks on all flights. Elf Haas has also implemented temperature checks before boarding from its hub at Wazee Chaldegolle. More important than ever before is our commitment to safety, operational excellence and our local communities in Amsterdam, Paris, and around the world. I would like to thank all our employees for their dedication and professionalism during these challenging times. We also took decisive financial action over the past few months. We immediately revised our CapEx investment plan downwards by more than 1,000,000 cut our operating costs by around 1,000,000 halted all non safety or nonoperationally critical investment projects and significantly reduced all consultants and external staff This resulted in an immediate cash savings of 1,000,000. The positive start to 2020 that we saw in January February was negated by the acceleration and global impact of COVID-nineteen towards the end of February. During the 1st 2 months of the year, passenger unit revenue was up 0.8% and unit costs were down by 1.6%. We saw our capacity drop in March by 35%, which resulted in a load factor decline of 20 points and an increase of unit costs by 17%. They'll be quickly responded by reducing our network capacity by more than 90% from April through June, and continuing to pursue 3rd party maintenance where possible. Unfortunately, we were not able to avoid a negative impact. The LCOS KLM group also deployed more cargo capacity to respond to the increased demand for essential medical supplies. Cargo flights were an essential element in the fight against COVID-nineteen. Over 100,000,000 pieces of protected medical equipment were shipped through so called air bridges using cargo and converted passenger aircraft alike. As the COVID-nineteen crisis evolved, Elfros, KLM and Transavia were in the first line to help our European customers get home, having repatriated more than 500,000 people to the Netherlands, to France and across Europe. Our ability to rapidly adapt to this major crisis and to support our governments and our fellow citizens and the collective efforts of our 83,000 employees around the world and show how capable and quickly the group is of engaging and mobilizing when necessary. I have absolutely no doubt that we will emerge from this crisis stronger than ever before. We are all working tirelessly together to rebuild the group starting now. I'm very pleased to note that the Alfons KLM Group and Alfons received exceptional support from the French government with a $7,000,000,000 financing package to get through the crisis and to set the basis for the post COVID-nineteen period. However, I must stress that this is not a blank check. There are several conditions to these loans chief amongst, which is the transformation of Alfrance into a more sustainable company with a significantly reduced environmental footprint. We are working hard on a restructuring plan, which We will present in the coming months, and it will address many of the conditions imposed by this support package in a commercially viable and responsible manner. The Dutch State has also showed its strong commitment in the form of a 1,000,000,000 to 1,000,000,000 financing package to KLM, which currently remains under discussion. The strategic priorities we set in November 2019 during our Capital Markets Day remain just as vital now as they were 6 months ago. But this plan Elkhon's launch an ambitious transformation plan to fix its current broken model and boost its profitability by increasing operational efficiency and simplifying processes and pivoting towards the most profitable flows in order to extract maximum value from the Paris market. KLM will continue to develop its current business model further growing as the best connection carrier in Europe. KLM will keep continuous focus on cost and operational excellence and leverage and evolve its global brand to remain a top customer choice and increase its profitability. Transavia is our tool to address the price sensitive market with an efficient and attractive low cost option. In the coming years Transavia will serve point to point destinations from Amsterdam Parioli and the French provinces taking advantage of unlimited growth potential now available at the French subsidiary. It targets to be number 1 or number 2 in all bases in which it operates. Looking ahead, our 3 airline brands have clear roadmaps to support the execution of the Alfalfos KLM group strategy during the years to come. The airlines are discussing internally how to best adapt to a post COVID reality, including through a resizing and restructuring of business activities, employee headcount and fleet which I'll speak to in a minute. The forecasted resizing of management and support functions at KLM and Alfrance is consistent and in line with their own internal transformation plans and projects. KLM has already announced a voluntary departure plan It plans to make available to all employees effective June 1st, while a similar project is still under discussion with labor groups at Al Hajas, which we begin by encouraging mobility from the provinces to Paris. Constructive discussions with elected employee representatives are currently underway in order to enable this accelerated transformation from a label perspective. The Alpha KLM Group's transformation must also have ambitious environmental goals. We are committed to a more virtuous, more sustainable aviation model that is better adapted to the world and to our customers of tomorrow. Both KLM and Alfas will reduce CO2 emissions per passenger kilometer by 50% by 2030 compared to 2005 levels. Fleet adjustments and the utilization of 2nd generation aviation biofuels is key. And we will play a large part in the establishment of a European aviation biofuel industry. As the recognized leader in the airline industry's energy transition for the past 15 years, acknowledged by multiyear 1st place rankings on the Dow Jones Sustainability Index, the group is preparing to accelerate its commitment to the environment. Alfrance's domestic network will undergo an accelerated overhaul in order to both meet the environmental targets set by the French government as well as being financially breakeven by 2021. Capacity will be reduced than 2 hours 30 minutes is available and which do not feed the hub at Palli Ponce Caldagold. The achieved labor stability lays the foundation for constructive discussions with elected employee representatives on the group's restructuring plan. Such as resizing the organization in order to adapt to post crisis activity levels. Following the November 2019 priorities, the various FSAS KLM divisions, cargo, commercial, engineering and maintenance and IT have been hard at work on their own restructuring plans which will be accelerated wherever possible. In terms of fleet due to plant closures and the aircraft manufacturers, we will be delaying the entry into service In addition, we have already accelerated the phase out of the Airbus A340s and Airbus A380s at Afras as well as KLM's Boeing 747 fourseven fleet. The earlier than planned exit of these aircraft help position our airlines to both meet their environmental objectives as well as help us achieve further fleet simplification and harmonization by reducing the number of fleet types at each airline KLM is already far along in this regard with 67 wide body aircraft in the winter 2019 season. Going forward by removing the Boeing 747 from its fleet, KLM will rely most heavily on the Boeing 777787 which carry a common pilot type rating, a very unique and efficient strength. The Rbus A33020300 and 300 fleet will remain for now as per our original medium term plan. However, should we see additional reduced demand in the future Due to a prolonged recovery, we have the downward flexibility to reduce the number of A330s in service at KLM earlier than planned. At El France, there are currently 109 wide body aircraft in the fleet. However, with the exit of the Airbus A340s and Airbus A380s, This will reduce the Alpha suite from 6 to 4 aircraft types, an improvement in fleet harmony by 1 third. The Boeing 770seven-two hundred ER and Airbus A330-two hundred fleet provide the downward flexibility at Elfa's giving the airline the necessary flexibility to weather any future storms on the horizon. We don't yet know how our customer's travel habits will change. Or how quickly they will start traveling again. Recovery of capacity and demand remains uncertain given several unable variables and moving targets. In any scenario, recovery is expected to be slow around 2 to 3 years at least and the ability to manage these variables will determine the speed will be dictated by the ability Secondly, as airlines, our ability to build trust with customers in terms of sanitary measures is key. Therefore, internationally recognized and agreed upon health standards are vital both to ensure safety and to permit synchronized and homogeneous airline operations around the world in a post COVID reality. Thirdly, the lockdowns implemented in many countries will significantly impact consumer behavior with the rise of working from home and video conferencing over the past few months replacing business travel. The more entrenched this behavior becomes, the greater the impact to our industry's recovery path, especially as many businesses might continue to restrict travel for cost and health reasons. Finally, we expect the airline sector to be reshaped going forward This is without doubt. As the crisis continues, we will see some less sure footed airlines go bankrupt. Many airlines are already going into administration, such as Avianca and Virgin Australia, while many others are shrinking notably through workforce reduction plans. This global capacity reduction might dampen the expected yield decreases due to previous capacity in the market. What is certain is that we need to rethink our model, rethink our network, our markets, our services, our products and our customer relationships. We will have to continue to reflect on our working methods and make them even more efficient. We have started to work on this across the airlines and business units of the Alfons KLM group, but we are going to have to move very quickly and rebuild a different group in a deeply shaken airline industry. By summer 2020, the group will present a new accelerated transformation plan aimed at being ready for the post COVID-nineteen world. The industry will need to respond to these expectations through various measures by various industry stakeholders, most notably through strong alignment from airports airlines and governments around the world. As you can see, the challenges are immense and I can assure you that I am totally confident and I trash that will be able to rebuild the near France scale and group, which will be strong and a leading player in our industry. I first have full trust in the teams of the group, what we have started to achieve when I took the helm and from the beginning of this crisis, it has been huge, our ability to adapt very quickly standing as united and in mutual support and sharing common goals. I have full trust in the management of the group, in the CEO committee, in Peter, in Anne, in Frederick, as well as all of the management line of the group. And I can testify, to the great sense of pride I and we all draw from working with all these people so you can count on my personal dedication and full commitments so that we weather this crisis and that we go on with our successful transformation to be an efficient leading group on the path of sustainable transition so much is what we wish for Air France Galen. Thank you very much. Thank you very much. Ben, says I'm Eric Coudeire. Thank you for this summary. And I suggest now that we watch a short video on the group. And then I will take over to speak to you about the work done by the Board of Directors. The COVID-nineteen pandemic has devastated companies, Countries And Economies. The scale of the impact on the airline industry has been totally unprecedented, prompting the grounding of virtually all the flights. As it has done, time and again, in its history, the Air France Kellen Group has responded to this crisis with impressive resoluteness. By maintaining a minimum schedule, we have made essential travel possible. While the global airspace was shutting down at exceptional speed, Air France, KLM and Transavia flights, enable the repatriation of more than 500,000 fellow European citizens who has trended abroad. Thank you, and well done. Congratulations to all the staff who help us and who enable us to travel today despite these very difficult circumstances. You are here. Thank you very much. This will remain the largest repatriation operation ever realized and a major example of cooperation with states Whether by cargo flights or by operating aircraft usually reserved for passenger transportation, the group has enabled the transportation of the medical equipment and supplies needed for European citizens. Our flight crews who are trained to deal with stressful and frightening situations have been paid tribute for their composure and professionalism. With this hubs and infrastructure that are strategic for our countries, Air France KLM has been a constant presence during the crisis and will remain so during the recovery. This is a source of pride for the 83,000 employees of the Air France scale and group. Throughout the crisis Air France KLM has shown its resilience. We will be the one of the infrastructure for the construction of the post COVID well, Efrance KLM is embarking on a new chapter in its history. 1st and foremost, traveling differently. Health safety as an absolute priority. We want to guarantee the highest possible level of health safety for our customers and employees the mandatory wearing of masks, temperature control, cabin disinfection, everything possible is being done to invent a new conditions of travel as pioneers in aviation safety will be the same for health leader in the airline industry's energy transition for the past 15 years, the group is preparing to accelerate this commitment to the environmental transition. Both Air France and KLM would reduce CO2 emissions per passenger per kilometer by 50% between now 2030. And relative to 2005. The utilization of 2nd generation aviation biofuels is key and will play a full part in the establishment of a European aviation biofuel industry. A lever of competitiveness and the service of all the economic sectors in France and Netherlands and elsewhere in Europe the group proved to be vital during the crisis and will be again for the relaunch of our economies and the service of all our customers. Dear Shareholders, I will take over in my capacity as chairperson of the, appointment and governance committee so that I share with you the work conducted by the Board of Directors and the Board Committee is now remembered that since May of 2018, Our company has opted for disconnecting the roles between the chairperson ship of the board and the CEO ship of the group. 2019 showed that this governance decision was very relevant making it possible for top management to focus on operational and strategic issues while the chairperson has taken on the issues connected with governance and relations with public powers among others. Now remember that in 2019, the board approved lead, a proposal made by Ben Smith, to expand the role of the CEO committee, which he shares, who has Frederick Gaugere and Rigay, Peter Albers, as Albers, sorry, as members, the goal being to improve the efficiency and profitability of the group. Ben Smith was then able to build upon a reinforced management governance by the CEO committee to set these strategic directions of a group, which were approved by your Board of Directors and were then able to implement such directions. Remember also that Ben Smith is a member of the boards of directors of Air France Calum, of course, but also of Air France, and he's a member of the supervisory board of KLM. This allows Ben Smith to transmit a common share strategic vision to these 3 governance bodies. So our board of directors has 19 members. It has a great diversity with respecting nationalities, stakeholders with gender balance between men and women and skills the diversity of a board member profiles has been a strength and an asset for our group. The ambition of the policy to, identify and select bald members has been to give reference to profiles with international exposure, with knowledge of the Transportation And Aviation Industry as well as expertise on customer relationship, digital technology, and corporate and social responsibility. The makeup of your board illustrates the equilibrium or balance between those board members representing our 4 major shareholders, the French state, the Dutch state, the Delta Airlines and China Eastern Airlines as well as the independent both members and the board members representing salaried employees and shareholder salaried employees. I would like to thank the members of the board committees as well as the chair persons of these board committees for their hard work dedication throughout 2019 with a very high attendance rate on the level of 94%. Now with respect to the audit committee, which is shared by Marie Solignon, it's a focus its work on reviewing the accounts, financial statements preparing for the budget, monitoring the risks, CapEx and investments, especially connected with the fleet, and fleet management as well as the aspects connected with the hedging policy of the group. And 2019 in this respect was the 1st year when the sustainability committee was introduced and played its full parts, the group has been very much engaged in social societal and environmental issues, especially with respect to its very bold and ambitious goal with respect to environmental transition. The work conducted by the sustainability committee, which is chaired by Anne Marie Idrack, has reinforced the level of information and sharing and knowledge of the board in this respect. Now with respect to the compensation committee, he had the Hoep Sheffer, who is the with a non independent board member has been sold since the moment when the Dutch state took a stake in the capital equity of the group in February of 2019. He was replaced since role as a chairperson for this committee by Madam Isabel Bouljon. I would like to thank her Isabel Bojo will be presenting to you the work conducted by this compensation committee in a video, which we'll be watching when we vote on the resolutions. And I take advantage of this AGM to very warmly thank Yab the Hope Scheffer for his dedication to the Efron Skelin group throughout the years when he served on our board. Finally, the Appointment And Governance Committee, which I chair, which is made up of Jean Dominique Commoli and Alexander Wineance, was very much called upon in 2019. He had to play a very active role in preparing the discussions on the governance mechanisms of the group jointly with the French and Dutch states. And I would like to review the key highlights for 2019. In February of 2019, as I said, the, Dutch state took a stake in the capital of our group following, the setting up of a working group between the French and the Dutch states, the board of directors has wanted to conduct an analysis of the governance agreements, in effect since 2003 and the Board of Directors had set for itself to the goal of simplifying some existing rules between the group level and the 2 airlines. Now these discussions and these development work was stopped due to the outbreak of the COVID crisis. The board of directors also actively participated in the various stages of building up France scale and strategic plan, especially with respect to the 5th November Capital Markets Day. And the Board of Directors was able to approve the financial targets, the long term financial targets and goals of the group with a very ambitious target to improve its margin, better than its competitors and the Board of Directors monitored the first steps in implementing this plan during the business review, and reviewing the key stages of the Air France transformation plan since March of 2020, as was mentioned by Ben Smith, And by Frederick Gauge, our group has been very, harshly impacted by this unprecedented crisis with a very, severe impact on our business operations, which has required very quick and very drastic measures, both internally and externally. Once again, I would like to thank our board, which has met every week, since the month of March to provide support to the top management in this unprecedented period which is so special for the future of Air France, KLM, Transavia and Hope Airlines. If I may, we will go to the appointments, reappointments and ratification of co optation of the board members on your board. 1st, it is my honor to call you for reappointing me. I was appointed as an independent director on the board of Air France Kalen for the first time in 2016. And remember that I also chair the appointment and governance and have been sharing it since 2016, you have some bio biographics here on the slide. And you have more detailed information in the brochure next with the convenient notice. So you are, so you are called upon to renew my term for a 4 year period. Next reappointment is Mr. Alexander Winens, who was first appointed in 2016. She's been a member on the appointment and governance committee since 2016. Alexander Winens has more than 30 years experience in insurance business and international finance since 2008, he was the chair and CEO of Aegon and his term of office terminated in April of 2020. So, you are called upon to reappoint him for a 4 year term, Mr. Yad De Hoepcheffer, the board member, appointed on a proposal by the Dutch state, let us know on 19th February 2020 that he resigned. From his civil office, effective today to replace him and upon a proposal by the Dutch State, we suggest that Mr. Dirk Jan Vandenberg be appointed for a 4 year to Mr. Vandenberg will contribute to our board, his experience in the field of economic and this industrial policy and diplomacy and is very great international car Since 2020, Mr. Vandenberg has been the chair of the medical insurance company association in the Netherlands. Mr. Yang Wong was co opted by our board on the 30th July 2019 upon a proposal by China Eastern Airlines following the resignation of Mr. Bing Tang, Mr. Wang is also a member of the Sustainability And Compliance Committee. Mr. Wang, has rich experience and knowledge with respect to corporate governance, investments and management responsibilities in the airline industry. He currently serves as secretary Secretary General to China Eastern Airlines. So you are requested to ratify this co optation for the length of the remaining term that is the AGM to take place in 2021. So I would like to thank you, dear, shareholders, for your attention. I will now give the floor to Frederic Gauge who will take you through the statutory auditors report over to you, Frederic. Thank you, madam chair. Given the very special terms of our general meeting, the auditors are now attending the meeting with us today. So with their agreement, I will proceed on their behalf. With the presentation of their report. And therefore, I will read the speech that they sent me. Reports on the consolidated accounts on the annual accounts for the fiscal year 2019 dated February 1920 20. Are shown respectively on pages 321340 of the universal, document for 2019. We certify those accounts. It's unqualified in light of the IFRS repository as approved in the European Union for consolidated accounts and in light of the French accounting principles and rules for the annual statements. These accounts were decided upon on 19th February 20 20 by the board taking into account the available information at this state regarding, especially the health crisis related to the COVID-nineteen since that date disclosures were made to you by the board on the events that occurred and the elements, known after these accounts were set relative to the development of the crisis, the COVID 19 pandemic through the press releases of March 10, 13th March, 16th March, the of April 2020. And in the universal recording document submitted to the French regulator, the AMF on 17th April. And with the following parts, recent events outlook for 2020 and risk factors this year, the auditors draw your attention onto the following method related changes, which and which do not challenge their opinion, our opinion on the consolidated accounts. First of all, booking the, documents with a limited lifespan per components and accounting for compensation paid out to customers resulting from delays and cancellations. These are so called client or customer compensations, our reports include a description of material misstatement risk, which we feel have been the most important for the audit of the accounts for the fiscal year 2019 as well as a summary of the work we conducted in order to respond to that. Those risks, which are named as key audit items, reflect mainly the main discussions we had with management and with the audit committee of the board. The key points of the audit bear upon this year on the revenue as it relates to the tickets issued, but not use the assessment of provisions for litigation and liabilities and booking the deferred asset taxes and the assessment of securities regarding the annual statements. We have no observation to express on the fact that the disclosure are true and regular. And as it's this regards with the annual and consolidated accounts, In addition, we have issued a special report on the regulated agreements on Page 344 of the universal recording document, which describes the, agreements between your company and the companies that have common directors or between your company and one of their directors when single agreement was authorized in 2019, it involves a change of agreements as they relate to the transatlantic partnership between Air France, KLM, Delta Airlines and Virgin Atlantic in order to reflect among others, the France KLM decision of not acquiring a stake in Virgin Atlantic. The reasons warranting the interest of these two agreements for the company are laid out on Page 345 of the so called universal document. Lastly, we have issued 2 reports, which include the following, transactions when it comes to the extraordinary resolutions of your general meeting. Report on the resolution with regard to the issuance of shares and various securities with maintaining or waiving the preferential subscription, right? And a report in terms of resolution on the increase in capital for employees who are part of a corporate savings scheme. The terms described in the, board report relative to these transactions do not require any remarks or observations from us, subject to a subsequent consideration of the conditions of issuance. We will issue if that is, if it's necessary, an additional report when we examine the conditions for setting the price of issuance ladies and gentlemen shareholders We thank you for your attention. The chair now. Thank you, Frederick. This ends the various presentations. We will now be able to move to the Q And A session and I turn it over now to Anne Sophie. Thank you very much, Anne Marie. So our general meeting is taking place behind closed doors. Therefore, you cannot ask questions in session. However, many of you asked us questions before meeting, and I thank you for that. You will find all of these questions as well as the answers provided by the board on our Internet website. The CEO committee will now answer some of your questions. The first question is the following one. The group is currently losing 1,000,000 per day and has obtained 1,000,000,000, 8, the group has stated that they will not find before 2020, the capacity level of 2019, how does a group think it can pay back such assistance Thank you, Frederic Hajde for answering this question. On the amount of the losses, we are clear within hide the fact that this situation was very tough. And when I mentioned in my presentation, the possibility of a negative EBITDA for 2020, I think it's a strong signal showing that the economic situation for the time being based on our assumptions is a situation, obviously, which is extremely tough for us, but also for all the global airlines also to be very clear, look at the list of the airlines that said they would be and the chapter 11 in the U. S. Or indicated of getting to a very dire situation. Perhaps two remarks on the question as it was expressed. First of all, the fact of having received, assistance, this not an is it an increase of our debt? First of all, we have a bigger debt, but we have more cash. So in a way, the net debt remains stable for the time being, Now what will matter in the coming month are 2 significant elements. The first one I believe is our own internal resources Look, Ben has already widely, elaborated on what was committed at the beginning of the crisis for my part. I system and what we had done in terms of safeguarding our cash, the savings schemes and the reduction of our CapEx plans. It is clear that our ability to face the crisis will be something major in the coming month. The second thing is what will be the scope of this crisis, will it stop at the end of the summer, at the end of the winter? Will it last for 2 years? Because clearly, the deterioration of our balance sheet, which will take place, which is taking place, will hold us stronger if the crisis is long. If the crisis is shorter, we might see things being more manageable in terms of a balance So these are the 2 elements that we should have in mind when we talk about the ability to pay back such aid. If if it's not too long this crisis, if the steps that we've taken are good and if the group in this few months will break out perhaps in a deteriorated situation that manageable, but if the crisis is much more dire than the soft scenario. And despite the very strong steps that we would be taking the impact, in that case, could be major on our balance sheet structure. And in that case, to be very clear, and this is what lies behind the question raised. Well, if we, I mean, strengthening egg equity, probably will have to be identified by the board. Thank you very much, Fredric. A new question around the Air France KLM recovery plan following the support of the French state, what are its ambitions and its timetable. Ben Smith, please? Yes. Thank you and Sophie. So many of you know, we presented a strategic, outlook plan, go forward plan in November of last year. That outlined each, each one of our strategies and targets for the medium term. That plan is still solid. As we said during the presentation today that, that plan was on track, throughout December and the early part of this year. We are now going to accelerate that, to ensure that we have a recovery, as, as best and as quickly as possible. The French domestic market, you know, ensuring the transformation of the French domestic market takes place in a accelerated fashion. That is one of our priorities, putting more emphasis on the impact, our environmental impact footprint of another, one of our major, axes. And then we do have extensive work going on with all the teams to make sure we have a comprehensive updated business plan that we will present, to the board of directors and to the French state in the middle of, the summer. Once we have more clarity around support from the Dutch state, we will try to align the updated business plans that we will be working on. So, okay, that is the overall picture on that. Marci Bo Kuben, in case Thank you very much, Ben. A question for Peter Elbitz around KLM. What are the major challenges in terms of KLMs transformation in order to adjust to the post COVID world, Peter? We had actually a pretty sound business model just before for COVID. And clearly, we're adopting ourselves now for a world after COVID where the demand is going to be less than it is today. I would just like to express. I'm very grateful and proud on all the staff who are working today in the very difficult circumstances. And in fact, rebuilding up the airline after a time where we had very little to no flights during the month of April. Today, in May, we are operating roughly 25% to 30% of our network and especially in the field of cargo, we are building up a lot of capabilities in attracting a business towards that. We've introduced a wide range of new sanitary measures, which is really helping us to make sure that our customers are having a safe and comfortable journey. So the world behind COVID or the world after COVID will depend on how well are we able to guarantee a safe and comfortable flight for our customers. It's even more important now than it was in the past. We have launched a whole range of initiatives in order to do so, and that will sort of speed up the transformation. Of course, we keep in mind various scenarios when it comes to what is going to be the precise numbers and precise amount of demand post COVID. Thank you. Thank you, Peter. A new question, what are the social distancing rules that will be applied by air fronts on its flights in order to spur passengers to feel totally confident onboarding aircrafts and rig I, please. Certainly, safety of our customers and of our staff is our absolute priority. And a significant recovery requires, confidence effect of being able to reassure our customers by rolling out robust health related steps. We announced this in the past few months since 11th May from for all the flights, we put in place temperature control or check of our customers, when checking in with a contactless to mommy to, I mean, it's now mandatory to wear a mask for our staff and for our customers when they arrive in the airport and also in our flights. I mean, in the airports, we have worked with the airport people to have social distancing that is adequate in order to separate the customers from our staff in with plexiglasses, we also strengthened all the cleaning procedures in airports, but also in our aircraft. Every surface area in contact with our customers are cleaned completely, we even have a specific procedure every 5 years. Well, we have a remnant impact. So we have strengthened procedures. Service onboard is adapting order to avoid useless contact between customers and staff on board. And in every cabin, we are putting in place a seating the way to, receipt our customers in order to have enough distance whenever possible today our load factors are not exceeding on average 50%. Therefore, we are doing this for most of our flights bearing in mind that the wearing of mask, which is mandatory for our customers and for cruise guarantees, the appropriate health protection I mean, aircraft cabins are very special environments. Be aware of this within the air in the cabin, which is renewed every 3 minutes, is filtered with very special filters as well, which we call high efficiency filters, which are the same ones that equip surgery rooms, and they can retain the viruses at more than 99.99% among them the COVID virus. Thank you very much. And a new question, what is the Air France policy and for KLM in terms of reimbursing tickets, if there's a cancellation flight related to the COVID-nineteen. Peter Elbers, would you like to answer, please? Yes. Thank you. I mentioned already a couple of times this afternoon. The situation we have encountered with COVID-nineteen has been unprecedented for everyone, for our customers and for us as airlines as well. And of course, all the negative consequences are 1st and foremost very very regrettable for our customers with so many flights, which had to be cancelled due to all the regulations we had facing in so many countries. So due to this sort of unprecedented size and scope, we took the decision with many airlines and approved in many countries to not issue money, but to issue vouchers. After a while, the situation has stabilized somewhat and therefore, as from the middle of March, We have adopted our policy also guided by some of the EU decisions and we revised it where customers do have a choice for vouchers or for cash. Clearly, we would like to keep our customers on board of our future flights and restore the confidence in flying. And therefore, we have added a 15% 15 surcharge or not surcharge, but actually added value to the vouchers for our customers to use going forward. It's a way to show confidence to our customers. It's a way to show confidence in future travel. And by doing so, we give the opportunity for customers to choose cash Now, if they will show or use the voucher in the future with a 15% more value. Thank you very much, Peter. A question for Fred Ricache recently, U. S. Companies which Coast Management And Donnet Smith Aimco each crossed the 5% threshold to reach together more than 12% of the Air France KLM capital, wouldn't we fear a change of the Air France KLM control for the benefit of non European shareholders. I think it's a good thing to have shareholders who are a bit diversified American shareholders. It's not a problem, especially the two names mentioned in the question are names that we know quite well. I think the Donald Smith company was a shareholder of KLM before the merger. So you see is this is, this is, and Cozway is also an investment company financial funds that we see quite often when we visit shareholders or in meetings with financial partners. So these 2 partners or these 2 shareholders are well known. They have levels within our equity, which has been changing sometimes upward, sometimes downward. And so the question is, is this putting at risk the structure of the group's capital or equity. Well, there are two things that should be kept in mind. Well, first of all, we have reference, shareholders, I have in mind, the 2 governments, there are also employees who are present as shareholders. And therefore, we have a stable core, beyond, Delta and, China Eastern. So then when it comes to the European situation, as you know, it's mandatory. For every airline, that is a European 1 due to the legislation on traffic rights, on the international basis, draft more than your equity held by shareholders who are European have shown you in the presentation early on that it was widely the case. And by the way, even though we would potentially exclude the British shareholders' situation, would still be favorable in terms of respecting that rule. So today, there's no problem, I believe, when it comes to European Control of our equity and the which, which represents more than 28 percent of the capital. I believe these are guarantees that, so that, there won't be any risk in terms of the European rules. Thank you very much, Frederick. A question for ANGI in terms of the loan granted to Air France KLM by an Air France by the French State Air France will, has committed himself to make its transformation what labor, what dialogue with your social partners, with the unions and how quickly it would not be considered to have such an in-depth transformation of its model without a dialogue or a negotiation with unions and employee representatives who continue to talk with these organizations based on the principles that have been laid out now for quite some time, the respect, non disclosure and trust principles have enabled us to have, again, before the crisis, social dialogue and maintain it alive despite the seriousness and complexity of the matters that we are facing. So there are discussions and negotiations that have been initiated around the transformation plan, and we have committed ourselves to going back to the representative organizations. In the coming weeks to identify the impacts of the speeding up of this transformation plan in terms of timetable, this should, plan in the coming years. Thank you very much. And a question for Ben. Ben Smith, the COVID crisis doesn't challenge our alliances and partnership, especially with Delta and China Eastern. During this crisis, the help and the partnership that we have with many, many, carriers around the world, but in particular, Delta and China Eastern, have helped us. And we expect as we return to activity that we will be in a stronger position vis a vis our partners, thanks to these, strong partnerships, the joint venture, which we have across the Atlantic between Afras, KLM, Virgin, Atlantic, as well as Delta is a huge strength for our group it will help us, restart operations ahead of, some of our competitors, Delta Airlines being the largest airline in the United States. Is, is a big strength for our group. And then of course, China Eastern with our main base at Shanghai. So our partnerships are more important than ever. The Skyteam Alliance is more important than ever. And we view this we view both of these as a very strong assets, to, Effron's Caitlin. Nextiva Kuben, Thank you very much, Ben. A new question for Fredericazi. If you are maybe you have maybe some negotiations for that, that state, how come it could not take place with the required support with the French state these state related, assistance with companies, who are hit hard by a crisis are governed by European texts. And additionally, each country has to implement them based on its own rules. For example, the rules governing state guarantee are different in France from, the Netherlands or the need of going before the parliaments with a debate or maybe passing a law, quite different between the Netherlands and France so that 2 processes were undertaken in parallel. 1 took more time than the other. However, right from the outset in substance in terms of state assistance for domestic airlines had to take place in the legal context of each state. This is why these two processes were undertaken in parallel, even though between Air France and Calum, there was a dialogue on a constant basis, there's no other reason beyond the fact that we had to cussions because we are in 2 different countries, even though these 2 aids, these 2 rescue plants, go to Air France and to KLM. Thank you very much, Frederick. The airline business already had difficulties before the COVID 19 with a new environmental search, what are the new commitments of Air France, ILM in terms of sustainable development in the after world? I thank Ben for answering this question, Anan and Peter, if they want to supplement this. So in 2019, the group achieved a, a 30% reduction in CO2 emissions, from a base, base date of 2005. AlfOS KLM has set a, target for itself of CO2 reduction of 50% between now 2030 And to this end, the group has implemented a climate action plan to reduce its, carbon footprint this is composed of 3 main priorities, fleet modernization, contributing to an aeronautical research, use of sustainable biofuels and involvement in research into renewable energies, as I just mentioned, reduction in CO2 through operational measures, the support for the implementation of the global climate agreement, otherwise known as Corcilla with a fair contribution for aviation. Regulatory and voluntary off setting of CO2 emissions, support for environmental programs and the rollout of carbon offsetting programs for customers. So maybe Anne can get into more detail about what specifically, Alfas is doing when it comes to, the environment, then Peter could do the same for KLM. Thanks. Well Air France, it was part of the group's commitments before the COVID outbreak. We commenced our set to reduce in CO2 by person, a kilometer by 50% by 2030 relative to a benchmark here. 20,005.5 of the way we had been half of the way in 2019, the first lever for that commitment is renewing the fleet next to many other actions such as co piloting, less weight or regulatory compensation or voluntary compensation. So the trajectory speeding up with this COVID crisis since the withdrawal of the 4 engine aircraft like the A340, Airbrush 340380, which were had been planned, but for later on, are operating being operated immediately. And these aircraft will be replaced for the long haul by Airbus 350s that will be entering gradually into our fleet and consume 25% less fuel than the aircraft that they are replacing for the commitments that are specific as part of the support by the French state, the loans guaranteed by the state. We've taken new commitments, which concern the domestic network in France, which can be split around 3 axis. The first one is to reduce our CO2 emissions in the domestic French in absolute value by 50 percent by theendof2024 relative to 2019. The second one is to continue what we have been doing since the start of the year to offset on a voluntary basis, all our CO2 emissions on the domestic network. And finally, it's about reducing the domestic networks if there's an efficient train alternative. That is an alternative with, a trip of less than 2 a half hours by excluding flights towards our, that feed or I see that open the world onto the world. So these are the flights from our league towards France or from French regions to other French regions. On this last point, we are considering with all the relevant partners about the best way to include, rail alternatives will a multimodal efficient approach, but without this hurting the Air France, grew in regard to indirect competitors. Yes. Also for KLM, the topic of sustainability has been very important and indispensable part of our strategy actually for many years already. And when we have embarked on that strategy of the importance on sustainability, we've taken numerous actions throughout the years, started with the pioneering in the field of biofuel, but also many of the other initiatives which at the end of the day reflected in this very strong position in the Dow Jones Sustainability Index, which Air France, KLM already holds for 15 years. Specifically at KLM in 2019, we are taking some bold actions and bold moves. And I think the most important two ones to mention here ID initiative, we took around the biofuel factory to be built in the Netherlands and secondly, deploy responsibly initiative, which we'll have launched in 2019. The reactions to that initiative had been very, very positive, and we will continue with these initiatives even after the Corona or after the COVID timeframe we're in now. Sustainability has become increasingly important for the airline industry. Therefore, it has been an integral part of our strategy and it will remain an integral part of our strategy also going forward. So the initiatives we took in 2019 will be continued and will be carried forward as well in 2020. Thank you very much to you 3 for these answers. A question to Anne. Angus Clark was recently appointed as a Chief Commercial Officer. For Air France. Can you explain the reasons for this and what the ambition is? Yes, well indeed, there are two main reasons for appointing Angus Flark as Chief Commercial Officer, Angus, is still EVP strategy for the Air France Calum Group and But also, he had a cross functional, non formalized role within Air France, coordinating the network planning fleet management customer experience functions. So with this appointment, Air France has formalized this role. The second reason is that we are in the context of a major crisis for the air transport and the So we have to reinforce all the actions, which will fuel the recovery of our financial trajectory so that we can repay the state backed under banking loans. So we've, implemented strict management mechanisms to ensure cost reductions but we have to reinforce the revenue side measures and anchors will be tasked with working on reinforcing the revenue side mechanisms is in charge of coordinating the sales and marketing levers and revenue levers. So he will put into place governance mechanisms to ensure the steering and coherence and consistency of all these levers, in particular, between the network, fleet, fleet management, customer experience teams, of Air France as well as the sales and revenue management and pricing teams of the Air France scaling group. Thank you very much. A new question to Peter, elders, what action has CalM taken to restart its operations after weeks of reduced activity. The important point, and this is one of the reasons why we have never stopped our operations actually and why we have continued even in the worst month in April with a meaningful operation. I think we have demonstrated to be flexible. And by first putting the Kombia site and then putting back the Kombia aircraft in order to meet the cargo demand, it has demonstrated our flexibility. We have further stepped up capacity, and we will continue to do so in the coming months. This is also why it was in the presentation of Ben We have made some more flexible approach towards the average 330s. We didn't park them completely. We stopped them for a while, but they'll be put back in operations. The entire company is, in fact, ready to restart. And even in terms of keeping our cruise current levels, it is good to see that our crews are back in the flight. And in fact, I took this flight this morning from Amsterdam to Paris. I hadn't taken flight for a long time. For this region. And our crew was happy to fly. And you could see that our teams are ready to welcome the customers back on board when we have a more stable environment. Thank you very much, Peter. Thank you very much, Peter. Last question to Ben Smith what will be Air France KLM's group's position with respect to consolidation in the industry in the coming months? Has always been extremely important. And with the COVID 19 crisis, this will probably accelerate As I mentioned earlier, we expect, numerous airlines, to disappear or to become a much more fragile We will study all of these opportunities as they come up as we always do. And if there is something that is appropriate within our risk profile, we will definitely, move forward or make an effort to move forward on that. But our number one priority is ensuring that our base operation So engineering and maintenance, IT, cargo, as well as our 3 airline brands, KLM, Transavia, and Alfas regain their strong footing and ensure that we protect the markets in which we operate. That is our number one priority. But of course, as I said, If there is a unique opportunity within our risk profile, we will definitely study and take action, if, if required. Thank you very much, Ben. Well, says the chair. This ends our Q And A session, which was, of course, in a very special format because it wasn't verbal with people asking questions in person that people put their questions in writing I hope we appropriately answered your questions with this Q And A session. So I will turn over again to Anne Sophie so that she, presents to you the results of voting on the resolutions. And Sophie, over to you. Thank you very much. And Marie, remember that in the final quarter, is 66.25%. This quarter, it takes into account the frozen voting rights of some shareholders because they reported the crossing of the statutory thresholds too late. Now with respect to the COVID, crisis and the fact that the AGM is being organized between behind closed doors, the voting was closed at 3 pm peristat No voting will proceed in session and I will be presenting to you the results of voting following the reading out of each resolution. Let us start with the ordinary business resolutions. The first resolution is with respect to the approval of the statutory financial statements for the year ended 31st December 2019 with a net loss of 1,000,000. So the resolution was adopted at 19.96%. The second resolution was with respect to approving the consolidated financial statements and transactions for the financial year ended 31st November 2019 with a net income of 1,000,000. So the resolution was approved by 99.96%. The 3rd resolution was with respect to allocating the result for the financial year ended 31st December 2019. It is recommended that the loss for the financial year be allocated to the retained earnings. The resolution was approved by 99.94 percent of this. The false resolution was about approving the regulated party agreements with respect to the transatlantic partnership between Air France KLM, Delta Air Lines and Virgin Atlantic, the resolution was approved by 99.94%. The 5th resolution is with respect to the reappointment of Ms. Anne Marie Coude as a Board Director for a 4 year term of office. The resolution was approved by 99.64%. The 6 resolution is with respect to the reappointment, I mean, it's Alexander Winens as a Board Director for a full year term. The resolution was adopted by 94.93%. The 7th resolution is with respect to the appointment of Mr. Dirk Vanyandenberg as the board director for a 4 year term of office. And this resolution was the 8th resolution was with respect to ratifying the co optation of Mr. Jing Wong as a member of the Board of Directors for a term, which will expire sense. The 9th resolution was about reappointing KPMG auditing firm as a Principal statutory auditor. The resolution was also approved by 99 0.74%. The 10th resolution was about the appointment of the deputy statutory auditor with Salustra Rydell being appointed, a resolution which was approved by 99.86%. I will now move to resolutions associated with the compensation of company officers. And before I review the resolutions and the results of the voting, I suggest we watch a video by Isabel Bojo, who chairs the compensation committee and she will be reviewing the main aspects and elements of the compensation for company officials for 2019, 2020. Ladies and gentlemen, dear shareholders in my capacity as chair of the compensation committee of your Board of Directors, I am going to outline for you the main items of compensation for fiscal 2019, together with the 2020 compensation policy. These items are detailed in the so called universal registration document and will be put to your votes in resolutions 11 to 16. Let us start with compensation granted to all of the Board of Directors in respect of fiscal 2019 amounting to in accordance with the allocation modalities as defined by the Board of Directors in its meeting of the 11th December 2019 with respect to the chairperson of the Board of Directors, her fixed compensation for fiscal 2019 amounted to 1,000,000 for our Chief Executive Officer, pursuant to the decisions taken by the board in 2018, the 2019 compensation is composed of the following items. Fixed compensation of unchanged since 2018, sorry, annual variable compensation, which was set by the board at 1000000,456 representing 85.4 percent, a fixed, fixed compensation, I. E. An achievement rate of 70% on the performance criteria. Finally, long term variable compensation was granted to him in fiscal 2019 in the amount of 1,000,000 divided into 2 plans. 1, comparing the right to performance units and the other, conveying the right to shares, these two plans are subject to ambitious performance terms and conditions, which were said by the board and which will be accessed over a 3 year period. Now let's just move on to the compensation policy in respect of fiscal 2020. Within the context of the COVID-nineteen outbreak, the chair of the Board of Directors decided to forfeit the increase in our compensation to as proposed by the board and decided to return to the same amount of annual fixed compensation as in fiscal 2019. IE she also decided to subject her fixed compensation to the same salary terms and conditions as those to be applied to all Air France and Air France scale employees during the period of so called partial activity. No other items or elements of compensation are foreseen. Now with respect to all board directors, the maximum amount of compensation to be allocated for fiscal 2020 is unchanged on its level in 2018, 2019. Here, you can see the allocation modalities for this compensation composed of a fixed portion and a variable portion. Based on the attendance of board directors at board meetings and based on their participation in board committees. In solidarity with the context of crisis, the Board of Directors have decided to reduce their 2020 compensation by some 25 percent pro rate at Amparis for the periods of so called partial activity as applied all employees. With respect to our Chief Executive Officer, you will see on the screen a diagram recap ping his compensation policy for fiscal 2020. Our Chief Executive Officer's fixed compensation remains unchanged on its level in 2018 2019, and it will amount to for fiscal 2020. It is important to note that in solidarity, on March 20, 2020, our CEO decided to subject his 2020 fixed monthly compensation to the same salary terms and conditions as those apply to all of Air France and Air France KLM employees, I. E, a reduction of 25% during the period of so called partial activity. For the variable, for the annual variable portion sorry, in view of the exceptional COVID-nineteen public health emergency, the board decided to undertake an in-depth review of the performance criteria applicable to the CEO's annual variable compensation as well as the assessment modalities so that they can be adjusted to this major crisis selecting only 2 criteria. A financial criterion linked to the management of cash, accounting for 70% of the assessment and another individual criterion relating to the management of the crisis and the development of a strategic recovery plan accounting for 30% of the assessment. Furthermore, the board also left open the possibility of granting no variable portion depending on how the situation develops over the course of 2020. Lastly, Mr. Ben Smith has already forfeated his annual variable compensation with respect to the 2020 financial year. Let us now move on to the long term variable session. In accordance with the decisions that had been taken by the Board of Directors back in 2018, Mr. Ben Smith also benefits from long term variable compensation in the amount of 1,000,000 divided into 2 plans a performance unit plan payable at the end of a 3 year period and a second plan which is a specific long term incentive plan, which is focused on the group's medium and long term objectives which targets an improvement in the operating performance and targeting the environmental and societal priorities. Right. Before we move on to voting on the 11th resolution, I want to correct a mistake. For Resolution number 6, the result is 94.93%. Now let's just move on to the 11th resolution with respect to compensation for all directors. That is all board members. The resolution was adopted by 99.68%. 12th resolution with respect to approving the 2019 compensation for the share of the Board of Directors, a resolution which is approved by 84.3%. 13th resolution approving the, the compensation of the CEO Benjamin Smith. Compensation was approved by 81.01 percent. 14th resolution, with respect to approving the 2020 compensation policy for the shareholder directors. This resolution was approved by 84.3 15th resolution, relative to approving the 2020 compensation policy for the non executive company officers. A resolution, which was approved by 99.77%. The 16th resolution is relative to approving the 2020 compensation policy for the Chief Executive Officer. A resolution which was approved by 84.14%. Finally, the 17th resolution, which is the last resolution with respect to ordinary business, authorized the Board of Directors to carry out transactions involving the company's shares for a maximum purchase unit price per share of with a maximum authorized amount of 5% of the share capital. This resolution was approved by 99.85%. Let us move on to extraordinary business resolutions. And let us start with the delegation of authority to be granted to the Board of Directors outside of, the context of a public tender offer. This is, to approve the 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 with a maximum authorized amount of 1,000,000, a resolution which was approved by 99.71%. The 19th resolution relative to the delegation of authority to be granted to a issue, shares and security granting access to other company capital securities without shareholders preferential subscription rights, but with a mandatory priority subscription period for 1,000,000 maximum authorized. Approved by 82.02%. The 20th resolution, is relative to the navigation of authority to issue shares or securities by a way of public tender offer. Without shareholders preferential subscription rights within the limit of maximum authorized amount of 1,000,000 to be used outside of the context of a public tender offer resolution which is approved by 81.53%. 21st resolution is relative to the delegation of authority to issue 2 shares and all securities without preferential subscription rights by way of a private placing within the limit of a maximum authorized amount of 1,000,000, this resolution was approved by 81.43%. The 22nd resolution is relative to the delegation of authority to be granted to the Board of Directors to increase the number of securities to be issued in the event of a capital increase with or without shareholders preferential subscription rights within a limit not to exceed 15% of the amount of the issue. A resolution was approved by 82.11 is relative to delegation of power to increase the share capital within the limit of 10% of the share capital 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 was adopted by 99.2%. The 24th resolution was about a delegation of authority, for the purpose of increasing the share capital via capitalization of reserve profits premiums, all of the amounts eligible for capitalization within the limit not to exceed a nominal amount of 1,000,000. A resolution was approved by 99.54%. The 20 the resolution of 25th to 31st are financial resolutions are the same nature, but for seeding levels, which are about half, of those I mentioned. So the 25th resolution is with respect to delegation of authority granted to the board for the purpose of issuing shares and all securities while maintaining shareholders preferential subscription rights within the limit not to exceed a nominal amount of 1000000. A resolution, which was approved by 86.01%. The 26 resolution. With respect to a delegation of authority granted to the board for the purpose of issuing shares and our securities, by way of a public offering without shareholders, preferential subscription rights, but with a mandatory subscription period and within the limit, not to exceed a nominal amount of 1,000,000, a resolution which was approved by 70.39%. The 27th resolution is with respect to the delegation of authority granted the level for the purpose of issuing securities by way of a public offering without shareholders preferential subscription rights and with an optional priority subscription period within the limit not to exceed a nominal amount of 4 1,000,000, a resolution which was approved by 69.79%. The 28th resolution is with respect to the delegation of authority granted to the law for the purpose of issuing shares and our securities without shareholders preferential subscription, right, by way of the private placings within the limit not to exceed nominal amount, 1,000,000 approved by 69.82 percent. Let us move on to the 29th resolution relative to the delegation of authority granted the board 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 with an limit not to exceed 15% of the amount of the initial issue. This resolution was approved by 70.49%. Moving on to the 30th resolution, relative to a delegation of power granted to the board for the purpose of increasing the share capital by an amount not to exceed a nominal amount of 1,000,000 in order to compensate contribution kind granted to the company to be used within the context of a public tender offer. Resolution approved by 86.05%. The 31st resolution is relative to a delegation of authority granted to the board for the purpose of increasing the share capital via capitalization of reserves, profits premiums or other amounts eligible for capitalization within a limit not to exceed nominal amount of 1,000,000. This resolution was approved by 86.52%. 30 second resolution relates to the delegation of authority granted to the board for the purpose of determining the issue price of shares and all securities within an annual limit not to exceed 10% of the share capital. In the event of the capital increase referred to in resolutions, 'nineteen, 'twenty, 'twenty six, 'twenty seven, 'twenty eight. This resolution was approved by 70.5%. 30 third resolution, relative to the delegation of authority to be granted to the board for the purpose of carrying out capital increases reserve to members of a company or group savings schemes without shareholders preferential subscription rights within the limit not to exceed 2% of the share capital valid for a 26 month period resolution, which was approved by 99 0.85%. Finally, the 34th and last resolution is relative to the powers to accomplish formalities, a resolution that was approved by 99.94%. So voting of resolutions is closed, and I turn over to Anne Marie Coude, our chairperson. Thank you very much, and Sophie. Our general meeting of shareholders behind closed doors is coming to an end. I would like to thank all the speakers And you appreciated, I'm sure there are presentations. I thank all the shareholders who are present in front of their screens and I thank all the teams that helped us have this general meeting. I would like to express the great pride I feel of being at the helm of this large European group together with all the management team our 83,000 employees and all our partners, I have great confidence in our collective ability to meet our new challenges and overcome the crisis. I thank you so much for your attendance and see you soon.