Issue 2017 Balance Key data on sustainability within the Lufthansa Group

About this report // 1 Balance, the Lufthansa Group’s Sustainability Report, informs stakeholders and the interested public about the Group’s goals, activities and advances in the areas of business, social responsibility, environment, product and corpo- rate citizenship. The data presented in this report complements and expands the information in the Annual Report. Across the Lufthansa Group, Corporate Responsibility is understood to comprise the following dimensions: • Economic sustainability • Corporate governance and compliance • Climate and environmental responsibility • Social responsibility • Product responsibility • Corporate citizenship Reporting follows the Global Reporting Initiative’s G4 guidelines (“core option”). This publication also serves as a progress report concerning the implementation of the ten principles of the UN Global Compact, which the Lufthansa Group joined in 2002. The Group determined the most significant topics related to sustain- ability in 2016 in the context of a materiality analysis, which is based on the results of a stakeholder survey. Scope of consolidation and comparability Unless noted otherwise, the data in this report refers to the finan- cial year 2016. You will find explanations concerning the scope of consolidation and calculation methods used to determine the absolute and specific resource consumption at the Lufthansa Group on page 85. This report covers the activities of the Lufthansa Group. Reporting restricted to individual Group companies is indicated in the copy. Due to changes in the portfolio over recent years, the figures for personnel and environmental performance cited in this report are only to a limited extent comparable with those reported for previous years. 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 14, 2016. The Group has regularly reported about its environmental performance since 1994 and has contin- uously expanded its reporting to the other dimensions of entrepre- neurial responsibility. Additional information on the Internet In addition to this report, the Lufthansa Group informs readers via the Internet about its activities in the area of sustainability: www.lufthansagroup.com/responsibility Disclaimer in respect of forward-looking statements The data included in this report has been collected and processed with the utmost care. Nevertheless, errors in transmission cannot be ruled out entirely. Information published in this report with regard to the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of definitive historical facts. Its purpose is exclusively informa- tional, identified by the use of such cautionary terms as believe, expect, forecast, intend, project, plan, estimate, count on, can, could, should or endeavor. These forward-looking statements are based on all the discernible information, facts and expectations available at the time. It is possible that the Group’s actual results and development may differ materially from the forward-looking statements implied by the forecasts. The Lufthansa Group assumes no obligation for and does not intend to adapt forward-looking statements to accommo- date events or developments that may occur at some later date. Accordingly, it neither expressly nor conclusively accepts liability, nor does it give any guarantee for the actuality, accuracy and completeness of this data and information. Note The terms Lufthansa Group, Group, aviation group, Company and aviation company are used synonymously in this report. 1 Taken from the Annual Report 2016 of the Lufthansa Group. 2 For the reporting year 2016, the following companies have been included in Balance: Lufthansa (including Lufthansa CityLine and Air Dolomiti), Lufthansa Cargo, SWISS (including Edelweiss Air), Austrian Airlines and Eurowings (including Germanwings). 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 86, table “Share of third parties”). 3 Types of flights taken into account: all scheduled and charter flights. 4 See page 86 “Fuel consumption”. 5 Balance: segments (operational perspective); Annual Report: distance (customer perspective). 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.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 3 Dear Readers, Digitalization is changing all areas of society and business. In aviation as well, digital solutions are driving the evolution of product and service offers. This trend is irreversible. It opens up a universe of opportunities and allows us to embark on new paths – with the customer experience in mind, but also with regard to our business segments. For this reason, we have made 2017 the Year of Digitalization across the Group and adopted the motto: Digitalization is one of the keys to the future for us. We have launched important digitalization projects in all areas of the Company – beginning with paperless aircraft maintenance and eJournals on board to eFreight at Lufthansa Cargo and virtual reality in pilot training. The largest current project in this domain is equipping all our short- and medium-haul aircraft with broadband Internet access. Our goal is a comprehensive and sustainable mobility concept, tailor-made to the customer’s individual wishes. To achieve this, digitalization along the entire travel chain plays a central role. It is not least our digitalization programs that allow optimized processes, improved services and faster communication – and they support the green transformation. For this reason, we have dedicated the cover story “#DigitalAviation” in this sustainability report to digitalization and would like to show you with a number of examples how this topic “moves” us quite literally. Movement continues to be a driving force in the area of the modernization of the Lufthansa Group's fleet. In 2016, we integrated 47 new aircraft into our Group’s fleet and this year we again expect a new aircraft almost every week. The current high point of our fleet renewal is the Airbus A350-900, the most modern and environmentally friendly long-haul aircraft. In December 2016, we received the first A350 of 25 aircraft on order. With the commissioning of the A320neo at Lufthansa and the Bombardier C Series at SWISS, there were even two world premieres during the reporting year. But the most important consider- ation is: With each new aircraft in operation we reduce our operating costs by 20 percent and make an important contribution to noise reduction and environmental protection. By having supported the UN Global Compact since 2002, we emphasize our continued commitment to fulfilling our responsibility for environmental and social issues alongside economic aspects. This also includes continuing to make ongoing contributions to society. I thank you for your interest in our work and wish you a sustainably captivating read. “Our digitalization pro- grams allow optimized processes, improved services and a faster communication – and they support the green transformation.” Carsten Spohr Carsten Spohr Chairman of the Executive Board and CEO Deutsche Lufthansa AG www.lufthansagroup.com/responsibility

AT A GLANCE Corporate headquarters Cologne Legal form Stock corporation Number of employees on 31.12.2016 124,306 Number of nationalities 144 Number of passengers in 2016 109.7 million Hubs Frankfurt, Munich, Zurich, Vienna Number of aircraft in the Group’s fl eet 617 Number of destinations (summer timetable 2017) 308 cities in 103 countries 1DAY AT THE LUFTHANSA GROUP 2,799 fl ights 1.72 million meals 1,700 aircraft supported 300,547 passengers Sustainability Report Balance // Issue 2017 // Lufthansa Group

From the Internet of Things via big data to smart homes: digitalization is a megatrend. Already, intelligent and interconnected systems shape our public and private lives. For some time now, digitalization has permeated almost all aspects of aviation, with enormous consequences on existing processes and products. The capabilities of information technology offer the Lufthansa Group concrete opportunities to further optimize its service value chain, to add digital components to its product and service offers and to personalize the latter. Similarly, work processes can be simplified and “green” transfor- mations can be advanced in this way. “Innovation and Digitalization” is one of the Group’s strategic action areas; the transformation toward electronically supported processes is fully underway in all business segments. Our stated goal: to be the “most digital” aviation group worldwide. On the following pages we’ll take you along on our flight – destination: digitalization. // 7

HOW CAN AN AVIATION COMPANY TAKE ADVANTAGE OF ELECTRONICALLY SUPPORTED PROCESSES TO OPERATE IN EVEN MORE SUSTAINABLE WAYS? From an economic perspective there is significant potential: The question is how digitalization can be harnessed to set up familiar business processes in better and more efficient ways. Specifically, we are looking at efficiency advantages in dimen- sions that cannot be realized by means of classic methods of continuous improve- ment such as lean management or kaizen. For example, the use of so-called chat- bots in customer service over the telephone – meaning digital assistants supported by artificial intelligence – reduces the workload of our service centers and simultane- ously shortens waiting times for our customers. There are also more concrete examples: in the spare parts supply chains for our aircraft we use sensors for geolocalization and tracking systems for aircraft components. Often new technol- ogies provide ecological advantages in addition to economic effects. For example, on its digital platform AVIATAR Lufthansa Technik developed a prognostic system that allows the continuous optimum trimming of the aileron, which in turn significantly reduces kerosene consumption and CO2 emissions. This is no longer a vision of the future but a solution used in daily operations. Equally, changing from paper-based to digital processes helps us to conserve precious resources along the value chain. HOW MUCH INFLUENCE DOES DIGITALIZATION HAVE ON THE LUFTHANSA GROUP’S WORK ENVIRONMENT? Our internal structures will change considerably. In the future, working in networks will increasingly gain importance. In contrast to classic hierarchical structures, net- works are formed by colleagues who have a particular identification with a topic and would like to make a contribution to it. A person’s hierarchical position or the question of organizational affiliation within the Lufthansa Group becomes secondary in this context. Our digital development teams already work in this manner and this highly motivating way of working, which is based on enthusiasm and the will to participate, is set to spread. With the network, a second legitimate organizational element establishes itself in tandem with hierarchy. The network with its ostensibly looser structure fosters searching, experimenting, learning and changing; as a result, a more flexible and agile type of organization will evolve. AVIATAR: DIGITAL DEPICTION OF AIRCRAFT AND THE MRO INDUSTRY With AVIATAR, the new product division Digital Fleet Solutions at Lufthansa Technik headed by Dr. Christian Langer is developing a cen- tral, Internet-based platform that offers customers access to all digital MRO solutions (Maintenance, Repair and Overhaul). It allows airlines to monitor the technical state of their fleets in real time and make decisions to ensure optimal technical maintenance. For example, using integrated forecasting systems (predictive maintenance), users are able to search directly for the most suitable spare part and arrange for its shipment to the nearest maintenance station even before the aircraft component in question has malfunctioned. Furthermore, all documents required for proof of airworthiness can be called up directly on AVIATAR. The deliberately open platform invites others – including competitors – to develop innovative applications and offer them there. This new approach aims to signifi- cantly increase the development speed of digital innovations for the MRO industry – for the benefit of airlines and passengers alike. i t w e v r e n i t r e p x E > // 9

i y c n e c i f E > y t i l a u Q > Under the umbrella of Lufthansa Cargo’s eFreight project, we are working on making air freight handling paperless and digitalizing the entire delivery chain by 2020. At the moment, paper documents still have their place in our business. There are airway bills, certii- cates, customs declarations and insurance documents – everything is printed, sorted, transported and archived. Therefore, we are creating a digital information chain that freight shipments. For example, the electronic airway bill (eAWB) has been introduced at more than 150 Lufthansa Cargo stations. the physical follows THORSTEN FRIEDRICH HEAD OF eFREIGHT GLOBAL ROLLOUT AT LUFTHANSA CARGO As is already the case for electronic passenger tickets, all data required for cargo shipments will in the future be available digitally and thus in high quality around the clock. The advantage: Our customers no longer have to produce and administer paper documents, while we can work at an early stage with the data transmitted. With eFreight we palpably improve the processes and eficiency of cargo shipments. In addi- tion, digitalization can help conserve about 7,800 ton- nes of paper across the industry per year. MICHAEL ORTWEIN DIRECTOR COMPETENCE CENTER OPERATIONAL APPLICATIONS AT LSG SKY CHEFS AND CODEVEL- OPER OF THE CBASE PROGRAM Digitalization is improving in-light catering in many ways. Until recently, our colleagues at LSG Sky Chefs and the crews had to rely on printed loading lists to know how many meals, cutlery sets, amenity kits and blankets are needed for a particular light. For each light operated by an Airbus A380 these lists run to about 100 pages. To improve this situation and opti- mize the loading process, we further developed CBASE at the IT department. This program depicts all relevant information concerning in-light catering. At the same time, we designed apps based in CBASE, such as the Galley Guide, to ensure that this data is available digitally. In the future, our employees and the crews will be able to ind all loading data by means of this app. Additionally, the digital production guide shows them current quantities and pictures of the meals to be loaded. These apps will help us not only to reduce paper consumption, but also to make the entire process smarter. As all information is always current and easy to access, we also prevent possible errors. // 11

? eated by Ben Cunningham oject eated by Ben Cunningham oject eated by chiara galli oject AIRCRAFT DESTINATION BOARDCONNECT Lufthansa Systems continuously works on improving passengers’ travel experience by means of personalized solutions and helping airlines position themselves optimally for the digital future. One example for this quest is Board- Connect. This digital platform comes in three versions that provide wireless in-light entertainment (IFE) on passengers’ smartphones and tablets. In addition to the permanently installed classic IFE solution BoardConnect there is also the lexible variant BoardConnect Portable. It combines all technical components in a single unit that can be installed quickly and simply aboard any aircraft without a great deal of cabling. The third option is an Internet-based solution supported by BoardConnect Plus. FLYNET Suring, chatting, mailing and streaming videos – and all in broadband quality. Lufthansa has offered this service on long- haul lights for many years. Now, passengers on Lufthansa, Austrian Airlines and Eurowings lights can enjoy the same offer by using FlyNet on short- and medium-haul lights when they connect their smartphone, tablet or notebook to the WLAN on board. Lufthansa Group airlines are thus among the irst in Europe to offer their pas- sengers this kind of suring experience. The reit program will be concluded at Lufthansa in 2018. ALLERGEN APP Be it milk, ish, peanuts, or grains containing gluten: Many people suffer from food intolerances. For this reason the LSG Group developed an allergen app based on EU Directive 1169/2011, which covers all relevant information concerning in-light meals and 14 key allergens. Passengers can thus let the purser know what their food intolerances are and the latter can show them which dishes are suitable for them. The application is available in 16 languages and is tailored precisely to the requirements of the EU Directive, which governs the labeling of foodstuffs (ingredients, information on allergies, expiration dates, etc.). DIGITAL BAGGAGE SERVICES “See you, we’ll be in touch!” is what Lufthansa passengers might have been saying since spring 2016 to their suitcases and bags as they check them in. The airline’s digital baggage services ensure that passengers can use a link on their mobile boarding passes in the Lufthansa app to ind out at any time where their checked-in luggage is at that moment. After their arrival at the destination airport the app informs customers when exactly and on which baggage carousel they will receive their luggage. In addition, luggage tags produced with the new solutions “HomeTag” and “Rimowa Electronic Tag” make checking in baggage signiicantly more comfortable. // 13

“HOW WE SHAPE TOMORROW’S WORLD TODAY IS DECISIVE.” Professor Sabine Pfeiffer holds a chair in sociology at Hohenheim University WHAT INFLUENCE DOES TECHNOLOGICAL PROGRESS HAVE ON THE INTERACTIONS BETWEEN PEOPLE, TECHNOLOGY AND ORGANIZATIONS? Technological change has always had a significant influence on people and organizations. What is new is that 4.0 technologies need a lot more shaping. Each company needs to define digitalization in highly concrete terms for itself. As a result, people and organizations now face more pronounced challenges concerning the design of technology than before. WHAT DOES THE WORK ENVIRONMENT 4.0 LOOK LIKE? Above all: confused and not simultaneous. Many things will develop in different ways. But the decisive point is how we shape tomorrow’s world today. In shaping the new working environments it is important to create jobs that allow for future changes. The broader the definition of tasks and the more qualified the employees, the greater a company’s ability to innovate in the future. AND TALKING ABOUT INDUSTRY 4.0: WHAT ARE THE REQUIREMENTS THAT EMPLOYEES HAVE TO FULFILL TO BE FIT FOR THE WORLD OF BITS AND BYTES? Employees are much fitter than is commonly assumed. One reason for this is that in their private lives they are digitally much more active than on their jobs. Another is that they have gathered experience with change due to digitalization and globalization over the past years. Our research shows that a large number of employees today often deal with change, complexity and impon- derables. We measure this requirement with an index concerning the working capacity or “Arbeitsvermögen” in German (AV)1. In Germany, 74 percent of employees show an AV value above average; in aviation this value stands at 85 percent and is thus considerably higher. Therefore, the employees know how to deal with change – the important point is to involve them actively from the beginning. HOW CAN COMPANIES BEST SHAPE CORPORATE SUSTAINABILITY IN THE AGE OF DIGITALIZATION? Digitalization provides more transparency concerning resource consumption. Smarter manage- ment systems for buildings, aviation and IT technology will make it easier to conserve resources. However, these opportunities have to be taken into account at the design stage of such systems. This is highly important because digitalization itself is very resource-intensive. Sabine Pfeiffer conducts research work on the changes affecting technology and the work environment. One area of emphasis in her work is the question of what effects digitalization has on work situations. In 2016 she was appointed to the scientific advisory council of the platform “Industrie 4.0”. i t w e v r e n i t r e p x E > 1 see http://www.bit.ly/Arbeitsvermögen // 15

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 17 Strategy and management All entrepreneurial activities across the Lufthansa Group are guided by aware- ness of responsible conduct. Applying sustainable management principles with regard to fi nancial, social and ecological aspects is in the interest of the aviation group and its stakeholders. Doing so is a fundamental requirement aviation group and its stakeholders. Doing so is a fundamental requirement for further increasing the Company’s value over the long-term. for further increasing the Company’s value over the long-term. The topic of sustainability is present in all seven action areas of The topic of sustainability is present in all seven action areas of the strategic program “7to1 – Our Way Forward”, which aligns the Lufthansa Group with the requirements of the future. Its measures designed to increase effi ciency are the basis on which the aviation group is to develop successfully and sustainably. The goal of the strategic program is to increase quality, effi ciency and the ability to innovate across the Group and thus to secure the Lufthansa Group’s innovate across the Group and thus to secure the Lufthansa Group’s competitiveness (see page 12, Annual Report 2016 and page 19, Balance 2016). The principles of sustainable management are a key element of the The principles of sustainable management are a key element of the Group’s governance. To steer the Company, the Lufthansa Group uses a value-oriented management system, which is part of all uses a value-oriented management system, which is part of all processes concerning planning, steering and control. This approach processes concerning planning, steering and control. This approach aims at creating long-term value independently of industry and business cycles. The focus of the sustainability strategy is on aspects that have the most signifi cant infl uence on the Lufthansa Group and where it can achieve the greatest effect. This includes above all the intention to reduce environmentally relevant effects from business activities on a continuous basis. The Group’s measurable contribution in this area comes above all from making comprehensive investments in new aircraft, new technologies and new products. Moreover, sustainable business practices can also ensure that the Company is able to take advantage of arising opportunities for its own business activities and that risks can be minimized or even avoided, especially those that may result from more stringent regu- lations, among others. Managing opportunities and risks is inte- grated into all business processes. The established internal control and risk management systems allow the aviation group to identify risks and their potential effects, and to take appropriate measures (see page 57 ff., Annual Report 2016). The Lufthansa Group has set itself a comprehensive sustainability agenda, which ensures responsible business practices in all busi- ness segments and comprises the dimensions shown below. T h e C o r p o r a t e R e s p o n s i b i l i t y d i m e n s i o n s o f t h e L u f t h a n s a G r o u p T h e C o r p o r a t e R e s p o n s i b i l i t y d i m e n s i o n s o f t h e L u f t h a n s a G r o u p C o r p o r a t e c i t i z e n s h i p E c o n o m i c s u s t a i n a b i l i t y P r o d u c t r e s p o n s i b i l i t y C o r p o r a t e R e s p o n s i b i l i t y C o r p o r a t e g o v e r n a n c e a n d c o m p l i a n c e S o c i a l r e s p o n s i b i l i t y C l i m a t e a n d e n v i r o n m e n t a l r e s p o n s i b i l i t y

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 19 T h e s t a k e h o l d e r s o f t h e L u f t h a n s a G r o u p S u p p l i e r s C o n t r a c t u a l p a r t n e r s C u s t o m e r s C o n s u m e r s LO H A S (Lifestyle of Health and Sustainability) E m p l o y e e s E m p l o y e e r e p r e s e n t a t i v e s S c i e n c e R e s e a r c h E d u c a t i o n N o n g o v e r n m e n t a l o r g a n i z a t i o n s ( N G O s ) O r g a n i z a t i o n s C o n s o r t i a C a p i t a l m a r k e t I n v e s t o r s S h a r e h o l d e r s A n a l y s t s R a t i n g a g e n c i e s G o v e r n m e n t s L e g i s l a t o r s P o l i t i c i a n s A u t h o r i t i e s N e i g h b o r s L o c a l c o m m u n i t i e s S o c i e t y P u b l i c i t y S o c i a l n e t w o r k s Materiality analysis The Lufthansa Group conducted a broad stakeholder survey in 2016, which built on earlier reviews (see page 22 f., Balance 2016). For this purpose, the Group’s experts identifi ed or confi rmed 12 relevant action areas. The latter focused on topics • through which the Lufthansa Group’s business activities have a signifi cant social impact, • which infl uence stakeholders substantially in their evaluation of the Company, • which are required by sustainability standards and regulations and • that have a signifi cant infl uence on the Lufthansa Group’s ability to generate fi nancial and non-fi nancial value over the medium and long term (see page 20 f., Corporate Responsibility: Action areas and goals). Safety and adherence to legal requirements were not included as topics in the survey, as the Lufthansa Group considers these to be basic prerequisites for its business activities. In addition to customers, employees and business partners, stakeholder groups were invited to participate in the survey that have a particular prox- imity to the Lufthansa Group due to their professions or their infl u- ence in public or political spheres. Their responses are combined with top management’s assessments in a materiality matrix (see page 22, Balance 2016). Over the years ahead, this matrix will serve the Lufthansa Group as the base from which to advance the strategic development of corporate responsibility management and for reporting in accordance with legal requirements that are binding for larger, capital-market oriented companies within the European Union from 2017 (see adjacent interview). In addition, the Group used the materiality analysis to determine and adapt the contents of its reporting. The Lufthansa Group will integrate in particular those action fi elds that have been defi ned as “very important” as well as the central aspects related to them even more strongly into its business pro- cesses and continue to develop related management approaches. It is also planned to regularly assess the relevance of action areas by means of new materiality analyses and make adjustments if needed.

CR dimension S o c i a l r e s p o n s i b i l i t y Action area Effect Relevance Approach Goals Employer attractiveness internal /external Job safety and health protection Employee awareness about sustainability internal internal • Health-promoting design of work environments, work processes and cooperation • Support for employees in assuming responsi- bility for their health • Fair and partnership- oriented relationship with employees • Comprehensive ap- proach to promoting greater diversity in all dimensions • Maintaining a balanced relationship between working and private life • Offer of broad portfolio of training and continu- ing education options • High social standards • Position all Lufthansa Group companies as attractive employers • Find and keep qua- lified personnel, also by means of talent management • Improve the Engage- ment Index • Maintain employees’ health and ability to perform long-term and sustainably • Promote individual responsibility: sensitize employees to actively look after their health • Sensitization of all employees concerning the importance of an environmentally and socially compatible company, for example by training, web-based training and internal communications • Increase employees’ awareness of respon- sible and sustainable business practices CR dimension S o c i e t y Action area Local value creation Corporate citizenship Transparent political Effect Relevance Approach Goals external internal /external commitment external • Airport operators, local service providers and suppliers particularly benefit from output sourced locally by airlines • Support economic development at regional level and make contribution in context of social commitment • Focused corporate citizenship concept • Providing humanitarian emergency aid and support in the event of catastrophes • Transparent and open advocacy of the Company’s or industry’s interests at the political level • Expand social com- mitment and increase efficiency • Ensure transparency with regard to the Lufthansa Group’s political commitment 1 The action areas were identified and evaluated in 2016 in the context of a broadly designed stakeholder survey (see page 22 f., Balance 2016). 2 The subject areas economic sustainability, anti-corruption and human rights were not included in the 2016 stakeholder survey as they are defined for the Lufthansa Group in the principles of sustainable corporate governance, as are the subjects of safety and compli- ance with legal frameworks.

STAKEHOLDER DIALOGUE: THE MOST IMPORTANT ACTIVITIES IN 2016 AT A GLANCE Customers • Customer surveys on a global basis • Regular ascertainment of Net Promoter Score (NPS®, see page 54) • Monthly customer in-flight magazines and regular newsletters • Lufthansa InTouch Service Centers ensure 24-hour reachability concerning all questions on flight reservations • New format “Lufthansa Flying Lab”: Passengers can experience innovative services on board “live” on selected flights, test them and provide feedback • Visitor service “Discover Lufthansa” assumes important function of customer care at largest location, Frankfurt. Made-to-measure programs for German and international top customers as well as airport neighbors, associations, research institutions and partner universities of the Lufthansa Group Employees • Group-wide employee survey “involve me!” (Quick Check, see page 69) • Realignment of internal Group media: With the product group “One” a new media architecture was developed for the Lufthansa Group and implemented at the beginning of 2016. This includes the monthly magazine “One”, the news app “One”, “eBase One” (news portal on the intranet) and “Connection One” (community on social intranet) • Introduction of “Yammer” as a social media tool at Austrian Airlines • Continuation of the dialogue forums for cabin and cockpit employees • New format “CabCon”: dialogue events for flight attendants at Lufthansa • Continuation of the dialogue series “Speaking openly...” with the Lufthansa Group’s CEO at varying Company locations and live transmission on the intranet • Continuation of the dialogue series “Breakfast with the Executive Board” in different business segments • Live chats and dialogue events for different employee groups and managers • Continuation of the event format “Market conferences”: dialogue events with managers and the Lufthansa Group’s CEO in different business regions (2016 in Nairobi, Panama and Tokyo) • New format “Alumni Network”: It offers former employees the option of staying in contact with the Lufthansa Group (see page 71) Shareholders, investors and analysts • Continuous and intensive shareholder dialogue • Beyond the quarterly conferences, Executive Board members and Investor Relations presented the Group’s latest develop- ments to institutional investors through 38 roadshows and 21 investors’ conferences as well as one “Expert Session” on the subject of Eurowings • Four forums specifically aimed at retail investors • Again two issues published of Shareholder information letter for private shareholders • In addition to annual and interim reports, the capital markets are informed monthly about the latest traffic developments at the flying companies of the Lufthansa Group • All publications, financial reports, presentations, background information and speeches, current news and relevant dates can be consulted at www.lufthansagroup.com/investor-relations • In 2016, the Lufthansa Group and Munich Airport were joint hosts of the CDP DACH Climate Leadership Award Conference. The event’s emphasis was “climate protection in air transport” Lawmakers and public administrations • Continuous and intensive exchanges with representatives from politics and administrations as well as participation in numerous events and panel discussions • “Policy Brief” and “Aeropolitics” are published by the Lufthansa Group and SWISS respectively to inform decision-makers in politics, media and business about developments in the aviation industry and topics related to aviation policy Science and research • Numerous cooperations with scientific research institutions • Participation in panel discussions and conferences, such as the 4th International Conference on Active Noise Abatement ICANA 2016 in Frankfurt • Participation in aviation cluster “Hamburg Aviation” to promote business location and interlinked research as well as develop- ment of high-quality products and services Neighbors and local communities • Regular information events and discussion round-tables with representatives of state and municipal governments at the Lufthansa Group’s hubs • Participation in the “Forum Airport and Region” in Frankfurt as well as in the “Vienna Airport Dialogue Forum“ • Since May 2015, LSG Sky Chefs has been a member of “LEEN 100” (Learning Energy Efficiency Network) initiated by the city of Frankfurt for improved CO2 values in the Rhein-Main area • Lufthansa CityLine has been a member of the fifth “Environmen- tal Pact Bavaria” since September 2015. Its goal is to give incen- tives to sustainable development and continuous improvement of corporate environmental protection in Bavaria • Participation of Lufthansa Technik and LZ-Catering in “Environ- mental Partnership Hamburg” and of Lufthansa Technik in Frankfurt in “Environmental Alliance Hesse”

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 25 Competition Compliance The module Competition Compliance introduces employees to the relevant regulations of competition and cartel legislation, so as to minimize or exclude risks for the Lufthansa Group. All employees handling issues relevant to competition or cartels are trained in the fundamental regulations of German and European antitrust legislation. Integrity Compliance With the module Integrity Compliance, the Lufthansa Group docu- ments its fundamental approach of law-abiding conduct in business relationships. The obligation to adhere to non-corrupt and ethically correct conduct flow naturally from current law, the internal Com- pliance Guidelines and self-set obligations related to the Group’s memberships in relevant national and international organizations. Examples of the latter include the Lufthansa Group’s commitment to the principles of the UN Global Compact and its membership in Transparency International. The Integrity Compliance Guidelines provide support in handling invitations, gifts and other attentions. Capital Market Compliance The module Capital Market Compliance gives employees an over- view of current capital market law, such as regulations relating to insider trading or ad hoc publicity. Accompanied by specialized training, this module ensures that all employees and Company bodies concerned receive in-depth insight into the regulations of the German Securities Trading Act (WpHG). Embargo Compliance The module Embargo Compliance serves to ensure that the Lufthansa Group, as a globally active corporation, adheres to country- and person-specific sanctions and regulations in the area of foreign trade. The Embargo Compliance Guidelines provide the employees concerned with a binding framework of conduct. Compliance training Automated IT processes ensure that all employees participate regu- larly in those web-based compliance trainings that are relevant for them. The employees of the subsidiary companies also have access to these e-Learning courses and are either included in automatic mailings of materials or have their own company-specific processes. In addition, the Group Compliance Office conducts trainings with personal participation worldwide and offers workshops. In 2016, about 20,000 employees worldwide completed the eCompliance trainings and/or trainings with personal participation relevant for them. Third-party due diligence processes The Lufthansa Group expects compliance from its business partners as well. Based on risk, business partners are therefore screened by means of third-party due diligence processes before the begin- ning of a business relationship. The appropriate processes are currently rolled out Group-wide. Monitoring and reporting In keeping with current requirements in the framework of the Ger- man Accounting Law Modernization Act, self-audits and external audits take place to evaluate the effective implementation of the Compliance Program. Furthermore, the Supervisory Board’s Audit Committee is informed twice a year about current developments relevant to compliance issues within the Group. T h e C o m p l i a n c e P r o g r a m o f t h e L u f t h a n s a G r o u p C o m p e t i t i o n I n t e g r i t y C a p i t a l M a r k e t E m b a r g o The Group Compliance Office is responsible for implementation, development and communication. Program consisting of four modules

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 27 During the reporting year, the Lufthansa Group worked intensively on the topic of human rights. One task was the development of a risk map for the Group that shows the number of employees by geographic region and the companies active locally. Complemented by risk assessment during the financial year 2017, this map is to serve as the basis for reevaluating existing processes and concepts. In the event of complaints concerning human rights issues, these are taken up in a decentralized format and treated with appropriate countermeasures on the basis of current law. Group Purchasing Guideline The Group Purchasing Guideline obliges suppliers to commit themselves to social and ecological responsibility. It is to be under- stood as an overriding specification for all procurement guidelines at the Group companies. In addition, it serves as a handbook for buyers and all employees with contacts to the procurement mar- kets. The regulations are updated and adapted continuously. Among other considerations, it requires that these obligations be included in contracts with suppliers: Sustainability in the purchasing processes The Lufthansa Group has more than 40,000 suppliers. The annual purchasing volume is about 17 billion euros. The aviation group demands of its suppliers that they fully comply with current law, guidelines and regulations concerning fair competition, integrity and responsible practices. Currently, the Lufthansa Group is working on realigning the pur- chasing function, consisting of the Group companies’ purchasing departments and the Group department Corporate Sourcing, by merchandise groups and transferring it into a matrix organization. The restructuring was started in 2016 and serves to increase effi- ciency, lower costs long-term and prevent risks in the supply chain even more effectively. There are also plans to anchor the topic of sustainability even more profoundly in the supply chain. For this purpose, nonfinancial ratios are to be developed to be able to better measure sustainability-relevant aspects in the procurement process. • Suppliers must comply with the ten principles of the UN Global Compact just as much as the Lufthansa Group (see adjacent overview). • They must comply with the four core work standards of the International Labor Organization (ILO). These concern freedom of association, the right to collective bargaining, the elimination of forced labor and child labor, and prohibition of discrimina- tion in respect of employment and occupation. • They must consent to announced and unannounced audits by companies of the Lufthansa Group. • They must recognize the Lufthansa Group’s right to terminate the contractual relationship in the event of a breach of the aforementioned agreements. Suppliers must also observe the Lufthansa Group’s Environmental Protection Guidelines. By stipulating these commitments, the Lufthansa Group ensures that sustainability is taken seriously as an issue and that it becomes a way of life all across the supply chain. The aviation group trains its purchasers at the Procurement Academy, its continuing educa- tion program across business segments. LUFTHANSA CARGO The certified environmental management system operated by Lufthansa Cargo comprises internal and external audits at stations in Germany and abroad. During these checks, auditors also assess how the logistics partner ensures that they adhere to local environ- mental laws and implement Lufthansa Cargo’s environmental standards. In addition, the air freight specialist has agreed high standards in the contracts with its road feeder service partners who deliver air freight by truck within Europe, including consideration of the emissions norms of the trucks used for these services. Lufthansa Cargo carries out regular audits to check on whether the partner companies meet these requirements.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 29 A320neo taking off is only about half as large as the comparable contour of an A320 in the existing fleet (see page 58, Balance 2016). Thanks to new engine technology and an advanced cabin interior with up to 180 seats, the A320neo is about 20 percent more cost effective. According to current plans, Airbus is to deliver five further A320neo aircraft to Lufthansa in 2017. For all continental routes Lufthansa now relies on a fleet that only comprises aircraft from the A320 family; on December 31, 2016 it consisted of 167 aircraft of types A319, A320 and A321. The airline operated its remaining Boeing 737-300s for the last time on Octo- ber 29, 2016 in scheduled operations. Their decommissioning brought an era spanning almost 50 years to an end at Lufthansa. Furthermore, at the end of 2016 the airline received its first Airbus A350-900, which is considered the world’s most modern and environmentally friendly long-haul aircraft. The A350-900 consumes 25 percent less kerosene and produces 25 percent less CO2 emissions (see illustration below). It consists of up to 70 percent high-tech materials such as composites, titanium and aluminum alloys. The combination of these materials increases corrosion resistance and reduces the aircraft’s weight, which has a positive effect on fuel consumption. Thanks to its advanced engines and weight reductions, an A350-900 taking off is considerably quieter than comparable types of aircraft. Its noise emissions are far below required threshold values. T h e A i r b u s A 3 5 0 - 9 0 0 : A n e w d i m e n s i o n o f f l y i n g 2 5 x A 3 5 0 - 9 0 0 The first 15 aircraft will be stationed in Munich. M o r e e f f i c i e n t u s e o f s p a c e A new cabin arrangement uses space more efficiently, provides increased seat pitch in Business Class and more seating capac- ity in Economy Class. I n n o v a t i v e l i g h t c o n c e p t 12 light scenarios have a posi- tive influence on the passengers’ biorhythms. S t a t e - o f - t h e - a r t m a t e r i a l s 70 percent of the aircraft con- sists of state-of-the-art materials: compound materials (53 per- cent), titanium and advanced aluminum alloys are used in combination. A e r o d y n a m i c w i n g d e s i g n The wings adapt their shapes to different flight phases. This helps reduce fuel consumption. M o r e e n v i r o n m e n t a l l y f r i e n d l y a n d q u i e t e r 25 percent lower kerosene con- sumption and thus 25 percent lower CO2 emissions, and con- siderably quieter than compa- rable types of aircraft. N e w R o l l s - R o y c e e n g i n e s The new XWB engines are among the most efficient models for large passenger aircraft.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 31 An Embraer 195 operated by Austrian Airlines Austrian Airlines In 2016, Austrian Airlines continued the replacement of its Fokker fleet, which began the previous year, with modern Embraer 195 medium-haul aircraft. By the end of 2016, the airline had added ten Embraers to its fleet. Another seven aircraft are on order and set to follow by the end of 2017. In addition, Austrian Airlines integrated two Airbus A320s from Lufthansa in its fleet during the reporting year. Eurowings The last CRJ900 left the Eurowings fleet in February 2017 and the airline now operates a homogeneous A320 fleet. This fleet harmo- nization strengthens the Eurowings concept, which is based on high efficiency, competitive costs and a scalable company struc- ture. This allows the airline the flexible integration of new partners with different cooperation models. To this end, by the end of 2016 Eurowings took delivery of a total of 33 Airbus A319 and A320 aircraft from Air Berlin under a wet-lease agreement, meaning complete with cockpit crews, cabin personnel and maintenance contracts. In 2017, the Eurowings fleet will continue to grow due to the consolidation of Brussels Airlines. Lufthansa Cargo At the end of 2016, Lufthansa Cargo had five Boeing 777F freighter aircraft in operation. This type is considered the quietest and most fuel-efficient freighter in its class and is characterized by its high level of reliability and long range. The fleet also includes 14 Boeing MD-11Fs, of which two will remain on the ground for the time being, given the difficult economic environment. T h e L u f t h a n s a G r o u p f l e e t A s o f D e c e m b e r 3 1 , 2 0 1 6 ( c h a n g e s c o m p a r e d t o 2 0 1 5 ) Lufthansa (including regional partners) Eurowings (including Germanwings) SWISS (including Edelweiss Air) Austrian Airlines Lufthansa Cargo In possession1 Age 1 In operation 2 Age2 350 78 89 81 19 (– 26) (+ 40) (+ 1) (+ 2) (± 0) 10.1 11.3 12.3 14.9 13.5 (– 0.5) (+ 2.5) (– 1.7) (– 1.2) (+ 1.0) 330 96 89 81 17 (+ 7) (+ 9) (+ 1) (+ 3) (– 2) 10.2 10.6 12.3 14.9 13.1 (± 0) (+ 0.2) (– 1.7) (– 1.2) (+ 0.7) Lufthansa Group fleet 617 (+ 17) 11.3 (– 0.5) 613 (+ 18) 11.3 (– 0.4) 1 Aircraft in the Group‘s possession 2 Aircraft operated by the Group

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 33 Strategy and management On a global scale, aviation is a growth industry and will need fossil fuels for an undetermined period of time. Among the signifi cant effects of fl ight operations are above all climate effects as a result of CO2 emissions. However, for many years the industry has improved its energy effi ciency and thus also its CO2 balance sheet: Despite marked growth rates, the share of aviation in world- wide CO2 emissions has declined, namely from 2.81 percent in 2000 to 2.55 percent in 20141. Apart from the climate-related effects, there are other environmen- tal burdens: During takeoff and landing, aircraft cause noise close to airports and have an infl uence on local air quality. In addition, upstream and downstream activities consume resources such as energy and water, and produce waste materials, in particular in airline catering and aircraft maintenance. Given this framework of conditions, assuming responsibility for climatic and environmental issues is a central concern for the Lufthansa Group. Guided by the aspect of materiality, the Company focuses its commitment above all on the “product of fl ying” and therefore on CO2 emissions and aircraft noise. The Group has set itself the goal of increasingly limiting the environmental effects of fl ying. The primary objective is to meet rising mobility needs with environmentally competitive products and to continually raise eco- logical effi ciency in fl ight operations. This approach is guided by the Group’s environmental strategy 2020, which was adopted in 2008. Concretely, the Lufthansa Group aims at reaching the objective of improving its fuel effi ciency by 25 percent from 2006 to 2020; at the end of 2016, it had realized 12.18 percent of this goal. Simulta- neously, the Company supports the ambitious climate protection goals formulated by the international aviation industry. This includes improving fuel effi ciency by 1.5 percent per year until 2020 and to realize transport growth after this date in CO2 neutral ways. By 2050 the industry’s net CO2 emissions are to decline by 50 percent on the basis of 2005. Risk management and organizational structures The entrepreneurial risks associated with climate change and noise tie the Lufthansa Group into a multidisciplinary, Company- wide risk management process. These risks are also summarized in a risk chart, which is updated regularly. To steer opportunities and risks associated with the environment, the Group has developed a range of mechanisms. They include the environmental strategy 2020, environmental programs and environmental management systems, among others (see page 35). The department Group Environmental Issues is responsible for the Lufthansa Group’s defi nition, coordination and implementation of Company-wide strategies and measures with environmental relevance. It also acts as the interface with the Executive Board. In addition, all larger subsidiaries have their own environmental departments, an environmental commissioner or coordinator. These experts meet twice a year at the Group-wide Environmental Forum to discuss current topics, exchange experiences and develop new ideas. They also explain and prioritize risks and opportunities from different perspectives. In addition, the Lufthansa Group maintains a comprehensive environmental database where information from Group companies is gathered. This data is the basis for calculating ratios and key indicators. 1 Source: http://data.iea.org

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 35 Energy and resource efficiency Under the motto “avoid, reduce, recycle” the Lufthansa Group works on continuously optimizing its energy and resource effi- ciency. In this way, the Group companies ensure that required resources, such as energy and water, are always used consci- entiously, both on the ground and in the air (see page 45 ff.). Research and development The Lufthansa Group cooperates with partners in science and research to drive innovation forward and to continuously improve its own environmental commitment on the basis of proven data. Furthermore, the Group has supported climate research concerned with observing the Earth’s atmosphere for many years (see page 51). In addition, the Company participates in the further develop- ment and use of alternative fuels (see page 40 f.). External guidelines and memberships In the area of climate and environmental responsibility, the compa- nies within the Lufthansa Group take their bearings from voluntary external guidelines and participate in numerous sustainable initia- tives. These obligations largely surpass the legal requirements. For example, the commitment in the area of climate and environ- mental responsibility beyond the four-pillar strategy of the aviation industry is also based on the UN Global Compact and the United Nations’ Sustainable Development Goals (see page 17 ff., Strategy and management). In the area of noise protection the Lufthansa Group applies the “Balanced Approach” guidelines of the Inter- national Civil Aviation Organization (ICAO) for handling aircraft noise, which has been implemented in Europe by means of the 2014 EU Regulation on Noise-related Operational Restrictions. And with regard to energy and resource efficiency, the Group companies act in accordance with Germany’s energy efficiency law. The activities of Lufthansa Technik, which joined Hamburg’s “Environmental Pact” at its location in the Hanseatic city, are considered exemplary. Environmental management systems The companies within the Lufthansa Group continuously expand their environmental management systems. This is an overview of the current situation: Lufthansa CityLine was the first airline worldwide to introduce a professional environmental management system in 1999 and pass EMAS (Eco-Management and Audit Scheme), the most stringent European certification system. Since then, the program has been recertified annually. Simultaneously, the airline has been certified in accordance with the international environmental standard ISO 14001. Lufthansa is currently setting up an environmental management system at its Munich location, which is expected to receive the EMAS seal by the end of 2017. Thus, the airline is creating impor- tant instruments for steering and documenting its environmental activities at the Munich hub. The preparations for the certification started in 2016, and included naming an environmental commis- sioner. Lufthansa is planning to extend the environmental management system to the entire airline as soon as it has been implemented in Munich. Swiss International Air Lines is evaluating the introduction of an environmental management system. Austrian Airlines is working on the implementation of an environ- mental management system certified in accordance with ISO 14001. Its implementation is to be completed by 2020. Lufthansa Cargo has been certified according to ISO 14001 since 2008 at its location in Frankfurt and worldwide since the end of 2015. The recertification due in 2017 will be carried out according to the revised standard ISO 14001:2015. The new standard has more stringent requirements concerning risk assessment, stake- holder orientation, supplier management and the involvement of top management. Furthermore, time:matters, an additional subsidi- ary, is to be included in the worldwide certification. Lufthansa Technik has been certified according to ISO 14001 since 1999. The company has also operated a job safety management program validated in accordance with the international specification OHSAS 18001 since 2008. Lufthansa Technik Milan, Lufthansa Technik Brussels and Lufthansa Technik Aero Alzey were certified in accordance with ISO 14001 and OHSAS 18001 for the first time in 2016, and in addition the overhaul operations in Sofia, Malta, Budapest and Shannon were integrated into Lufthansa Technik’s group certificate. All production-related locations are to be certified by these two standards by the end of 2018. The LSG Group has run an internal environmental management system since 2008, which comprises the ten core elements of ISO 14000. All facilities worldwide that are fully-owned by the airline caterer are covered by this system. The system’s components are continuously supported by short- and long-term goals, activities and programs. In addition, the locations in Rome and Lisbon are certified according to ISO 14001. LZ-Catering is working on introducing an environmental manage- ment system. The company is an Environmental Partner of the City of Hamburg and has been a member of Ökoprofit since 2010. Since July 2014, LZ-Catering has offered at least one daily “CO2 friendly” main course at a large number of its company restaurants. Individual temporary specials with regional ingredients complement the menu offers at selected locations.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 37 Fuel effi ciency as a central action area Fuel effi ciency is of central importance for the Lufthansa Group, in particular as fuel expenditure is a signifi cant cost item for the Com- pany. But the Lufthansa Group is motivated not only by economic, but also by ecological considerations to use the required kerosene as effi ciently as possible. Doing so contributes to reducing the effects of fl ying on people and the environment, and securing the Company’s success over the long-term. Moreover, fuel effi ciency is an important expectation on the part of stakeholders and one prerequisite the Lufthansa Group must meet in order to fulfi ll nation- al, regional or industry-specifi c energy and emissions regulations (see page 33 ff., Strategy and management). Through the action areas “Continuous effi ciency increases” and “Innovation and digitalization” the topic is also anchored in the strategic program “7to1 – Our Way Forward”, which helps secure the Lufthansa Group’s future viability. Fuel effi ciency also ensures that air transport can meet future chal- lenges. Aviation is and will remain a growth industry. As transport volumes rise strongly, absolute fuel consumption and thus emis- sions also increase – despite continuous effi ciency gains. In 2016 alone, the number of passenger kilometers sold worldwide in- creased by 6.3 percent compared with the preceding year, ac- cording to fi gures published by the International Air Transport Association (IATA). According to IATA forecasts the number of passengers is to nearly double by 2035, from 3.8 billion in 2016 to 7.2 billion, with the strongest growth expected in the Middle East and the Asia-Pacifi c region. The Lufthansa Group and the entire aviation industry prepare for these future challenges with ambitious climate protection goals (see page 33, Strategy and management). D i r e c t a n d i n d i r e c t C O 2 e m i s s i o n s o f t h e L u f t h a n s a G r o u p 2 0 1 6 S c o p e 1 76.4 % 29,250,821 tonnes Direct CO2 emissions from the Lufthansa Group’s fl ight operations and ground traffi c of own vehicles as well as own energy-generating facilities. S c o p e 2 0.7 % 275,161 tonnes Indirect CO2 emissions of electricity and energy purchases for ground operations, including catering and maintenance. S c o p e 3 22.9 % 8,774,231 tonnes Further indirect CO2 emissions along the supply chain and from purchased services, here essentially the emissions from the kero- sene supply chain and those related to the manufacturing of aircraft and engines.

F r e i g h t t r a n s p o r t a t i o n 2 0 1 6 2 , 3 S p e c i f i c f u e l c o n s u m p t i o n i n l i t e r s p e r t o n n e k i l o m e t e r s ( l / t k m ) 0.280 m k t / l S p e c i f i c C O 2 e m i s s i o n s i n k i l o g r a m s p e r t o n n e k i l o m e t e r s ( k g / t k m ) 0.70 m k t / g k D e c o u p l i n g o f t r a n s p o r t p e r f o r m a n c e a n d f u e l c o n s u m p t i o n 2 C h a n g e s c o m p a r e d t o 1 9 9 1 i n p e r c e n t , v a l u e s f o r t h e f l e e t o f t h e L u f t h a n s a G r o u p Transport performance Efficiency gain + 355 % + 189 % Fuel consumption 360 340 320 300 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 Average specific fuel consumption in l/100 pkm as well as the shares of the respective traffic areas in total passenger fuel consumption Airlines and Lufthansa Cargo. Excluding services of third parties as the Company cannot influence their performance. 2 All scheduled and charter flights operated by Lufthansa (including Lufthansa CityLine and 3 On the basis of freight tonne kilometers (FTKT), transported on both cargo and passenger Air Dolomiti), Eurowings (including Germanwings), SWISS (including Edelweiss Air), Austrian aircraft. For further environmental ratios refer to the chapter Service and information, page 86 f. Sustainability Report Balance // Issue 2017 // Lufthansa Group

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 41 Lufthansa Technik’s EVE test unit on the test bed in Hamburg. In this setup, DLR scientists and Lufthansa jointly analyzed the emission-related effects of biofuels. The EVE test unit is a CFM56 aircraft engine equipped by Lufthansa Technik with additional measuring instruments for test purposes. new biokerosenes in the context of this project. The final report was completed in 2016; it contains additional significant insights into the emissions characteristics of biokerosene and has been pub- lished on the European Commission’s website. In 2016, the Lufthansa Group refueled its aircraft at Oslo Airport with a fuel blend that contained 5 percent biokerosene. Air BP Aviation, the Norwegian airport operator Avinor and the biofuel specialist SkyNRG joined forces to offer jet biofuel to airlines serv- ing Gardermoen Airport. For a period of one year, Air BP Aviation fed 1.25 million liters of sustainably produced and appropriately certified biofuel into the tanks at Oslo Airport. During this time, about 5,000 flights operated by the airlines of the Lufthansa Group flew on jet fuel blended with biokerosene. They included Lufthansa, SWISS, Austrian Airlines, Germanwings and Brussels Airlines. Pillar 2: Improved infrastructure Single European Sky The largest climate protection project in European aviation is to establish a standardized airspace above Europe. This Single Euro- pean Sky (SES) will help airlines emit 10 percent less CO2 and save about 5 billion euros in fuel costs every year. Today, however, about 60 air traffic control centers are responsible for air safety in 27 different national systems with more than 650 sectors; a system that does not always allow aircraft to follow an optimum route to their destinations. The goal of SES is to remove this kind of patchwork and to steer air traffic flows substantially more efficiently than is currently the case. An important milestone on the path toward the Single European Sky is the standardization and modernization of the European aviation infrastructure. For this purpose, the European Commission set up the SESAR (Single European Sky ATM Research) program. The goal of this project is to develop, test and implement Europe- wide new technologies, procedures and standards that contribute to harmonizing and optimizing European air traffic management. The Lufthansa Group’s airlines and Lufthansa Systems are actively involved with their respective expertise in a number of SESAR research and demonstration projects as well as standardization initiatives. The synchronization of SESAR with its American coun- terpart “NextGen” as the basis for global interoperability of air traffic control systems has a high priority in this context. The first modernization package was integrated by the European Commis- sion in the Pilot Common Project (PCP). The implementation of these technologies in daily operations is jointly coordinated by the members of the industry consortium “SESAR Deployment Manager”. Lufthansa is a member of this consortium and provides its own experts. Since the start of the introduction phase in 2014, the first positive effects from optimized routings and flying times have been observed in the daily operations of airports, air traffic control orga- nizations and airlines. In 2016, the Lufthansa Group’s experts participated in the following three demonstration projects, among others: In the framework of the project Free Solutions, whose goal is the introduction of more direct flight routings under scheduled flight conditions, 68 flights were able to travel on such routings in Europe. The routes from Frankfurt to Nice, Málaga, Algiers, Barcelona and Valencia as well as the route from Munich to Paris could thus be shortened permanently. The quantity of kerosene saved in this way each year corresponds to the fuel burn of about 200 flights between Frankfurt and Zurich.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 43 “Sharkskin” saves kerosene In the framework of the research project FAMOS, Lufthansa Technik – together with its partners Bremer Werk für Montagesysteme (bwm), Airbus Operations GmbH and the subcontractor Fraunhofer IFAM – is working to develop a highly automated system to apply low- drag microstructured surfaces for commercial aircraft (see page 10, Balance 2015). The so-called riblets resemble the fine ribs on the scales of fast-swimming 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 per- cent of fuel. On December 2, 2016, the Lufthansa “sharkskin” plane took off to Montreal for its maiden flight, marking the start of a two-year test phase for the riblet structure. During this time, the research partners will assess the riblets’ durability in flight opera- tions and the visual appearance of larger riblet-covered surfaces, in particular with regard to surface dirt. At the same time, Lufthansa Technik further developed its efficient engine wash Cyclean® during the reporting year. Thanks to this highly efficient cleaning method for aircraft engines, airlines are able to reduce their kerosene consumption by up to 1 percent (see page 51, Balance 2016). Currently, more than 40 airlines world- wide use Lufthansa Technik’s Cyclean® product. A total of about 80,000 Cyclean® engine cleanings have already been performed. T o p t e n m e a s u r e s f o r t h e s u s t a i n a b l e r e d u c t i o n o f f u e l c o n s u m p t i o n a n d t h u s C O 2 e m i s s i o n s A i r l i n e M e a s u r e E x p e c t e d a n n u a l C O 2 s a v i n g s i n m e t r i c t o n n e s P r o j e c t d u r a t i o n / i m p l e m e n t a t i o n p e r i o d SWISS • Global Dispatch Network (GDN) and Godwit, including mis- 40,114 2014 - 2017 sion support, offers new planning options and policies that will reduce fuel burn substantially Lufthansa • The Trent 500 engines of the aircraft type Airbus A340 are to be modified by the installation of optimized components • Service trolleys were exchanged step-by-step for lighter models • Fuel calculation principles were changed to avoid unnec- essary transport fuel, while maintaining safety reserves. • The Trent 900 engines of the aircraft type Airbus A380 are to be modified by the installation of optimized components • The Trent 700 engines of the aircraft type Airbus A330 are to be modified by the installation of optimized components • Long-haul flights were monitored in the air and supported with up-to-date information • The flight profile optimizer calculates the optimum flight profile (altitude and speed) more accurately with the inclu- sion of current weather data than was previously possible and flight profiles are displayed on the “Electronic Flight Bag” (EFB) in the cockpit • All records required for a flight’s operation are provided electronically in the “Electronic Flight Folder” (eFF) on the “Electronic Flight Bag" (EFB) • 22 aircraft of the existing A320 fleet were retrofitted with sharklets identical to those of the A320neo 32,494 30,621 28,273 15,145 25,253 12,026 11,011 9,689 9,273 2012 - 2020 2011 - 2016 2015 - 2016 2013 - 2020 2012 - 2019 2014 - 2016 2014 - 2016 2016 2013 - 2016

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 45 Energy and resource management Keeping air transport’s effects on the environment as limited as possible is one of the Lufthansa Group’s most important concerns. First and foremost, the aviation group continuously focuses on increasing fuel efficiency in flight operations. But attention is equally given to ground activities with the aim of applying sustainable and responsible business practices. Making economically and ecologically efficient use of energy and resources is of decisive importance in all business segments across the Lufthansa Group. In addition to meeting legal requirements, it is important for the Group to identify sustainable potentials for the sparing use of electricity and water, and to develop corresponding solutions. Equally important are measures to reduce and recycle waste materials. Another essential approach on the ground is to implement energy-saving and resource-conserving measures in planning, modernizing and constructing buildings. This endeavor is based above all on the Group’s strategic environmental program, which was implemented in 2008 (see page 36, Balance 2015). Possible energy-related optimizations in buildings are particularly discernible from results of energy audits in accordance with the EU Energy Efficiency Directive (EED). EU Energy Efficiency Directive Since December 5, 2015, companies above a certain size in the EU have been obliged to undergo an energy audit at least once every four years. Accordingly, 120 Lufthansa Group companies were audited during the reporting year to meet this deadline. Among other feedback, these audits produced more than 300 suggestions concerning the improvement of energy efficiency of buildings. In general, audit results serve the aviation company as a base from which to continuously optimize its energy management. The initial contacts for all questions in this area are the experts at the department Facility Management, Standards and Steering. Within the new matrix organization the Group invests in coopera- tion between its companies in the area of energy management with the goal of creating synergies and strengthening the exchange of best-practice examples. Group-wide monitoring makes it possi- ble to implement energy conservation measures rigorously and to obtain an overview of all savings potentials. Against this back- ground, the Lufthansa Group at its Frankfurt location has partici- pated in the Business Energy Efficiency Network of utility Mainova. Greater efficiency, lower energy consumption At energy-intensive service companies Lufthansa Technik and LSG Group, the topic of energy management has a particularly high priority. For this reason, both use their own concepts and systems that are tailor-made for the particularities of their business activities. Lufthansa Technik Specialized environmental protection solutions for customers and corresponding measures concerning the company’s own work processes and locations are of central importance for Lufthansa Technik. A proprietary building standard, applied company-wide, helps the leading provider of MRO (Maintenance, Repair & Over- haul) services to further increase the energy efficiency of its loca- tions worldwide. In addition, the Lufthansa Technik Group launched a carbon-save program. Its goal is to reduce CO2 emissions by 30 percent by 2018, compared with 2012. At the end of 2016, more than 60 percent of this reduction had already been achieved.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 47 Lufthansa LEOS has had an electrically powered eTug in daily operational use since 2016. E-PORT AN drives electromobility Aviation still needs gasoline or diesel for vehicles on the ground. Continuously reducing fuel consumption and switching individual vehicle types step-by-step to electric propulsion technologies is the ambitious goal of the initiative E-PORT AN at Frankfurt Airport. In addition to the Lufthansa Group, Fraport AG, the State of Hesse and the Rhine-Main Model Electromobility Region are committed to this project. It is scientifically accompanied by the Technical University Darmstadt and the Technical University Berlin. The initia- tive is supported by Germany’s Federal Ministry for Transport and Digital Infrastructure and in 2013 was honored as “Lighthouse Electromobility Project” by Germany’s Federal Government. During the reporting year, the project partners gave passengers the oppor- tunity to discover more about the numerous electromobility activi- ties at Germany’s largest civil airport by visiting the first “Green Gate” worldwide (see page 53, Balance 2016). E-mobility projects at the Lufthansa Group TaxiBot test phase ended From December 2014, the Lufthansa Group and patent holder IAI (Israel Aerospace Industries) tested the pilot-controlled diesel-electro hybrid aircraft tug TaxiBot in the Boeing 737 fleet in Frankfurt. As the last B737s left the fleet in October 2016 (see page 28 ff., Fleet development), test operations involving scheduled Lufthansa flights ended as well. A further important milestone was the TaxiBot’s EASA certification for the Airbus A320 fleet at the beginning of May 2017. Tests are currently being planned for late summer 2017 to run trials of new processes. The goal is to increase operational efficiency by means of these innovative tugs. A noise and emissions assessment by the Technical University Darmstadt showed a sig- nificant reduction potential that can be realized when the aircraft’s engines remain switched off during taxiing. Addition to eTug fleet In April 2017, Lufthansa LEOS ordered the second electro-powered eTug. The first aircraft tug of this type has been used in daily opera- tions since 2016. Smaller improvement potentials were identified in the context of the accompanying project, which will be taken into account in the construction of the second vehicle. eLift – The catering lift truck of the future With the project “eLift” LSG Sky Chefs pursues the goal of devel- oping the electric-powered catering lift truck of the future. Currently, the eLift is under construction and is to be delivered in July 2017. The project is a cooperation with companies Doll Fahrzeugbau and Terberg as well as the Technical University Berlin. The use of elec- trically powered propulsion systems will lead to measurable reduc- tions of all types of emissions, primarily noise and CO2. Independent of E-PORT AN, the Company regularly takes delivery of new catering vehicles around the world. As a rule, these fulfill the current emissions standards and thus offer improved fuel efficiency. LSG Group is planning to replace a larger number of older vehicles during 2017.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 49 Investments in more modern aircraft During the reporting year, the Lufthansa Group continuously pur- sued its fleet modernization and added a new aircraft to the fleet almost at a weekly rhythm. Among others, the Group airlines re- ceived Airbus A320neo, Airbus A350-900 and Bombardier C Series 100 aircraft (see page 28 ff., Fleet development). As these advanced types of aircraft fly especially quietly, these investments mean a perceptible and sustainable lessening of noise emissions for peo- ple living near airports. In mid-2016, Swiss International Air Lines became the first airline worldwide to start operations with the new Bombardier CS100. Compared with the aircraft operated so far, noise emissions during takeoff drop by half with this model. As a result, with the C Series 100 SWISS makes an important contribution to the quality of life for people near airports. As a replacement for the Avro RJ100 and the A319 fleets, the airline has 15 CS100s and 15 CS300s on order, and took delivery of the first CS300 at the end of May 2017. Incor- porating all 30 C Series is to be completed by the end of 2018. The Airbus A350-900 is another aircraft to fly especially quietly. Lufthansa started operations with the first aircraft of this type at the end of 2016. A new type of engine, the Rolls-Royce Trent XWB, weight reductions and an advanced aerodynamic design ensure that the A350-900 is significantly quieter during takeoff than com- parable types of aircraft. Compared with predecessor models, the noise footprint of this long-haul aircraft is about 40 to 50 percent smaller (see illustration on the left). The noise emissions of the A350-900 are far below the required Chapter 3 noise standard and fall below the Chapter 3 noise limit values by 31.9 EPNdB (Effective The Airbus A350-900 is significantly quieter during takeoff than comparable types of aircraft. Perceived Noise dB). This makes the A350-900 the quietest aircraft in the entire long-haul fleet operated by the Lufthansa Group. On short- and medium-haul routes, the Airbus A320neo is by far the most efficient and quietest aircraft thanks to new engine tech- nology and improved aerodynamics. In January 2016, Lufthansa became the first customer worldwide to take delivery of this model. In comparison with an A320 in the existing fleet, the A320neo features a noise footprint that is about 50 percent smaller (see illustration page 58, Balance 2016). In October 2016, Lufthansa phased out its last six Boeing 737-300s, so that the airline operates only quieter aircraft from the A320 family on its entire continental route network. Noise-reducing technologies for the existing fleet At the beginning of 2014, Lufthansa was the first airline worldwide to start operations with an Airbus A320 equipped with noise-reducing vortex generators, thus setting an industry standard (see page 59, Balance 2016). In the meantime, Lufthansa Technik retrofitted all of the airline’s A320s with this type of vortex generator. At the same time, Airbus only delivers new aircraft of this type equipped with this modification. In 2016, SWISS also equipped its aircraft of the Airbus A320 family with the noise-reducing vortex generators. This modification signifi- cantly reduces noise burdens in the regions around Zurich and Geneva airports. In fall 2016, Austrian Airlines also launched the retrofit of its A320 aircraft with vortex generators, which is to be completed in summer 2017. In addition, the airline is assessing the possibility of equipping its A319 and A321 aircraft with this techni- cal improvement in the course of 2017. Retrofitting aircraft with vortex generators is another example that shows how economy and ecology go hand in hand for many mea- sures. With this project, the Lufthansa Group makes progress in active noise protection and lessens the noise burden on people close to airports. On the other hand, there is a positive economic effect as, for example, noise-related fees at Frankfurt Airport are reduced. In an environment with intensified competition, the eco- nomic efficiency of such measures will increasingly gain importance.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 51 Commitment to climate research The Lufthansa Group cooperates with partners from the areas of science and research to advance industry innovations on the basis of sound data and to further improve its own environmental management. Furthermore, the Group has been committed to climate research for more than 20 years and thus makes an important contribution to improving climate models and weather forecasts. Commercial aircraft fly at an altitude that is of particular importance for the Earth’s climate and therefore for climate research too. They also offer a high degree of continuity and in this way permit long- term observations that would be impossible and far too costly with individual flights undertaken by research aircraft. During the reporting year, the Lufthansa Group had three aircraft in operation that are equipped with specialized measuring instru- ments and able to measure atmospheric trace substances and cloud particles on a global basis. The data recorded are read out after each landing, processed and analyzed by research institutions. One of these long-haul aircraft, the Airbus A340-600 “Leverkusen”, carries equipment for the project CARIBIC (Civil Aircraft for the Regular Investigation of the atmosphere Based on an Instrument Container). Two further long-haul aircraft flew every day of 2016 in the service of the climate research project IAGOS (In-service Aircraft for a Global Observing System). Climate research on scheduled flights IAGOS: Setting up a worldwide research infrastructure In 2011, Lufthansa was the first airline worldwide to participate in the IAGOS project initiated by the research institute Forschungs- zentrum Jülich (see page 61, Balance 2016). In 2015, the Lufthansa Group expanded its commitment for this novel type of long-term research of the Earth’s atmosphere by means of scheduled flights and equipped a second aircraft with specialized measuring instru- ments. Currently, five more airlines support this scientific large-scale project aimed at setting up a worldwide research infrastructure. In 2016, it was honored as an outstanding infrastructure project by the European Strategy Forum on Research Infrastructures (ESFRI). Among the equipment operated on IAGOS aircraft are instruments for measuring the properties of ice crystals and water vapor. This allows insights into the global characteristics of high-altitude ice clouds – also called cirrus – whose deduction until now had only been possible by means of flights with research aircraft. The IAGOS analyses also allow researchers to compare cloud obser- vations made by satellites with direct measurements at a scope not possible before; in this way, satellite products used in applications such as weather forecasts can be improved over the long-term. www.iagos.org www.fz-juelich.de

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 53 Strategy and management Offering a premium product is of fundamental importance for the Lufthansa Group’s business success. The objective is therefore to further increase customer satisfaction and primarily to implement measures for the safety and health of passengers, flight crews and employees. This includes the protection of personal data. In this way, the aviation group aims at always being its customers’ first choice. For the Lufthansa Group, product responsibility means above all optimizing the different services along the travel chain on a contin- uous basis and to make flying in all its facets a sustainably positive experience (see page 68 f., Balance 2016, Sustainability in all phases of the travel experience). In 2016, the aviation group intro- duced additional programs and services aimed at further improving the travel experience and thus also customer satisfaction. Concrete goals concerning customer satisfaction are also included in calcu- lating the variable remuneration of the members of the Executive Board by means of a system of ratios (see page 80, Annual Report 2016). Customer centricity and quality focus “Customer centricity and quality focus” is one of the seven action areas of the Lufthansa Group’s strategic program “7to1 – Our Way Forward”. These fundamental tenets serve the purpose of securing the Group’s long-term success and value creation ability. The central importance of “Customer centricity and quality focus” was again confirmed during the reporting year by stakeholders and manage- ment, as the materiality matrix and materiality analysis show (see page 22 f., Balance 2016, and page 20 f., Corporate Responsibility: Action areas and goals). The focus has been placed on further enhancing the Lufthansa Group brands and the related brand promises. An additional goal is to understand customer needs even better and to identify and realize optimization potentials on a continuous basis. Systematic determination of customer satisfaction To learn as much as possible about their customers as well as their wishes and expectations, the Lufthansa Group’s airlines conduct regular surveys. Thanks to these worldwide opinion polls, possible approaches can be identified to improve customer orien- tation continuously and to secure the Company’s long-term success. The further development of the feedback management process also contributes to this evolution. At the same time, the respective departments responsible make use of satisfaction values to pinpoint the strengths and weaknesses in quality perceived by passengers and to implement concrete improvement measures on this basis. In this way the Lufthansa Group is able to check to what extent customers honor adaptations, improvements and innovations related to products as well as new services. The three hub airlines Lufthansa, SWISS and Austrian Airlines determine continuously how satisfied passengers are with the different offers along the travel chain. This is done daily by means of online surveys that are representative for each airline’s passenger volume and route network. Evaluations of individual products and services are compiled by the airlines into satisfaction indices for onboard and ground products. In addition, they calculate an over- all satisfaction index on this basis. In the past, Lufthansa, SWISS and Austrian Airlines pursued their own approaches for measuring their passengers’ satisfaction. In 2016, however, they launched a project aimed at harmonizing these different paths and introducing a standardized and comparable measuring method in 2017.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 55 Customer centricity and quality focus are of central importance for the Lufthansa Group. SMILE Concurrently, since 2014 the Lufthansa Group has been working in the project SMILE on making communications with customers along the entire travel chain as personalized as possible and to offer added value in this way (see page 14, Balance 2015, Digital innovations for a perfect travel experience). Thanks to SMILE, passengers receive tailor-made flight offers, travel information as well as offers for additional services and options – all in real-time via digital com- munication channels. These personalized service improvements make an important contribution to deepening customer relationships and increasing customer trust. SMILE is only one example of how actively the Lufthansa Group has pursued its “7to1” action area “Customer centricity and quality focus”. The strategy is based on innovative approaches and tech- nologies that give a face to the IT terms of big data, analytics and open innovation. At the same time, such projects make an impor- tant contribution to advancing the digital transformation of the entire Lufthansa Group. Like Lufthansa, the other two hub airlines have already introduced numerous personalized services. Many insights that Lufthansa has gained in introducing such innovations have been incorporated into the implementation of these services at SWISS and Austrian Airlines. Further new digital services Independent of SMILE, during the reporting year the Group compa- nies introduced new digital services along the entire air travel chain that offer passengers further advantages. These include Internet access on board and new digital applications such as the inTime and Allergen apps (see page 12 f.). Such innovations are not limi- ted to the travel experience, but begin far ahead of it. Sustainable improvements at SWISS and Austrian Airlines Aiming at further emphasizing its distinctive customer focus, during the reporting year Swiss International Air Lines adopted a new brand image centered on the claim “Made of Switzerland”. The new claim comprises the most important characteristics that define SWISS as a brand: “Swissness”, emotionality and strong customer orientation (see page 45, Annual Report 2016). Further- more, SWISS opened three new lounges in Terminal E at Zurich Airport that offer long-haul passengers an entirely new kind of comfort on an overall surface of 3,300 square meters, featuring modern SWISS design. These lounges were constructed by local companies and meet current standards concerning water and electricity consumption. Moreover, the new lounges in Terminal A and the Terminal in the Terminal will be constructed in the course of 2017 in adherence to these technology standards. Simultaneously, SWISS works continuously on making passengers’ actual flight experience increasingly sustainable. For example, during the reporting year the airline replaced disposable packaging for economy meals on medium-haul flights with reusable bento boxes. This reduces waste quantities and thus increases cus- tomers’ and crews’ satisfaction. Since 2016, all vegetarian meals served aboard SWISS flights have been developed by Hiltl in Zurich, the world’s oldest vegetarian restaurant. And SWISS had the summer collection of amenity kits for Business Class manu- factured from 100 percent recycled PET bottles. Austrian Airlines now uses environmentally friendly packaging made from cornstarch flour, for hot meals on selected flights.

Areas of emphasis in 2016 In 2016, the participants completed the research project “SaMSys – Safety Management System for the Improvement of Flight Safety”, which is supported by Germany’s Federal Ministry for Economics and Technology and headed by the Lufthansa Flight Safety Depart- ment in Frankfurt. The scientific insights from this project led to an expansion of the scope of training at Lufthansa and had an influ- ence on new recruitment processes. Another area of focus was the standardization of selection and training benchmarks for Lufthansa Group pilots at a high level. In 2017, the Group will concentrate on adapting its safety structures to the new internal matrix organization. Cabin air quality For many years, the Lufthansa Group has actively cooperated with investigations of so-called smell events aboard aircraft. Together with national and international authorities, associations, research institutes and manufacturers, the aviation company supports research concerning the composition of cabin air and its effect on the human body. In 2012, the Lufthansa Group set up its Cabin Air Quality Review Board, whose members represent Flight Opera- tions, the Medical Service, Lufthansa Technik, Technical Operations Management and Group Job Safety. EASA study confirms good air quality On March 23, 2017, the European Aviation Safety Agency presented its final report concerning a study of cabin air quality aboard com- mercial wide-body aircraft. In it, EASA again reached the conclusion that there is no verifiable correlation between cabin air and health problems. In fact, the air quality on measuring flights was compara- ble to that in normal indoor spaces such as classrooms or offices. Earlier series of measurements had reached the same conclusion (see page 71, Balance 2016). In the context of the EASA study, the Fraunhofer Institute for Toxico- logy and Experimental Medicine (ITEM) and the Hanover Medical School (MHH), together with the Lufthansa Group, Condor and British Airways, analyzed air samples from cockpits and cabins, which had been taken on 69 measuring flights on eight different aircraft and engine types. On these flights, neither the thresholds for harmful substances were exceeded, nor were substances found in concentrations hazardous to health. While miniscule quantities of TCP (tricresyl phosphate) were occasionally detected by the sensors on all aircraft types at the nano scale, the neurotoxic ortho-tricresyl phosphate (oTCP) was never found. GERMANWINGS FLIGHT 4U9525 Flight safety is always the first priority for the Lufthansa Group. Therefore, the Group airlines implemented numerous measures to improve flight safety in the immedi- ate phase after the Germanwings accident on March 24, 2015 (see pages 70 and 74 f., Balance 2016). Similarly, the Group combined all tasks concerning the follow-up of the crash of flight 4U9525 and the comprehensive care for relatives in the so-called Post Emergency Organization (PEO). For relatives, an ongoing offer of psychological care and psychosocial support was available in 2016 as well. With the goal of supporting projects, initiatives and proposals from relatives and other affected groups in memory of the victims, Lufthansa set up an aid fund in 2015, endowed with 15 million euros. In this fund, Germanwings and Lufthansa have combined their voluntary and long-term commitment following the accident (see page 74, Balance 2016). During the reporting year, projects and initiatives were supported with 6.9 million euros from the fund, allocated according to binding criteria. In addition, it has been important for Lufthansa and Germanwings from the beginning that young people who have lost one or both parents in the accident should be able to complete a school education, professional training or university studies that correspond to their personal prefer- ences and abilities. For this reason, Lufthansa decided that they receive voluntary payments from the aid fund, depending on age and whether they lost one or both parents, indepen- dent of compensation claims. A total of more than 5 million euros are available for this purpose, of which a large part has already been paid out. On March 24, 2017, a sculpture commemorating the victims was unveiled in Le Vernet in the French Alps. At a memorial ceremony that marked the accident’s second anniversary and in which more than 500 relatives from around the world participated, Carsten Spohr, Chairman of the Executive Board of Deutsche Lufthansa AG, handed over the “Sun Sphere”, created by German artist Jürgen Batscheider, to the be- reaved families.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 59 The Lufthansa Group applies the most stringent standards to data protection and data security. EU-US Privacy Shield After the European Court of Justice (ECJ) declared the Safe Harbor Agreement between the EU and the USA concerning the exchange of personal data to be invalid, the draft for a new agreement “EU- US Privacy Shield” concerning data transfers between the EU and the USA was presented on February 2, 2016 (see page 73, Balance 2016). In June 2016, the EU-US Privacy Shield was ratified and can now be applied, provided US companies conform to these new rules. As a further instrument, data transfers to the USA in conformity with current law – the so-called Standard Contractual Clauses – are available, and have to be signed by senders and recipients of data. New EU General Data Protection Regulation The European Parliament adopted the new EU General Data Pro- tection Regulation on April 14, 2016, which will come into effect on May 25, 2018 (see page 73, Balance 2016). The Lufthansa Group will adapt its existing data protection management system to this Europe-wide standardized data protection law. Nevertheless, indi- vidual national deviations from this norm will continue to be in application for the aviation group, such as those concerning the obligations to appoint data protection commissioners and with regard to employee data protection. Simultaneously with the General Data Protection Regulation, the introduction of EU-wide regulations for transmitting Passenger Name Record (PNR) data for flights outside the European Union and optionally for flights within the EU to so-called Passenger Informa- tion Units in the 28 Member States was set for 2018 at the latest. Germany’s federal parliament adopted the corresponding law at the end of April 2017, allowing implementation at the national level. For airlines this means above all more complex reservation and check-in processes. IT Security The Lufthansa Group department IT Strategy & Security is respon- sible for implementing requirements concerning data protection and IT security. This includes the development of appropriate concepts and measures such as e-mail encryption, cyber crime prevention, and protection from criminal activity over the Internet. The Lufthansa Group’s information security policy is regulated on three levels: The Group Information Security Guideline is con- cerned in a comprehensive way with the protection of processes related to information processing and storage. On the subsequent level, a framework describes the Group’s information security management including the requirements on its implementations within Group companies. And third, detailed guidelines outline IT security aspects concerning specific topic areas, products, loca- tions and target groups. PROTECT campaign as focus in 2016 Like many other companies, the Lufthansa Group is a permanent target for different cyber-attack scenarios. These include attempted theft from mileage accounts of the frequent flyer and premium program Miles & More, attacks on the availability of the Group’s presence on the Internet and an increasing number of commer- cially motivated attempts at fraud. Therefore, the Lufthansa Group is reinforcing its activities in all areas to identify, combat and guard against criminal activity on the Internet. For example, the IT department launched PROTECT in the fall of 2016; a comprehensive program aimed at increasing the Group’s cyber resistance. This includes process optimizations and invest- ments in technology. Among the program’s first building blocks was a cyber crime prevention and awareness campaign. Its objec- tive was to demonstrate to employees and managers how far- reaching their personal responsibility is in supporting the Lufthansa Group in its protection against cyber crime. The Group is only able to guarantee the protection of business and customer data when all employees act in a security-aware manner to complement technical measures. As Lufthansa Group managers have a particu- lar role in this context, security training with personal participation was conducted specifically for this target group. In addition, employees are continuously informed about IT security issues in the Group’s internal media, by means of a Cybercrime Prevention Newsletter or quiz-based games. Furthermore, the Lufthansa Group launched a bug bounty program at the beginning of 2017, aimed at identifying and removing secu- rity vulnerabilities in IT systems with help from invited hackers and research centers. The goal is to further improve the protection of customer data.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 61 Strategy and management At the end of 2016, the Lufthansa Group employed 124,306 staff worldwide, more than 68,000 of whom worked in Germany. Their know-how and wide- ranging talents are a signifi cant success factor for the aviation group. As a socially responsible employer, the Lufthansa Group supports its employees with an attractive work environment as well as transparent structures and processes. Working at the Lufthansa Group has many facets. But the focus is always on people. The Group aims at being the fi rst choice for shareholders and customers, and in particular wants to be the fi rst choice in aviation for existing and new employees. To create an attractive and need-oriented work environment, the Lufthansa Group counts on a self-motivated and trust-based work culture in tandem with modern information technology. Attractiveness as an employer In the materiality analysis carried out in 2016, stakeholders and top management confi rmed the action area “Attractive employer” as being very important. The decisive factors in this context are: rela- tions between employer and employees based on fairness and partnership, high social standards (see page 68 f.) as well as offers for a balance between work and private life (see page 67). In addi- tion, the Lufthansa Group counts on a broad spectrum of training and continuing education options (see page 70 f.) and comprehen- sive health management to maintain the employees’ health and ability to perform (see page 72 f.). Equally, diversity and equal opportunities are among the aviation group’s central principles. For a service company with global ac- tivities and an international clientele such as the Lufthansa Group, promoting diversity among its employees continues to gain impor- tance (see page 63 ff.). This also includes increasing the share of women on all management levels at a continuous pace. The aviation group is actively involved in these topics to ensure that it will fi nd suitable employees in the future and to secure the long- term employability of current staff members. Furthermore, social megatrends and developments – such as digitalization, globaliza- tion and diversifi cation of life and work-time models (see page 6 ff., Balance 2016, Changing working environment) – demand not only continuously increasing levels of fl exibility, but also new compe- tencies in work areas with high demand in the future. To increase the latter, the Lufthansa Group implemented an organizational restructuring that took effect on January 1, 2016. Taking the role of active sparring partners, the personnel departments at the Group companies accompany and support the Lufthansa Group’s current transformation process into an agile, process-oriented matrix organization. Core topics “Culture and leadership” As far back as 2012, the aviation company implemented specifi c initiatives and effective measures to change both corporate culture and management culture across business segments. In July 2014, the Lufthansa Group introduced the strategic program “7to1 – Our Way Forward”, whose action area “Culture and leadership” has been an area of emphasis in HR management. The focus on “Cul- ture and leadership” takes one consideration into account above all. In an increasingly volatile environment, highly educated and committed employees who inspire customers are indispensable for the Lufthansa Group’s sustainable business success.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 63 Diversity and equal opportunities For the Lufthansa Group, diversity at management and staff levels is a funda- mental prerequisite for remaining innovative and versatile. The Company has explicitly defined diversity as a strategic element that secures and expands economic success – in accordance with the interests of its employees and the social concerns of society. Systematic diversity and the appreciation of all employees associ- ated with it make an organization more agile, flexible and creative. Diversity Management actively includes the life situations of all employees in the entrepreneurial process and makes a significant contribution to recognizing stakeholder needs more clearly and optimizing services. The Lufthansa Group pursues a comprehensive management approach that understands diversity in the sense of versatility, variety of ideas, blending of perspectives and strengthening of competitive- ness. Diversity and equal opportunities are a significant element of the future-oriented strategy “7to1 – Our Way Forward”, where they are anchored in the action area “Culture and leadership”. The mere fact that the Group’s employees worldwide represent 144 nationalities proves the diversity desired. Beyond that, the Company already represents the core idea of diversity very well: in the differences between business segments and business models, in the differences in employees’ competencies and experiences that flow from these differences, in the international links and in the diversity among customers and employees. In addition, the objec- tive of diversity is reflected in the philosophy of talent management as it is applied every day. Under the motto “Welcome diversity!” one objective of this leadership approach is to create a working environment in which all employees are increasingly able to shape – and should shape – their own careers within the Group accord- ing to their talents (see page 83 ff., Balance 2015). Welcome diversity! Varied goals With its diversity-oriented personnel policy the Lufthansa Group pursues several goals. It aims at accessing the enormous potential of the existing diversity among its approximately 124,000 employ- ees even better, and simultaneously to apply more diversity in profiles, competencies and experiences up to management levels. In doing so, it aims not only at making the Company’s organization more effective, but also at strengthening and increasing its attrac- tiveness as an employer – above all against the backdrop of demographic change and the fact that talented young employees are not always easily found on the labor market.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 65 Organizational foundations To reach these goals, diversity and equal opportunities have long since been firmly anchored in the Group’s organization. For example, among other measures the function of an equal opportu- nities commissioner at the Lufthansa Group has existed since 1995. Furthermore, since 2015 the working group Diversity@ LHGroup has treated the topics of gender balance in management, internationality and age structure on a Group-wide level. Addition- ally, the Lufthansa Group launched the project “Promoting women in management” during the reporting year (see page 66, Three questions for: Simone Marshall). Central action areas Diversity among staff and executives The Lufthansa Group approaches the task of realizing diversity and equal opportunities according to its objectives from four directions: diversity among employees and in management positions, an integrated link between work and private lives or work and family (work-life integration), intercultural competence, as well as inclu- sion. Activities and initiatives in each area make a contribution to achieving the goals that have been set. Women in management positions are a matter of course at the Lufthansa Group, and their numbers are to be further increased. At the end of the reporting year, 34.1 percent of supervisors with staff responsibility worldwide were women. This is an increase by 0.2 percentage points compared with 2015. At top management level, the share of female managers worldwide reached 15.6 per- cent (0.7 percentage points higher than in 2015) and more than every 20th pilot was a woman (5.5 percent). However, the Group is not content with this result. Since the middle of 2016, it has been active in the initiative “A matter for the boss”; a network of managers from business, science, the social economy, the public sector and media, who feel personally obligated to equal opportunities for men and women. The initiative aims at supporting the necessary changes in society by acting as an example and providing new concepts and approaches. Also in 2016, the Group companies Delvag Versicherungs-AG and Eurowings participated in founding the Cologne-based alliance “More women in leader- ship”. The participating companies have set themselves the goal of jointly developing and implementing strategies for promoting women in management positions. In addition, the Group is bound by the voluntary self-set objectives of companies listed in the DAX 30 stock index to increase the share of women in management positions.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 67 Leadership can be shared, too: The Lufthansa Group offers the option of job sharing management positions. Work-life integration: Family-aware corporate culture Traditional family and work models are undergoing change and new models are gaining more and more importance. Today, the focus is increasingly on work-time models that take into account changing needs in different life phases. These not only allow for a better harmony between working and family life, they also increase employees’ motivation and health. The Lufthansa Group supports its employees and managers by offering flexible work-time models and provides detailed information on this subject on the intranet and in the context of various events. For example, the Company offers the options of filling managerial positions in tandem (shared leadership) or taking sabbaticals from work. In Frankfurt, Lufthansa employees have the use of two parent-child offices together with their children when there are difficulties with child care; in 2016, the Group extended this offer to its Hamburg location. Options such as the summer school vacation care program “Luftikusse” in Frankfurt and Munich, pme Familienservice at all German locations or the network Väter gGmbH (“Fathers, Inc.”) were continued during the reporting year as well (see page 86 f., Balance 2016). After having signed the “Charter for care” in 2015, the Lufthansa Group has further intensified its internal communications on the subject of improved compatibility of work and caring for family members. Inclusion For the Lufthansa Group, employment and inclusion of people with disabilities is not only a legal obligation, but also fulfills a social responsibility and is thus an important goal of personnel policy. The Group is committed to promoting people with disabilities professionally and treating them fairly and caringly. Measures designed to include people with disabilities are discussed and advanced in regular dialogue events involving top management, HR management and representatives of the severely disabled. At the end of 2016, the employment rate for people with disabilities at the Lufthansa Group in Germany stood at 4.3 percent. While some Group companies, such as LSG Sky Chefs, reach employ- ment rates of more than 20 percent and thus overfulfill the legally defined minimum quota of 5 percent, the relevant employment at the passenger airlines is significantly lower due to legal require- ments. Therefore, the Lufthansa Group also takes advantage of other ways of supporting people with disabilities, such as placing orders with Werkstätten für Behinderte Rhein-Main (see page 80) or the cooperation with the National Paralympic Committee Ger- many (DBS).

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 69 Collective agreement concluded with ver.di trade union in Germany On January 1, 2016, the new collective agreement “Lufthansa Pension Ground” took effect for the approximately 30,000 ground staff in Germany employed by Lufthansa, Lufthansa Cargo, Lufthansa Technik and LSG Sky Chefs. The proposed new system provides fundamentally that in the future Lufthansa will pay contributions for each employee into an individual capital account (defined contribu- tion system) and invest these funds on the capital market instead of guaranteeing pension levels (defined benefit system). Lufthansa pays 5.2 percent of the qualifying salary into a personal pension account under this format. As a rule, existing employees covered by collective agreements receive a transition-related and age- dependent contribution with a guaranteed fixed interest rate of 3.5 percent per year. Furthermore, these employees have the option of also receiving a contribution of 5.2 percent that will then be invested on the capital market. Lufthansa guarantees that at least the sum of the contributions paid in will be disbursed when pension payments begin. In addition, each employee has the option of further increasing the level of his or her Company pension by means of gross salary conversions. All pension entitlements previ- ously earned under the Company pension scheme remain unchanged in any case. “involve me!”: Employee commitment counts Regular employee surveys have for a long time been an important instrument for the Lufthansa Group to measure employee commit- ment, identify action fields and initiate change where needed (see page 82, Balance 2015). “involve me!” is the name of the survey launched in 2015 and carried out every two years in a standardized format across the Group. It allows management to make a direct comparison of data from individual Group companies and initiate a transparent, Group- wide dialogue. The survey also serves as basis for the calculation of the “Engagement Index” (EI). This ratio was introduced by the Executive Board in 2016 and indicates to which degree employees feel committed to the Company and to which degree they are willing to lend their support to their employer (see page 90, Balance 2016). The EI is based on input analogous to German school grades and includes the components “Say” (willingness to recommend), “Stay” (commitment to the Company) and “Strive” (willingness). A high level of commitment follows from positive responses to these three components. As a performance ratio, the EI is anchored in the Group’s strategy. It is important for the Lufthansa Group to keep this ratio current and to feed the messages associated with its value into guiding the Company on a continuous basis. In years without a complete “involve me!” survey the Executive Board calls for a “quick check”, which is limited to those questions with relevance for determining the EI. For 2016 this short form of the survey resulted in an EI value of 2.4, after 2.3 in the preceding year. The external reference value or benchmark is currently 2.2. Even though the EI declined slightly compared with 2015, it can be called stable against the back- ground of the current restructuring process taking place within the Lufthansa Group. From 2018 the EI is anticipated to improve annu- ally and reach the level of the external benchmark in 2020. The Lufthansa Group is aware of the fact that merely measuring employee commitment is not enough. The greatest challenge comes after the survey is completed: Progress can only be achieved if concrete measures are derived from the survey results and employees can thus see that the Company takes their responses seriously. In 2016, the Group increased the number of its dialogue events, and initiatives related to issues of corporate culture and interdisciplinary teams. One example in this area is “culture4growth”, a program launched at Austrian Airlines in 2016. In addition to determining the Engagement Index, the Lufthansa Group again calculated the Leadership Index (LI) in 2016 from data collected through “involve me!”. The LI is directed by the Group’s five Leadership Principles (see page 73, Balance 2015). For the reporting year, the LI remained unchanged from the previous year at 2.2 and is thus better than the external benchmark of 2.5. Program for professional reorientation In 2013, the Lufthansa Group set up a program for professional reorientation. It continues to address employees who seek new professional challenges within or outside the Group or who would like to become self-employed. The program thus makes an impor- tant contribution to shaping staff adaptation processes in socially compatible ways. Since the program’s launch, more than 1,500 employees have already used its confidential career counseling services. It consists of various service modules, including compre- hensive counseling concerning professional reorientation, active accompaniment by counselors throughout the application process as well as a Company-related job exchange. The content of the program was updated in 2016 and has been made available across the entire Lufthansa Group in a need-oriented manner since 2017.

second new format, the Group remains in contact with external talents more easily – for example with former interns who con- vinced with exceptional performance. The primary target group is job beginners and young professionals, who are an additional recruiting resource for jobs filled by external applicants. The third new format is the Alumni Network, which gives former employees the opportunity to remain in contact with the Lufthansa Group and to position themselves for possible reentry via job offers. Among the tried-and-tested talent management formats are the Junior Round Table, an onboarding program for academic job beginners, and the trainee program ProTeam. Both serve to retain exceptional personalities at the Company, as they contribute to the latter’s ability to innovate and be competitive. In 2016, the Lufthansa Group extended the standardized perfor- mance and talent assessment instrument “Profile” to about 1,600 employees not covered by collective agreements. Overall, more than 5,000 employees were assessed with standardized tools during the reporting year. Managers play a central role in this con- text as they give increasing attention to developing and promoting talents, following the core message “Fostering Talent”. To follow this new path consistently, the Lufthansa Group replaced the previ- ous competency model with the Leadership Principles (see page 91, Balance 2016) and introduced talent clusters, which ensure the standardized and objective development of all employees covered. Sustainability Report Balance // Issue 2017 // Lufthansa Group // 71 The new format “TalentHub” allows the Lufthansa Group to more easily keep in contact with external talents. Shaping the future The Lufthansa Group adapts to social changes in a continuous and flexible process. This objective is also taken into account by the Group’s trainee programs. Against the background of increasing digitalization (see page 4 ff., cover story #DigitalAviation), the “Pro- Team” applicants for the IT area are to be addressed and selected in a more targeted manner in 2017. The Lufthansa Group also plans to further expand the cooperation between different trainee programs. Another goal is to promote the spirit of an internal com- munity even more strongly and to support employees in creating self-organized networks. TO DEVELOP EMPLOYEE POTENTIALS THROUGH 360° FEEDBACK 360° Feedback is available to all employees on the Lufthansa Group’s intranet, allowing them to ask for feedback from managers, colleagues as well as customers and suppliers concerning their own work. Feedback received reflects not only the impression a person makes on others, but also the person’s own appraisal in comparison with third parties that helps the employee’s personal development. In 2016, about 900 employees used 360° Feedback and received feedback from more than 11,500 managers, col- leagues and customers.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 73 Wide range of offers during the Health Days 2017 at the Frankfurt location: sports courses, information booths and interviews, including one with Heike Drechsler (left), a two-time Olympic winner in long jump. Occupational safety An important contribution to employee health also comes from occupational safety. At the Lufthansa Group, preventive measures are consistently implemented to avoid accidents, adverse effects on health and job-related illness. By means of risk assessments and regular safety walkabouts the Group’s occupational safety experts check all professional activities in the Group companies. In work areas with particular burdens the aviation company offers its employees programs aimed at promoting health (see page 93, Balance 2016). Activities in 2016 In 2016, the Group’s occupational safety experts focused above all on creating contemporary conditions for effective job protection in a highly interlinked matrix organization. An Occupational Safety Committee (OSC) was established as the central steering body for all issues concerning work-related safety within the Group. Among the committee’s members are Lufthansa, SWISS and Austrian Airlines. In addition, the aviation group bundled central topic areas related to occupational safety and transferred responsibility for them to two administrative departments. This allows simpler and faster management of processes across the Group. Clearly as- signed responsibilities in the organization of occupational safety at the global level ensure that health risks for the Company’s own and external employees are avoided in a preventive manner. The job safety processes that are to be newly defined within the Lufthansa Group establish homogenous and binding standards worldwide that offer the same level of protection for all employees and legal certainty for the Company’s management. The OSC is the highest steering body for all subjects concerning job safety at the Lufthansa Group. Among its tasks is to suggest regulations in alignment with local legislation for all business seg- ments and companies, and to ensure the exchange of information concerning relevant topics. The OSC ensures that all interests Group-wide related to occupational safety are taken into consid- eration, adhered to and standardized. Number of job-related accidents at very low level Given the heterogeneous composition of the Lufthansa Group, there are different types of job-related risks. By implementing targeted protective measures, the Group has been able to keep the number of work-related accidents at a very low level. Nevertheless, the Lufthansa Group’s goal is to further reduce the number of accidents and to improve occupational protection on a continuous basis.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 75 Strategy and management The Lufthansa Group’s stakeholders expect a comprehensive social commit- ment that reflects the Group’s importance and size, and that is transparent, credible and comprehensible at the same time. To meet this expectation, responsible thinking and practice go far beyond the aviation group’s operative business activities. The Lufthansa Group’s commitment to social causes has tradition- ally grown organically and – given the portfolio changes over the past years – is today correspondingly varied as a result. The resources the Group has made available for these activities have on the whole not shown the desired results due to a high degree of division into individual projects. For this reason, since 2015 the Lufthansa Group has concentrated more on its social and humani- tarian activities. It was only consistent that the aviation group had its portfolio of commitments evaluated not only internally in 2016, but also by external experts who analyzed and assessed all action fields related to corporate citizenship. The goal was to combine the diverse activities into thematic bundles and thus increase effective- ness to the level desired. The Group airlines were included in this process along with the service companies and marketing function. A focused portfolio of commitments The key result of these analyses is that in future the Lufthansa Group will concentrate entirely on the core areas of education/enabling and life/health. In implementing this approach under the umbrella of the help alliance, which was transformed into a charitable limited liability company (see page 76 ff.), the Group counts on its core competencies: logistics, route network and the diverse know-how of its employees. The Lufthansa Group is convinced that developing a focused portfolio of commitments will benefit society and the Company in equal measure. This also implies that projects with no or a narrow goal or time horizon can be avoided in the future. More intensive employee commitment A goal-oriented social commitment on the part of its employees is an important part of the Lufthansa Group’s approach to corporate citizenship and has therefore been part of its HR strategy for many years. To make its employees more aware of sustainability issues and to give them more opportunities for assuming effective social responsibility, the aviation group is working on new concepts for further developing its corporate volunteering offers. These volun- tary measures are designed to give employees opportunities to apply their varied individual talents and to use them outside work for solving social problems in a goal-oriented way.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 77 Language promotion for refugee children in cooperation with the association “Stern des Südens” is one of the long-term integration projects of the help alliance. in crisis-affected regions in particular receive an opportunity to lead self-determined lives. All project content is guided by the strict standards of the UN children’s rights conventions. The Lufthansa Group has supported the help alliance’s commit- ments from its inception by providing nonmaterial, communica- tions, logistical and economic support. S m a l l c h a n g e – I t ’ s a b i g h e l p To build bridges leading to a better life for people in need, the help alliance set up the on-board collection program “Small change – It’s a big help” in 2001. It gives Lufthansa Group passengers the opportunity to donate coins and bills in any currency that they bring back home on long-haul flights. Emphasis of activities in 2016 Education is the key to the successful integration of refugees. Therefore, the help alliance’s project portfolio comprises numerous education and integration offers for refugees who have found refuge in Germany. During the reporting year, the help alliance supported several long-term integration projects. The Düsseldorf- based learning-and-coaching project for children and youths with a migration background and from educationally alienated families is exemplary in this area. It was initiated by the association Chan- cenwerk, which the help alliance has supported since 2015. In the Rhine-Main region, language training for refugee children in cooperation with the association Stern des Südens, a help alliance cooperation partner since 2007, has pivotal importance (see page 100/101, Balance 2016). O n - b o a r d c o l l e c t i o n p r o g r a m D e v e l o p m e n t o f d o n a t i o n v o l u m e s i n e u r o s 5 0 6 , 3 8 2 2 6 6 , 2 6 3 3 2 8 , 7 9 4 6 6 5 , 1 0 3 0 8 3 , 8 1 3 2 0 1 6 2 0 1 5 2 0 1 4 2 0 1 3 2 0 1 2 October 2002: start of Condor’s participation September 2011: start of Brussels Airlines’ participation July 2012: start of Austrian Airlines’ participation

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 79 In 2016, Cargo Human Care supported a medical camp in the Massai Mara for the second time. start up their own companies. Both the 30 participants and the lecturers, including many Lufthansa Group employees working as volunteers, helped on their days off with emergency aid work in affected areas. New fundraising activities In addition, the help alliance moved forward in 2016 with initiating new fundraising models: Lufthansa Miles & More Credit Card holders have had the option since August 2016 to set an individual amount on the Mastercard donation platform that beneits the help alliance’s aid projects with each card transaction. In this way, the social commitment of Lufthansa Group customers is integrated into everyday life and promoted. donate.mastercard.com/helpalliance Another highly successful Miles & More initiative is Miles to Help. It gives participants in Europe’s largest frequent lier and premium program the opportunity to donate miles they have earned to help alliance projects. For example, 5,000 donated miles help with inancing an additional teaching post in Africa for one month. With 3,000 miles, tuition, teaching materials and uniforms for six children can be provided for one month in India. www.helpalliance.org Cargo Human Care Cargo Human Care (CHC) is a humanitarian aid project focused on Kenya. The association, which was founded in 2007 by Lufthansa Cargo employees and German physicians, provides direct medical support for poor, ill and destitute people – free of charge and unbureaucratically. In addition, the charitable organization works for impoverished and ill orphans by giving them a home and opening up educational opportunities. From CHC’s inception, Lufthansa Cargo has supported the charity by providing freight capacities free of charge and air tickets for the physicians who work on a voluntary basis. Lufthansa Cargo em- ployees in Germany also volunteer to coordinate the assignments of medical doctors. Furthermore, CHC covers the costs of the Kenyan personnel at the CHC Medical Center and of treatments and operations required at the local Nazareth Hospital. Currently, the aid project is able to draw from a pool of 50 German medical doctors with different specializations. All treatments are given at CHC’s own medical center in Nairobi. The center also pro- vides free medical care to needy people from the surrounding area and to 120 orphans living at Mothers’ Mercy Home in Kianjogu,

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 81 Emergency humanitarian aid Victims of natural disasters or humanitarian crises need effective aid immedi- ately. For this reason, providing transport capacities aboard its freight aircraft in the event of a crisis or catastrophe is an established element of the Lufthansa Group’s corporate citizenship concept. In such cases, Lufthansa Cargo makes freight capacities available either free of charge or at low rates that cover costs. To ensure that initial relief can be launched in an unbureaucratic and swift manner, the Lufthansa Group’s logistics specialist closely cooperates with renowned aid organizations. This includes the long-standing partnership with the emergency aid association “Aktion Deutschland Hilft” and its alliance partner “World Vision Deutschland”, among others. This cooperation has guaranteed since the beginning of 2013 that the 23 German aid organizations joined in this alliance have direct access to the logis- tical infrastructure of Lufthansa Cargo. The goals are to be even better prepared in the event of a catastrophe by bundling re- Effective December 1, 2016, Lufthansa Cargo signed a cooperation contract with Germany’s Red Cross. sources and know-how, and to be able to set up a functioning logistics chain and set it in motion at short notice (see page 98 f., information illustration, Balance 2016). On December 1, 2016, Lufthansa Cargo signed the same type of cooperation contract with Germany’s Red Cross (DRK). The focus of the association between Germany’s largest aid organization and the logistics service provider is on the objective of making prepa- rations for aid flights significantly easier and more efficient in the future. This will make the transportation of medications, drinking water treatment equipment and other aid items needed at their destinations at short notice even more flexible and thus faster. In addition, Lufthansa Cargo has been a member of Airlink since the end of 2016. This noncommercial humanitarian aid organization, which was founded by employees of the International Society of Transport Aircraft Trading Foundation (ISTAT) in 2010, connects airlines and charitable organizations, thus speeding up the delivery of humanitarian aid significantly. Currently, 35 aviation companies and charter airlines as well as 60 charitable organizations around the world participate in Airlink. Moreover, thanks to the charter services offered under the Network on Demand umbrella, Lufthansa Cargo is also able to transport aid shipments not only within, but also outside of the Lufthansa network to all destinations worldwide – and at any time. For example, in October 2016 Lufthansa Cargo transported more than 70 tonnes of aid supplies aboard an MD-11 freighter to Haiti. It was part of a campaign initiated by “Deutsche Bahn Stiftung” and joined by “Kinderhilfswerk nph” and seven other aid organizations as well as the logistics specialist DB Schenker. The campaign was prompted by the devastating aftermath of hurricane Matthew, which had hit the island nation with wind speeds of up to 230 kilometers per hour; the latest of numerous natural disasters to have occurred there.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 83 The Lufthansa Choir celebrated its premiere performance in November 2016 in a concert with the Lufthansa Orchestra. Cultural commitment Partnership with Gürzenich Orchestra extended In 2016 the Group prolonged its commitment to the Gürzenich Orchestra in Cologne as First Global Partner. One of the orchestra’s highlights during the reporting year was a charity concert at Cologne’s Philharmonie. Revenues went to the association “Wir helfen” supported by Cologne-based publishing house DuMont Schauberg, as well as to the help alliance. Lufthansa Choir celebrates its premiere The Lufthansa Choir was founded at the end of 2015 and consists of 50 singers from across the Group. It gave its premiere perfor- mance in November 2016 in a concert with the Lufthansa Orches- tra. The latter, with more than 65 members and set up in 2011, has made its name above all with the annual spring and fall concerts in Frankfurt. A smaller lineup of the orchestra also performs at occa- sions such as the memorial event on the first anniversary of the Germanwings accident on March 24, 2016. Sports sponsorship For many years, Lufthansa has been the official airline of the German Olympic teams, copartner of the German Olympic Sports Confederation (DOSB) and cosponsor of the National Paralympic Committee Germany (DBS) (see page 105, Balance 2016). In 2016, Lufthansa flew the German Olympic team and the Paralympic team to Rio de Janeiro and back. For the flight home the airline provided a Boeing 747-8 featuring the special design “Olympia Siegerflieger” (“Olympic winner’s plane”). In 2016, SWISS also operated flights in its role as official airline and partner of the Swiss Olympic and Swiss Paralympic teams. How sports sponsorship and social commitment can be connected in meaningful ways was illustrated by the Group during the Olympic year, which also marked the 60th anniversary of the route to Rio de Janeiro. Lufthansa Group employees renovated the charitable professional education institution Centro Comunitário Paulo da Portela (CCCP) in this Brazilian city. They received hands-on sup- port from Olympic beach volleyball winners Julius Brink and Jonas Reckermann. The CCCP has received support from the help alliance since 2011. Young people receive profession-related instruction and are prepared for university entrance exams, for example. Athletes need experts working in the background in all areas to be able to achieve top performances. The Lufthansa Group sees itself as a part of this “team behind the teams” and has supported asso- ciations, institutions and sports clubs for many years. Since 2007, the Lufthansa Group has been a National Sponsor of the German Sports Aid Foundation. Football Lufthansa has been a partner of the German Soccer Association (DFB) since 2005 and flies the national soccer team to its European championship games. The airline is also active at the football club level as the Official Carrier of FC Bayern München. Furthermore, Eurowings has been Borussia Dortmund’s official airline since 2016. www.lufthansagroup.com/sports

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 85 Notes on the scope of consolidation and methodology for calculating absolute and specific consumption and emissions Scope of consolidation Reporting on transport performance, kerosene consumption, and emissions from flight operations in 2016 is – unless noted other- wise – based on the following scope of consolidation: • Lufthansa (including Lufthansa CityLine and Air Dolomiti), Eurowings (including Germanwings), SWISS (including Edelweiss Air), Austrian Airlines and Lufthansa Cargo. Not included are services performed by third parties, as their performance is beyond our control. • Types of flight service: all scheduled and charter flights. Methodology of calculations Kerosene in absolute terms Kerosene consumption is calculated on the basis of actual flight operations (i.e. using actual load factors and flight routings) according to the gate-to-gate principle. This covers all phases of a flight, from taxiing on the ground to flying detours and holding patterns in the air. Emissions in absolute terms The emissions from flight operations are calculated on the basis of actual transport performance and hence on actual load factors and the actual absolute quantity of kerosene consumed in the reporting year. Transport performance is measured in tonne kilometers; i.e., payload transported over a distance. For passengers and their luggage, an average of 100 kilograms is the standard estimate; for freight, it is its scale weight. Each aircraft/engine combination present in the fleet is considered separately, and the associated values are calculated with the aid of computer programs provided by the aircraft and engine manufacturers. The annual average flight profile for each subset of the fleet is then fed into these programs. This allows us to determine emissions in relation to flight altitude, 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 in a fixed ratio to the quantity of kerosene burned. The combustion of 1 tonne of kerosene generates 3.15 tonnes of CO2. Specific consumption and emission values Calculating specific consumption and emissions entails expressing absolute values in relation to transport performance. For example, the ratio liters per 100 passenger kilometers (l/100 pkm) is calcu- lated on the basis of actual load factors along with the quantity of kerosene actually consumed. The distances used in the calculations are great-circle distances. In combination flights (freight and passen- ger transport in one aircraft), fuel consumption is attributed on the basis of its share of the total payload to calculate the passenger- and freight-specific figures. Since 2013, the DIN EN 16258 standard has provided a guide for standardized calculation of greenhouse gas emissions for transport processes. This guide uses the same estimates for calculating payload as the Lufthansa Group. When traveled distances are calculated, 95 kilometers must be added to the great-circle distance according to the guidelines of the EU emission allowance 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 passengers and attribute a larger share of fuel consumption to passengers because of the passenger-specific infrastructure. Although this method has no effect on the overall efficiency of a flight, it changes the apportionment between passengers and freight. There are still divergences between the two methods (including from the method used up to now by Lufthansa). We would welcome a standardized, internationally harmonized and accepted method. Environmental database The environmental data for this report were compiled by the Lufthansa Group by means of its central environmental database. All Lufthansa Group companies are encouraged to feed their envi- ronmentally relevant performance and consumption data (such as fuel consumption) into the Group’s environmental database. Data used for the calculation of the Lufthansa Group’s carbon footprint (Scope 1 - 3 emissions) were additionally checked by an external auditor for completeness and correctness according to accepted verification standards and verified with High Assurance (Scope 1) and Limited Assurance (Scope 2 and 3) respectively. Accuracy For presentation purposes the figures in the charts and tables are rounded. Changes from the previous year’s figures and share 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 reported. Because of the rounding of share percentages, it is also possible that the sum of their addition may differ from the sum of the unrounded percentages. For example, as a result of rounding, share percentages may not add up to 100 percent even though it would be logical to expect them to.

S p e c i f i c f u e l c o n s u m p t i o n P a s s e n g e r t r a n s p o r t a t i o n 3 S p e c i f i c f u e l c o n s u m p t i o n F r e i g h t t r a n s p o r t a t i o n 3 , 1 0 i n l i t e r s / 1 0 0 p a s s e n g e r k i l o m e t e r s ( l / 1 0 0 p k m ) i n l i t e r s / t o n n e k i l o m e t e r s 4.32 4.34 4.30 4.20 4.18 4.06 3.91 3.84 3.84 3.85 0.285 0.295 0.304 0.289 0.289 0.287 0.278 0.276 0.282 0.280 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 P a s s e n g e r t r a n s p o r t a t i o n 3 CO2 emissions in kilograms /100 passenger kilometers NOX emissions in grams /100 passenger kilometers CO emissions in grams /100 passenger kilometers UHC emissions in grams /100 passenger kilometers 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 9.71 9.69 9.69 9.84 10.24 10.53 10.58 10.84 10.93 10.88 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 47.0 46.3 45.8 46.7 48.4 49.4 48.8 50.0 50.6 49.8 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 7.1 7.1 7.3 7.4 7.8 8.2 8.4 8.5 8.5 8.6 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 0.68 0.67 0.72 0.74 0.80 0.87 0.87 0.91 0.96 0.99 F r e i g h t t r a n s p o r t a t i o n 3 , 1 0 CO2 emissions in kilograms /tonne kilometers NOX emissions in grams /tonne kilometers CO emissions in grams /tonne kilometers UHC emissions in grams /tonne kilometers 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 0.70 0.71 0.70 0.70 0.72 0.73 0.73 0.77 0.74 0.72 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 3.5 3.5 3.4 3.3 3.5 3.5 3.5 3.7 3.6 3.4 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 0.4 0.4 0.4 0.3 0.4 0.4 0.4 0.4 0.4 0.4 2016 0.04 2015 0.04 2014 0.04 2013 0.04 0.05 2012 0.05 2011 0.05 2010 0.06 2009 0.06 2008 0.06 2007 Sustainability Report Balance // Issue 2017 // Lufthansa Group

A v e r a g e a g e A g e s t r u c t u r e 3 L u f t h a n s a G r o u p , i n y e a r s a s o f D e c e m b e r 3 1 , 2 0 1 6 Female employees Male employees Total L u f t h a n s a G r o u p , i n p e r c e n t a s o f D e c e m b e r 3 1 , 2 0 1 6 45 40 41.4 40.3 39.0 2007 41.5 40.4 39.1 2008 41.5 40.3 39.0 2009 41.8 40.7 39.5 2010 41.9 40.8 39.6 2011 42.4 41.3 40.2 2012 42.7 41.9 40.9 2013 43.1 42.3 41.3 2014 43.4 43.3 42.3 42.2 41.3 40.9 2015 20163 4.4 9.2 16.5 16.4 13.2 13.3 11.2 9.3 5.2 60 and older 55 – 59 50 – 54 45 – 49 40 – 44 35 – 39 30 – 34 25 – 29 20 – 24 18 – 19 15 – 17 0.1 1.0 P a r t - t i m e e m p l o y m e n t P a r t - t i m e w o r k b y G r o u p c o m p a n i e s L u f t h a n s a G r o u p , i n p e r c e n t a s o f D e c e m b e r 3 1 , 2 0 1 6 L u f t h a n s a G r o u p , i n p e r c e n t a s o f D e c e m b e r 3 1 , 2 0 1 6 Female employees Male employees Total 50 40 30 20 10 43.8 26.8 14.3 2007 42.7 26.5 14.0 2008 42.7 26.9 14.0 2009 43.9 26.9 13.6 2010 44.2 27.1 13.3 2011 45.3 27.9 13.7 2012 45.6 28.1 14.1 2013 45.0 28.0 14.3 2014 45.7 28.8 14.9 2015 43.4 27.4 14.0 2016 Group total 27.4 Passenger Airline Group Logistics MRO Catering Others 20 9 11 28 46 D i s t r i b u t i o n o f e m p l o y e e s L u f t h a n s a G r o u p , e m p l o y e e s a s o f D e c e m b e r 3 1 , 2 0 1 6 Group total of which Passenger Airline Group of which Logistics of which MRO of which Catering of which others 2016 2015 124,306 120,652 54,308 4,568 20,839 35,530 9,061 55,255 4,607 20,661 34,310 5,819 Change + 3.0 % – 1.7 % – 0.8 % + 0.9 % + 3.6 % + 55.7 % Sustainability Report Balance // Issue 2017 // Lufthansa Group

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 91 Glossary A Aerosols Aerosols are solid and/or liquid particles that are suspended in the air. They reach the atmosphere by means of natural processes (wind, desert storms, volcanic eruptions) or human activities (com- bustion of biomass and fossil fuels). The most important aerosols are mineral dust, sea salt, cellular (biological) particles, soot, or- ganic compounds, and sulfates. From a climatic perspective, aerosols are the opponents of greenhouse gases, as they can reflect incident light and thus have a cooling effect. aireg e. V. – Aviation Initiative for Renewable Energy in Germany aireg is a registered association of leading German research institutions, Lufthansa and other companies in the aviation industry, and bioenergy producers. The goal of this initiative, which was founded in 2011, is to advance the development and introduction of regenerative aviation fuels in Germany and to inform the public at large about this topic. www.aireg.de ATM – Air Traffic Management Air traffic management ensures both the safe and the efficient movement of aircraft in all phases of operations. Atmosphere Mass of air surrounding the Earth. It is divided into various layers, which are separated from one another by significantly different vertical temperature distributions. Important for air traffic are the two lower layers: the troposphere and, above it, the stratosphere. The troposphere’s upper boundaries vary depending on season and latitude. They lie at altitudes of 16 to 18 kilometers above sea level at the equator, and at eight to 12 kilometers above sea level at the poles. The temperature in the tropopause, the transition layer between troposphere and stratosphere, drops to about minus 60 degrees Celsius. It rises again in the stratosphere. C Carbon monoxide (CO) Chemical compound consisting of one carbon and one oxygen atom, formed in the incomplete combustion process of substances containing carbon. For aircraft engines, the level of CO emissions depends greatly on the thrust level: The emissions per kilogram of fuel burned are higher at idle settings, while taxiing, and on approach than during the climbing and cruising phases. CDP (previously Carbon Disclosure Project) The CDP is an independent nongovernmental organization with a current membership of more than 820 institutional investors world- wide. Every year this initiative, which was founded in 2000, gathers data and information on CO2 emissions, climate risks as well as reduction goals and strategies on a voluntary basis from corpora- tions and organizations on behalf of investors by means of standard- ized questionnaires. In 2016, 6,000 companies and organizations published their greenhouse gas emissions and other environmentally relevant performance ratios in this way. Today, CDP administers the world’s largest database of its kind. Investors use this data to assess long-term opportunities and risks for the companies in their portfo- lios, to determine their investment strategy and to develop invest- ment products and indices. www.cdp.net Chapter 4 aircraft Aircraft that comply with the strictest noise protection standard currently in force – the Chapter 4 noise standard. The Environmental Committee (CAEP) of the ICAO agreed on this standard in Septem- ber 2001. As a result, all aircraft newly certified since 2006 must remain cumulatively below the Chapter 3 noise levels by 10 decibels or more. The maximum noise emission values for aircraft were introduced by the ICAO under Annex 16 to the Convention on International Civil Aviation. Noise levels depend on the aircraft’s maximum takeoff weight and number of engines. From December 31, 2017, the new Chapter 14 standard will apply for newly-certified regional aircraft; for all other aircraft from December 31, 2020. CO – see “Carbon monoxide” CO2 – see “Carbon dioxide” Carbon dioxide (CO2) Gas resulting in nature from the burning or decomposition of organic substances (e.g. plant material). The greenhouse gas CO2 remains in the atmosphere for about 100 years. Scientists attribute the increase in atmospheric CO2 over the last 100 years to the burning of fossil fuels (e.g. coal, oil, natural gas) by humans. Per tonne of fuel, 3.15 tonnes of CO2 result from the combustion process. Currently, about 2.55 percent of the CO2 emissions due to human activities are caused by global air traffic. (Source: International Energy Agency (IEA) 2016, 2014 values) Compliance Compliance describes in their entirety all measures that ensure the lawful conduct of companies, their management bodies, and their employees with regard to legal directives and interdictions. Corporate Responsibility (CR) Corporate responsibility expresses the degree to which a company assumes accountability for the effects its business activities have on employees, customers, society, and the environment.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 93 Greenhouse gases Gaseous substances that contribute to the greenhouse effect and have both natural and human (anthropogenic) causes. The most important natural greenhouse gases are water vapor (H2O), carbon dioxide (CO2), and methane (CH4); the most important anthropo- genic greenhouse gases are carbon dioxide from the combustion of fossil fuels and methane, primarily from agriculture and industrial livestock farming. Other artificial greenhouse gases are nitrous oxide (N2O), fluorocarbons (FCs and HFCs), sulfur hexafluoride (SF6), and chlorofluorocarbons (CFCs). K Kerosene Fuel for jet and propeller engines that is chemically similar to petroleum. Like diesel fuel or gasoline, kerosene is produced by distilling crude oil; unlike these fuels, kerosene does not contain halogenated additives. L H Load factor – see explanation under “seat load factor” Hub In air transport, a hub is a central traffic point or an airline’s transfer airport. Passengers and freight are transported from their point of departure to one of the airline’s “home airports” (hub). From there, they are carried to their destination by a second flight alongside passengers and freight from other departure points, but with the same destination. I IATA – International Air Transport Association The umbrella organization of international commercial aviation. www.iata.org ICAO – International Civil Aviation Organization A United Nations agency that develops internationally binding norms for civil aviation. www.icao.int ILO standards Work standards of the International Labor Organization, which include, among others, the bans on child labor, forced labor, and discrimination as well as the fundamental right of freedom of association for employees. ISO 9001:2008 The international standard DIN EN ISO 9001:2008 defines the requirements a quality management system must fulfill. Proof that the standard is adhered to is given by independent certifiers, who issue a certificate with fixed validity after a validation. www.iso.org ISO 14001 – International environmental management system Companies thereby receive an effective instrument that allows them to take environmental aspects into consideration in decisions relating to corporate policies and to continuously improve the situation of environmental care in relation to all daily tasks. www.iso.org M Mentoring Instrument for targeted support of junior employees. Focuses on regular personal contacts between mentor and mentee. MRO Acronym standing for maintenance, repair, and overhaul of aircraft. MSCI Global Sustainability Index Series The US index provider MSCI launched a series of sustainability indices in September 2010. The MCSI index family comprises seven environmental, two value-based and 15 best-of-class indices. These include shares of companies with high and medium market capitalization and are based on the MSCI World Index. They depict companies that are particularly committed to environmental, social and governance (ESG) issues. Lufthansa has been included in this index series since June 2015. www.msci.com/esg-indexes MTOW Acronym standing for maximum takeoff weight of an aircraft. N Nitrogen oxides (NOX) Chemical compounds consisting of one nitrogen and several oxy- gen atoms. NOX is defined as the sum of NO and NO2 compounds. Natural sources include lightning and microbes in the soil. Nitrogen oxides are also generated in combustion processes under high pressures and temperatures. Both of these parameters have been increased in modern aircraft engines to significantly reduce fuel consumption as well as emissions of carbon monoxide and un- burned hydrocarbons. However, future combustion chambers of an advanced design could help reduce NOX emissions by 85 percent. Air traffic contributes 2 to 3 percent of man-made NOX emissions. Climate models show that nitrogen oxides have increased the con- centration of ozone at cruising altitudes by a few percentage points. NOX – see “Nitrogen oxides”

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 95 GRI index G E N E R A L S T A N D A R D D I S C L O S U R E STRATEGY & ANALYSIS G4-1 G4-2 Statement by the Executive Board on the organization’s sustainability page 3 Description of key impacts, risks and opportunities page 16 ff., page 33 Annual Report 2016, page 57 ff. ORGANIZATIONAL PROFILE G4-3 G4-4 G4-5 G4-6 Name of the organization Primary brands, products and services Location of the organization’s headquarters Countries where the organization operates G4-7 Nature of ownership and legal form G4-8 Markets served G4-9 Scale of the organization G4-10 UNGC G4-11 UNGC OECD G4-12 G4-13 G4-14 UNGC Employee figures Employees covered by collective bargaining agreements Description of the organization's supply chain Significant changes during the reporting period regarding the organization's size, structure or ownership Explanation of how the precautionary principle is addressed G4-15 Externally developed sustainability agreements/principles/initiatives to which the organization subscribes or which it endorses G4-16 Active memberships of associations and organizations page 4 f. page 4 f. page 4 f. page 4 f. For further important locations of service companies see Annual Report 2016, pages 52 and 55 page 4 f. Annual Report 2016, page 8 The shareholder structure, updated quarterly, can be accessed at: www.lufthansagroup.com/investor-relations page 4 f. Annual Report 2016, page 15 f. Given their materiality, the information presented in the sustainability report refer to the worldwide route network of the Lufthansa Group airlines. page 2, page 4 f. Annual Report 2016 page 88 f. No separation by gender and by region, as this data is not control relevant. No description of staff by employees and staff subject to directives, and no indication of the share recognized as permanent freelance employees, and employees and staff subject to directives of contractual partners. 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 4 f., page 85 In this report, the primary focus is on the product “flying” without upstream and downstream processes. No significant changes during the reporting year The management of opportunities and risks is integrated in all business processes, see Annual Report 2016, page 57 ff. To manage environmentally relevant opportunities and risks, the Group has developed numerous mechanisms. These range from the Environ- mental Strategy 2020 to environmental programs and environmental management systems, see page 33 ff. page 22, page 26 An overview of the most important, voluntarily supported initiatives can be accessed at: www.lufthansagroup.com/responsibility page 22 An overview of the most important memberships can be accessed at: www.lufthansagroup.com/responsibility IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-17 G4-18 G4-19 G4-20 G4-21 G4-22 G4-23 Companies incuded in the consolidated financial statement Process for defining the report content Identified material aspects Report the Aspect Boundary within the organization Report the Aspect Boundary outside the organization Effects and reasons of any restatements of information page 1, page 85 page 19 page 20 f. page 20 f. page 20 f. No significant changes during the reporting year Changes in the scope, aspect boundaries or measuring methods applied page 20 f.

EFFLUENTS & WASTE G4-DMA Disclosure on management approach PRODUCTS AND SERVICES G4-DMA Disclosure on management approach G4-EN27 Extent of impact mitigation of environmental impacts of products and services SUPPLIER ENVIRONMENTAL ASSESSMENT G4-EN32 Percentage of new suppliers that were screened using environmental criteria CATEGORY: SOCIAL LABOR PRACTICES AND DECENT WORK EMPLOYMENT G4-DMA G4-LA3 Disclosure on management approach Return to work and retention rates after parental leave LABOR/MANAGEMENT RELATIONS G4-DMA Disclosure on management approach G4-LA4 UNGC Minimum notice periods regarding operational changes OCCUPATIONAL HEALTH AND SAFETY G4-DMA G4-LA5 OECD Disclosure on management approach Percentage of total workforce represented in formal management-worker health and safety committees G4-LA8 OECD Health and safety topics covered in formal agreements with trade unions TRAINING AND EDUCATION Disclosure on management approach Programs for skills management and lifelong learning G4-DMA G4-LA10 OECD DIVERSITY AND EQUAL OPPORTUNITY G4-DMA G4-LA12 Disclosure on management approach Composition of governance bodies and employee breakdown EQUAL REMUNERATION FOR MEN AND WOMEN G4-LA13 SUPPLIER LABOR PRACTICE ASSESSMENT G4-LA14 Ratio of basic salary and remuneration of women to men Percentage of new suppliers that were screened using labor practices criteria Sustainability Report Balance // Issue 2017 // Lufthansa Group // 97 page 45 f. The current report concentrates primarily on describing the product “lying” without upstream and downstream processes. Therefore, the focus of reporting is on fuel consumption and emissions produced by the Lufthansa Group airlines. page 33 ff., page 36 ff. page 36 ff. page 27 There are plans to anchor the subject of sustainability even more pro- foundly in the supply chain in the future. For this purpose, non-inancial ratios are to be developed to be better able to measure sustainability- relevant aspects in the procurement process. page 61 ff. page 66 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, 27.4 percent of the Lufthansa Group’s employees worked part-time, 72.3 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. page 68 ff. In accordance with the stipulations of Industrial Relations Law and in the sense of an active social partnership, the responsible bodies of codetermi- nation and the Company’s publics are informed at an early stage. page 72 f. In Germany, work protection committees that include representatives of employees and employer are active at all 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 pro- tection committees. Occupational safety is regulated in Germany by the Occupational Health and Safety Act and other legal stipulations. Within the Lufthansa Group, occupational safety is regulated within the Company’s own responsibility and in cooperation between the divisions Occupational Safety and Corpo- rate Medical Services, and the employees’ representations. Employment agreements were concluded concerning a number of subjects. The con- tinued evolution in this area is ensured. page 70 f. page 62, page 69 page 63 ff. The composition of the supervisory bodies is monitored with regard to the share of women and used for targeted control. An extension of this view to further diversity criteria, such as age and internationality, is planned as a perspective for management positions and the Executive Board/top management. Further differentiation is currently not control relevant for the Lufthansa Group. page 66 page 27 There are plans to anchor the subject of sustainability even more pro- foundly in the supply chain in the future. For this purpose, non-inancial ratios are to be developed to be better able to measure sustainability- relevant aspects in the procurement process.

Sustainability Report Balance // Issue 2017 // Lufthansa Group // 99 Editorial information Contact partner Deutsche Lufthansa AG Lufthansa Group Communications Susanne Kotysch Head of Corporate Responsibility & Events Management FRA CI/B Lufthansa Aviation Center Airportring D-60546 Frankfurt/Main balance@dlh.de www.LH.com is the Please note that central contact point for all inquiries con- cerning customer service. Under the header “Help & Contact” you will find full informa- tion on how to contact Lufthansa. You will find further information on sus- tainability within the Lufthansa Group at: www.lufthansagroup.com/responsibility Order your copy of our Annual Report 2016: www.lufthansagroup.com/investor-relations Photo credits Lufthansa Technik (cover) Andreas Pohlmann (page 3) Sonja Brüggemann (page 8) Gregor Schläger (pages 10, 34, 47, 60, 63, 67, 76) Oliver Rösler (pages 10, 14, 16, 18, 30, 54, 62, 66, 73, 77, 82) Daniel Kummer (page 11) Isabelle Mager (page 11) www.thenounproject.com (pages 12, 13) Hans-Gerd Säcker (page 14) Andreas Amann (page 15) Photogenika (page 22) Lufthansa Cargo (pages 27, 81) Jens Görlich (pages 30, 49, 56) SWISS (pages 30, 42, 65) Austrian Airlines (page 31) Kirsten Karacan (page 32) Jürgen Mai (page 36) David Weigelt (page 41) Stefan Rebscher (page 50) Rolf Wenzel (page 51) organic Marken-Kommunikation (pages 52, 60, 74) Dominik Mentzos (pages 55, 59) Squaredpixes, Getty Images (page 60) Silvia Wels (page 65) Patrick Kuschfeld (pages 65, 80, 83) Rolf Bewersdorf (page 78) Cargo Human Care (pages 79, 80) Joachim Pfeifer (page 79) www.fotolia.com: rcfotostock (page 84) Others: Lufthansa Group photo archive Published by Deutsche Lufthansa AG Lufthansa Group Communications Senior Vice President: Andreas Bartels Concept and editors Lufthansa Group Communications Corporate Responsibility & Events Management Director: Susanne Kotysch Steffen Milchsack Claudia Walther Design and production organic Marken-Kommunikation GmbH, Frankfurt Copy deadline June 16, 2017 Paper Contents: ENVIRO TOP, recycling paper made from 100 percent recycled paper. Produced without optical brightening agents or chlorine bleach. Certified with The Blue Angel environmental label – RAL-UZ 14. Cover: Hello Fat Matt (FSC-certified) carbon neutral natureOffice.com | DE-197-418433 print production Reprints, including excerpts, only with written permission from the publisher and by citing Deutsche Lufthansa AG as the source (text and images). In this case we ask that you send us a copy or clipping. Printed in the Federal Republic of Germany ISSN 1612-0906

The operating fl eet of the Lufthansa Group (as of December 31, 2016) Lufthansa and regional partners Airbus A380-800 LH: 14 aircraft, 509 seats, 12,400 km range Embraer 195 CL: 14 aircraft, 120 seats, 2,300 km range EN: 10 aircraft, 120 seats, 2,300 km range Embraer 190 CL: 9 aircraft, 100 seats, 3,500 km range Boeing 747-8 LH: 19 aircraft, 364 seats, 13,000 km range Bombardier CRJ900 CL: 29 aircraft, 90 seats, 2,100 km range Boeing 747-400 LH: 13 aircraft, 371 seats, 11,850 km range Eurowings and Germanwings Airbus A340-600 LH: 24 aircraft, 297 seats, 12,900 km range Airbus A330-200 EW: 6 aircraft, 310 seats, 10,100 km range Airbus A350-900 LH: 1 aircraft, 293 seats, 12,650 km range Airbus A320-200 EW: 25 aircraft, 180 seats, 4,000 km range 4U: 16 aircraft, 168 seats, 3,100 km range Airbus A340-300 LH: 12 aircraft, 283 seats, 11,800 km range CL: 6 aircraft, 300 seats, 11,500 km range Airbus A319-100 4U: 43 aircraft, 150 seats, 2,900 km range Airbus A330-300 LH: 19 aircraft, 236 seats, 9,850 km range Bombardier CRJ900 EW: 6 aircraft, 90 seats, 2,100 km range Airbus A321-100 / 200 LH: 63 aircraft, 200 seats, 2,600 km/ 4,150 km range Lufthansa Cargo Airbus A320neo LH: 5 aircraft, 180 seats, 3,000 km range Airbus A320-200 LH: 62 aircraft, 168 seats, 3,200 km range Boeing MD-11F LH: 12 aircraft, 579 m3/ 89.4 t, 6,700 km range Airbus A319-100 LH: 30 aircraft, 138 seats, 3,350 km range Boeing 777F LH: 5 aircraft, 657 m3/103 t, 8,900 km range

Corporate Responsibility: Prizes, awards and indices // 103 Every year, the Lufthansa Group and the Group companies receive numerous prizes and awards. Here is a selection of those related to the topic of Corporate Responsibility: 2016 • The US trade publication Air Transport World honored the partners of the initiative E-PORT AN, which includes the Lufthansa Group, as Eco-company Partnership of the Year. It thus acknowledges their pioneering role and their commitment to more electro- mobility on the apron. • San Francisco Airport honored Lufthansa as Quietest Overall Airline, an award that is given in the context of the “Fly Quiet Program”. The airport’s Round Table Initiative praised above all the airline’s efforts in the areas of fleet modernization and noise reduction. • For its analysis software OMEGA, which it jointly developed with IT company Aviaso, Lufthansa received the Innovation Award of German Aviation in the category emissions reduction. • The City of Los Angeles certified Lufthansa Cargo’s local station as a Green Business. The certification, which will be valid until March 2019, proves that the logistics specialist’s operations in Los Angeles are in accordance with sustainable principles and use resources sparingly. • Wholly-owned Lufthansa Cargo subsidiary Jettainer and Cologne University make a contribution to more efficient ULD planning through the big-data joint project “Decision Support System”: as a result, the transportation of empty loading containers can be avoided. The project came in second at the German Logistic Awards and qualified as a finalist for the IATA Air Cargo Inno- vation Awards 2017 and the German Innovation Award. • The Health Management of Swiss International Air Lines re- ceived the Health Award of Foundation for Health Promotion Zurich 2016. Since 2015, the airline has also held the Friendly Workspace label. • Since 2005, Austrian Airlines has participated in the environmental initiative ÖkoBusinessPlan of the City of Vienna. It supports com- panies in implementing ecologically and economically relevant measures. As in the preceding years, the airline again received the coveted ÖkoProfit award for numerous projects in 2016. • Austrian Airlines was again named European champion in service in 2016: For the third time in a row, the airline won the title Best Airline Staff Service in Europe at the renowned Skytrax World Airline Awards 2016, which includes both cabin and ground personnel. • At the Future Business Austria Infrastructure Symposium, Austrian Airlines received the Infrastructure Award Red Arrow for the company’s strategic development and its contribution to securing the hub function of Vienna’s Schwechat Airport. The award has been given once a year since 2007 to companies, individuals and institutions for particularly noteworthy initiatives concerning Austrian infrastructure and the business location Austria. • The Austrian Federal Ministry of Science, Research and Economy awarded the State Prize KnewLEDGE 2016 for exemplary intracompany continuing education measures and honored the personnel development program of Austrian Airlines with second place. 2017 • Lufthansa Cargo was rated by DHL Global Forwarding with four “green aircraft” as preferred carrier and awarded the GoGreen Carrier Certificate. • With the project “OMEGA – CO2 Reduction on the Basis of Big Data” Lufthansa Cargo won the German Award for Excellence of audit company DQS in the Environmental Responsibility category. At the German CSR Prize, the company reached the finals with OMEGA in the category CO2 avoidance as a contri- bution to climate protection, together with two other companies. In 2016 Deutsche Lufthansa AG was listed in the following sustainability indices and received the following ratings: • FTSE4Good • ECPI EMU Ethical Equity • ECPI Euro Ethical Equity • ECPI Euro ESG Equity • ECPI World ESG Equity • MSCI Global Sustainability Index Series • oekom Prime Rating • With a climate scoring result of “B” in the CDP Climate Change Report 2016, Deutsche Lufthansa AG has achieved the status “Sector Leader Transportation” in the DACH region. The Group thus ranks among the industry’s best in Germany, Austria and Switzerland.