BALANCE Sustainability report, Issue 2018 Cover story Creating value sustainably E N I L N O T R O P E R Y T I L I I B A N A T S U S y t i l i i b s n o p s e r / . m o c p u o r g a s n a h t f u l

ABOUT THIS REPORT Balance, the Lufthansa Group’s Sustainability Report, informs stake­ Additional information on the Internet holders and the interested public about the Group’s goals, activities and In addition to this report, the Lufthansa Group informs readers via the advances in the areas of business, social responsibility, environment, Internet about its activities in the area of sustainability: product and corporate citizenship. It thus complements and expands ↗ www.lufthansagroup.com/responsibility the information in the Annual Report. Disclaimer in respect of forward-looking statements Across the Lufthansa Group, Corporate Responsibility is understood to The data included in this report has been collected and processed with comprise the following dimensions: the utmost care. Nevertheless, errors in transmission cannot be ruled out entirely. Information published in this report with regard to the • Economic sustainability future development of the Lufthansa Group and its subsidiaries consists • Corporate governance and compliance purely of forecasts and assessments and not of definitive historical • Climate and environmental responsibility facts. Its purpose is exclusively informational, identified by the use of • Social responsibility • Product responsibility • Corporate citizenship such forward­looking terms as believe, expect, forecast, intend, project, plan, estimate, count on, can, could, should or endeavor. These for­ ward­looking statements are based on all the discernible information, facts and expectations currently available. This report has been prepared in accordance with the GRI Standards: Core option. This publication also serves as a progress report concern­ Numerous factors affect the facts and forecasts published in this report, ing the implementation of the ten principles of the UN Global Compact, which are in large part outside the Lufthansa Group’s sphere of influen­ which the Lufthansa Group joined in 2002 and to which it has been ce. This includes, among others, changes in national and international committed as “Participant” since 2018. The Group determined the most laws and regulations or fundamental changes in the economic or significant topics related to sustainability in 2016 in the context of a political environment. materiality analysis, which is based on the results of a stakeholder survey. In 2017, an internal evaluation was carried out (see page 22). It is possible that the Group’s actual results and development may differ materially from the forward­looking statements implied by the fore­ Scope of consolidation and comparability casts. The Lufthansa Group assumes no obligation for and does not Unless noted otherwise, the data in this report refers to the financial intend to adapt forward­looking statements to accommodate events or year 2017. You will find explanations concerning the scope of consoli­ developments that may occur at some later date. Accordingly, it neither dation and calculation methods used to determine the absolute and expressly nor conclusively accepts liability, nor does it give any guaran­ specific resource consumption at the Lufthansa Group on page 95. This tee for the actuality, accuracy and completeness of this data and report covers the activities of the Lufthansa Group. Under the aspect information. Accordingly, it neither expressly nor conclusively accepts of materiality, reporting primarily focuses on the product of “flying” liability, nor does it give any guarantee for the actuality, accuracy and without upstream and downstream processes. Reporting restricted to completeness of this data and information. individual Group companies is indicated in the text. Due to changes in the portfolio over recent years, the figures for personnel and environ­ mental performance cited in this report are only to a limited extent comparable with those reported for previous years. For example, Brussels Airlines, which has been full part of the Lufthansa Group since January 2017, was included for the first time in this report’s coverage during the reporting year. There are also certain differences in approach compared to the Annual Report when calculating passenger numbers and their derivative performance indicators (see explanations relating to the overview on page 2, At a glance). Publication dates of this report Balance, the Lufthansa Group’s Sustainability Report, is published once a year in German and in English. The preceding edition was published on July 3, 2017. The Group has regularly reported about its environmental performance since 1994 and has continuously expanded its reporting to the other dimensions of entrepreneurial responsibility. page 1 1 Taken from the Annual Report 2017 of the Lufthansa Group. 2 For the reporting year 2017, the following companies have been included in Balance: Lufthansa (including Lufthansa CityLine and Air Dolomiti), SWISS (including Edelweiss Air), Austrian Airlines, Eurowings (including Germanwings), Brussels Airlines and Lufthansa Cargo. Excluding the services of third parties, i.e. airlines outside the scope of consolidation of Balance, but that take over services from Lufthansa, for example in the event of capacity bottlenecks (see page 96, table “Share of third parties”). 3 Types of flights taken into account: all scheduled and charter flights. 4 See page 96 “Fuel consumption”. 5 Balance: segments (operational perspective); Annual Report: distance (customer perspec­ tive). One distance can include several segments, e.g. in the event of stops en route. 6 Balance: on the basis of all passengers aboard; Annual Report: on the basis of all revenue passengers. 7 Companies referred to as in 2, but including the services of third parties, as these contribute to the Group’s results. Types of flights as in 3, but including ferry flights, as these represent costs.

“ We also want to take a leading role within our industry in the important area of sustainability. Dear Readers, The financial year 2017 was the most successful one in the Lufthansa Group's history; we achieved an all-time best result. All companies within the Group contributed to it. Overall, the airlines of the Lufthansa Group welcomed more than 130 million passengers over the past year and again set a new passenger record. At the same time, we reduced the average kerosene consumption per passenger and 100 kilometers by 4.5 percent to 3.68 liters – also a new record! This is the welcome result of our continuous fleet modernization and efficiency programs. To make our flight operations as environmentally friendly as possible, we will continue to invest in economic, fuel-efficient and quiet aircraft. The Supervisory Board approved an order for up to 16 more aircraft in May 2018. Thus we have about 190 aircraft on order at the moment. The cover story in this issue of Balance, “Creating value sustainably”, shows how we are organizing our core business as well as the upstream and downstream processes in sustainable ways. We also want to take a leading role within our industry in the important area of sustainability. That is why we make sure that our entrepreneurial activities are managed sustainably and respon- sibly. As a “Participant” in the UN Global Compact, we gain consistent orientation from its ten principles, and we launched further measures during the reporting year aimed at actively implementing these self-commitments in our sphere of influence. For example, in 2017 we adopted our Code of Conduct, which documents our values, principles and standards of conduct in our daily operations. This includes respecting human rights. As a modern and cosmopolitan company we are continuously evolving. Our approximately 130,000 employees worldwide are vital for our business success. Furthering their careers, for example by means of our programs for junior and management staff, is one of the most important tasks of our personnel management. Last but not least, corporate citizenship is part of our sustainable management. We now concentrate on the action areas Education / Enabling and Life / Health. Under the roof of our charitable aid organization help alliance we supported 37 aid projects around the world in 2017 alone. We will further cultivate these activities and associate them more closely with our personnel strategy. I thank you for your interest and wish you a captivating read. Carsten Spohr Chairman of the Executive Board and CEO Deutsche Lufthansa AG LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 3

THE SET-UP OF THE LUFTHANSA GROUP NETWORK AIRLINES EUROWINGS GROUP The business segment Network Airlines comprises the The business segment Eurowings Group comprises the companies Lufthansa, SWISS and Austrian Airlines. They flight operations of the Eurowings Group as well as offer their customers a premium product and, thanks to the Brussels Airlines and the equity investment in SunExpress. multi-hub strategy, a comprehensive route network combined They offer an innovative and competitive product for with the highest degree of travel flexibility. price-sensitive and service-oriented customers in the ↗ www.lufthansa.com | www.swiss.com | www.austrian.com growing direct-traffic segment. ↗ www.eurowings.com | www.brusselsairlines.com AVIATION SERVICES The Aviation Services are leaders in their worldwide markets and strengthen the portfolio of the Lufthansa Group. They include the business segments Logistics, MRO (Maintenance, Repair and Overhaul), Catering as well as other companies and Group functions. Lufthansa Cargo AG, with headquarters Lufthansa Technik AG, with headquarters The LSG Group offers a comprehensive in Frankfurt, is the Lufthansa Group’s in Hamburg, is the world’s leading portfolio of products in all areas of specialist for logistics and Europe’s manufacturer-independent provider in-flight services. With the expertise of leading cargo airline. ↗ www.lufthansa-cargo.com of maintenance, repair and overhaul the established LSG Sky Chefs brand, services for civil commercial aircraft. the largest network of in-flight kitchens ↗ www.lufthansa-technik.com worldwide, it is the industry leader for high-quality in-flight catering. The group’s parent company, LSG Lufthansa Service Holding AG, is headquartered in Neu-Isenburg. ↗ www.lsgskychefs.com Hubs Frankfurt, Munich, Zurich, Vienna Number of aircraft in the Group’s fleet 728 Number of passengers in 2017 more than 130 million 2018 Number of destinations (summer timetable 2018) 343 destinations in 103 countries LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 5

Conducting business according to responsible and sustainable principles – in all Company areas and along the entire value chain – is an aspiration that forms the basis for the Lufthansa Group’s business activities and its guidelines day after day. Be it in procurement, flight operations or the customers’ travel experience: Sustainable conduct – with a specific focus on quality, efficiency and innovation – generates added value in the economic, social and ecological spheres. At the same time, applying value-based management and steering approaches ensures that responsible and future-oriented thinking is anchored in all decision-making processes. Long-term value creation on the basis of solid finances is the fundamental prerequisite for the Lufthansa Group to stay on course in the future as well. Follow us along the value chain: On the pages ahead we will show you just how sustainable the “product of flying” is already today.

Value­based corporate management with regard to financial, social and ecological aspects is a fundamental requirement for increasing Company value long­term. Responsible and lawful conduct is a significant element of corporate culture. The Lufthansa Group Code of Conduct summarizes principles and guidelines, and is binding for all bodies, executives and employees within the Lufthansa Group. “product of flying” AVIATION SERVICES CUSTOMERS & DISTRIBUTION Careful use of resources by means of effective waste management on board and on the ground Efficient maintenance procedures for aircraft and aerodynamic improvements Promotion of e­mobility across ground services – CO2 Product offer compatible with sustainable consumption: • Customers are able to compensate the CO2 emissions of their flights on a voluntary basis. • Lufthansa Express gives customers the option of combining air travel with rail, bus or car­sharing services. • Digital processes help reduce paper consumption. Regular measurements of customer satisfaction to increase the level of customer orientation. Flight safety as well as passengers’ and crews’ health have the highest priority for the Lufthansa Group. Recycling & disposal After withdrawal of aircraft from the fleet: • Sale of aircraft and continued operation by new owners • Decommissioning of aircraft and recycling or up­cycling Separation of waste materials and use of recyclable materials Commitment to social issues with the help alliance as the central pillar LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 9

TOGETHER WITH YOUR TEAM YOU ARE RESPONSIBLE FOR THE WHAT ARE YOUR OPTIONS TO FURTHER IMPROVE THE GROUP FLEET’S SIZE, COMPOSITION AND ASSIGNMENT FOR THE ENTIRE FLEET’S ENVIRONMENTAL COMPATIBILITY? LUFTHANSA GROUP. WHAT IS ESPECIALLY IMPORTANT IN THIS CONTEXT? Fleet planning means designing structures a long time in advance. Currently our focus is on two central themes: we want to further harmonize our Group fleet and strengthen our efficiency. We are proud that the about 190 aircraft we currently have on order will allow us to integrate the most environ- mental friendly models into our fleet that are available on the market at the moment. WHICH ROLE DOES THE TOPIC OF SUSTAINABILITY PLAY IN THIS CONTEXT? My team and I are active in three areas: firstly – and this is the largest lever – the purchase of efficient aircraft. Secondly, measures on aircraft that increase efficien- cy or decrease noise. And last but not least, we can influence the manufacturers’ development goals related to new aircraft programs. 190 AIRCRAFT CURRENTLY ON ORDER TO WHICH CRITERIA DOES THE LUFTHANSA GROUP PAY PARTICULAR ATTENTION IN PLANNING FOR AND BUYING NEW AIRCRAFT? Our decisions concerning the fleet first follow primarily econo- mic decision criteria – only a fleet that can be operated in a Sustainability plays an important role in all decisions concerning sustainably economic way is justifiable from an entrepreneurial the fleet. And incidentally, we are lucky that ecology and perspective. Beyond that, the aircraft needs to fly safely and economy go hand in hand in this case. In the area of fuel highly reliably, meet the customers’ high expectations con- consumption, for example: this remains the single most impor- cerning the product aboard and, of course, it needs to fit in tant cost driver of an airline. By operating aircraft with low fuel consumption it is not only our costs that fall, but also CO2 emissions. The same is true for noise emissions: new, quieter with the other aircraft in the fleet of the Lufthansa Group. And environmental aspects play an important role – we consider only especially environmentally friendly aircraft a sustainable aircraft mean not only lower airport fees but also a lessening investment. of the burden on people living around airports. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 11

The Boeing 777­9, set to enter service at Lufthansa in 2020, a SWISS Bombardier CS300 and an Austrian Airlines Boeing 777 (from left). New life for old aircraft parts When the Lufthansa Group withdraws an aircraft from its fleet, it is either sold and then operated by another airline – or recycled. A decommissioned aircraft contains numerous valuable materials and parts. For example, up to 92 percent of a jumbo jet’s parts can be overhauled and reused. The components are thoroughly checked, repaired and certified, and then fed back into the component pool. Dismantling of decommissioned aircraft is the task of Lufthansa Technik Component Services (LTCS) in Tulsa, USA. Since 2012, the subsidiary of Lufthansa Technik has taken apart and recycled 37 aircraft: 30 Boeing 737CLs, five Boeing 747­400s and two Boeing MD11s. At the end of the dismantling process only the fuselage is left, which is recycled as scrap metal. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 13

EMPLOYMENT EFFECT ILLUSTRATED BY THE LUFTHANSA AIRBUS A350-900 220 JOBS are secured by an Airbus A350-900 long-haul aircraft operated by the Lufthansa Group. 7 Ground operations 58 IT, administration, freight, flight training and others 11 Catering In addition MANY MORE JOBS are secured at airports, air traffic control, the manufacturer, suppliers and haulage companies. 100 Cabin 24 Cockpit 20 Maintenance An Airbus A350-900 long-haul aircraft has the employment effect of a LARGE COMPANY. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 15

CREATING VALUE SUSTAINABLY In 2017, the Lufthansa Group achieved the best results in the Company’s history. This success is based on the trajectory of modernization with cost reductions and simultaneous investments in quality. Furthermore, sustainable corporate governance makes a significant contribution to financial, social and ecological aspects and, ultimately, to further increasing Company value over the long-term. Development of financial Key Performance Indicators (KPIs) REVENUES (IN BILLIONS OF EUROS) INCREASED BY 12 PERCENT 35.6 30.0 30.0 32.1 31.7 2013 2014 2015 2016 2017 UNIT COSTS 1 (IN EURO CENTS) DECLINED BY 0.4 PERCENT 6.5 6.6 6.5 7.0 6.5 2013 2014 2015 2016 2017 1.8 BILLION EUROS OF VALUE CREATED (EACC) 2 1,758 323 817 – 338 – 223 2013 2014 2015 2016 2017 1 constant currency CASK excl. fuel Unit costs (CASK) denote the operating expenses divided by offered seat kilometers. 2 EACC = Earnings After Cost of Capital (€m)

Developments in society have a profound influence on the busi- ness activities and sustainability agenda of the Lufthansa Group. Among the worldwide megatrends and challenges are population growth, increasing mobility, technological progress and the advanc- ing digitalization of numerous processes. Concurrently, environ- mental protection is gaining increasing importance against the backdrop of climate change and resource shortages. For the Lufthansa Group, facing up to these developments means acting sustainably and responsibly. In this context, the Group places the focus on those aspects that allow it to achieve significant effects. In particular, this includes limiting environmentally relevant effects from flight operations by making comprehensive investments in new aircraft, technologies and products. The Lufthansa Group is a service company whose economic suc- cess depends to a significant extent on the commitment and moti- vation of its employees. Applying a responsible and sustainable approach to dealing with resources, the environment and employees secures not only long-term financial stability, but also acceptance for its business model inside and outside of the Company as well as attractiveness for customers, employees, shareholders and part- ners. This also includes the attentive management of opportunities and risks, consistent supply chain management and a constructive dialogue with diverse stakeholder groups. In this way, the Group underscores the goal of fulfilling its role as a leader in the aviation industry, including in the area of sustainability, on a continuous basis. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 19

Four questions for CLAUDIA HÜGEL Senior Director Group Strategy / Sustainability Claudia Hügel headed the production of the first non-financial report at the Lufthansa Group in accordance with the CSR Directive Implementation Act. The success of our sustainability work also depends decisively on all employees and their involvement. This is another reason why it is important for us to create a motivating working environment, where employees can contribute their ideas and projects. HOW IS THE LUFTHANSA GROUP POSITIONED WITH REGARD TO SUSTAINABILITY? WHAT ARE THE NEXT STEPS IN THIS CONTEXT? Our commitment to sustainability has many facets: from the We have worked for some time in the context of a matrix start, climate protection and active noise abatement have had organization within the Group. Tasks and topics are steered in a particular importance for us. Apart from the ecological aspects, a process-oriented manner. We take advantage of this approach we want to give even more attention to our supply chain. As to optimize the Group-wide management of non-financial a globally active company we want to act responsibly and aspects, based on the current form of organization. We have lawfully within the Group and along the supply chain, and we noticed an increased level of interest among our customers, want to make sure that human rights are respected. Our Code shareholders, employees and other stakeholder groups con- of Conduct and our participation in the UN Global Compact cerning sustainability topics over the past years. This confirms have already created a good basis. Now our task is to further our approach and spurs us on to become even more active in develop the management approach and to raise awareness for this area and, above all, to seize the associated opportunities corporate responsibility within the industry together with other more consciously. companies. WHAT DOES THIS MEAN FOR THE LUFTHANSA GROUP IN PARTICIPATION IN THE UN GLOBAL COMPACT? WHAT IS THE IMPORTANCE OF THE LUFTHANSA GROUP’S CONCRETE TERMS? We have been active in the UN Global Compact for more than We already have a broad know-how and a network concerning 15 years. Respecting its ten principles – and since 2015 also issues relating to corporate responsibility. We want to improve supporting the Sustainable Development Goals – is part of our the steering of these two elements and further develop the entrepreneurial activities. In 2018, we have again confirmed our existing organizational structure. By doing so, we can advance commitment in this area by adopting the new “Participant” sustainability topics even more effectively and further sharpen option. The next step is to assess intensively how we can align the Lufthansa Group’s profile as a leading company within the our sustainability strategy even more clearly with the global airline industry – including in the area of sustainability. development goals of the Agenda 2030. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 21

Stakeholder dialogue: The most important activities in 2017 at a glance CUSTOMERS INVESTORS, SHAREHOLDERS AND ANALYSTS • Continuous, worldwide passenger surveys • Continuous and intensive shareholder dialogue • Customer events, customer forums and participation in discussion • Beyond the quarterly conferences, Executive Board and Supervisory forums Board members, and Investor Relations presented the Group’s latest • Monthly published customer onboard magazine and regular newsletter developments in 2017 to institutional investors through 34 roadshows, • Lufthansa InTouch Service Centers ensure 24-hour reachability for all 24 investors’ conferences as well as other event formats. In this context, questions concerning flight reservations about 400 personal one-on-one and group discussions were held • Digital Aviation Forum 2017 • Five forums specifically aimed at private investors • Event “Lufthansa Cargo in Dialogue” with more than 160 representatives from the logistics industry • • “Shareholder information” for private shareholders In addition to annual and interim reports, the capital markets are • Format “Lufthansa FlyingLab”: on selected flights passengers informed monthly about the latest traffic developments at the airlines can experience innovative products and services live onboard, of the Lufthansa Group test them and provide feedback (see page 37) • All publications, financial reports, presentations, background informa- • Visitor service “Discover Lufthansa” assumes important function of tion and speeches, current news and relevant dates can be consulted customer care at largest location, Frankfurt. Tailor-made programs for at: ↗ www.lufthansagroup.com/investor-relations German and international top customers as well as for airports’ neigh- bors, associations, research institutions and the Lufthansa Group’s LAW MAKERS AND PUBLIC ADMINISTRATIONS partner universities • Continuous and intensive exchanges with representatives from politics EMPLOYEES panel discussions • Group-wide employee survey “involve me!” (see page 69) • “Policy Brief” and “Aeropolitics” are published by the Lufthansa Group • Customer Centricity Days (see page 84) and SWISS respectively to inform decision-makers in politics, media • Cabin Air Quality Forum and business about developments in the aviation industry and topics and administrations as well as participation in numerous events and • New format “Pilots’ Convention” – pilots in a dialogue related to aviation policy with represen tatives of management • Continuous communication via the formats pooled in the product SCIENCE AND RESEARCH group “One”: every two months employee magazine “One”, news app • Numerous cooperations with scientific research institutions “One”, “eBase One” (intranet news), “Connection One” (community on • Participation in panel discussions and conferences the social intranet) and the newly introduced large screens at central locations, “Screens One” NEIGHBORS AND LOCAL COMMUNITIES • Continuation of dialogue forums for cabin and cockpit employees • Regular information events and discussion round-tables with • Continuation of CabCons: dialogue events for flight attendants representatives of state and municipal governments at the at Lufthansa Lufthansa Group’s hubs • Continuation of the dialogue series “Speaking openly ...” with the • Participation in the “Forum Airport and Region” in Frankfurt as Lufthansa Group’s CEO at varying Company locations and live well as in the “Vienna Airport Dialogue Forum” transmission on the intranet • Participation in the German aircraft noise commissions • Live chats, web casts and other personal dialogue events for different • Since May 2015, LSG Sky Chefs has been a member of “LEEN 100” employee groups and managers in different business segments (Learning Energy Efficiency Network) initiated by the city of Frankfurt to • Continuation of the event format “Market conferences”: dialogue events with managers and the Lufthansa Group’s CEO in different business help reduce CO2 values in the Rhein-Main area and increase the share of renewable energies regions (2017 in Delhi, Brussels and Chicago) • Lufthansa CityLine has been a member of the fifth “Environmental Pact Bavaria” since September 2015. Its goal is to give incentives to sustainable development and continuous improvement of corporate environmental protection in Bavaria • Participation of Lufthansa Technik and LZ-Catering in “Environmental Partnership Hamburg” and of Lufthansa Technik in Frankfurt in “Environmental Alliance Hesse” LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 23

Values and standards of conduct With the aim of continuing the corporate culture based on trust and integrity, and to secure the Company’s sustainable success, the Lufthansa Group introduced a binding Code of THE 10 PRINCIPLES OF THE UN GLOBAL COMPACT Conduct for all bodies, executives and employees in 2017 (see Already since 2002, the Lufthansa Group has page 28 f.). The Group has supported the ten principles of the UN Global Compact for sustainable and responsible corporate governance since 2002. The initiative’s goal is to help shape participated in the UN Global Compact, the largest initiative worldwide for responsible and sustainable corporate governance. The participating companies globalization in socially and environmentally compatible ways. commit themselves to aligning their business Since 2018, the Lufthansa Group has been committed to the “Participant” tier in this alliance between United Nations and activities and strategies with ten principles from the areas human rights, labor standards, environmental businesses. In this way, the aviation group confirms again its protection and anti-corruption measures. self-commitment of aligning its business strategy with the ten globally recognized principles covering the areas human rights, HUMAN RIGHTS labor standards, environmental protection and anti-corruption 1. Businesses should support and respect measures. The Lufthansa Group participated in the yearbook “Global Compact Deutschland 2017” with a good-practice the protection of internationally proclaimed human rights; and example in the subject area of “Digitalization supports sustain- 2. make sure that they are not complicit in human able development”. The Group shows in it how digitalization rights abuses. programs contribute to the UN Agenda 2030. Sustainable Development Goals The central element of the Agenda 2030 is a set of 17 global LABOR 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; 4. the elimination of all forms of forced sustainability goals, which were adopted in September 2015 and compulsory labor; by the United Nations’ members (Sustainable Development Goals, SDGs, see ↗ www.un.org/sustainabledevelopment). The SDGs are reflected in the important action areas of the Lufthansa Group. A large part of the global sustainability goals 5. the effective abolition of child labor; and 6. the elimination of discrimination in respect of employment and occupation. is relevant for the Group, even though intensity and shaping vary. ENVIRONMENT Of particular importance for the entrepreneurial activities of the Lufthansa Group are support for climate goals (13) and responsible use of resources (12). These are the areas where the Company sees the greatest opportunities for applying its influence in order to make a measurable contribution. The same is true for promoting female employees (5) and the 7. Businesses should support a precautionary approach to environmental challenges; 8. undertake initiatives to promote greater environmental responsibility; and 9. encourage the development and diffusion of environmentally friendly technologies. continuous improvement of working conditions (3, 8). In the ANTI-CORRUPTION context of innovation and digitalization projects (9) the 10. Businesses should work against corruption in all Lufthansa Group also pays increased attention to social and its forms, including extortion and bribery. ecological compatibility. Among others, this applies to paper- less aviation, the promotion of intermodal solutions, electro- ↗ www.unglobalcompact.org mobility at airports and active noise abatement. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 25

External evaluation The Lufthansa Group received the following ratings in 2017: Sustainability analysts and rating agencies regularly assess the activities of the Lufthansa Group according to criteria of CDP: scoring result “A-” In the 2017 climate change reporting of CDP, the international responsible corporate governance. In 2017, the Lufthansa share charitable rating organization, the Lufthansa Group reached was again represented in the following sustainability indices: leadership status in the global ranking, with the Climate FTSE4Good The Lufthansa share has been listed in the FTSE4Good index Scoring Result “A-” (previous year: “B”). The aviation group thus not only ranks again among the best in its industry in Germany, Austria and Switzerland according to the CDP since 2001. It includes only those companies that meet the evaluation, but is now also listed in the highest ranking seg- internationally accepted standards of entrepreneurial ment. Moreover, the Lufthansa Group also received the ranking responsibility. MSCI Global Sustainability Index Series The MSCI Global Sustainability Index Series has listed the Lufthansa share since 2015. The index family depicts companies with a particular commitment to environmental, “A-” in the “CDP Supply Chain Information Request for Climate Change 2017”, in which approximately 4,800 companies worldwide participated. oekom Corporate Rating: “Prime” status In the oekom Corporate Rating of November 2017 the social and governance (ESG) issues. Lufthansa Group again received “Prime” status. It thus belongs ECPI The Lufthansa share is listed in the sustainability indices ECPI companies evaluated. The rating process evaluates the social and environmental compatibility of companies against more EMU Ethical Equity, ECPI Euro Ethical Equity, ECPI Euro ESG than 100 selected industry-specific social and ecological Equity and ECPI World ESG Equity. ECPI has offered a selec- criteria. to the group of “Industry Leaders” among a total of 69 aviation tion of ESG indices since 1997 and uses its own evaluation method that is based on exclusion criteria as well as positive criteria in the categories environment, social issues and corpo- rate governance. Only a few hundred companies are included in these indices, which depict suitable, sustainable investment according to ECPI’s assessment. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 27

Corporate Compliance Office The Group-wide implementation, development and commu- Automated IT processes ensure that all employees and mem- bers of bodies of the Lufthansa Group regularly take part in the nication of the Lufthansa Group Compliance System is the web-based compliance trainings that are relevant for them. The responsibility of the Group Compliance Office, which is part of Group companies’ employees have access to these e-learning the central Legal Department. It is supported by a worldwide courses and are in part already linked to automated mailings network of compliance managers at the Group companies. or participate in corresponding company-specific processes. Continuous self-audits and audits ensure the effective imple- As a complement, the Corporate Compliance Office conducts mentation of the compliance program. worldwide classroom training and offers workshops. During the reporting year, the Corporate Compliance Office conducted The head of the Legal department and Chief Compliance Officer 110 trainings and workshops with more than 1,300 participants. reports directly to the Executive Board member for Human The training offers are directed at managers as decision-makers Resources and Legal Affairs and presents two Compliance and multipliers as well as at employees who need in-depth Reports a year to the Executive Board. The Corporate compliance knowledge to handle their tasks. Compliance Office is supported by a worldwide network of compliance managers at the Group companies. Furthermore, the Steering Committee of the Supervisory Board is informed Risk-based third-party due diligence A risk-based, third-party due diligence process is intended to twice a year about compliance-relevant developments within ensure the integrity of suppliers and service providers. In the the Group. Anti-corruption training All managers, team leaders and employees from relevant areas course of the review, the employees in the Corporate Compliance Office carry out compliance screenings. First of all, this entails determining the identity of the business partner in order to then carry out a check against databases in the participate in obligatory two-year cycles of an IT-based anti- compliance, embargo, sanctions, PEP (politically exposed corruption training to make them aware of potential risks. person) and watch lists categories, ensuring that there are no Code of Conduct The principles anchored in the Lufthansa Group’s Code of Conduct are the basis for fair competition and help to avoid legal risks and to identify and avoid reputational risks. In addition to the Code of Conduct, a number of Company-internal guidelines complement the Code’s binding principles and standards of conduct. In particular, this includes the Lufthansa Group Compliance Program, which consists of the following components: COMPETITION INTEGRITY CAPITAL MARKET EMBARGO To allow for confidential information concerning potential crimes or violations of laws or regulations, the Lufthansa Group set up an ombudsman system. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 29

SUSTAINABILITY IN THE SUPPLY CHAIN The Lufthansa Group has more than 40,000 suppliers. The The Group procurement policy includes the obligation to annual procurement volume is about 18 billion euros. assume social and ecological responsibility. It is to be under- To meet the standards it sets for the sustainability of its own lines at the Group companies. In addition, it serves as a hand- products, the Lufthansa Group relies on close cooperation with book for buyers and all employees with contacts in the suppliers who share and implement these standards. This procurement markets. Among other considerations, it requires approach is also part of the Lufthansa Group’s Code of that these obligations be included in contracts with suppliers: stood as an overriding specification for all procurement guide- Conduct. The Group expects from its suppliers that they fully comply with current law, guidelines and regulations concerning fair competition, integrity and responsible practices (see page 28 ff., Compliance and human rights). A transparent supply chain allows the Lufthansa Group to manage procurement processes in a targeted manner. Bottlenecks and weak points can thus be identified quickly • • • • to comply with the ten principles of the UN Global Compact (see overview on page 25); to comply with the four basic principles of the International Labor Organization (ILO); to consent to announced and unannounced audits by companies of the Lufthansa Group; to accept the termination of the contract in the event and counter measures can be taken. Therefore, setting up that these contractual obligations are breached. and expanding a sustainable supply chain is of strategic importance for the Lufthansa Group. By imposing these obligations, the Lufthansa Group endeavors to ensure responsible practices by its direct suppliers and thus Since October 2017, the purchasing units in the Lufthansa Group meet its own standards for corporate responsibility. have been organized within a single reporting line under the Chief Financial Officer. They inform the Executive Board about The Lufthansa Group is currently reviewing its Group procure- current developments on a regular basis. In some cases, the ment policy. At the same time, a Group-wide, standardized and purchasing units are centralized, especially for airline-specific structured supplier screening, which is integrated in the pur- processes such as purchasing aircraft or kerosene. In other chasing process, is being implemented. cases they are decentralized throughout the Group companies (for more specialized products). Reporting lines are based on responsibilities for different product groups and Group Binding regulations for chemicals For the Lufthansa Group, product responsibility in the supply companies. Defining product groups optimizes the purchasing chain also includes the safe use of chemicals. To this end, at function in the procurement markets. Reporting on the basis the beginning of 2017 Lufthansa Technik adopted a compre- of Group companies ensures the security of the supply. hensive policy concerning chemicals: the Restricted and Declarable Substance List. With these binding regulations the The introduction of a process-based matrix organization makes Group company obliges its suppliers to declare substances in it easier to establish sustainability standards because it means their products delivered to Lufthansa Technik that are of very that standardized processes and IT systems are increasingly high concern – and to replace them as far as this is technically used. The goal is also to improve the enforcement of sustain- possible, and permissible under aviation law. With this listing, ability standards. The restructuring of the organization that Lufthansa Technik also ensures that its products do not contain came into effect on October 1, 2017 serves to increase efficien- so-called conflict minerals. cy, cut costs sustainably and avoid risks in the supply chain by means of strict process management. In addition, confidential information concerning potential criminal conduct or violations of laws or regulations are made possible by the Group’s ombudsman system. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 31

In the future, the aircraft will be configured and standardized from the start so as to allow conversions within a short time Lufthansa and with little effort when they are transferred between Group In 2017, Lufthansa put five A320neo aircraft into service. airlines. This allows the Lufthansa Group to react more swiftly The A320neo is much more fuel-efficient than comparable and flexibly to current developments, and to move aircraft and capacities more simply and efficiently between its airlines and hubs. predecessor models and thus stands out by producing correspondingly lower CO2 emissions (see page 28 f., Balance 2017, and page 30 f., Balance 2016). In addition, the 85-decibel noise footprint of an A320neo taking off is only about half as An overview of the Group airlines’ fleet development: large as the comparable footprint of an A320 in the existing fleet (see page 58, Balance 2016). For operations on all continental routes Lufthansa counts on a fleet that consists exclusively of aircraft from the Airbus A320 family and comprised a total of 170 aircraft of the types A319, A320 and A321 as of December 31, 2017. Lufthansa Group airlines to standardize A320 fleet Uniform specification for all aircraft of the Airbus A320 family, which will be delivered to the Lufthansa Group from 2019 onwards GALLEY A modular standard configuration simplifies the conversion of airline-specific features when the operator changes. FREIGHT A standardized modular cargo loading system representing the needs of the airlines is being developed. CABIN DESIGN Uniform design (side walls, color), but defined areas for brand-specific elements. SEATS One seat for all Lufthansa Group Airlines; the seat cover has different color accents to make it brand-specific. COCKPIT SYSTEMS A uniform standard of equipment, technology and functionality enables consistent safety standards, procedures and training processes. SAFETY EQUIPMENT As far as possible uniform equipment taking into account all airline-specific congestion locations. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 33

Eurowings Eurowings is Europe’s fastest-growing airline. The fleet has grown significantly compared with the previous year. Eurowings has become the market leader at the four German LUFTHANSA AVIATION TRAINING locations Cologne / Bonn, Stuttgart, Hamburg and Düsseldorf. A contribution to this development came from fleet change- over from 23 Bombardier CRJ900 aircraft to the same number of Airbus A320s, which was successfully concluded in the first half of 2017. Brussels Airlines The flying school of Lufthansa Aviation Training in Phoenix, Arizona, is in the process of replacing its existing Bonanza fleet with single-engine Cirrus SR20 air- craft. It has a total of 25 of these propeller aircraft on order, the first six of which were delivered at the end of October 2017. The Lufthansa Group has been the sole shareholder of Brussels Airlines since January 9, 2017. The Belgian airline was assigned Moreover, since the end of 2017 a new A320neo full-flight simulator FT75 has to the Eurowings Group business segment (see page 5). At the been available for training sessions at the end of October 2017, Brussels Airlines decommissioned its last Avro RJ100. As a result, the fleet consists only of Airbus A330- 300, A330-200, A320-200 and A319-100 aircraft. Lufthansa Cargo Lufthansa Aviation Training Center in Frankfurt that can be used both as an A320neo simulator with Pratt & Whitney engines and as an A320 simulator with CFM engines. The FT75 is the 16th simula- tor of the Airbus A320 family operated by Lufthansa Aviation Training. Six of these are At the end of 2017, Lufthansa Cargo operated five Boeing 777F located in Frankfurt, and two each in freight aircraft. This aircraft is considered the quietest and most Munich, Berlin, Essen, Vienna and Zurich. fuel-efficient freighter in its class and is characterized by a high level of reliability and a long range. The fleet also includes 12 Boeing MD-11F aircraft. THE LUFTHANSA GROUP FLEET AS OF DECEMBER 31, 2017 (changes compared to 2016) In possession ¹ In operation 2 Number Age Number Age Lufthansa (including regional partners) 357 (+ 7) 10.9 (+ 0.8) 337 Eurowings (including Germanwings) 136 (+ 58) 10.4 (– 0.9) SWISS (including Edelweiss Air) Austrian Airlines Brussels Airlines (new from financial year 2017) Lufthansa Cargo Lufthansa Group fleet 1 Aircraft in the possession of the Lufthansa Group 2 Operated by companies of the Lufthansa Group 91 83 44 17 (+ 2) (+ 2) 11.0 (– 1.3) 13.7 (– 1.2) (+ 44) 15.3 – (– 2) 14.1 (+ 0.6) (+ 7) (– 9) (+ 2) (+ 2) 10.9 (+0.7) 10.2 (-0.4) 11.0 (-1.3) 13.7 (-1.2) (+ 44) 15.3 – (± 0) 14.1 (+1.0) 87 91 83 44 17 728 (+ 111) 11.4 (+ 0.1) 659 (+ 46) 11.5 (+0.2) LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 35

The Lufthansa Group annually confers the Innovator Awards for outstanding innovation projects. Lufthansa tested a humanoid robot equipped with artificial intelligence for the first time. Another established part of the Group-wide culture of innova- To secure its worldwide pioneering role in the area of digital i- tion is the Innovator Award. This internal honoring for preemi- zation and innovation within the aviation industry, the nent innovation projects, which is given once a year in different Lufthansa Group 2018 provides 20 million euros from the new categories, supports the development of new ideas and pro- Lufthansa Digital Fund (LDF) for digital business models as motes the spirit of innovation within the Lufthansa Group. well as technology and venture capital projects. The goal is to Since the launch of the Innovator Awards in 2014, more than be able to scale plans and projects more quickly in this way, 500 projects have been submitted; 128 during the reporting which often go beyond the existing structures in the Lufthansa year alone. business segments. Thus, the number of successful digital business models can be increased significantly. Moreover, since 2014 projects of different Group companies can receive support from an internal innovation fund. The The Lufthansa Group also cooperates with aircraft manufac- largest share of innovations is related to the digitalization turers, airports, fuel producers and scientific organizations in environment, followed by those that are dedicated to new order to advance innovation on the basis of sound data and to business model approaches. continuously improve its own environmental commitment. For more than 25 years, a fixed component in this context has In January 2017 at Frankfurt Airport, the first Lufthansa Digital been the commitment to climate research, with which the Aviation Forum took place, with the goal of facilitating exchanges Group makes an important contribution to improve climate on topics, trends and questions concerning the advancing models and weather forecasts (see page 51, Balance 2017). digitalization in everyday (travel) situations. During the reporting year, the Lufthansa Group operated three aircraft equipped with specialized measuring instruments that In addition, with the format “FlyingLab” the Lufthansa Group record data concerning trace atmospheric substances and has created an open innovation platform. On selected cloud particles on a global basis. The data captured are read Lufthansa flights, passengers have the opportunity to expe- out after each landing, processed and analyzed by research rience innovative products and services on board first-hand, institutions. test them and give feedback. In 2017, four “FlyingLabs” took place. For example, on March 9, 2017 on the way to the world’s largest digital conference, “South by Southwest” (SXSW) in Austin, eight speakers gave insights into digitalization topics. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 37

Global aviation is a growth industry and for the foreseeable future, Global a it will require the use of fossil fuels. The primary environmental it will requir impacts of flight operations are therefore primarily climate effects impacts o due to the CO₂ emissions produced by burning kerosene and the due to noise caused by aircraft taking off and landing. In addition, upstream noise caused b and downstream activities consume resources such as energy and do and water, and generate waste materials. and wa Against this background, climate and environmental responsibility Agains are key concerns for the Lufthansa Group. The Company has been are key committed to limiting the environmental effects of its business committ activities for many years. This approach also has an economic activities motivation as both the consumption of fuel and the purchase of motiva CO2 certificates and noise-related fees generate costs. In line with CO2 certifica the consideration of materiality, the Lufthansa Group concentrates the consider its commitment above all on the core business of the “product of its commitmen flying”. Central action areas are the reduction of emissions, active flying”. Cen noise abatement, energy and resource management as well as noise aba commitment to research and the implementation of environmental commitmen management systems according to ISO 14001 or EMAS (European managemen Eco-Management and Audit Scheme). Eco-Managemen The Lufthansa Group aspires to conducting business in sustainable The Lufthansa Gr and responsible ways in all its business segments. The Company’s and responsible goal is to meet increasing mobility needs with environmentally goal is compatible products and to increase the eco-efficiency of flight compa operations on a continuous basis. operations on a con LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 39

Environmental management systems To support the systematic control and continuous optimization of environmentally relevant processes, the Lufthansa Group steadily advances the implementation of environmental management systems according to ISO 14001 or EMAS at the Group companies. This is an overview of the current situation: The Group’s pioneer is Lufthansa CityLine with its long-stand- ing experience in environmental protection: in 1999, it became the first airline worldwide to launch a professional environmen­ tal management system and pass the most rigorous European certification system, EMAS (Eco­Management and Audit Scheme). Since then, the program has been validated annually. Lufthansa CityLine is also certified according to the interna­ tional environmental standard ISO 14001. The Lufthansa location Munich was validated according to EMAS and certified in accordance with ISO 14001 for the first time in January 2018. After this successful EMAS validation in Munich, the airline is considering to extend the validated and certified environmental management system to other locations. Lufthansa Cargo has been certified at its Frankfurt location since 2008 according to the environmental management stan­ dard ISO 14001 and worldwide since the end of 2015. The worldwide recertification took place in 2017, for the first time in accordance with the more stringent requirements of the revised standard. The latter include the detailed compilation of environmentally relevant risks and opportunities as well as a materiality analysis and a life­cycle evaluation including sup­ plier management. After the certificate’s validity had been extended to Jettainer GmbH, it was successfully widened to include another subsidiary, time:matters GmbH. Lufthansa Technik has been certified according to ISO 14001 since 1999. The MRO specialist has also operated a job safety management program validated in accordance with the inter­ national specification OHSAS 18001 since 2008. In 2017, the certification of Lufthansa Technik Philippines in Manila was concluded successfully. Thus, of all non­European locations of the Lufthansa Technik Group, those in the Asia­Pacific region have been certified. The certifications at the locations Tulsa, Sun Valley and Puerto Rico will be continued in 2018, and the engine overhaul locations in Wroclaw (XEOS) and Jasionka (EME Aero), which are being set up, are already preparing for certification in 2019 and 2020, respectively. “ Our environmental management approach produces not only ecological but also eco nomical improvements. Our employees strongly identify with the concept of sus tain­ ability and get involved enthusiastically with our environmental goals. Peter Taubitz Environmental Officer at Lufthansa Hub Munich, Deutsche Lufthansa AG LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 41

FUEL CONSUMPTION AND EMISSIONS The CO2 emissions of civil aviation currently account for about 2.7 percent 1 of all CO2 emissions caused by human activities, according to the International Energy Agency (IEA), and count among the industry’s significant global environmental effects. Given that increasing demand for mobility is foreseeable, air transport and its related emissions will continue to increase in the future. The aviation industry has reacted to this develop­ ment and in 2009 adopted the following goals with worldwide validity: 1. Fuel efficiency is to be increased by 1.5 percent per year by 2020. 2. From 2020, growth in civil aviation is to be realized in CO2­neutral ways. 3. By 2050, the net­CO2 emissions of civil aviation are to decline by 50 percent, compared with 2005. The Lufthansa Group had a significant role in this approach and shares the industry’s goals. The Company participated in numerous working groups of the International Air Transport Association (IATA), such as the Environmental Committee and the Industry Affairs Committee as well as the Board of Governors. In addition, the Lufthansa Group has set its own goals to reduce its specific CO2 emissions by 25 percent by 2020, compared with 2006 values. It achieved 64 percent of this goal by the end of 2017. Against the background of responsible mobility, fuel efficiency and climate protection in flight opera­ tions are fundamental for the Group, both from an economic and an ecological perspective. In this way, effects on environ­ ment and society can be reduced as well as operational costs – important preconditions for ensuring the Company’s long­ term success. Simultaneously, the Lufthansa Group fulfills the (transparency) requirements of its stakeholders and meets national, regional and industry­specific energy and emissions regulations. All projects concerning the subject of improving fuel efficiency are managed by the department Flight Operations Efficiency & Innovation. The experts’ task is to identify, develop and imple­ 1 Source: International Energy Agency (IEA) 2017, 2015 values ment concepts, projects and processes in flight operations – with the goal of continuously improving the Lufthansa Group’s fuel efficiency (see page 48, interview Jörg Pikolin). In addition to the projects and processes steered by this department, the modernization of the fleet is a fundamental building block within the concept of resource conservation (see page 32 ff., Fleet management). Specific fuel consumption: A new efficiency record 3.68 l / 100 pkm EFFICIENCY INCREASE BY 4.5 PERCENT COMPARED WITH THE PREVIOUS YEAR The Lufthansa Group established a new efficiency record in the reporting year: in 2017, the aircraft of the passenger fleets needed only 3.68 liters of kerosene on average to transport one passenger over a distance of 100 kilometers (2016: 3.85 l / 100 pkm). This is an improvement of 4.5 per­ cent compared with the previous year. It is parti­ cularly welcome that all passenger airlines within the Lufthansa Group im ­ proved their specific fuel consumption (see page 96). The most efficient Group airline was again SWISS with an average specific fuel consumption of a mere 3.19 liters per 100 passen­ ger kilometers – an improvement of 7.3 percent compared with 2016. The absolute fuel consumption, and thus the absolute CO2 emissions of the Lufthansa Group, increased by 6.2 percent during the reporting year, compared with the preceding year. This increase is largely due to the expanded scope of consoli­ dation following the complete acquisition of Brussels Airlines. This was contrasted by positive effects from the implementa­ tion of operative measures to reduce fuel consumption and further efficiency improvements due to the operation of new aircraft models. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 43

EUROWINGS Share of fuel consumption by traffic areas 1 Total Long- Medium- Short-haul Long-haul Medium-haul Short-haul 4.18 10.53 –– –– 3.85 4.55 9.71 11.47 BRUSSELS AIRLINES 3.62 9.13 3.19 4.05 8.05 10.21 –– –– 50 % 50 % 44 % 56 % DECOUPLING OF TRANSPORT PERFORMANCE AND FUEL CONSUMPTION 2 SINCE 1991 Changes compared to 1991 in percent, values for the fleet of the Lufthansa Group 400 350 300 250 200 150 100 50 0 +407 % Transport performance +207 % Fuel consumption Efficiency gain 1991 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 For further environmental ratios refer to the chapter Service & Information, page 96 ff. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 45

Four pillars for climate protection The aviation industry intends to reach its goals concerning fuel efficiency and reduction of CO2 emissions by pooling different measures implemented by different players (manufacturers, airports, air traffic control, airlines, politics). These were classed at the IATA assembly in 2007 in the industry’s four­pillar cli­ mate protection strategy (see overview below). This strategy also forms the basis for the Lufthansa Group’s fuel­efficiency activities. Furthermore, the Group draws orientation in the area of climate and environmental responsibility from the environ­ mental principles of the UN Global Compact and the Sustain­ able Development Goals of the United Nations (see page 25). Pillar 1: Technological progress The most important lever for reducing CO2 emissions from flight operations is to invest continuously in modern and especially fuel­efficient aircraft and engine technologies (see page 32 ff., Fleet management). The airlines within the Lufthansa Group took delivery of 29 new aircraft in the course of the reporting year. For example, five further Airbus A350­900s were put into service, whose CO2 emissions are about 25 percent lower than those of comparable types of aircraft. Four pillars for climate protection Lufthansa was the launch customer of the Airbus A320neo, which flies more efficiently and quietly than preceding models. Moreover, the Lufthansa Group has participated for a number of years in researching and testing alternative fuels in flight operations. This includes the research project “airegEM”, which analyzed the properties of biofuels with support from Germa­ ny’s Federal Ministry for Economic Affairs and Energy. Before the aircraft of the Group airlines can use alternative fuels, a number of basic requirements must be fulfilled. They include above all reliable quality specifications, sustainability in pro­ duction and along the supply chain, and economic efficiency, of course. 1. Technological progress 2. Improved infrastructure 3. Operational measures 4. Economic measures Innovation in aircraft and engine technologies Alternative fuels Better use of airspace Efficient aircraft sizes Needs-based airport infrastructures Optimal flight routes and speeds Optimized processes on the ground A global, sensibly designed, market-based system for reducing emissions to complement the other three pillars LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 47

Pillar 2: Improved infrastructure The largest climate protection project in European aviation is to PROJECT PROFILE establish a standardized airspace above Europe, the so-called PROJECT NAME: Single European Sky (SES). In this way, airlines could burn AAL 2 (AUGMENTED APPROACHES TO LAND 2) 10 percent less fuel, according to Eurocontrol, the European air traffic control organization, and reduce their CO2 emissions proportionally. In Europe, there are still about 61 air traffic con­ trol centers with responsibility for air safety in 28 different national systems, which means that aircraft can rarely follow an optimum route to their destinations. The goal of SES is to manage air traffic flows substantially more efficiently than is currently the case. An important milestone on the path toward this goal is the standardization and moderni­ zation of the European aviation infrastructure. For this purpose, the European Commission set up the SESAR (Single European Sky ATM Research) program. SESAR is to develop, test and implement Europe­wide new technologies, procedures and standards that contribute to harmonizing and optimizing Euro­ pean air traffic management. The Lufthansa Group is committed to SESAR with the clear expectation that measurable operational improvements in the area of air traffic management will turn into reality. The goal is to create direct advantages for customers and the environment, and to reduce the cost of air traffic control over the long­term. The implementation of these technologies in everyday opera­ tions is coordinated under the roof of the industry consortium SESAR Deployment Manager (SDM). The Lufthansa Group is a member of this consortium and provides experts on site. Cur­ rently, the SDM coordinates 299 projects across Europe. The different airlines of the Lufthansa Group and Lufthansa Systems as an IT provider actively participate in the SESAR research and demonstration projects as well (see profile on the right). In addition to the improved use of air space, the goal is to opti­ mize conditions on the ground too. Here, more than anything it is airport infrastructure adapted to actual needs that allows efficient flight operations. Another contribution to reducing environmental burden is pro­ vided by intelligent links between different modes of transport. The Lufthansa Group is also active in this area and develops intermodal transport concepts that systematically interconnect air, rail and road transport. The current offer includes connec­ tions to airports by high­speed train, modern long­distance bus and car sharing. In the follow­up project of AAL (see pages 42 and 50, Balance 2017) experts are optimizing current navigation procedures in order to demonstrate more efficient and emissions­reduced approach procedures. In addition, they are working to test the usability of the Ground Based Augmentation System (GBAS) for approaches during low­visibility conditions. Furthermore, the use of the Continuous Descent Approach procedure is to keep approach traffic longer at higher altitudes and thus quieter. The design of the procedures that are to be implemented by January 2019 is already complete. TOPIC AREA SESAR (Single European Sky ATM Research) demonstration FOUR-PILLAR STRATEGY This project makes a contribution to the pillar “improved infrastructure” in particular, but also to the pillars “technological progress” and “operational measures”. PARTICIPATING EXPERTS System partners from the aviation industry participate in this interdisciplinary project, including airlines, aircraft manufacturers and air traffic control. A total of more than 300 test flights with the aircraft types A320, B 737NG and B 747­8 are to take place. GOAL AAL 2 is to prove that modern satellite navigation in combination with advanced approach procedures produce economic and ecological advantages. DURATION OF THE MEASURE February 2018 to February 2020 LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 49

After switching to more lightweight containers (see page 42, Balance 2017) Lufthansa Cargo is also testing the use of more lightweight pallets for loading freight. While a standard pallet currently in use weighs about 100 kilos, lightweight variants weigh about 20 to 30 kilos less. Considering a stock of about 18,000 pallets, a conversion would produce significant effi­ ciency gains. Among other initiatives, six pallets from two manufacturers are being tested on flights between Budapest and Vienna. Another option for saving weight aboard freighters is opened up by SquAIR­timber materials, which are to replace the wooden boards used as loading devices with cardboard. In the framework of the research project FAMOS, Lufthansa Technik – together with its partners Bremer Werk für Montage­ systeme (bwm), Airbus Operations GmbH and the subcontrac­ tor Fraunhofer IFAM – is working to develop a highly automated system to apply low­drag micro­structured surfaces for commercial aircraft. The so­called riblets resemble the fine ribs on the scales of fast­swimming sharks and are therefore referred to as artificial sharkskin. Thanks to a reduction of air resistance, this innovative technology is expected to help conserve up to 1.5 percent of fuel and avoid a corresponding quantity of pollutants emitted. In 2017, the company and its partners presented a directing system, which automatically coats the multifunctional surfaces of commercial aircraft with a low­drag “shark skin” structure. The riblet plates and patches were tested last year on the Lufthansa Airbus A330 “Cuxhaven”, which is stationed in Munich. Currently, the insights gained are being analyzed by the system partners with the aim of reaching market maturity with this product in the near future. Group­wide, the Company implemented a total of 34 projects aimed at fuel conservation in 2017, which lowered CO2 emis­ sions by about 64,400 tonnes over the long­term. The quantity of kerosene conserved amounted to 25.5 million liters – this corresponds to the fuel consumption of about 250 return flights between Munich and New York with an Airbus A350­900. The positive financial effect of the measures reached 7.7 million euros. PROJECT PROFILE PROJECT NAME: FUEL ORDER MODEL The project Fuel Order Model is to support pilots on the basis of comprehensive information and an improved user interface in calculating the optimum quantity of reserve fuel while taking safety and economic aspects into account. An important consideration is to make the empirical values available after a flight to other pilots for the benefit of their future fuel decisions. TOPIC AREA Innovation and digitalization – the spectrum of projects ranges from fuel quantity calculations and flight procedures to better capacity utilization at airports and in air space infrastructure to optimizations on fuselages and engines. FOUR-PILLAR STRATEGY This project makes a contribution to the pillar “operational measures”. PARTICIPATING EXPERTS Experts from Flight Operations and Operations Control, the department responsible for planning flight routings and operative support, are active in this project. In addition, experts from Lufthansa Technik and the Ground Operations function are active in other projects. GOAL Reduced takeoff weights are to lower Lufthansa’s CO2 emissions by approximately 4,500 tonnes per year. DURATION OF THE MEASURE The Fuel Order Model is to be introduced step by step at the Group airlines from 2018. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 51

Measures taken by the Network Airlines to reduce fuel consumption and thus also CO2 emissions (selection) Airline Measure • The Trent 500 engines of the aircraft type Airbus A340 are to be modified by the installation of optimized components. Lufthansa • The OMEGA software displays historical flight routings (so­called “tracks”) in flight on pilots’ electronic maps, allowing them to identify shortcuts early on and to plan more efficient approaches. SWISS • The Trent 700 engines of the aircraft type Airbus A330 are to be modified by the installation of optimized components. • Global Dispatch Network (GDN), including Mission Support, offers new planning options and policies that will reduce fuel burn substantially. • In the CFM56­5B engines of the aircraft type Airbus A320 the existing combustion chambers were replaced step by step with more fuel­ efficient combustion chambers. • The analysis software SOCRATES (OMEGA at Lufthansa) allows the identification of different optimization potentials based on statistical analysis and their targeted implementation. Expected annual CO2 savings in metric tonnes Project duration / implementation period 34,062 2012 – 2020 26,937 2015 – 2017 13,227 2012 – 2019 40,114 2014 – 2017 6,600 2014 – 2017 > 1,134 2016 – 2017 • A weight saving is realized on the entire Boeing long­haul fleet with 2,100 2017 – 2018 the introduction of Premium Economy Class seats. Austrian Airlines • An upgrade in the high­pressure turbine of the PW4060­3 engines in the B767­300ER fleet (improved clearance) reduces fuel consumption. 1,398 2015 – 2017 • Print media on all Austrian Airlines flights were sustainably reduced. 622 2014 – 2017 LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 53

Waste and recycling management Permanently reducing waste quantities on board or increasing its recycling ratio are important considerations for the Lufthansa Group’s waste management. Beyond legal re- quirements, the internal initiative “Flygreener” contributes to reaching this goal Group-wide. Its objective is to help reduce waste volumes continuously, especially in flight operations, and to improve the related processes on board. In recent years the aviation group has implemented numerous measures on this basis. Specially trained flight attendants act as “Ambassadors on Board” and support crews with their know­how on how to recy­ cle more effectively and cut waste quantities on board. Fur­ thermore, the Company regularly makes its flying personnel more aware of this issue by setting up information stands. Over the mid­term, practice­related training, such as web­based courses for existing employees are planned. Moreover, close cooperation between the LSG Group and the Lufthansa Group’s Network Airlines create synergies. During the reporting year, Lufthansa and LSG Group employees again initiated a so­called empty­out campaign. This time, they analyzed the waste material from 15 long­haul and 20 short­ haul flights in Munich and Frankfurt. Their objective was to assess progress in reducing non­recyclable waste at the Munich hub and to evaluate the potential of recyclable mate­ rials at the Frankfurt hub. Furthermore, in Frankfurt the com­ plete load of service items from seven long­haul aircraft was sorted and analyzed to find out if there might be overcapacities in beverages on board and how these can be avoided. In addi­ tion, a project group was set up in 2018 with the task of devel­ oping a specialized recycling trolley aimed at establishing alter­ native options for discarding liquids. The fully electrified catering lift truck “eLift” is operated by the LSG Group in Frankfurt. E­mobility projects at the Lufthansa Group Fuel­efficient and quiet aircraft are the central, but not the only regulating possibilities that can be used to make air transport more environmentally compatible. On the ground, there are also numerous opportunities, in particular in ground handling processes as well as taxiing and towing processes of aircraft. At Frankfurt Airport, the Lufthansa Group places an emphasis on advancing projects aimed at reducing the consumption of gasoline or diesel related to ground traffic. Switching individual vehicle types step­by­step to electric propulsion technologies is the ambitious goal of the initiative E­PORT AN at this loca­ tion. In addition to the Lufthansa Group, Fraport AG, the State of Hesse and the Rhine­Main Model Electromobility Region are committed to this project. The partners’ investments in these future­oriented electromobility projects are supported by Ger­ many’s Federal Ministry for Transport and Digital Infrastructure with an amount of several million euros. The initiative is scientif­ ically accompanied by the Technical University Darmstadt and the Technical University Berlin. In this way, the LSG Group developed the fully electrified cater­ ing truck “eLift” in close cooperation with external partners, whose operation at the Frankfurt hub causes no CO2 emissions and significantly reduces noise too. The individual components LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 55

ACTIVE NOISE ABATEMENT Operating aircraft causes noise, especially during takeoffs and landings. As a result, it is mostly people living in areas surround- ing airports who are affected by aircraft noise. At higher alti- tudes, such as during cruising flight, aircraft noise is without consequence. The noise­related effects of the Lufthansa Group’s aircraft operations mostly affect hub locations. The Lufthansa Group supports numerous activities and mea­ sures over the long­term in order to decrease aircraft noise perceptibly. The primary goal is to sustainably lower noise at the source and to develop optimized flying procedures in cooperation with system partners. In addition, the activities concerning noise protection also have an economic compo­ nent: by flying quiet aircraft, the Group may prevent possible restrictions on operations. Therefore, the Lufthansa Group has been working with deter­ mination on operating the quietest aircraft possible and on making its existing fleet even quieter. These efforts have been successful: in 2017, 99.5 percent – and thus almost the entire operative Group fleet – fulfilled or exceeded the strict minus­ 10­decibel criterium of the ICAO Chapter 4 standard (see over­ view page 114). The aircraft noise experts from the Group’s dif­ ferent departments are closely connected within a network. In addition, they are active in aircraft noise commissions, dia logue forums and research projects, which in some cases they initiated and have coordinated. For example, this includes participation in test projects under the umbrella of SESAR (Single European Sky ATM Research, see page 49). The Lufthansa Group’s commitment to active noise abatement comprises five dimensions (see graphic below). In addition to this issue of Balance, the Lufthansa Group also published this approach in its Annual Report 2017 as part of the combined non­financial report (see info box page 24). Active noise abatement 1. Investments in quieter aircraft 2. Noise-reducing technolo- gies for the existing fleet 3. Participation in noise research 4. Optimization of approach and departure procedures Introduction of the latest aircraft such as the Airbus A320neo and Airbus A350­900 Retirement of older models Retrofitting of noise­reduc­ ing vortex generators to the existing fleet Continuous collaboration and exchange with partners from research and industry Development and analysis of new noise­reduction measures Cooperation with system partners Development and testing of new methods Use of new navigation technology 5. Dialogue with residents near airports and other stakeholders Continuous exchanges with residents as in the Airport and Region Forum Active participation to aircraft noise commissions LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 57

5. Dialogue with residents near airports and other stakeholders Since 2001, the Lufthansa Group has actively and continuously participated in measurement packages aimed at noise abate­ ment in the framework of dialogue forums, in Frankfurt and Vienna among other locations. One example is the “Alliance for Noise Abatement” in Frankfurt, in which the state govern­ ment of Hesse, Fraport AG, Deutsche Lufthansa AG, the Air­ port and Region Forum (FFR), Deutsche Flugsicherung (DFS) and the aviation association BARIG participate. Moreover, the Lufthansa Group also works actively in some of the German aircraft noise commissions stipulated by Germany’s Civil Aviation Act. In January 2018, the FFR presented 17 additional measures to reduce the noise burden in the areas surrounding Frankfurt Airport or to enable an improved political and legal framework for the expedited implementation of measures. Those involved took the first steps in this context in 2017. The package of mea­ sures “Active Noise Abatement” builds on the 12 noise protec­ tion measures that were implemented in the past in standard operations, and also opens up new perspectives, such as the precision navigation system. Simultaneously, Hesse’s Ministry for Economic Affairs and Transport, the Frankfurt Aircraft Noise Commission, Lufthansa, Condor, BARIG, Fraport and the FFR agreed on a voluntary upper noise limit at Frankfurt Airport. This agreement gives the airlines an additional incentive for flying even more quietly: doing so is the only way to increase the number of their aircraft movements. The Lufthansa Group welcomes such a reliable, clear and long­term regulatory framework that creates invest­ ment and planning security for future growth and fleet decisions. In May 2016, the state of Hesse and the aviation industry had already sealed the voluntary introduction of noise breaks in an “Alliance for Noise Breaks” (see page 60, Balance 2016, and page 55, Balance 2015). 3. Participation in noise research For many years, the Lufthansa Group has been committed to noise research via projects such as MODAL (Models and Data for the Development of Active Noise Abatement Measures in Aviation), which help create the foundations for successful active noise protection. In 2017, the project “EffFlug” (Efficiency increases in flight operations) was added. Its goal is to analyze efficiency mea­ sures more precisely with regard to their noise reduction potential compared with previous solutions. To this end, the existing evaluation methods are to be expanded and deepened. Digitalization makes it possible to analyze flight operations data even more intensively and to link them with intelligent analytic tools. The prerequisite for the participation in “EffFlug” is a high degree of expert knowledge and cockpit experience. In this project, the Lufthansa Group closely cooperates with the German Aerospace Center (DLR), Fraport AG and Flughafen München GmbH. Continuous research and development work, in particular by manufacturers, produce quieter aircraft and engine generations as well as desired optimizations on the aircraft in the existing fleet. Therefore, it is of great importance for the Lufthansa Group to help shape this steady cycle of intensive research as well as new technologies and products in order to achieve further effi­ ciency improvements in aircraft and engines. 4. Optimization of approach and departure procedures Optimizing flight procedures and flight routings also contrib­ utes to noise reductions. The Lufthansa Group is active in this area in numerous ways by cooperating with international part­ ners such as Eurocontrol. For example, in July 2017 Deutsche Flugsicherung (DFS, air traffic control), Lufthansa and Fraport successfully tested and implemented new navigation technol­ ogy on the so­called southern circumnavigation in Frankfurt in the context of SESAR. The newly used Radius­to­Fix (RF) functionality allows flying highly­precise circular­path seg­ ments with fixed radius and fixed origin at a quality level that so far is unique in Germany. For people living in the region, this is likely to produce correspondingly positive effects on noise burdens. Operations will be accompanied by comprehensive monitoring in cooperation between DFS and the Environment and Neighborhood House. The outlook is that the DFS intends to use the procedure on other departure routes from Frankfurt as well. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 59

Working at the Lufthansa Group has many facets. But the individual is always at the center of attention. The employees’ know-how and diverse talents are a central variable that directly influences the Company’s entrepreneurial success. Therefore, the Group’s goal is to establish itself as an attractive employer over the long-term while meeting its social responsibility. The Lufthansa Group places the greatest emphasis on offering its employees an attractive working environment with transparent structures and processes in order to meet future requirements and strengthen the innovative forces within the Company. Custom-fit offers for continuing education, a realistic framework of conditions to promote balance between working and private life, a comprehensive approach to equal opportunity and diversity in all its dimensions, and intensive support for talent – all of these are significant action areas for the aviation company to meet its self- defined benchmark for treating employees fairly and as partners. By using modern information technology the Group takes into account the fact that the working world is global, digital and net- worked. In addition, the Group meets its responsibilities for its em- ployees by means of its tried-and-tested health and safety policies. With regard to society as a whole, the Lufthansa Group also acts responsibly. As a corporate citizen it engages in a dynamic process supporting social issues and has firmly anchored specific employee involvement in its HR strategy. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 61

Welcome Diversity! Organizational anchoring For more than 20 years, the Group has had an officer responsi­ ble for equal opportunities, whose task and role is the strategic The Lufthansa Group pursues a comprehensive management further development of this topic within the Group. In addition approach, which understands diversity in the sense of variety to the reporting responsibility by the process owner and the with regard to gender, demography and internationality, crea- head office function, the Lufthansa Group set up a project to tivity and mixing of perspectives. Diversity and equal opportu- promote women in management positions in 2016; it initiates nities are firmly anchored in the current personnel strategy and and implements measures to increase the share of women in simultaneously in the Group­wide organizational structure by management (see page 66, Balance 2017, Three questions for: means of clear responsibilities. Simone Marshall). The process­oriented matrix organization defines so­called process owners across the Group. They are responsible for developing and implementing measures that are suitable for Goals and central action areas reaching defined goals. In 2017, a “Diversity” process owner The Lufthansa Group pursues several goals with its diversi­ was named in this context. He is responsible for the Group­ ty­oriented personnel policy. The Company wants to better wide development of diversity and monitors the implementa­ take advantage of the enormous potential of the diversity that tion of goals in the relevant processes. Regular reporting, for already exists among its roughly 130,000 employees, while instance concerning the gender quota, allows the verification simultaneously further increasing diversity in profiles, compe­ of the effectiveness of the management approach and the tencies and experience up to the management level. In addi­ related measures. Additionally, exchanges in networks or with tion to its explicit goal of strengthening and expanding its other DAX­30 companies allow comparisons of developments attractiveness as an employer, the aviation group aims at using by means of external benchmarks. Furthermore, such compari­ diversity management to secure its competitiveness and future sons provide insights on how effective specific measures are. viability, increase its ability to innovate, facilitate access to potential employee groups on the global labor market and boost its distinctive customer orientation. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 63

In the context of a pilot project, the Lufthansa Group examined the influence of gender-neutral language on applicants’ behavior and the selection of applicants. Concretely, job advertisements and the selection of applications for the “ProTeam” Generation EMPLOYEES IN THE LUFTHANSA GROUP 2018 were scientifically administered. The Company is already KEY DATA 2017 1 taking advantage of the insights thus gained for the selection of the next generation of this program. Since the middle of 2016, the Lufthansa Group has been active in the initiative “Chefsache” (“A Matter for the Boss”), a net- work of managers from business, science, the social sector, the public sector and media, who feel personally committed to equal opportunities between men and women. On the occasion of International Women’s Day 2018, all-women crews again took off on flights operated by Lufthansa Group airlines – as they did the previous year – to a number of inter- national destinations. To put down another marker on this day, Lufthansa showed “FlyingLab” presentations from female digital experts during an in-flight conference on its flight to Houston. The Group also participated actively in the 5th German Diversity Day by having a presence in the intra-company Diversity Film Nights. These campaigns were intensively 129,424 EMPLOYEES Group total 46.1 % FEMALE EMPLOYEES Group total 35.0 % communicated to increase awareness. SHARE OF WOMEN with staff responsibility Within the Group, the concept of equal opportunities has been 15.1 % anchored in collective bargaining agreements for a long time. SHARE OF WOMEN in management positions The principle of “same pay for same performance” was applied within the Lufthansa Group as long ago as the 1970s. Collective wage agreements that can be consulted by all employees and company-wide non-tariff remuneration sys- tems are proof of this approach. The “Report on equality and equal pay” was produced in accordance with § 21 and 22 of the Remuneration Transparency Act (EntgTranspG) for Deutsche Lufthansa AG and published on the Internet. Apart from a statistical part, it contains information concerning measures to promote equality between men and women as well as their effect, and measures to ensure equal pay for men and women. ↗ www.lufthansagroup.com/responsibility An important topic for internal communications remains sensiti- zation concerning the topic of “unconscious bias”. The Group intends to increase awareness of this phenomenon of uncon- scious thinking patterns and their effect on personnel proces- ses in 2018 as well. Therefore, each manager watches a short video on the subject before making a selection decision. This measure was developed jointly with the companies represented 6.1 % SHARE OF WOMEN in the cockpit 1,101 APPRENTICES 120,000 JOB APPLICATIONS in the initiative “Chefsache” (“A Matter for the Boss”). 1 as of December 31, 2017 LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 65

Four questions for CLAUDIA RAUTENBERG Head of Cultural Transformation and of Lufthansa Group CAMPUS This means that business transformation needs to be imple­ mented both in effective and responsible ways. Managers in particular are forced in a way not known earlier to initiate transformation, steer this process together with their teams, and ensure operative stability at the same time. This is why we accompany and accelerate this process, and thus ensure that changes take place in a way that is as comprehensible as possible for managers and employees, and unfolds without significant frictional loss. YOU ARE RESPONSIBLE FOR THE AREA OF CULTURAL TRANSFORMATION AT THE LUFTHANSA GROUP. DOES THE COMPANY’S CORPORATE CULTURE NEED A NEW WHICH PROGRAMS AND TOOLS HELP TO DRIVE ORIENTATION? CULTURAL CHANGE? “New” is often understood to mean that everything needs to On the one hand, we promote cultural development by making be changed. And yet, today there are companies and areas structural changes. For example, we replaced our bonus sys­ within the Lufthansa Group that work together highly success- tem based on individual performance with a collective bonus, fully while their cultural identities have evolved very differently. which rewards the collective performance. On the other hand, We want to strengthen and expand this ability. At the same last year we fundamentally expanded and changed our mana­ time, we need to evolve culturally at the same speed as we gerial programs because cultural development takes place evolve structurally. Our business model is today challenged by above all when managers give a corresponding behavioral new competitors and in entirely new ways. That is why we example. The focus is on measures that support the managers’ need to become faster, further expand our ability to innovate, role, agile work performance within the matrix, and process and focus on the customer more than ever. For the Group this orientation. means shedding unnecessary organizational complexity. Equally, each individual employee needs to assume responsibility, to remain flexible and to learn continuously. HOW IMPORTANT IS IT TO ADOPT IMPULSES FROM EMPLOYEES AND WHAT ROLE DOES THE GROUP-WIDE EMPLOYEE SURVEY “INVOLVE ME!” PLAY? “CHANGE MANAGEMENT” IS ONE OF HR’S CENTRAL BUZZWORDS. WHY IS THIS SO IMPORTANT? Impulses given by employees are very important. The results The world around us is changing rapidly. Because of this change the Lufthansa Group needs to further evolve as well – structurally, but also with regard to its attitude and conduct. In dealing with this kind of volatility we need professionalism. initiatives gain traction. In addition, the survey gives us impor­ tant input for further measures and change projects. This type of feedback is a self­evident component of any modern error­and­ dialogue culture and thus essential for our ability to innovate. of the employee survey show us very clearly whether our LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 67

for all of its employees worldwide (see info box page 25). The results of “involve me!” also serve as basis for the calcula­ Employees in any country where Lufthansa companies are tion of the “Engagement Index” (EI). This ratio indicates to active are free to lawfully organize themselves and become which degree employees feel committed to the Group, to involved in defining their working conditions. For the reporting which degree they are willing to lend their support to their year 2017, it is assumed that no business activity within the employer, and how much they are inclined to recommend the Lufthansa Group jeopardized the free exercise of employees’ Company to others. It also gives insights into the Group’s rights concerning their freedom of association and right to attractiveness as an employer and allows comparisons with collective bargaining. other employers across industry lines. The result is indicated on a scale from 1 (best value) to 5 (lowest value). During the reporting year, the Lufthansa Group achieved an Engagement Index of 2.3. While this corresponds to a slightly below­average value for German companies, it also marks an improvement of 0.1 points compared with the previous year. In the years ahead, the Engagement Index is to improve annually and reach the average level of comparable companies in Employee survey “involve me!” Germany by 2020. Regular employee surveys have for a long time been an impor­ The Lufthansa Group is aware of the fact that merely measur­ tant instrument for the Lufthansa Group to measure employee ing employee commitment is not enough. The greatest chal­ commitment, identify action fields and initiate change where lenge comes after the survey is completed. Progress can only needed (see page 67, interview Claudia Rautenberg). be achieved if concrete measures are derived from the survey results and employees can thus see that the Group takes their In 2015, the Lufthansa Group conducted “involve me!”, its first responses seriously (see page 22 f., Stakeholder dialogue). group­wide standardized, voluntary employee survey, which was extended to the significant Group companies (including In parallel to determining the Engagement Index, the LSG Germany) in 2017. On the basis of the results of this Lufthansa Group again calculated the Leadership Index (LI) survey, management is able to directly compare data from the in 2017 from data collected through “involve me!”, which is individual Group companies and engage in a transparent, oriented by the Group’s five Leadership Principles (see page Group­wide dialogue. In 2017, employees had the opportunity 73, Balance 2015). During the reporting year, the LI stood at to respond to questions from 11 topic areas. With a return rate 2.1 points and thus 0.1 point higher than the previous year. of 50 percent, participation was at about the same level as in the preceding year. Furthermore, in 2017 the Group calculated the Health Index on the basis of data generated by “involve me!” for the first time The results of the employee survey are also reported to the (see page 72 f., Occupational safety and health management) Supervisory Board and the Executive Board. At management and thus received a third significant ratio. level and broken down for individual teams, the results are communicated and discussed in order to derive and implement strategic measures for the entire Lufthansa Group and individual organizational units. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 69

and increase not least the Company’s ability to innovate by In the Group­wide trainee program “ProTeam”, the means of different employee competencies, experiences and Lufthansa Group introduced two new modules in 2017: perspectives. In this context, the Lufthansa Group places great “ProInnovation” and “ProSocial”. The module “ProInnovation”, emphasis on diversity and equal opportunities. It is one of the which is to be expanded in 2018, is based on a tandem concept. Group’s special concerns to support the career development It combines the knowledge of selected employees (experienced of female talents (see page 62 ff., Diversity and equal specialists and managers from different hierarchical levels opportunities). across the Group as well as members of the employee re­ presentative committee and the Supervisory Board) with The topic of talent management is regularly on the agendas of employees from different trainee programs. The goal of com­ the Executive Board, HR board and Supervisory Board; these munication at “eye level” established in this way is the shared, committees can thus initiate adaptations and complementary responsible shaping of the future by means of diversity in age, actions when needed. Beyond that, regular exchanges within education, hierarchy and specialist knowledge. networks ensure the validation of such measures. The second new “ProTeam” pillar, the “ProSocial” module, Meaningful data on the development of the Lufthansa Group’s includes a four­week stint in a social project. It aims at employees is provided annually by the internal performance strength ening the participants’ social and intercultural compe­ and talent assessment instrument “Profile”. Based on this data, tencies, team spirit and sense of responsibility. In October the Group is able to evaluate the effectiveness of talent man­ 2017, the Lufthansa Group realized the program for the first agement measures and to which degree set goals have been time in cooperation with its charitable aid organization help reached. During the reporting year, about 12,000 employees alliance (see page 75 ff., help alliance). within the Lufthansa Group completed or started the perfor­ mance and talent process. The related platform “eProfile” is The Lufthansa Group also aims to increase its attractiveness being rolled out step by step for additional employee groups for external talents on a continuous basis. Using innovative and thus allows a Group­wide overview of the talents within employer branding, it positions itself as an attractive employer the Company. Promoting internal talents in the applicants’ market and emphasizes the variety and specific strengths of individual Group companies. Those interested can find paths into the Group’s working world via the career portal ↗ www.Be-Lufthansa.com (see page 9, Balance 2016). For modern personnel recruitment the Group The different formats and initiatives used in the Lufthansa Group’s also uses active sourcing via external recruiting platforms. In talent management are addressed at all employees and are not conjunction with other social media channels the Group takes only limited to vertical promotions. Their goal is also both to advantage of the opportunities offered by (inter)active com­ support defined competencies and to identify and broaden munication with potential qualified employees and managers. talents for specific job families and different career paths. The To have an additional recruiting resource available, the options range from trainee programs to initiatives at the top Lufthansa Group maintains contacts with former employees management level. In this context, strategic personnel planning on the formats “Talent Hub” and “Alumni Network” (see page always takes the employees’ different life phases into account. 71, Balance 2017). An important format is the visibility platform “Spotlight on Talent”, introduced in 2016 (see page 70, Balance 2017). During the reporting year, the Lufthansa Group expanded this format significantly. The annual process aims at giving talents in specific job families more visibility – across all boundaries of companies within the Group (see illustration on the left). At the same time, this format is designed to give the Lufthansa Group an overview of the talent situation in the individual job families. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 71

Health Index Psychological and psychosocial factors also have a significant The Health Index was compiled for the first time in 2017 as the influence on health, safety and performance levels in work set­ primary performance indicator for measuring the employees’ tings. Since 1985, the Lufthansa Group has therefore offered its overall health level; it is based on relevant questions in the employees, teams and organizational units individual counseling “involve me!” survey. The results serve to identify aspects of and mediation services under the obligation to maintain confiden­ work that require adjustment, to develop focused measures to tiality, as well as different services of psychosocial organizational strengthen individual health resources and minimize the risk of counseling. occupational hazards. As with the Engagement Index, they are communicated to top management, team managers and the Beyond the obligatory features in the area of health protection, entire workforce. the Lufthansa Group offers its employees a wide range of preven­ tive measures on a voluntary basis, both for administrative and The Health Index uses a scale from 1 (best) to 5 (worst). In 2017, flying personnel. These measures and campaigns are widely it stood at 2.3, which corresponds exactly to the external communicated within the Company. benchmark for the region including Germany, Austria and Switzerland and for each individual country in this region. To be able to determine more exact indications of need for action, characteristics of healthy work culture were drawn from the Occupational safety results of “involve me!” Based on these factors of influence, Another important contribution to employee health comes the Group companies are better able to analyze their individual from the function of occupational safety, which has existed for health­related results in a differentiated way and identify action many years and consistently implements measures to prevent areas aimed at improving the Health Index. Therefore, the focus accidents, health risks and occupational illnesses. By means of for 2018 is on deriving need­oriented, target­group­specific risk assessments and regular safety inspections, the Group’s measures and activities across the Group. occupational safety experts check all professional activities in Medical Service the Group companies in Germany. Low numbers of work­related accidents and occupational illnesses are a measure of success for medical and technical The Medical Service has a key role in the Lufthansa Group’s aspects of occupational safety and occupational hygiene. concept of occupational safety and health protection (see page 92, Balance 2016). Its permanent core task is to secure the Group The Occupational Safety Committee (OSC) is the central employees’ ability to perform and thus ensure reliable business steering unit for all issues related to job safety within the activities and flight operations. Lufthansa Group; meeting at regular intervals, it pools all issues of job safety Group­wide and monitors their The Medical Services at Lufthansa, SWISS and Austrian Airlines implementation. are holistic centers of excellence, permanently offering the full range of services for aviation and occupational medicine, vaccina­ In Germany, occupational safety committees with employer tions and travel medicine, outpatient care, a comprehensive social and employee representation are active at all relevant locations and medical advisory service, and other preventive and healthcare of the Lufthansa Group. They optimize processes and agree on treatments. Beyond these individual treatments, the Medical measures to improve job safety. Services provide advice to decision­makers, committees and employee representatives concerning all issues of occupational health and safety. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 73

Lufthansa flight attendants visiting the help alliance project iThemba. Closer to the world. Closer to its people. interview Andrea Pernkopf and Susanne Kotysch). Predefined criteria ensure that the supported projects are sustainable. The focus of corporate citizenship activities is on social and The decision to focus on social and humanitarian projects in humanitarian projects around the world. These are pooled the core areas of Education / Enabling and Life / Health has and managed under the umbrella of the help alliance, the made it possible to harmonize the charitable initiatives of the Lufthansa Group’s nonprofit aid organization. The help alliance Group companies. At the same time, it enables the efficient was founded by Lufthansa employees in 1999 as a registered and targeted use of available funds. Fundraising models can association. Effective from January 1, 2017, it was restructured thus be made more systematic and donations can be acquired as a nonprofit limited liability company (gGmbH) with head­ more effectively. quarters in Frankfurt and under the umbrella of the Lufthansa Group. Prior to this, the Lufthansa Group had provided both For the financial years 2017 and 2018, the Lufthansa Group in­kind and financial support, and sponsorship for the work of fully covers the costs of administration, project monitoring, the employee initiative help alliance e. V. The importance of the fundraising and communications for the help alliance gGmbH. help alliance is emphasized by the fact that it belongs to the This ensures that all other donations can be fully used as funds department of the Chairman of the Executive Board and CEO. for aid projects. This also includes voluntary salary donations The help alliance acts as a catalyst for greater social commit­ so­called payroll giving, introduced in April 2017, is initially ment, combining proven projects initiated by employees with open to about 80,000 employees and retirees who are covered the strength and network of the Lufthansa Group (see page 76, by the Lufthansa Group’s joint payroll system. from employees of the Lufthansa Group. The option of the LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 75

Areas of emphasis in 2017 and outlook for 2018 During the reporting year, the help alliance was responsible for 37 aid projects with a financial volume of 2 million euros. One area of emphasis for the help alliance’s commitment was on the project iThemba in South Africa, which offers children in a 37 AID PROJECTS WORLDWIDE Cape Town township a high­quality pre­school education. Continuous monitoring and regular evaluations of proj ects according to a prede­ fined catalogue of criteria ensure that the supported projects and programs improve the life situati­ ons of children, their families and the community in an effective and ON-BOARD COLLECTION PROGRAM “SMALL CHANGE – IT’S A BIG HELP” sustainable way, and that project funds With the goal of creating a bridge towards a better are used effectively and efficiently. The construction of the iThemba primary school in the life for people in need, the help alliance launched the on­board collection program “Small Change – It’s a Big Help” in 2001. It offers passengers aboard Capricorn township is the help alliance’s largest project so far Lufthansa Group long­haul flights the option to with an investment volume of more than 1 million euros. Since donate coins and banknotes in any currency. Small, its inauguration in January 2018, 105 children can be taught in sealable donation envelopes are available in the seat three classrooms. As soon as construction is completed, 700 disadvantaged boys and girls will receive a high­quality education and thus a perspective for a better future. With this project, the help alliance makes a determined com­ pockets for this purpose, which are collected by flight attendants and forwarded to the help alliance. Remaining currency can also be deposited in donation pillars placed in employee areas, Lufthansa lounges at German and selected international airports as well mitment to attaining the “quality education” goal on the United as the public areas at the Frankfurt and Munich hubs. Nations’ Agenda 2030 for sustainable development (see page 25, Sustainable Development Goals). To realize a comprehensive approach, the construction of a Community College open to all family members is planned for the mid­term. It will also offer evening classes and sports activities for young people. The help alliance set another milestone together with Fraport AG by installing 40 new donation pillars at Frankfurt Airport. These are intended to collect donations of up to 100,000 euros to support social aid projects. While half of the donation revenues benefit education initiatives in Africa supported by the help alliance, 25 percent benefit the project “Ocean Clean Up” at the suggestion of Fraport and 25 percent the association “Wings of Help”. DEVELOPMENT OF DONATION VOLUMES IN EUROS 283,127 2017 2016 2015 2014 2013 283,605 362,662 497,823 301,566 October 2002: Start of Condor’s participation July 2012: Start of Austrian Airlines’ participation November 2017: Start of Edelweiss Air’s participation LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 77

Further social projects within the Group companies SWISS BRUSSELS AIRLINES • The airline has supported SOS Children’s Villages Switzerland since • During the reporting year, employees of Brussels Airlines again took its foundation – among other measures with flight tickets and on-board part in “Bike for Africa”. This mountain bike event is an initiative of collections of funds in coins. “b.foundation for Africa”, a program launched by Brussels Airlines in • Funds donated benefit projects located at SWISS destinations. 2010. Revenues benefit humanitarian projects on the African continent • In 2017, 20 renovated family houses were formally inaugurated at and in Belgium. the SOS Children’s Village in Bawana, India, for 118 children and their • In addition to the social commitment of its employees, the airline also families. The comprehensive renovation was made possible by supports several nongovernmental organizations. SWISS passengers who donated coins on board with a total value of 370,000 Swiss Francs. LUFTHANSA CARGO • In cooperation with the Foundation ProJuventute, SWISS made it pos- • A close cooperation has existed for more than 35 years with the regis- sible for children and adolescents from the Zurich region to experience tered association “Werkstätten für Behinderte Rhein-Main e. V.” (Work- the airline and airport first-hand during the summer vacation. The Foun- shops for the Disabled, WfB Rhein-Main) in producing lashing straps dation’s goal is to support adolescents energetically in their develop- used for loading cargo aboard aircraft. WfB Rhein-Main’s goal is to give ment towards becoming self-confident and responsible adults. people with disabilities an opportunity to participate in working life and • In its procurement process, SWISS takes special suppliers into con- to integrate them into the job market. sideration: every year, SWISS orders about 1,900 Business Class and • With a current order volume of almost 1.2 million euros Lufthansa Cargo 290 First Class clothes hangers from the Foundation “Orte zum Leben” is the largest manufacturing customer at WfB Rhein-Main. (“Places to Live”). The foundation offers people with disabilities a place • The association was certified in 2016 by the European Aviation Safety to live and work, and operates a carpenter’s workshop, among others. Agency (EASA) as development company and by Germany’s Federal The Foundation Pigna, a workshop for people with disabilities in Kloten, Aviation Office (LBA) as manufacturing company. WfB Rhein-Main looks after cleaning and readying for use about one million onboard is thus one of only six manufacturers worldwide that produce lashing headphones a year for SWISS. straps certified according to these standards. AUSTRIAN AIRLINES LUFTHANSA TECHNIK • Concentration on social projects in central and eastern Europe. • Supports sports events at Group’s corporate headquarters in Hamburg, • The focus is on renowned organizations such as “Global 2000”, for example the “Airport Run” and “Cyclassics”. “Help for Children from Belarus”, and “Alliance for Children”. • Made arrangements for a concert in the framework of the renowned • In 2017, 1,800 blankets were donated to “Caritas”. Schleswig-Holstein Music Festival for the benefit of work developing young musical talents and supports the foundation “phönikks”, which aids families affected by members ill with cancer. LSG GROUP • Its regionally varying commitment includes educational projects, health promotion and sports events, among others. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 79

This includes Germany’s Red Cross (DRK), with which It is a particularly important concern for its stakeholders that Lufthansa Cargo signed a cooperation agreement at the end of the Lufthansa Group will support the sustainable protection 2016. The goal of this cooperation is to accelerate and simplify the preparation of aid flights in measurable ways. This coopera­ tion sustainably improves the effective support and provision for people in need in crisis and catastrophe situations. In addition, the freight airline has been a member of Airlink since the end of 2016. This noncommercial humanitarian aid organi­ zation was founded in 2010 by employees of the International Society of Transport Aircraft Trading Foundation (ISTAT). At the beginning of 2013, Lufthansa Cargo entered into a long­term partnership agreement with the emergency aid association “Aktion Deutschland Hilft”. Under the motto “Helping faster, together” the preconditions were set up to be prepared for humanitarian emergency situations at any time and to allow the implementation of a swift worldwide logistics chain (see page 81, Balance 2017). The aid association’s logo on the fuselage of one of the MD­11F freighters in Lufthansa Cargo’s fleet symbol­ izes this solidarity pact visually as well. Further commitment of the crane, its heraldic bird, in the future as well. The aviation group responded to this wish immediately: the Lufthansa Group continues its proven cooperation with Naturschutzbund Deutschland e.V. (NABU) and extended the long­standing partnership with NABU’s subsidiary Kranichschutz Deutschland gGmbH (Crane Protection Germany). In the future, NABU and the Lufthansa Group will interlink their existing potentials even more closely. ↗ www.kraniche.de In the cultural area, the Lufthansa Group has cooperated with the Gürzenich Orchestra in Cologne for many years and is its First Global Partner. One of the highlights for the orchestra during the reporting year was again a charitable concert at Cologne’s Philharmonie. The revenues of 20,000 euro were equally divided between the help alliance and the children’s aid association “Wir helfen” of Cologne­based publishing house DuMont Schauberg. The cooperation with the Gürzenich Orchestra comes to an end at the close of the 2017 / 18 season. The Lufthansa Group has redefined the strategic alignment of its social commitment and now concentrates essentially on The Lufthansa Orchestra, which was founded in 2011, currently counts more than 65 employees from all Group companies, social and humanitarian subject areas. In addition, it supports representing a wide range of professional groups. The ensem­ – as in previous years – selected projects in the areas of nature ble gave two concerts in spring and fall 2017 in Langen near and species protection as well as culture and sports. Frankfurt. The Lufthansa Choir was founded in 2016 and unites about 60 singers from the Group companies and different Company locations. In 2017, the choir gave a spring concert in Wiesbaden, and also appears together with the Lufthansa Orchestra, for example in April 2018 with the Brahms Requiem in Frankfurt. Both ensembles receive financial and organiza­ tional support from the Lufthansa Group. Another good tradition at the Lufthansa Group is supporting sports. The Company has been a National Sponsor of the German Sports Aid Foundation since 2007 and for many years the official airline of the German Olympic teams, copartner of the German Olympic Sports Confederation (DOSB) and cosponsor of the National Paralympic Committee Germany The Lufthansa Group will continue its support for crane protection. (DBS, see page 105, Balance 2016). LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 81

Customers are always the center of attention at the Customer Lufthansa Group. Their satisfaction is a primary concern at all Lufthansa Gr times. The aviation company aims at providing its passengers times. with perfect service and making flying in all its facets a sustainably with perf positive experience. Against this background, the goal is to assess positiv the Company’s offers and products along the entire travel chain the Compan on a continuous basis with the aim of optimizing them. on a con Flight safety and health protection always have top priority in Flight sa this context. To implement this fundamental standard without this con qualification, all airlines within the Lufthansa Group operate qualifica comprehensive safety management systems. In addition, the compr Group has a leading position in researching the quality of cabin Group has a leading position in r air. Equally important are data protection and data security as air. Equally a basis for trusting business relationships. a basis Customer orientation and a focus on quality are the Customer Lufthansa Group’s strategic cornerstones. Regular surveys and Lufthansa Gr a continuous dialogue with passengers help learn as much as a continuous dialogue possible about customer needs and to include them in the possible about cus development of innovative offers. Significant investments in developmen a modern and efficient Group fleet, more comfort on board, a mod numerous product innovations, and digital offers ensure that flying numer is becoming more and more attractive and sustainable for the is becoming mor Lufthansa Group’s customers. And the high level of commitment Lufthansa Gr to product responsibility is being honored: in 2017 the airlines and to produc service companies again received numerous prizes and awards. service companies again r Lufthansa distinguished itself, above all, by becoming Europe’s first Lufthansa dis airline to receive the coveted 5-star Skytrax airline rating, world airline t aviation’s highest-ranking quality seal. aviation LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 83

In 2017, Lufthansa became the only European airline to receive the Skytrax five­star seal for premium service and top comfort. In a parallel move and dependent on the relevant target vari­ able (for example satisfaction or recommendation), Lufthansa, New programs and services SWISS and Austrian Airlines collect data for additional central In 2017 / 18, the Lufthansa Group again introduced new aircraft, performance indicators such as the loyalty index. Furthermore, there is the Net Promoter Score (NPS®) 1 which has been generated since 2014 and places the focus on the travel programs and services that are aimed at further improving the travel experience and customer satisfaction along with it. experience as the airlines’ central product or service category. For example, the new Airbus A350­900 offers passengers Its calculation was also harmonized in 2017 by the three more comfort thanks to its wider cabin and its innovative light Network Airlines. To establish the NPS®, the airlines continu­ concept (see pages 29 f. and 54, Balance 2017). Furthermore, ously survey their customers, asking if they would recommend Lufthansa is planning to introduce a completely new Business the company concerned to friends or acquaintances, based on Class when the innovative Boeing 777­9 will join the fleet from their travel experience. 2020, offering optimum sleeping comfort and generous priva­ cy. These improvements will be provided above all by a new The fact that the Lufthansa Group continuously improves seat, which was tested by more than 500 customers during the quality and service was acknowledged numerous times in 2017. development process. In this context, the most prominent of all awards came from British consulting firm Skytrax, which specializes in aviation: it SWISS is planning to equip its five Airbus A340­300 aircraft made Lufthansa the first European airline to receive the cov­ with a new cabin product in 2018 in all three service classes, eted five­star seal for premium service and top comfort. In the with First Class resembling the existing cabin aboard the Business Traveller Awards 2017, the Lufthansa Group’s Network Boeing 777. Austrian Airlines has been integrating the new Airlines also took the first three places in the category “Best Premium Economy Class since 2018 aboard all its long­haul airline for business travellers on German and European routes” aircraft. And at the start of the summer timetable 2018, (see page 115, Prizes and awards). Eurowings became the first low­cost airline to offer the BIZclass on selected long­haul flights. 1 NPS® – Net Promoter Score, a registered service mark of Bain & Co., Inc., Fred Reichheld and Satmetrix Systems, Inc. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 85

Before departure, the passengers of the Group airlines benefit ing, communications and campaign activities. SWISS added from newly opened lounges and improved services for lounge the Family Check­in in Zurich during vacation periods to its visitors. An example: on March 5, 2018, the new 650­square­ family concept as well as special fares for families and children. meter SWISS First Lounge in Terminal A at Zurich Airport opened its doors. It offers not only the highest levels of service and More and more digital services improve the passengers’ travel comfort, but its construction also involved the latest techno l­ experience from planning to arrival (see page 12 f., Balance ogy standards concerning water and electricity consumption. 2017). For example, the Lufthansa Group further expands its Since the beginning of 2018, the Lufthansa Group has imple­ eJournal offer. Digital baggage services also contribute to mented a new lounge concept: in the future, new or remodeled traveling in a relaxed manner. Thanks to these, passengers now lounges will feature more individual designs than is currently know where their baggage is at any given time and on which the case and offer a “local touch”. carousel it will be delivered. Since January 2018 there has also been the electronic baggage tag “BAGTAG”. After checking in On board, Lufthansa has served meals and beverages to its their baggage with the Lufthansa app, passengers can transmit passengers traveling on all intercontinental flights in Economy the data from the digital boarding pass to their suitcase with a Class on new tableware since the middle of 2017. The latter click on “BAGTAG”. features a timeless design and is more environmentally friendly. New materials and the innovative anti­slip coating make Meanwhile, Lufthansa and the Lufthansa Cargo subsidiary serving easier for cabin crews. Jettainer have sustainable luggage produced by upcycling: air freight containers, container tarps, freight lashing straps and Furthermore, the Group airlines continued to expand their life jackets withdrawn from service are made into trendy bags services for families during the reporting year. Thus, Lufthansa produced in limited editions. launched a new platform that pools all family­relevant market­ LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 87

Spot check In addition, on the basis of the revised Air Traffic Act, so­called The Lufthansa Group airlines withdrew the two­person rule in ADM controls have been carried out at German flight operations the cockpit in 2017. A comprehensive safety review had shown since April 21, 2017. The checks, which are independent of that this rule, which had been introduced as a precaution after suspicion, are applied to pilots before their shifts begin as a the Germanwings accident in 2015 (see page 74 f., Balance sample taken at random. As an additional safety mechanism, 2016), does not increase safety. The Group airlines also fulfill pilots selected randomly by an algorithm are checked for the all requirements of the EU air safety authority EASA that are consumption of alcohol, drugs and certain medications. necessary for the rule’s withdrawal. In the meantime, EASA had analyzed the evidence gathered and revised its recommen­ dation in summer 2016. As a result, airlines may now decide themselves if they wish to withdraw or uphold the two­person­ cockpit rule. GERMANWINGS FLIGHT 4U9525 Three years after the crash of the Germanwings aircraft on March 24, 2015, crash site, and the accompanying sun portal at the visitors’ platform on the the unity between all employees of the Lufthansa Group and the bereaved Col de Mariaud. In the meantime, a space for commemoration and a room around the world remains as strong as ever. It is an important concern for for retreat have been set up for relatives in Le Vernet. The latter offers them the Group to keep alive the memory of the people who lost their lives in the a place to rest and pause during their visits. It was designed according to accident that occurred in the Alps in southern France, and to support the the family members’ wishes. next of kin. For this reason, a Post Emergency Organization (PEO) was set up immediately after the crash. It maintains contact with relatives, and Restoring the crash site to its natural condition was concluded in 2015. coordinates all tasks related to the accident. This includes close coordina­ While soil and water samples continue to be taken regularly at the accident tion with national authorities and local institutions in France. site, no conspicuous results have been observed so far. Relatives continue to receive support in dealing with the effects of the The aid fund set up immediately following the crash to support social and accident through numerous voluntary forms of assistance and can reach cultural projects commemorating the victims (see page 74, Balance 2016) contacts within the Company at any time through a Care Center. The had already supported more than 40 projects by spring 2018. A particular Center also organizes visits to the accident location. The continuous, close priority is giving support to young people who lost one or both parents in dialogue with relatives gives those responsible at the PEO a picture of the crash. Independent of claims for damages, an aid fund of more than individual needs, so that offers of ongoing assistance can be adapted in 5 million euros was made available for them to give financial support for an accordance with a family member’s personal situation, origin, cultural academic education or professional training in accordance with their environment and faith. To allow space for mourning, a number of private preferences and abilities. and public places of remembrance have been created since 2015. They include the commemorative sculpture “Sun Sphere” created by German The aid fund’s board of trustees, in which the relatives have seats and artist Jürgen Batscheider, which was unveiled in September 2017 at the voting rights, decides on all support initiatives. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 89

Information booth on cabin air quality addressing flying personnel. Detailed communications and information Furthermore, cockpit and cabin crew representatives from all The Lufthansa Group covers the topic of cabin air quality flying companies within the Lufthansa Group as well as the comprehensively in its internal and external media. Experts from airlines’ personnel and union representatives met on November the relevant Group departments regularly inform employees in 21, 2017 for the first Group­wide Cabin Air Quality (CAQ) Forum operational areas at different company locations about mea­ in Frankfurt. The goal of this internal event was to provide and surement and research results as well as technical analyses exchange information about measures implemented and and innovations. The Group has presented the HEPA / carbon insights gained so far, as well as on current developments filters several times at product stands in Frankfurt and Munich. concerning cabin air issues. More CAQ Forums are to take place in the future. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 91

International data protection regulations In 2017, the Lufthansa Group conducted a broadly­designed internal data protection campaign with numerous information events and launched the new web­based training “Principles of data protection according to the EU General Data Protection Data protection regulations in other countries play an increasing Regulation” in October. In this way, the Group implements the role for the Lufthansa Group due to its international operations. EU­GDPR’s requirement to make employees familiar with the Conflicts arise in the airline industry in particular because law’s regulations. The comprehensively revised training tool foreign authorities increasingly request passenger data. replaces all previous web­based training units concerning data However, providing such data would often be contrary to protection. It includes a supplementary chapter for special European data protection rules (see page 67, Balance 2015). target audiences such as managers, HR staff and employees Since June 2016, the “EU­US Privacy Shield” has regulated with customer contact. All employees, and in particular those data transfers between the EU and the USA (see page 73, who work with personal data, must participate in the new Balance 2016, and page 59, Balance 2017). training. Additionally, the Group offers specialized trainings online for specific target audiences (see page 72, Balance In the European Union, the new EU General Data Protection 2016) and offers continuing education in sessions with required Regulation has been in effect since May 25, 2018. The personal presence on the topic of data protection when the Lufthansa Group adapted its existing data protection manage­ need arises. ment system to this Europe­wide standardized data protection law and carried out related projects necessary for its introduc­ tion within those Group companies affected. Nevertheless, individual national deviations from this norm will continue to be IT security in application for the aviation group, such as those concerning The increasing digitalization of business processes within the the obligations to appoint data protection commissioners and Lufthansa Group also increases the necessity of prevention with regard to employee data protection. In the context of her against cyber risks (see page 74 f., Annual Report 2017). At the legal supervision function, the Group Data Protection Commi s­ Group level, the department IT Strategy & Security is responsi­ sioner will regularly monitor the implementation of the ble for implementing requirements concerning data protection EU­GDPR. Employee sensibilization and targeted training and IT security. This includes the development of appropriate concepts and measures such as e­mail encryption, a cyber crime awareness campaign, and protection from criminal activity over the Internet (see page 59, Balance 2017). The risk and security management systems as well as selected mea­ sures are regularly checked by internal auditors. The Group Data Protection Commissioner supports employees In 2017, the Lufthansa Group again implemented numerous and managers by means of web­based training programs and projects in order to meet the increasing risks from information comprehensive communication in understanding data protec­ technology with adequate means. Among other initiatives, the tion, its necessity and its principles within the Lufthansa Group. Group continued the PROTECT campaign which was launched This includes important concepts, the organization of data in fall 2016 and increases the Company’s cyber resistance; it protection and specific aspects concerning certain areas. The was concluded at the end of the first quarter of 2018. The bug Group Data Protection Commissioner plans the necessary bounty program, which was successfully launched at the training measures as a recommendation, informs those respon­ beginning of 2017 and aims at identifying and removing securi­ sible about their training obligations and supervises – as much ty vulnerabilities in IT systems with help from invited hackers as this is technically possible – by means of an automated and research centers, will be continued in 2018 and expanded monitoring system and concrete controls that these training step by step. obligations are met. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 93

Notes on the scope of consolidation and methodology for calculating absolute and specific consumption and emissions ↗ GRI 102-45 ↗ GRI 102-48 Scope of consolidation are great­circle distances. In combination flights (freight and Reporting on transport performance, kerosene consumption, and passenger transport in one aircraft), fuel consumption is attributed emissions from flight operations in 2017 is – unless noted other- on the basis of its share of the total payload to calculate the wise – based on the following scope of consolidation: passenger- and freight-specific figures. • Lufthansa (including Lufthansa CityLine and Air Dolomiti), Since 2013, the DIN EN 16258 standard has provided a guide for SWISS (including Edelweiss Air), Austrian Airlines, Eurowings standardized calculation of greenhouse gas emissions for transport (including Germanwings), Brussels Airlines and Lufthansa processes. This guide uses the same estimates for calculating Cargo. Not included are services performed by third parties, payload as the Lufthansa Group. When traveled distances are as their performance is beyond our control. calculated, 95 kilometers must be added to the great-circle • Types of flight service: all scheduled and charter flights. distance according to the guidelines of the EU emission allowance Methodology of calculations Kerosene in absolute terms trading scheme. The International Air Transport Association (IATA) has separately developed its own calculation proposals, which deal with the division of fuel consumption between freight and passen- Kerosene consumption is calculated on the basis of actual flight gers and attribute a larger share of fuel consumption to passengers operations (i.e. using actual load factors and flight routings) because of the passenger-specific infrastructure. Although this according to the gate-to-gate principle. This covers all phases of method has no effect on the overall efficiency of a flight, it changes a flight, from taxiing on the ground to flying detours and holding the apportionment between passengers and freight. There are still patterns in the air. divergences between the two methods (including from the method used up to now by Lufthansa). We would welcome a standardized, Emissions in absolute terms internationally harmonized and accepted method. The emissions from flight operations are calculated on the basis of actual transport performance and hence on actual load factors and Environmental database the actual absolute quantity of kerosene consumed in the reporting The environmental data for this report were compiled by the year. Transport performance is measured in tonne kilometers; i.e., Lufthansa Group by means of its central environmental database. payload transported over a distance. For passengers and their All Lufthansa Group companies are encouraged to feed their luggage, an average of 100 kilograms is the standard estimate; for environmentally relevant performance and consumption data (such freight, it is its scale weight. Each aircraft / engine combination as fuel consumption) into the Group’s environmental database. present in the fleet is considered separately, and the associated Data used for the calculation of the Lufthansa Group’s carbon values are calculated with the aid of computer programs provided footprint (Scope 1 – 3 emissions) were additionally checked by an by the aircraft and engine manufacturers. The annual average flight external auditor for completeness and correctness according to profile for each subset of the fleet is then fed into these programs. accepted verification standards and verified with High Assurance This allows us to determine emissions in relation to flight altitude, (Scope 1) and Limited Assurance (Scope 2 and 3) respectively. distance flown, thrust, and load. This approach is necessary for nitrogen oxides (NOX), carbon monoxide (CO), and unburned hydrocarbons (UHC) in particular. Carbon dioxide (CO2) emissions do not require special calculation methods, as they are generated Accuracy For presentation purposes the figures in the charts and tables are rounded. Changes from the previous year’s figures and share in a fixed ratio to the quantity of kerosene burned. The combustion of 1 tonne of kerosene generates 3.15 tonnes of CO2. percentages refer in each case to precise figures, however. For this reason it is possible that a reported value may remain the same from one year to the next even though a relative change is Specific consumption and emission values reported. Because of the rounding of share percentages, it is also Calculating specific consumption and emissions entails expressing possible that the sum of their addition may differ from the sum of absolute values in relation to transport performance. For example, the unrounded percentages. For example, as a result of rounding, the ratio liters per 100 passenger kilometers (l / 100pkm) is calcu- share percentages may not add up to 100 percent even though it lated on the basis of actual load factors along with the quantity of would be logical to expect them to. kerosene actually consumed. The distances used in the calculations LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 95

SPECIFIC FUEL CONSUMPTION PASSENGER TRANSPORTATION LUFTHANSA GROUP SPECIFIC FUEL CONSUMPTION PASSENGER TRANSPORTATION LUFTHANSA in liters / 100 passenger kilometers (l / 100 pkm) . in liters / 100 passenger kilometers (l / 100 pkm) . . . . . . . . . SPECIFIC FUEL CONSUMPTION PASSENGER TRANSPORTATION AUSTRIAN AIRLINES SPECIFIC FUEL CONSUMPTION PASSENGER TRANSPORTATION SWISS in liters / 100 passenger kilometers (l / 100 pkm) . in liters / 100 passenger kilometers (l / 100 pkm) . . . . . . . . . SPECIFIC FUEL CONSUMPTION PASSENGER TRANSPORTATION EUROWINGS in liters / 100 passenger kilometers (l / 100 pkm) . . . . . SPECIFIC FUEL CONSUMPTION FREIGHT TRANSPORTATION , in liters / tonne kilometers (l / tkm) . . . . . LUFTHANSA GROUP Sustainability Report Balance / Issue 2018 / page 97

VERIFICATION STATEMENT SCOPE 1- 3 LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 99

AVERAGE AGE 7 AGE STRUCTURE 7 Lufthansa Group, in years as of December 31, respectively Lufthansa Group, in percent as of December 31, 2017 Female employees Male employees Total 60 and older 45 40 42.7 41.9 40.9 43.1 42.3 41.3 43.3 42.3 41.3 43.4 42.2 40.9 43.5 42.2 40.9 2013 2014 2015 2016 2017 55 – 59 50 – 54 45 – 49 40 – 44 35 – 39 30 – 34 25 – 29 20 – 24 18 – 19 15 – 17 4.6 9.8 16.8 15.1 13.6 12.9 11.3 9.4 5.6 1.0 0.1 SHARE OF WOMEN IN MANAGEMENT POSITIONS SHARE OF WOMEN WITH STAFF RESPONSIBILITY Lufthansa Group, in percent as of December 31, respectively Lufthansa Group, in percent as of December 31, respectively 20 15 10 5 50 40 30 20 14.5 14.2 14.9 15.6 15.1 34.1 35.1 33.9 34.1 35.0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 1 Scope of application: Group scope of consolidation; calculation according to HGB guidelines (without board members, including temporary workers, including employees with Lufthansa employment contracts at other companies). 2 Without apprentices 3 Consists of cockpit and cabin. 4 Previous year’s figures adapted due to restructuring of business segments. 5 The business segment “Point-to-Point Airlines” was renamed “Eurowings Group” in the first quarter of 2018. 6 Scope of application: Group scope of consolidation; shares in percent; part-time including age-related part-time (sabbatical blocks included); from 2014 including Aerologic (partially consolidated at 25%). 7 Scope of application: Group scope of consolidation, without parts of LSG abroad, LH Malta Aircraft- Leasing Ltd., time:matters GmbH, time:matters Spare Parts Logistics GmbH, time:matters Holding GmbH, LH Technik Philippines Inc., LH Technik Puerto Rico LLC, LH Technik Shannon Ltd. Co., LH Technik Malta Ltd., LH Technik Airmotive Ireland Leasing Ltd. Co., LH Technik Budapest Repülögeb, Hawker Pacific Aerospace (US), Aerologic GmbH (25 percent partially consolidated), LH Technik Landing Gear Services UK Ltd., BizJet International Sales & Support Inc., LH Technik North America Holding Corp., LH Technik Sofia OOD, LH Technik Component Services LLC, LH Malta Holding Ltd., LH Malta Corporate Finance Ltd., LHAMIH LIMITED, LH Malta Finance Holding Ltd. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 101

CO – see “Carbon monoxide” Equivalent continuous noise level (Leq) CO2 – see “Carbon dioxide” D Decibel (dB) The Leq is a measure for the energetic average of all sound pressure levels over a defined period of time. All sound events that differ in intensity and duration are summarized according to mathematical rules. The resulting average value is an accepted and proven measurement of the noise quantity occurring over an observed time interval. Measuring unit for the intensity and pressure of sound. The difference in intensity between the softest sound the human F ear can perceive and the pain threshold is 1 : 10 trillion. To depict this enormous range objectively, acoustics uses the Freight performance (FTKO / FTKT) logarithmic decibel scale. On this scale, the value “0” is as­ Airlines distinguish between freight performance offered signed to the perception threshold (for a sound of 1,000 Hz) (FTKO, freight tonne kilometers offered) and its sold freight and the pain threshold at the value “130”. An increase of 10 dB performance (FTKT, freight tonne kilometers transported). corresponds to a tenfold increase in sound intensity. For the See also “Tonne kilometers”. perceived volume, a difference of 10 dB corresponds to half or double the volume. However, the human ear is not equally Fuel dump sensitive across the entire range of frequencies. Low and high Dumping of fuel in flight due to emergency situations to sounds are not perceived as being equally loud even at the reduce a long-haul aircraft’s weight to the maximum permissi- same intensity. For measurements, this difference is equalized ble landing weight before unscheduled landings (e.g. in the and noted accordingly. The best known such notation is the event of technical problems or serious passenger illness). A value, marked by the index dB(A). To measure aircraft noise, Special air space is assigned to the aircraft, if possible above the EPNdB (Effective Perceived Noise Decibel) unit is used uninhabited or thinly populated areas. Fuel is usually dumped internationally. Diversity at altitudes of 4 to 8 kilometers. A minimum altitude of 1,800 meters and a minimum speed of 500 km / h are required. The aircraft may not fly a fully closed circle. The dumped kerosene In a corporate context, diversity refers to all characteristics that is released from outlet vales and forms a fine mist behind the distinguish employees from one another. Diversity offers aircraft. So far, no contamination has been detected in plant approaches for handling human differences for the benefit of or soil samples after fuel dumps. company and employees alike. E EBIT G Great-circle distance The shortest distance between two points on the Earth’s Financial indicator; it denotes earnings before interest and surface, measured in kilometers (great circle kilometers) or taxes. From financial year 2015 it has been used as the central nautical miles. The center of a great circle is the center of earnings indicator. It is calculated from total operating income the Earth. minus operating expenses plus the result from equity investments. Greenhouse gases EMAS – Environmental Management and Audit Scheme and have both natural and human (anthropogenic) causes. European regulations concerning environmental management and certification; colloquially referred to as EU eco-audit regulations. The most important natural greenhouse gases are water vapor (H2O), carbon dioxide (CO2), and methane (CH4); the most important anthropogenic greenhouse gases are carbon dioxide from the combustion of fossil fuels and methane, primarily Gaseous substances that contribute to the greenhouse effect LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 103

precursor substances (summer smog) and irritates the mucous membranes. At current levels, nitrogen oxide emissions from W air traffic at cruising altitudes cause an increase in atmospheric Water vapor ozone, analogous to the generation of summer smog, esti- The most important greenhouse gas, even ahead of carbon mated by scientists at 3 to 4 percent on the heavily-flown dioxide. Without water vapor from natural sources, the Earth’s North Atlantic routes. P Passenger kilometer (PKO / PKT) surface would be around 22 degrees Celsius cooler. This makes water vapor responsible for two-thirds of the natural greenhouse effect (33 degrees Celsius). For each kilogram of kerosene burned, 1.24 kilograms of water vapor are released. Concerns that air traffic might increase the concentration of water vapor in the stratosphere and thus change the climate Measure for transport performance in passenger carriage have been refuted by scientific research. The German Aerospace (number of passengers multiplied by distance flown). A Center (DLR) concluded that even a one hundred-fold increase distinction is made between available transport performance in the quantity of water vapor emitted by air traffic would not (PKO, passenger kilometers offered, or, synonymously, SKO, result in a detectable climatic signal. seat kilometers offered) and actual transport performance (PKT, passenger kilometers transported). S Seat kilometer Measure of the transport capacity available (SKO, seat kilometers offered). T Tonne kilometer (TKT / TKO) Measure of transport performance (payload multiplied by distance). A distinction is made between available transport performance (TKO, tonne kilometers offered) and the actual transport performance (TKT, tonne kilometers transported). In calculating payloads, passengers are taken into account by means of a statistical average weight. U UHC – Unburned hydrocarbons Organic mixture of carbon and hydrogen that results from the incomplete combustion of fuels containing hydrocarbons or from the evaporation of fuel. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 105

GRI STANDARD DISCLOSURE TITLE PAGE NUMBER AND / OR URL / EXPLANATION Strategy GRI 102­14 GRI 102­15 Ethics and integrity Statement from senior decision­maker page 3 Key impacts, risks, and opportunities Annual Report 2017, page 64 ff. GRI 102­16 Values, principles, standards, and norms of behavior Governance GRI 102­18 Governance structure Stakeholder engagement GRI 102­40 GRI 102­41 List of stakeholder groups Collective bargaining agreements GRI 102­42 GRI 102­43 GRI 102­44 Identifying and selecting stakeholders Approach to stakeholder engagement Key topics and concerns raised Report profile GRI 102­45 Entities included in the consolidated financial statements GRI 102­46 Defining report content and topic Boundaries GRI 102­47 List of material topics GRI 102­48 Restatements of information page 28 f. The Executive Board of Deutsche Lufthansa AG adopted a Code of Conduct in 2017 that serves as a basis for the Lufthansa Group’s value system. It is binding for all bodies, executives and employees of the Lufthansa Group. Annual Report 2017, S. 13 The assignment of responsibilities for business areas within the Executive Board did not change in comparison with the preceding year. Further committees with regard to economic, ecological and social subjects are on page 20, page 40, page 63 and page 72. page 22 page 68 In Germany, almost all companies are subject to collective agreements (close to 100 percent). For the entire Lufthansa Group this statement is not possible at the moment. page 22, page 24 page 22, page 24 page 22, page 24 The Lufthansa Group considers the results of passenger satisfaction surveys as confidential information. Balance 2017, page 19 ff. page 95 Annual Report 2017, page 174 A list of major subsidiaries, joint arrangements and associated companies can be found in the Annual Report, page 189 ff. page 24 Balance 2017, page 19 ff. Balance 2016, page 22 ff. page 24 Balance 2017, page 19 ff. Balance 2016, page 22 ff. page 95 For the reporting year 2017, the company Brussels Airlines was included for the first time. GRI 102­49 GRI 102­50 GRI 102­51 GRI 102­52 GRI 102­53 GRI 102­54 GRI 102­55 GRI 102­56 Changes in reporting Reporting period Date of most recent report Reporting cycle page 24 page 1 page 1 page 1 Contact point for questions regarding the report page 113 Claims of reporting in accordance with the GRI Standards GRI Content Index External assurance page 1, page 106 page 106 ff. page 99 In this report, the Scope 1­3 emissions data were subjected to an external audit. In addition, for the first time the Lufthansa Group published a combined non­financial report for the financial year 2017 in its Annual Report. This combined non­financial report was the subject of a voluntary limited assurance engagement in accordance with ISAE 3000 (revised). The management approaches and concepts published in it were adopted for this report and complemented with supplementary information. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 107

GRI STANDARD DISCLOSURE TITLE PAGE NUMBER AND / OR URL / EXPLANATION GRI 305-4 GHG emissions intensity page 44 f. Values for specific CO2 emissions in kilograms per 100 passenger kilometers (kg / 100 pkm) GRI 305-5 Reduction of GHG emissions page 51 ff. Supplier Environmental Assessment GRI 103: Management approach 2016 GRI 103-1, GRI 103-2, GRI 103-3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach GRI 308: Supplier Environmental Assessment 2016 page 31 An evaluation of the management approach is planned in the medium term. GRI 308-1 New suppliers that were screened using environmental criteria page 31 Active noise abatement GRI 103: Management approach 2016 GRI 103-1, GRI 103-2, GRI 103-3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 57 ff. Number of aircraft that meet or exceed the 10-dB criterium of the ICAO Chapter 4 standard. page 114 Employment GRI 103: Management approach 2016 GRI 103-1, GRI 103-2, GRI 103-3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 61 ff. GRI 401: Employment 2016 GRI 401-3 Parental leave The compatibility of work and private life is an important element for the Lufthansa Group to provide long-term support to employees to maintain their ability to work and perform. During the reporting year, 28.6 percent of the Lufthansa Group’s employees worked part-time, 72.9 percent of whom were women. Furthermore, numerous employees took family leave. A nuanced analysis of return rates is currently not yet possible, but is targeted for the future. Labor / management relations GRI 103: Management approach 2016 GRI 103-1, GRI 103-2, GRI 103-3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 68 f. GRI 402: Labor / management relations 2016 GRI 402-1 Minimum notice periods regarding operational changes Engagement Index (EI) Leadership Index (LI) Occupational health and safety GRI 103: Management approach 2016 GRI 103-1, GRI 103-2, GRI 103-3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach GRI 403: Occupational health and safety 2016 GRI 403-1 Workers representation in formal joint management– worker health and safety committees In accordance with the stipulations of Industrial Relations Law and in the sense of an active social partnership, the responsible bodies of code - termination and the Company’s publics are informed at an early stage. page 69 page 69 page 72 f. page 72 In Germany, work protection committees that include representatives of employees and employer are active at all relevant locations of the Lufthansa Group. They jointly optimize processes and agree on measures to improve work protection. All employees in Germany are represented in work protection committees. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 109

GRI STANDARD DISCLOSURE TITLE PAGE NUMBER AND / OR URL / EXPLANATION Supplier Social Assessment GRI 103: Management approach 2016 GRI 103­1, GRI 103­2, GRI 103­3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach GRI 414: Supplier Social Assessment 2016 page 31 An evaluation of the management approach is planned in the medium term. GRI 414­1 New suppliers that were screened using social criteria page 31 Customer health and safety GRI 103: Management approach 2016 GRI 103­1, GRI 103­2, GRI 103­3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 88 ff. GRI 416: Customer health and safety 2016 GRI 416­1 Assessment of the health and safety impacts of product and service categories page 88 ff. Customer Privacy GRI 103: Management approach 2016 GRI 103­1, GRI 103­2, GRI 103­3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 92 f. GRI 418: Customer Privacy 2016 GRI 418­1 Substantiated complaints concerning breaches of customer privacy and losses of customer data In 2017 the Lufthansa Group did not record a reportable violation of data protection as defined by Germany’s Federal Data Protection Act. Service and customer centricity GRI 103: Management approach 2016 GRI 103­1, GRI 103­2, GRI 103­3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 84 ff. Corporate citizenship GRI 103: Management approach 2016 GRI 103­1, GRI 103­2, GRI 103­3 Explanation of the material topic and its Boundary / The management approach and its components / Evaluation of the management approach page 74 ff. An evaluation of the management approach and the development of KPIs are planned in the medium term. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 111

CONTACT Deutsche Lufthansa AG Lufthansa Group Communications Susanne Kotysch Head of Corporate Responsibility Communications & Events FRA CI/B Lufthansa Aviation Center Airportring D­60546 Frankfurt/Main balance@dlh.de Please note that ↗ www.lufthansa.com is the central contact point for all inquiries concerning customer service. Under the header “Help & Contact” you will find full information on how to contact Lufthansa. You will find further information on sustainability within the Lufthansa Group at: ↗ www.lufthansagroup.com/responsibility Order your copy of our Annual Report 2017: ↗ www.lufthansagroup.com/investor-relations LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 113

THE OPERATING FLEET OF THE LUFTHANSA GROUP 1 AS OF DECEMBER 31, 2017 Lufthansa and regional partners Airbus A380-800 LH: 14 aircraft, 509 seats, 12,400 km range Airbus A319-100 LH: 30 aircraft, 138 seats, 3,350 km range Embraer 195 CL: 6 aircraft, 120 seats, 2,300 km range EN: 11 aircraft, 120 seats, 2,300 km range Boeing 747-8 LH: 19 aircraft, 364 seats, 13,000 km range Embraer 190 CL: 9 aircraft, 100 seats, 3,500 km range Boeing 747-400 LH: 13 aircraft, 371 seats, 11,850 km range Bombardier CRJ900 CL: 35 aircraft, 90 seats, 2,100 km range Airbus A340-600 LH: 17 aircraft, 297 seats, 12,900 km range SWISS and Edelweiss Air Airbus A350-900 LH: 6 aircraft, 293 seats, 12,650 km range Airbus A340-300 LH: 12 aircraft, 283 seats, 11,800 km range CL: 6 aircraft, 300 seats, 11,500 km range Airbus A330-300 LH: 19 aircraft, 236 seats, 9,850 km range Airbus A321-100 / 200 LH: 63 aircraft, 200 seats, 2,600 km / 4,150 km range Airbus A320neo LH: 10 aircraft, 180 seats, 3,000 km range Airbus A320-200 LH: 67 aircraft, 168 seats, 3,200 km range Boeing 777-300ER LX: 8 aircraft, 340 seats, 13,650 km range HB JNA FRAUENFELD M A HB JMA Airbus A340-300 LX: 7 aircraft, 219 seats, 13,000 km range Airbus A330-300 LX: 14 aircraft, 236 seats, 9,850 km range Airbus A321-100 / 200 LX: 9 aircraft, 219 seats, 2,100 km range Airbus A320-200 LX: 21 aircraft, 180 seats, 2,700 km range Airbus A319-100 LX: 5 aircraft, 138 seats, 3,350 km range LEGEND LH = Lufthansa, Lufthansa Cargo 4U = Germanwings CL = Lufthansa CityLine EN = Air Dolomiti EW = Eurowings LX = SWISS OS = Austrian Airlines SN = Brussels Airlines WK = Edelweiss Air Range indicated in general with maximum number of passengers or payload, respectively. In part, different versions are in operation. 1 Operated by companies of the Lufthansa Group.

PRIZES AND AWARDS 2017 / 18 Every year, the Lufthansa Group and its subsidiaries receive numerous • The SESAR project iStream, in which Lufthansa and SWISS prizes and awards. Here is a selection: participated together with others, received the IHS Jane’s ATC Award in the category “Enabling Technology”. 2017 • The SESAR project Optimized Descent Profile (ODP), in which • Carsten Spohr is named “Manager of the year 2017”. Germany’s Lufthansa and SWISS participated together with others, was “manager magazin” honored the Chairman of the Executive honored with the IHS Jane’s ATC Award in the category Board and CEO of Deutsche Lufthansa AG for his successful “Environment”. restructuring of Europe’s largest aviation group. • The demonstration project Augmented Approaches to Land (AAL), • Lufthansa became the only European airline to be awarded the in which Lufthansa and SWISS participated together with others, five­star seal by Skytrax for premium service and top levels of won the Single European Sky Award 2017 in the category comfort. “Innovation and Technology”. • In a Skytrax survey, 18 million passengers selected Lufthansa • Lufthansa Cargo was rated by DHL Global Forwarding with four as Europe’s best airline. The airlines of the Lufthansa Group “green aircraft” as preferred carrier and awarded the GoGreen received a total of four of the renowned Skytrax World Airline Carrier Certificate. Awards. • In the context of the World Airports Awards 2017 of London­based • Lufthansa Cargo’s project “OMEGA – CO2 Reduction on the Basis of Big Data” won the German Award for Excellence given by DQS Skytrax Institute, Terminal 2 at Munich Airport was elected the best in the category “Environmental Responsibility”. passenger facility worldwide. Terminal 2 is operated by Flughafen • At the German CSR Prize, Lufthansa Cargo reached the final München GmbH and Deutsche Lufthansa AG in a ratio of 60:40. • At the Business Traveller Awards 2017, SWISS, Austrian Airlines and with OMEGA in the category “CO2 Avoidance as Contribution to Climate Protection”, together with two other companies. Lufthansa took first, second and third prize in the category “Best • At the Payload Awards Asia 2017, Lufthansa Cargo received the Airline for Business Travellers on German and European Routes”. Corporate Social Responsibility Award. Furthermore, the readers of Business Traveller put SWISS in second • Lufthansa Systems received the German Mobility Prize for the place in the category “Best Airline for Business Travellers on digital obstacle database Lido / SurfaceData, which was intro duced Worldwide Routes”. And ↗ www.lufthansa.com won the first prize in the market at the beginning of 2017. in the category “Best Internet Offer for Business Travellers”. • SPIRIANT, a subsidiary of the LSG Group, was honored at the • At the ceremony of National Tourism Awards in China, TravelPlus Awards as Supplier of the Year for its amenity kits. Lufthansa Group airlines won three prizes: Lufthansa was honored • At the Corporate Art Awards 2017 in Rome, the Lufthansa Aviation as “Best European airline”, while SWISS received the prize for “Best Center was honored for its art collection. Its prizes are bestowed Economy Class”. Austrian Airlines won in the category “Best under the patronage of Italy’s Ministry of Culture. Onboard Service”. • For its mobile self­services, Lufthansa received the Fast Travel 2018 Platinum Award of the International Air Transport Association • At the Business Travel Awards 2018, Lufthansa received first prize (IATA). The Fast Travel program’s goal is to make passenger in the category “Best Long­haul Airline”, while the Group company travel more pleasant and to reduce waiting times. AirPlus was honored for the “Best Corporate Payment Product”. • The Lufthansa Innovation Hub was honored by business magazine • The International Air Transport Association (IATA) honored the “Capital” as Germany’s best innovation laboratory. The underlying mobile self­services of Austrian Airlines with the Fast Travel study compared 34 German digital laboratories and accelerators. Platinum Award. • SWISS has borne the label “Friendly Work Space” since 2015. In • SWISS was recognized with the Randstad Award 2018 as 2017, the airline was recertified accordingly. Switzerland’s most attractive employer. • The apprentice workshop of Austrian Airlines was honored with the • Lufthansa received a total of 15 prizes at the most amaZone Award in the category “Large Corporations”. This award is important Deutscher Werbepreis ADC Award (Art Directors given to companies that give particular support to women enrolled Club für Deutschland e. V.), including for the campaign in apprenticeships for technical professions and skilled trades. #LifeChangingPlaces. LUFTHANSA GROUP / Sustainability Report Balance / Issue 2018 / page 117