Luxair Annual Report 2023

As an actor of Luxembourg and the Greater Region, this accomplishment underscores our resilience, determination, and unwavering dedication to serving our community.

Giovanni Giallombardo, Chairman of the Board of Directors

LETTER FROM THE CHAIRMAN

With this report, let's take the opportunity to reflect on Luxair's journey through 2023, a year of significant achievements and pivotal decisions for our airline. The year gone by has been once again a persistent commitment to enhancing connectivity and expansion.

In 2023, Luxair charted new heights, achieving a historic milestone by transporting over 2.5 million passengers for the first time. This momentous achievement not only represents a significant 22% increase compared to the previous year but also signifies a triumphant return to and surpassing of pre-health crisis passenger volumes. As an actor of Luxembourg and the Greater Region, this accomplishment underscores our resilience, determination and unwavering dedication to serving our community.

But 2023 was also the year during which, the re-fleeting project was launched. This strategic move not only positions us for the future but also underscores our dedication to providing the highest quality service to our customers and partners.

Looking ahead, the new fleet that will be introduced in the coming years will propel us even higher and closer to our strategy of improving operational efficiency, quality performance and sustainability.

At Luxair, we take pride in our role as ambassadors of the Grand-Duchy of Luxembourg, connecting our homeland to 96 destinations in Europe and beyond its boundaries.

We always strive to find solutions to cater to the needs of our valued customers, passengers and partners. Together with the other members of the Board of Directors and the Management team, we are committed to ensuring a sustainable future for Luxair and its employees. Their passion, experience and dedication are indispensable to our success.

As the President of this esteemed company, I am proud of our accomplishments and I am confident about our future. Together, we will continue to chart new horizons, inspire new journeys and soar to even greater heights.

Giovanni Giallombardo, Chairman of the Board of Directors

BOARD OF DIRECTORS

Mr Giovanni GIALLOMBARDO

Chairman of the Board of Directors

Mrs Françoise THOMA Vice-Chairman

Chief Executive Officer, Banque et Caisse d’Épargne de l’État

Mrs Angèle DA CRUZ

Member (since September 2023, replaced Jean-Louis THILL) Ministry of Foreign Affairs, Ambassador, Director of European Affairs and International Economic Relations

Mrs Stéphanie OLINGER

Mr Tom WEISGERBER

of Mobility and Public Works

the Department of Public Works Mr Patrick STREFF

Doris ENGEL

Officer, Banque et Caisse d’Épargne de l’État

Mr Romolo BARDIN

Chief Executive Officer & Chief Financial Officer, DELFIN S.à.r.l

Mr Laurent BAUMGARTEN

CHARTING A COURSE AT FULL THROTTLE: LUXAIR'S YEAR LIKE NO OTHER AND STRATEGIC FLIGHT PLAN

...our dedicated team of employees played a pivotal role in our success. Their hard work, dedication and passion for delivering excellent service contributed significantly to making 2023 a successful year.

Gilles Feith, Chief Executive Officer

Mr. Feith, 2023 will mark Luxair’s history as as exceptional year, during which over 2.5 million passengers were transported. Can you share some insights into what contributed to this remarkable achievement?

Luxair experienced an exceptional year in 2023. We achieved a historic milestone by transporting over 2.5 million passengers for the first time ever. This achievement represents a significant increase compared to 2022 and surpasses the pre-health crisis figures of 2019. This record performance for Luxair is also a highlight of our robust recovery and growth trajectory and shows that the quality offered by Luxair as a full-service carrier is well received among our customers in Luxembourg and the Greater Region.

This achievement was the result of a combination of several factors. We focused on expanding our reach, enhancing our route network, offering more destinations and convenient connections to meet the diverse needs of travelers. We placed a strong emphasis on customer experience. From the moment passengers book their flights to their arrival at their destinations, we ensured a seamless and enjoyable journey and stay. We continued to prioritize safety and reliability and to maintain the highest operational efficiency. We offered and tailored new services to meet the evolving needs of our customers.

The incorporation of the 2 leased Boeing 737-8 aircraft into our fleet enabled us to substantially increase our operational capacity, notably catering to the demands on LuxairTours destinations. Even more capacity was made available, offering appealing options tailored to customers' various travel purposes, consequently unveiling an extensive network of destinations catering to diverse preferences. Furthermore, our ongoing investments in fleet expansion and infrastructure upgrades contributed significantly to our ability to meet growing demand and maintain service excellence and will continue to do so in the upcoming years. Most importantly, our dedicated team of employees played a pivotal role in our success. Their hard work, dedication and passion for delivering excellent service contributed significantly to making 2023 a successful year.

Such success can often be accompanied by challenges. Was this the case for Luxair too? If yes, can you elaborate on some of the challenges faced and how the company overcame them?

Such success came with its own set of challenges. While breaking the record was a remarkable achievement, the most important challenge was to manage the increased volume of passengers while maintaining high standards of service. This required careful planning, adaptation and teamwork.

With the surge in passenger numbers, flexibility was essential to respond to the changing demands of the industry and the needs of our passengers. Flight schedules had to be adapted and resources efficiently allocated. Proactivity was also key to anticipate potential challenges by tackling them preemptively. Despite the difficulties encountered, in the end, thanks to the dedication of Luxair’s teams, we were able to successfully navigate through the turbulence that arose.

Looking ahead, we anticipate the years 2024 - 2025 to be a bit more complex as we have capacity constraints while we await the arrival of our new aircraft. However, with our proactive approach and the dedication of our team, we are confident in our ability to navigate through these constraints successfully.

2023 was also the year of strategic changes for Luxair’s future. Can you share an overview of the most important ones?

In 2023, there were two strategic changes, which will shape our future.

The first one being the order of new aircraft. Indeed, in the coming years, Luxair is awaiting the delivery of eight Boeing 737 aircraft and four Embraer E195-E2. With these new aircraft, we prove once more our commitment to offering an enhanced flying experience to our passengers while achieving operational savings and reducing environmental footprint thus chartering a course towards a sustainable future.

The new Boeing 737 represents the future of Luxair's fleet with its increased capacity and will allow optimization of our existing routes and exploration of new destinations, on both Luxair and LuxairTours networks. On the other hand, the Embraer E195-E2 embodies our commitment to inno-

vation and passenger comfort. With its technological advancements and ergonomic design, the Embraer 195-E2 offers an exceptional flying experience while reducing emissions and operational costs.

The second important change was the preparation for the handover of the Ground handling Cargo activity to Luxcargo Handling, which was finalised on May 1st 2024.

Overall, both strategic changes were pivotal and will influence our future. These investments in our fleet renewal and strategic business changes position Luxair for long-term success and sustainability in the ever-evolving aviation industry.

Finally, what message would you like to convey to your staff members, customers and stakeholders for the future direction of Luxair?

Moving forward, we will remain focused and dedicated to expanding our service offerings, continually seeking to enrich travel experiences and connecting Luxembourg and the Greater Region even further with a diverse range of European and international destinations, always keeping in mind our commitment to excellence in aviation services.

Our continued investments in innovation, customer experience and sustainability will drive our journey forward, ensuring that Luxair remains a trusted and preferred airline for years to come.

We understand the challenges the industry faces, and we are prepared to adapt, innovate and grow… full throttle.

ON THE RUNWAY

OUR EXCOM

(from right to left)

Gilles Feith - Chief Executive Officer

Sara Macedo - Chief Financial Officer

Daniel Colling - Accountable Manager

Thomas Fischer - Chief Commercial Officer

Emmanuelle Bourdeau - Head of Legal and General Secretary

MILESTONE MARKERS

96 destinations in total in 33 countries and 3 continents

destinations vs 2019 NETWORK EVOLUTION

aircraft turnarounds

Top 5 destinations

1. Canary Islands

2. Balearic Islands

8.713 number of flights

MEALS SERVED

3. Continental Spain

4. Tunisia

5. Italy 25.842 assisted at Luxembourg airport.

*including all Luxair and luxairTours flights, other airlines and charter flights.

CARGO AIRCRAFT

over 2.800.000

catering meals served on board our flights over 811.000 tons decrease vs 2022 6.046

aircraft turnarounds handled by LuxairCARGO teams

COUNTRY OF NATIONALITIESRESIDENCE

COUNTRY OF RESIDENCE AGE DISTRIBUTION

NETWORK OF DESTINATIONS 2023

J 96 destinations

J 33 countries

Bordeaux

Almería

Calvi Majorca

Rimini

Bastia Florence Bologna

Funchal

Faro Málaga

Jerez de la Frontera

Figari

Olbia Cagliari Naples Malta

Palermo

Tunis

Monastir

Djerba Enfidha

Rome

Dubrovnik Pescara

Bari Lamezia T Catania

Marrakech

Agadir

Tenerife

Las Palmas Lanzarote Fuerteventura

Ljubljana

La Palma

Milan Linate Milan Malpensa

Cape Vert

Senegal

Finland

United Arab Emirates

LUXAIR'S FLEET

2 BOEING 737-8

Seats: 186

Speed: 853km/h

Range: 5,740 km

Average age : 5 years

4 BOEING 737-800

Seats: 186

Speed: 853km/h

Range: 4,050 km

Average age : 9.5 years

4 BOEING 737-700

Seats: 141

Speed: 853 km/h

Range: 4,600 km

Average age : 17.3 years

11

DE HAVILLAND Q400

Seats: 76

Speed: 667 km/h

Range: 1,500 km

Average age : 9.5 years

FLYING FORWARD: LUXAIR'S FLEET RENEWAL PROGRAM

“The Fleet Renewal Program, involving the acquisition of advanced aircraft from Boeing and Embraer, represents one of the most significant ventures in Luxair's history. These new planes will not only enhance the onboard experience for our customers but also significantly reduce fuel consumption and CO2 emissions, aligning with Luxair’s strategic commitment to sustainability.

Thomas

Fischer, Chief Commercial Officer

Could you provide insights into Luxair's decision to go towards a refleeting? How does the purchase of these additional aircraft align with Luxair's long-term growth strategy?

Luxair's refleeting project is a strategic move to replace our existing fleet of B737-700s, -800s, and De Havilland Q400s within the next decade. Although our fleet is relatively young, these models are no longer being produced. Particularly, our oldest B737-700s, in service for over 20 years, are due for an update not just for efficiency but also to ensure we continue to offer the best in class comfort and amenities. Choosing the Boeing 737-8 and the Embraer E2 families as the future pillars of our fleet reflects our commitment to innovation, sustainability and enhancing customer experience, crucial elements of Luxair's future growth strategy.

How does Luxair anticipate the expansion of its fleet with the addition of the new Boeing 737-8 aircraft, including those acquired through purchase and lease agreements, to impact its service offerings?

By integrating the Boeing 737-8 into our fleet, we're gearing up to meet the growing demand for travel to both existing and new destinations. Our market analysis points to a bright future, with significant passenger potential up to 2030. The Boeing 737-8, with its versatility and larger capacity, enables us to offer enhanced service across a diverse range of routes. Whether it's a quick trip to Palma de Mallorca or an adventure to Dubai, these aircraft are a game-changer for Luxair, promising a superior travel experience.

Luxair emphasizes its commitment to investing in more modern and fuel-efficient aircraft. Can you elaborate on the specific features and benefits of the aircraft purchased that align with Luxair's objectives of providing a more comfortable flying experience and expanding its network of destinations?

Both aircraft families selected will provide lower fuel consumption per seat than previous generations. For example, a B737-8 consumes up to 20 % less fuel than our current 737s. Luxair is committed to the aviation industry’s target of reducing CO2 impact and environmental footprint. As a result of the lower fuel consumption, the aircraft can also fly longer distances than previous B737 models.

What challenges does Luxair anticipate during the fleet renewal process, and how is Luxair planning to address these challenges effectively?

Introducing new aircraft types, such as the Embraer E2, presents significant challenges, requiring comprehensive training across our operational teams. However, integrating the Boeing 737-8 is somewhat smoother, thanks to our extensive experience with the B737 series, allowing us to significantly reduce the transition period. This phased approach ensures we maintain our high standards of safety and service quality throughout the renewal process.

Could you share with us which departments have held a major role in the refleeting project?

The refleeting project is a testament to the power of teamwork, involving virtually every department within Luxair. I'm incredibly grateful for the unwavering support and dedication of our Flight Operations, Maintenance, Schedule Planning, Revenue Management, Sales, Finance, Legal, Ground Operations, and Catering teams. Their collaborative effort, under the guidance of our Top Management and Board of Directors, has been instrumental in navigating the complexities of this project and ensuring success.

IMPRESSIONS FROM THE FLIGHT DECKOUR BOEING 737-8'S FIRST

JOURNEY TO IT'S NEW HOME BASE

Looking forward, we have high expectations and aspirations for the continued operation of the Boeing 737-8 aircraft within Luxair's fleet, envisioning its pivotal role in shaping the future of the airline.

Right: Georges Heintz, Fleet Chief Boeing

Left: Christian Wilmes, Captain Boeing

How did you prepare for the inaugural flight of the Boeing 737-8 aircraft, considering it's a new addition to Luxair's fleet?

Preparation for the inaugural flight of the Boeing 737-8 aircraft, marking its debut in Luxair's fleet, commenced in November 2022 within the flight operations department. Our focus was on integrating all pertinent Boeing 737-8 information into Luxair's Flight Operations documentation, with the target of readiness for the delivery of our first Boeing 737-8 in June 2023. Achieving this objective required a collaborative effort among the Flight Operations, Maintenance and Training Departments.

By the end of January 2023, we underwent comprehensive Boeing 737-8 difference training at CAE in Amsterdam. This training encompassed theoretical coursework and simulator sessions, aimed at acquainting us with the technical and operational disparities between the Boeing 737700/800 and the new Boeing 737-8 model.

The delivery flight of Luxair's first Boeing 737-8, bearing registration LX-LBL, occurred on July 2, 2023.

The flight crew for this initial journey included Technical Pilot Captain Christian Wilmes, myself, and a Boeing pilot who provided invaluable assistance during our inaugural flight on the Boeing 737-8. In anticipation of this significant event, an extensive pre-flight briefing was conducted the day before departure. This briefing involved collaboration with the Boeing support pilot, a maintenance representative, and the flight crew, ensuring meticulous preparation for the ferry flight to Luxembourg.

What were your initial impressions of the Boeing 737-8 aircraft in terms of handling, performance, and cockpit ergonomics compared to other aircraft in Luxair's fleet?

Overall, my initial impressions of the Boeing 737-8 aircraft revealed striking similarities in handling compared to the Boeing 737-800. However, notable improvements were observed, particularly in stability, especially during turbulent air conditions, rendering the transition between aircraft models relatively seamless. The enhanced performance of the B737-8 is chiefly attributed to an augmented range, courtesy of the engines' improved fuel efficiency, and a more aerodynamically refined wing compared to its predecessor, the B737-800.

Regarding cockpit ergonomics, the amplified size of the flight instrument displays notably enhances crew situational

awareness. Additionally, a discernible reduction in aerodynamic noise contributes significantly to enhanced comfort levels on the flight deck.

Can you share any memorable moments or highlights from the flight back to Luxembourg with the Boeing 737-8 aircraft?

Advancing the thrust levers for the first takeoff as well as the first landing in Luxembourg on the new aircraft were very exciting moments. Moreover, the water salute orchestrated by the Luxembourgish fire brigade and lux-Airport, staged in front of the Luxair Maintenance hangar, added another memorable highlight to the flight back.

How did the aircraft's advanced features and technology enhance your overall flying experience and contribute to the success of the flight?

The advanced features and technology incorporated into the aircraft notably elevated the overall flying experience and significantly contributed to the success of the flight. Notably, the transition to partially electronically controlled flight controls, as opposed to mechanical cable controls found in the Boeing 737-700/800, resulted in smoother and more direct handling of the aircraft.

Moreover, the discernible reduction in wind noise within both the cockpit and cabin, coupled with minimized engine noise, collectively fostered a markedly more pleasant and enjoyable flight experience for passengers and crew alike.

Looking ahead, what are your expectations and aspirations for the continued operation of the Boeing 737-8 aircraft within Luxair's fleet, and how do you envision its role in shaping the future of the airline?

Looking forward, we have high expectations and aspirations for the continued operation of the Boeing 737-8 aircraft within Luxair's fleet, envisioning its pivotal role in shaping the future of the airline. As the designated future workhorse for LuxairTours flights, the Boeing 737-8 brings forth several key advantages that align with our goals of sustainability and operational efficiency.

Primarily, the aircraft's reduced fuel burn, lower emissions, and enhanced engine design, which contribute to lower noise levels, represent significant strides towards reducing Luxair's environmental footprint. Operationally, the heigh-

tened efficiency of the Boeing 737-8 compared to its predecessors, the Boeing 737-700/800, suggests the potential for expanding to new destinations in the future. Moreover, the introduction of the new aircraft is poised to elevate the overall customer experience. Reduced cabin noise levels and increased hand luggage stowage space, facilitated by the larger passenger cabin overhead compartments, offer tangible benefits that enhance passenger comfort and convenience.

BEHIND THE SCENES: THE SEAMLESS TRANSITION TO THE BOEING 737-8

“

I am proud that Luxair succeeded in introducing this new 737 variant into our fleet within a short period of time.

Laurent Donteri, Director of Flight Operations

How did your teams prepare for the arrival of the new Boeing 737-8?

Laurent Donteri: The introduction of the Boeing 737-8 into our fleet required some preparation time. Since it is a variant of the existing 737 fleet, quite a lot of procedures and documentation have been taken as a base in order to adapt it to the 737-8. Our teams at the Flight Operations department have been heavily involved into the introduction of the 737-8 and I can say that I am proud that Luxair succeeded in introducing this new 737 variant into our fleet within a short period of time.

Beside the whole documentation, there was also a need to train our pilots and cabin crews in order to familiarize themselves with the 737-8. The training for our pilots consisted of a CBT (Computer based training program) for the theoretical part, followed by a simulator session for the practical part. A familiarization flight took place as well for all our pilots with a pilot from Boeing.

What strategies have you implemented to ensure a smooth transition during the renewal of the fleet?

Laurent Donteri: In our industry, planning ahead is paramount. The aviation industry is very regulated as we need to follow a lot of regulations, be it on a National, European or International level. Those regulations foresee the establishment of a risk assessment which enables the companies to correctly prepare the transition needed when introducing a new aircraft into their fleet. In effect, this ensures a transition as smooth as possible.

In which ways will the refleeting impact your current teams and your need for new hires?

Laurent Donteri: Our office teams have had an increased amount of work since the introduction of a new aircraft variant/type requires quite a few documentation related updates. The manufacturer documentation is also different depending on the different aircraft variants/types. The whole training needed to be adapted and programmed as well, for which we needed the help of an external well known ATO (Approved Training Organisation).

With the introduction of the 737-8, we also increased the amount of aircraft within Luxair. This requires the hiring and training of additional crew members, being it pilots and cabin crews.

Can you provide an overview of the ambassador program and its objectives within the cabin crew department?

Mélanie D’Alimonte: the Ambassadors are proudly dedicated to supporting and connecting with our crews. Their regular presence in the crew room during weekdays ensures a permanent contact and exchange. Additionally, they assist their colleagues directly on the line.

Their mission consists in the expansion of the communication channels between the Cabin Crew Department, the crews and all the stakeholders. Moreover, they ensure that our customer service standards are followed to enhance Luxair’s brand image. Ensuring an exceptional standardized service and representing the Airline’s values and culture is

one of their main missions, as well as helping to identify areas for improvement and make necessary adjustments to enhance the overall flying experience.

Can you share any success stories or instances where the ambassador program has enabled better communication and teamwork among cabin crews?

Mélanie D’Alimonte: The Ambassadors and the Cabin Crew Department are proud to highlight a significant improvement through dedicated efforts in several areas that reflect ongoing commitment to excellence and positive collaboration between the crews and other departments. Furthermore, the creation of an environment of trust and support for our crews has resulted in a positive outcome.

Being a Cabin Crew Ambassador is a prestigious role that requires a unique set of qualities. The interactivity and cooperation between our different departments has seen a remarkable development. As an example, the monitoring of our internal procedures has notably resulted in positive feedback among the crews and better understanding of Luxair operations in various departments. Safety on board combined with excellent service is a top priority on every single flight for our Airline.

The Ambassadors and the Cabin Crew Department are proud to highlight a significant improvement through dedicated efforts in several areas that reflect ongoing commitment to excellence and positive collaboration between the crews and other departments.

Melanie D’Alimonte, Head of Cabin Crew

BEYOND THE HORIZON: HOW OUR NEW FLEET IS SHAPING OUR FUTURE

...the main contributors to the success of this whole project were the Luxair staff. Without their commitment this phase-in would not have been possible.

Christoph Blaha, VP Technical Services

How did Luxair prepare to ensure a smooth integration of the temporary leased Boeing 737-8 aircraft into its existing fleet operations?

When Luxair launched its refleeting initiative, the earliest aircraft deliveries would have been possible in 2026. When in November 2022 the opportunity arose to lease 2 aircraft it meant that we would be able to receive our first Boeing 737-8 just in time for the summer 2023 season. Thus, a huge undertaking began, as the 737-8 constituted a new aircraft type for Luxair, an extensive project across all Luxair departments was necessary to receive all required approvals in time for the start of the operations. On the Luxair Technics side, thankfully, we already had a lot of experience operating the Boeing 737, but our teams still required quite extensive additional trainings. Another major topic was the analysis of the differences with the current version of the 737 operated by Luxair by the Logistics and Maintenance teams for specific spare parts and tools. Despite long lead times and contract negotiations, all required spare parts and tools could be secured for the start of the operation. This included, among others, heavy and expensive parts such as wheels, brakes and specific 737-8 electronic components and tools like fibre optic instruments for the new cockpit instrumentation.

Could you provide insights into the adjustments being made to Luxair's maintenance procedures and facilities to accommodate the introduction of the leased Boeing 737-8 aircraft?

Luxair made significant adjustments to its maintenance procedures and facilities to accommodate the introduction of the leased Boeing 737-8 aircraft. This included the development of a tailored Maintenance Program by our Engineering and Planning team, as well as the incorporation of the specific aircraft data into Luxair's IT systems. Furthermore, the Engineering team coordinated and supervised at our base maintenance provider in Ostrava the modification of the aircraft to the Luxair standard, such as language adjustments on the cabin placards, adaptation of emergency equipment and installation of the Electronic Flight Bag. Finally, the aircraft were painted in their new Luxair colours.

How has the training process been for Maintenance staff transitioning from the 737-800 to the 737-8?

As it turned out, the most critical point was the training of the mechanics of the Maintenance teams and the colleagues in the Maintenance Control Center (MCC). Despite the similarities to the previous versions of the 737, the teams still required a three weeks course for each individual mechanic and colleague in the MCC. The theoretical part (two weeks) could be done in Luxembourg in our headquarters in Munsbach. But as the first courses had to be done before the first aircraft was delivered, the first two practical courses (one week each) were performed in Istanbul. After the delivery of the first aircraft in July subsequent practical courses were done in Luxembourg which simplified the training a lot. Additional required courses like engine ground run or fibre optic repairs were done in small teams for 2-3 days in the Boeing Training Center in Gatwick in the United Kingdom.

This topic was of the utmost importance as a prerequisite to receive approval from the Direction de l'Aviation Civile to operate this new type of aircraft was that we had to provide substantiating evidence to show that we had sufficient trained personnel as well as the availability of spare parts and tools.

Have there been any challenges identified in the transition process?

The biggest challenge encountered, especially for the Luxair Technics teams was that this whole project required a huge amount of preparation in a very short time. This ambitious timeline was only made possible by the fact that Luxair already had a vast experience operating the previous versions of the Boeing 737 family. From the signature of the Letter of Intent for the two aircraft at the end of January to the start of the operations in the beginning of July, the project was successfully completed in less than 6 months. This achievement was only possible with an excellent cooperation between all Luxair departments as well as the support of suppliers and partners. However, the main contributors to the success of this whole project was the Luxair staff. Without their commitment to change roster, cover for the colleagues away on training or in Ostrava, and working on this project in parallel to their ongoing normal operations this phase-in would not have been possible.

Can you discuss any investments or infrastructure upgrades Luxair is making to support the Maintenance, servicing, and operation of the future fleet at Luxembourg Airport?

Luxair has invested in infrastructure upgrades at Luxembourg Airport to support the maintenance, servicing, and operation of our future fleet. These investments encompass our new hangar which was inaugurated in April 2024, including the addition of specialized equipment and technology to safely and comprehensively maintain our Boeing 737-8 aircraft.

CHARTING PROGRESSLUXAIR'S ESG JOURNEY

Well-trained and skilled personnel are the cornerstone of delivering exceptional services

Sara Macedo, Chief Financial Officer and Head of ESG

Sara, 2023 will be the first year for which an Environmental Social Governance report will be prepared. As CFO and Head of ESG, can you give us some information about it please?

Indeed, at Luxair, we are proud to launch for 2023 our first voluntary ESG report addressed to Luxair stakeholders. ESG related matters have been an integral part of Luxair’s business operations for many years. However, considering the increased ESG focus in recent years, end of 2022, following the creation of the ESG department, an internal project was launched at Luxair to centralize and report on ESG related matters and initiatives in a separate ESG report.

The purpose of this first separate ESG report is to share Luxair’s ESG vision, mission and strategy with its internal and external stakeholders.

Can you provide an overview of the key elements and objectives outlined in our ESG report? How does Luxair define and prioritize ESG aspects within our operations?

In 2023, Luxair undertook a so-called “materiality assessment” to identify, assess and prioritize non-financial topics.

Based on feedback gathered from its different business units and other stakeholders, 22 non-financial topics of attention have been identified as detailed in our ESG report out of which 8 topics have been assessed as priority areas:

Flight Operations, safety and security,

2. Customer satisfaction,

3. Health and Safety at work,

4. Training,

5. Greenhouse gas emissions, energy reduction and waste management,

6. Fuel efficiency,

7. Data protection and security

8. Business ethics.

We see it as essential for transparency to disclose Luxair’s performance with regards to these priority topics in our report.

What specific indicators are highlighted in the ESG report to address environmental concerns?

Luxair’s ESG report transparently communicates Luxair’s greenhouse gas emissions and reaffirms Luxair's decarbonization commitment. Between 2020 and 2023, Luxair decreased with CO2/RTK emission by -24.4 % and displays further projected reductions by 2028 following the aviation decarbonization path.

Furthermore, with regards to initiatives, since 2020, a profound commitment to integrate environmental Management into operational activities led to the formation of the Luxembourg Airport Environmental Committee (LAEC).

Considering that passenger transportation and ground handling activities have been defined as Taxonomyeligible activities in 2024, for the financial year 2023, Luxair has already incorporated the reporting requirements defined in European Union Regulation 2020/852 ("EU Taxonomy Regulation"), aimed at establishing a framework promoting sustainable investment, including the delegated acts drawn up under the regulation, applicable at the reporting date.

How does Luxair approach social responsibility, and what measures are outlined in the ESG report to ensure we meet these priority areas?

Within a very competitive industry and challenging macroeconomic environment, Luxair puts continuous effort into maintaining its attractive social model, notably through the application of its Collective Work Agreement. Prioritizing employee safety and welfare is absolutely central to Luxair’s activity.

Flight operations, safety and security are critical to safeguard Luxair’s operational and employee safety. In this regard, Luxair employs a robust and structured approach to passenger flight safety management, leveraging data analysis from regulatory and internal sources to continuously assess and enhance aviation safety.

With its meticulous publication reviews, participation in aviation conferences and workshops, as well as with periodic reviews for the Safety and Quality Review Board, Luxair has proven that it is committed to being at the forefront of Compliance. Essentially, each component of our operation is a reflection of a broader goal to establish new

benchmarks among regional airlines, distinguished by safety, compliance and a relentless quest of excellence.

With regards to covered workers, we also conduct periodic reviews by the Health and Safety Committee focusing on evaluating the effectiveness of actions, programs and procedures. We also encourage constructive feedback from employees to ensure continuous improvement.

Different initiatives such as “Luxair goes orange”, “From blue to pink” or “Ugly Xmas sweater” underscore Luxair's dedication to creating a workplace and operational environment that actively celebrates the richness of diversity and effort to giving back to the communities.

Luxair's commitment to corporate social responsibility and community engagement was continuous throughout 2023. Our approach focused on working alongside organisations in favour of important causes, promoting actions close to our hearts through internal and external campaigns to raise awareness, while supporting employees' initiatives. Well-trained and skilled personnel are the cornerstone of delivering exceptional services to passengers while concurrently upholding rigorous safety protocols. Luxair’s commitment to safety and customer experience necessitates continuous investment in the human capital development of its workforce. Stirring to excellence, Luxair has increase the total amount of training hours in 2023.

At Luxair, customer satisfaction is an absolute priority. Products and services result from meticulous management by our marketing, commercial teams and operational teams.

Can you discuss the governance structures and policies detailed in the ESG report to ensure transparency and accountability?

In 2023, we established a dedicated CSR committee at Luxair to streamline and reinforce accountability. As such, support is provided by this specialized CSR committee focused on critical environment social governance areas. This setup ensures a cohesive approach to CSR, with concerted efforts to meet the company's sustainability goals effectively within the year of its inception.

Furthermore, as our commitment in responsible governance, we have active measures in place to cultivate an inclusive environment for all members of the Luxair workforce. The ESG report also reemphasizes our commitments

towards business ethics, including integrity management, anti-corruption position, commitment to human rights and to anti-modern slavery.

Luxair’s Supplier Code of Conduct mandates compliance with laws and regulations, encompassing environmental laws, labor laws and regulations related to fair business practices. Our Supplier Code of Conduct firmly opposes bribery, conflicts of interest, and all forms of corrupt activities. Luxair’s political stance emphasizes the importance of transparency, integrity, and ethical behaviour in supplier relationships, setting the tone for responsible business practices.

With regards to Data Governance, proactive steps are taken to enhance defenses, safeguard sensitive information, and maintain the trust of clients, partners and employees.

Finally, Luxair has incorporated a whistleblowing policy and platform to create a standard process to receive and treat employee’s and external stakeholders’ (customers, suppliers, etc.) concerns, with respect of one’s privacy and/or wish to remain anonymous. This policy, and the associated whistleblowing platform, embedded in our overarching commitment to responsible practices, exemplifies our dedication to upholding the highest standards of corporate governance.

The content of the ESG report has been structured by considering as a reference the Global Reporting Initiatives (GRI) Standards and will evolve in the future to consider the European Sustainability Reporting Standards (ESRS) and considering the regulatory landscape, namely the EU taxonomy, Corporate Social Responsibility Directive (CSRD), Corporate Social Due Diligence Directive (CS3D).

How does the ESG report align with Luxair’s overall mission, vision, and values?

All aspects reflected in the ESG report are fully aligned with Luxair’s mission statement, which aims to maintain its position as the leading airline in Luxembourg and the greater region by focusing on safety, customer experience and quality.

Luxair will strive for operational excellence through a modernized fleet, efficient operations, and a high level of dispatch reliability, while never compromising on safety.

As a full-service airline, Luxair is committed to providing a seamless customer experience throughout the entire journey.

We will continue to prioritize customer satisfaction and expand our range of commercial offerings to cater to a larger customer base in a changing environment.

Luxair is committed to maintaining the best social model for an airline operating in Luxembourg and is striving for sustainability throughout its businesses while facilitating the aviation transition pathway aiming at carbon neutrality in the future

Luxair will continue to enhance connectivity for Luxembourg and the Greater Region, by serving close to 100 destinations.

NEW DESTINATIONS 2023

J Ljubljana

Starting September 14th, Luxair connected travellers to the capital of Slovenia in just two hours. Flights operated twice a week, offering a perfect getaway to this city of rich history and natural beauty.

J La Palma

Beginning November 9th, Luxair expanded its Canary Islands service with a weekly flight to La Palma, UNESCO's biosphere reserve known as "La Isla Bonita

J Pescara

This picturesque Italian coastal city, renowned for its stunning beaches and historic charm, saw winter services operating twice weekly.

In the summer, the frequency increased, providing more opportunities to explore Pescara's allure.

J Milan Linate

Commencing October 29th, 2023, Luxair added its 16th Italian destination. This route, operating on weekends, complemented the existing Milan – Malpensa service, allowing passengers quick access to Milan's city centre

J Praia

For the 2023 Christmas season, Luxair introduced flights to Praia in Cape Verde. This seasonal route, operating from December 18th to January 9th catered to the Cape Verdean community in Luxembourg and the surrounding region.

CONSOLIDATED BALANCE SHEET

assets Luxair (expressed in euros)

liabilities Luxair (expressed in euros)

Consolidated liabilities Luxair (expressed in euros)

a.

3. Payments received on account of orders in so far they are not shown separately as deductible from stocks

a.

b.

4.

a.

5. Bills of exchange payable

a.

b.

6. Amounts owned to

a.

b.

7.

a.

8. Other creditors

a.

b.

CONSOLIDATED INCOME STATEMENT

FINANCIAL PERFORMANCE AT A GLANCE

THANK YOU

TO ALL LUXAIR STAFF MEMBERS THEIR HARD WORK AND COMMITMENT

MEMBERS FOR COMMITMENT! “

THIS ANNUAL REPORT WAS DEVELOPED IN HOUSE

Publisher

Luxair S.A.

Thank you to all of Luxair's story tellers and to those in this report

Mélanie D'Alimonte, Laurent Donteri, Christoph Blaha, Christian Wilmes, Georges Heintz, Giovanni Giallombardo, Gilles Feith, Thomas Fischer, Sara Macedo

Special thanks to the Ramp Handling teams for their help with the preparation for the photoshoot on the tarmac.

This report was edited and designed by Luxair Paper Publication

Communication Specialists – Lydia Schneider & Jessica King

Photos by Fréderic Pfister & Sergio Cacela