Luxair

Annual report 2012
LuxairGroup

Content
4 Board of Directors
6 Chairman’s letter
8 Executive committee
10 CEO’s letter
14 Management report
27 The Luxair fleet
28 Operational results
32 Corporate social responsibility
42 Consolidated balance sheet LuxairGroup
44 Consolidated income statement
45 Highlights
46 Auditor’s report

Board of Directors
Marc Hoffmann
Chairman of the Board
until 14 May 2012,
Chief Executive Officer
CBP Quilvest S.A.
Paul Helminger
Chairman of the Board
since 14 May 2012
Jean-Claude Finck
Vice-Chairman of the Board,
Chief Executive Officer, Banque
et Caisse d’Epargne de l’Etat
Michel Birel
Member,
Deputy Chief Executive officer,
Banque et Caisse d’Epargne
de l’Etat
Marco Gadola
Member
until 22 June 2012,
Chief Financial Officer,
Panalpina Welttransport
(Holding) AG
Jean Graff
Member,
Ambassadeur et Directeur
des Relations Economiques
Internationales, Ministère
des Affaires Etrangères
Karsten Benz
Member,
Member of the Executive
Board Austrian Airlines AG
Tom Weisgerber
Member,
Premier Conseiller de
Gouvernement, Ministère
du Développement Durable
et des Infrastructures
Frank Wagener
Member
until 14 May 2012,
Chairman of the Board,
Banque Internationale
à Luxembourg S.A.
François Pauly
Member
since 14 May 2012,
Chief Executive Officer,
Banque Internationale à
Luxembourg S.A.
Paul Reuter
Member,
Staff Representative,
Luxair S.A.
Helder De Oliveira Borges
Member,
Luxair S.A.
Raoul Roos
Member,
Luxair S.A.
Max Nilles
Commissaire du
Gouvernement
auprès de Luxair S.A.,
Conseiller de direction adjoint
Ministère du Développement
Durable et des Infrastructures
Michel Folmer
General Secretary
LuxairGroup, Secretary
of the Board of Directors
of Luxair S.A.
4 Annual report 2012

When I took over as chairman of the LuxairGroup
Board of Directors in May last year, I was well aware
that it was not going to be a walk in the park. The
world of aviation was already in turmoil, especially
in Europe where the major players seem intent
on ever more dramatic restructuring plans and
regional operators continue their gradual disap-
pearance from departures and arrivals boards.
Against this background, the fact that LuxairGroup
hassurviveduntilnowcaninpartbeattributedtothe
diversity of its activities and a financial position which
remains healthy. But the most significant factor in
this durability is the quality of our product and there-
fore the skill and commitment of our employees. Be
that as it may, the challenges are sizeable: On the
one hand, we face increasingly invasive competition
and the “low cost” approach of what is a profoundly
changing market. On the other, we must assume
our responsibilities as a reference shareholder of
Cargolux – the continued presence of this business
in Luxembourg being the sole guarantor for more
than a third of our employees’ jobs.
Under these difficult circumstances, the share-
holders appointed Roland Berger Strategy Con-
sultants GmbH to conduct a strategic review of
the Airline. The consultant’s verdict is clear: at the
present time there is no alternative to the current
model of a regional airline providing a quality link
from Luxembourg and the Greater Region to major
European business centres.
Nevertheless, maintaining this position and finding
development potential within it entails one essen-
tial pre-condition: the restoration of financial equi-
librium between now and 2015. Consequently, the
Board of Directors has instructed management to
take all necessary measures to achieve this objec-
tive: increasing revenue, reducing costs, and negoti-
ating with the bodies representing the workforce in
a bid to reduce and control wage costs.
If we are to rediscover our competitive edge it is
essential that together we make a success of these
efforts. The survival of LuxairGroup and the pro-
tection of several thousand jobs in a strategically
important sector of the nation’s economy are at
stake.
It is time to tighten our belts, that is undeniable. But
we must not let this lead to panic. On the contrary,
we must calmly discuss the measures to be taken
and implement them resolutely. We must put our-
selves in “combat mode” at every level. Not against
each other, quite the opposite! Not in rear-guard
combat either. We must work together to defend
and, if possible, increase our share in a market
which is clearly more difficult than ever but which
also offers real opportunities for LuxairGroup.
Paul Helminger
Chairman’s letter

Executive committee
Michel Folmer
General Secretary
Laurent Jossart
Executive Vice-President
Finance
Alberto Kunkel
Tour Operating
and Sales&Marketing
Hjoerdis Stahl
LuxairCARGO

Thomas Czypulowski
Senior Vice-President
Information Systems
Robert Faymonville
Vice-President
Human Resources
Martin Isler
Airline
Adrien Ney
President and Chief
Executive Officer
9

LuxairGroup’s results for financial year 2012 came
as no surprise, unfortunately. All our company’s
activities have suffered in the wake of the financial
crisis, which means that profits are down for all our
business lines.
LuxairGroup is by no means alone in this. The avia-
tion industry as a whole is suffering as a result of
the recession. Countless European airlines have
reported heavy deficits, implemented restructuring
plans or, in most cases, announced both deficits and
restructuring simultaneously.
LuxairGroup’s results do not make for happy reading.
For the first time in 30 years, Luxair S.A. has made a
loss. It posted a negative net income of over 10 mil-
lion euros (consolidated net loss of 21 million euros),
with operating losses of around 18.2 million euros
(consolidated operating loss of 17.9 million euros).
However, as I said at the beginning of my letter,
these results come as no surprise. Competition is
becoming increasingly tough, a contributing factor
being the arrival of low cost operators at Luxem-
bourg Airport, which has speeded up the rate of
price erosion. At the same time, business travellers,
still the main customer base of Luxair Luxembourg
Airlines, are making fewer and fewer trips as travel
budgets are cut in these times of crisis. Given that
air freight handling is even more vulnerable to eco-
nomic uncertainties, the slowdown at LuxairCARGO
was also a foregone conclusion. No surprises then
as far as the operating results are concerned.
If we remember that the crisis has already lasted
years and that production costs are spiralling each
year, the answer is obvious: if LuxairGroup wants to
survive, something has to change. That is why our
Board of Directors asked the Roland Berger consul-
tancy to analyse our business model and instructed
the Executive Committee to work with Roland
Berger to formulate a new strategy for the future.
This exercise confirmed that our business model
is the only viable one for operating in and from
Luxembourg. However, to ensure this model’s
future sustainability, we will have to cut produc-
tion costs as a matter of urgency, and therefore
find ways of making ongoing savings.
It will not be easy to sell these savings measures,
whichwillrequiresacrificesfromallofLuxairGroup’s
employees. Every single one, from Management
down, will have to contribute to the effort, in pro-
portion to their salary. But if we can achieve and
sustain these savings, we will succeed in creating
the platform for a new takeoff, without having to lay
people off and without a redundancy plan. In these
difficult times, solidarity among all the members of
LuxairGroup has to be our watchword. Obviously,
we are counting on dialogue between management
and employees to reach the necessary agreements
with the trade unions and employer organisations.
I strongly believe that success will prove us right.
By restoring financial balance by 2015, we will be
laying the foundations for a company that will once
again be in a position to invest, and which will be
able to develop and return to growth.
However, we have to face the fact that this is our
last chance to achieve this.
Adrien Ney
CEO’s letter

Luxair Luxembourg Airlines
Taking passengers to the right destination in
complete safety and providing them with the best
possible on-board experience, while reducing the
environmental impact – that is Luxair Luxembourg
Airlines’ objective every day. The environmental
aspect is the determining aspect when deciding
on operational procedures, and is also an impor-
tant consideration when choosing the fleet.

Luxair Luxembourg Airlines
Management report
Owing to a drop in capacity (-3% of the seats),
mainly linked to a reduction in the number of
flights leaving from Saarbrücken and the stoppage
of the Prague, Dublin and Turin routes, Luxair Lux-
embourg Airlines experienced a slight fall in pas-
senger numbers in 2012 (-0.5%); the airline was
also unable to put an end to the continuing erosion
of its income per passenger (-4%):
Luxair pursued its strategy of stimulating demand
using recurring offers of low-priced tickets coupled
with aggressive marketing campaigns. As part of
this strategy, 304,000 Primo tickets and promo-
tional fares were sold in 2012, i.e. 38% of the total
number of tickets sold (versus 264,000 (32%) in
2011 and 215,000 (28%) in 2010).
Regarding business travel, the fall in the income
per passenger witnessed over the past few years,
with the economic crisis as catalyst, continues.
The number of passengers travelling in business
class and in economy class on high-yield flexible
tickets continued to fall, from 20% to 16% of the
total number of passengers. This percentage has
nearly halved in just 5 years (37% in 2007, 30% in
2008, 24% in 2009, 22% in 2010 and 20% in 2011).
Apart from the constant growth in production
costs (in particular payroll costs) the intensification
of competition severely affected the financial per-
formance of Luxair Luxembourg Airlines. The fol-
lowing routes were affected: Munich (Lufthansa),
Geneva (Darwin), London (easyJet), Saarbrücken-
Hamburg (OLT), and transit traffic (British Airways,
Swiss and KLM). Repeated rises in fuel prices were
also a factor (+14% vs. 2011).
In light of the losses reported for a tenth year run-
ning, of the worrying extent of the deficit and in
order to ensure the long-term survival not just of
Luxair Luxembourg Airlines but the LuxairGroup
itself, a Committee was formed by representatives
of all the shareholders. This Shareholders’ Com-
mittee launched an invitation to tender in July 2012
to recruit a consultant in order to conduct a stra-
tegic review of the Airline; this process resulted in
the selection of Roland Berger.

Prospects for 2013
In March 2013, Roland Berger delivered his recom-
mendations for enabling the airline to balance its
books by 2015. On the basis of these recommenda-
tions, the Board of Directors mandated the Mana-
gement Board to implement all necessary measures
linked to income, productivity and costs. The aim
being a saving of EUR 25 million per year, resulting
in a break even position by 2015. The Management
Board began negotiations with bodies representing
the workforce in a bid to rework collective bargai-
ning agreements on a new footing, due considera-
tion being given to the conclusions of the strategic
review and Luxembourg’s social model.
IATA is forecasting that the operating earnings of
European airlines will be slightly positive in 2013
(overall profits of USD 0.8 billion or 0.4% of turnover),
fed primarily by long-haul activities. The weakness
of the European economy is however still expected
to depress the economic performance of regional
traffic.
The profitability of the short and medium haul net-
work of all European national airlines has been
under extreme pressure for several years. Many
traditional, independent, small size European airlines
which do not operate long-haul services are facing
financial disaster and are fighting for survival. The
only airlines which operate an intra-European net-
work and which are managing to do well are the
low-cost airlines. According to a survey conducted
by Prologis, 33% of European regional airlines have
folded between 2008 and today.
In Luxembourg, the competition is going to inten-
sify further in 2013 with the arrival of Vueling on
the Barcelona route and easyJet on the Milan route.
15

LuxairTours
Providing advice, service and support to customers
throughout their journey and also at their destina-
tion is the everyday responsibility of LuxairTours,
the LuxairGroup tour operator. LuxairTours is
conscious that responsibility as a professional tour
operator also goes hand-in-hand with promoting
tourism that respects not only the environment
but also the cultures and people of the destination
countries.
17Annual report 2012

LuxairTours
Building on its success over the past five years,
LuxairTours commercialized an additional aircraft
over the summer of 2012, giving it a significant
increase in capacity (17% more seats versus 2011).
Amid a highly unstable political and economical
context LuxairTours once again experienced a year
that was full of ups and downs. Political instability
in North Africa, especially in Egypt, but also the
French tourists’ temporary disaffection from
Turkey and the Greek chapter of the sovereign
crisis were not propitious for building trust among
holiday-makers.
Although the overall growth in passengers was
remarkable (+15% vs. 2011), the different market
segments experienced mixed fortunes.
Whereas ad hoc charter flights increased by 45%
(+7,500 passengers vs. 2011) thanks to the addi-
tional capacity and an increased availability of the
Boeing fleet, the growth in classic package hol-
idays was below expectations (+4% or +13,000
passengers vs. 2011).
Sales of seats without package holidays (flight only)
grew impressively by 32% (+25,000 passengers).
Special offers were increased by 49% (+15,000 pas-
sengers) in response to the political uncertainties
(North Africa and Greece) and economic uncertain-
ties, and now account for 13% of package holidays
versus 9% in 2011.
Sales of blocks of seats to tour operators and travel
agencies increased by 28% with the commissioning
of an additional plane.
The geographical customer split was as follows:
France 35%, Luxembourg 31%, Belgium 10% and
Germany 13%. Direct sales rose by 31% and now
account for 11% of total income.

Prospects for 2013
After a year of strong growth in 2012 in terms of
passenger numbers, combined with some pres-
sure on margins, LuxairTours decided to focus on
enhancing its profitability in 2013.
In light of the current level of bookings, LuxairTours
is on track to meet its target. However, the political
instability in North Africa, primarily in Tunisia (the
company’s second market after Spain) calls for
caution. Bookings for Tunisia are down significantly
but they are being offset by the other markets,
such as Greece, which after a very fraught year in
2012, is showing promise.
Any economic and political tensions, together with
social upheavals in Southern European countries
(Greece, Spain, Italy) where the main destinations
are located, might have dire consequences on the
results of LuxairTours.
For the summer of 2013, LuxairTours will be intro-
ducing Figari (Corsica) as a new destination and will
be marking its return to Croatia.
19

LuxairCARGO
Commitment is the watchword at LuxairCARGO,
the LuxairGroup’s air freight handling specialist.
LuxairCARGO’s staff are committed to providing
reliable, efficient and safe services 24/7, and this
commitment remains binding, regarding societal
issues.

LuxairCARGO
After a long period of growth, air freight was badly
hit by the economic recession and emerged in
dire shape from the years 2008 and 2009, deeply
affected by a dramatic fall in volumes (-4% in 2008
and -14.5% in 2009). The recovery experienced in
2010, with a 20.6% growth in air freight worldwide,
was short-lived. In 2012, air cargo volumes fell by
-1.5% for the second year running.
The weakness of the European markets continued
to depress exports from Asia, directly affecting the
main clients of LuxairCARGO, whose cargo volumes
are closely linked to the health of trade between
Asia and Europe. Our airport freight services activity
in Luxembourg airport experienced another year of
crisis, with an overall fall of nearly 6% in volumes
handled, whereas the volumes handled specifically
on behalf of our main client, Cargolux, fell by 4%.
Our 2012 volumes have shrunk to the levels of 2003,
i.e. the equivalent of 9 years of growth have been
lost, and they are down by 30% relative to the
peaks reached in 2007. Since 2011, Luxembourg air-
port has lost its position as the fifth platform for air
freight in Europe and currently oscillates between
seventh and eighth place, behind airports which
host the European platforms of operators special-
ising in express international courier and transpor-
tation services (UPS in Cologne, TNT in Liege and
DHL in Leipzig).
In 2012, the Cargocentre handled a volume of only
638,068 tons, versus 678,000 tons in 2011 (900,000
tons in 2007). Turnover fell by 6% to EUR 71 million.

Prospects for 2013
In light of the economic circumstances, which
remain fraught, a further 5% reduction in volumes
handled, to 603,000 tons, is likely in 2013.
However, a slight rise in volumes handled for the
period to end-February 2013 (+1%) combined with
widely varying trends for different clients (+8% for
Cargolux versus a fall for most of our other clients)
was witnessed.
On 8 April 2013 LuxairCARGO inaugurated its new
“Pharma & Healthcare Center” which provides
a capacity of 78,000 tons of freight per year. The
overall demand of the market for handling cargo at
carefully regulated temperatures according to strict
standards and constraints is expected to grow
sharply (+8% between 2010-2015) and these facil-
ities will position Luxembourg airport among the
most cutting-edge players in this field in Europe.
23

LuxairServices
To provide an unrivalled service to all passengers
and airlines transiting through Luxembourg air-
port and to ensure that all airport activities run
smoothly, while handling unforeseen events
quickly and efficiently – that is LuxairServices’
philosophy. Safety and security form an integral
part of the outstanding quality proposition
offered by this airport services specialist.
25Annual report 2012

LuxairServices BUY bye Luxembourg Airport Shops
LuxairServices is less visible than Luxair Luxem-
bourg Airlines, LuxairTours and LuxairCARGO, and
comprises, among other activities, the activities of
assistance to transit passengers and catering at Lux-
embourg Airport. It has therefore taken full advantage
of the growth of Luxembourg airport.
Reflecting the growth in traffic witnessed every-
where in Europe, passenger numbers at Findel
airport grew once more, exceeding nearly 1.9 mil-
lion passengers, while the number of commercial
aircraft movements remained steady at 39,000.
The Catering department, which offers catering ser-
vices not only to Luxair but also to the other airlines
that serve Luxembourg Airport, delivered 1,689,000
covers in 2012, i.e. 14% more than in 2011.
Since May 2008, LuxairGroup has been managing
the four BUY bye Luxembourg stores in Luxembourg
Airport.
The rebranding, which took place in autumn 2012,
strengthened and rejuvenated the brand image of
the BUY bye Luxembourg Airport Shops. The three
shops located in the airside section of the airport
are themed and sell specific types of products:
accessories, fashion, scents, wines, spirits and local
products.
The fourth store, located, in the main hall of the air-
port, offers a varied range of all these products and
is accessible to members of the public seven days
a week.

The Luxair fleet
In 2012, Luxair carried 1,374,810 passengers ove-
rall, up by 5.5% relative to 2011. Luxair operated
26,222 flights versus 27,653 the previous year.
The load factor rose slightly with an average of
73.4% for the year versus 72.4% in 2011.
The Luxair fleet was expanded by one aircraft in 2012
and come 31 December 2012 consisted of 6 Embraer
aircraft (ERJ145), 4 Boeing aircraft (3 737-700 and
1 737-800) and 6 Bombardier aircraft (Q400).
Three former generation Bombardier (Q400) air-
craft were sold during the 4th quarter of 2012
and at the start of 2013, whereas 4 new gene-
ration Bombardier (Q400) aircraft were added to
our fleet during the 2nd half of 2012.
In order to sustain the growth of LuxairTours,
offer more comfort to passengers and operate
more environment-friendly aircraft, 3 Boeing 737-800
were ordered from the US aircraft manufacturer.
The first was delivered in December 2012 and
the following two are due to be delivered in early
2014 and in early 2015.
27
Embraer ERJ 145
6 2012
6 2011
Bombardier Q400
6 2012
5 2011
Boeing 737-700
3 2012
3 2011
Boeing 737-800
2* 2012
1 2011
* One plane of XL Airways Germany as wet lease for the summer season

Operational results
LuxairGroup transported 1,374,810 passengers in
2012, an increase of 5.5% compared to 2011. Luxair-
Group operated 26,222 flights, versus 27,653 the
previous year. The seat load factor increased mar-
ginally to an annual average of 73.4% compared to
72.4% in 2011.
Luxair Luxembourg Airlines carried 804,198 passen-
gers in 2012, a decrease of 0.5% compared to 2011.
In view of the decreased capacity, the load factor
increased slightly from 58.2% to 60.7%.
In 2012, LuxairTours operated 4,724 flights (up 7.4%
from 2011) and carried 570,612 passengers (+15%).
The flights registered a load factor of 79.4% com-
pared to 80.8% in 2011.
The geographical split of customers was the fol-
lowing: France 35%, Luxembourg 31%, Belgium
10% and Germany 13%.
Volumes handled in the Cargocentre amounted to
only 638,068 tons, versus 678,000 in 2011 (900.000
tons in 2007). The number of aircraft movements
fell to 4,631 (down 8% from 2011).
All LuxairServices departments took advantage
of the increase in traffic at Findel airport which
exceeded the level of 1.9 million passengers.
Net turnover increased from EUR 428.6 million in
2011 to EUR 446.7 million in 2012. The net result
for 2012 is a loss of EUR 21.2 million, compared to
EUR 1.4 million profit in 2011.
Businesses with which Luxair S.A. has a shareholding relationship
Cargolux
Cargolux is a cargo airline based in Luxembourg, in
which Luxair S.A. holds a share of 43.42%, which is
consolidated using the equity method.
In 2012, Cargolux once again suffered the effects of
a weak economy. The volumes carried fell by 2% to
645,800 tons. The trading year ended with a loss
of USD 35 million after tax (compared with a loss of
USD 18 million in 2011), the earnings having been
affected by a 7.6% fall in turnover.
Luxfuel S.A
Luxfuel is based at Luxembourg Airport and
manages both a fuel supplies deposit and aircraft
refuelling. In 2012, 31,607 refuelling operations
were carried out, involving 449,575 m3
of jet fuel
and representing a drop of 8% compared to 2011.
There was no change in the scope of its business in
2012.
Euro Moselle Loisirs
On the 15th of November 2012, Luxair S.A. acquired
a 35% stake in the Euro Moselle Loisirs Group (EML).
EML manages around twenty travel agents in the
northeast of France and is the premier independent
distribution network in the Lorraine Nord region.
EML also operates a travel service for schools and
is the 4th largest operator in this sector in France.
Company turnover for 2012 came to EUR 33 million.

29
2012 2011
1,374,810 1,302,771 +6%
26,222 27,653 -5%
638,000 678,000 -6%
446.7 Mio 428.6 Mio +4%

Corporate social responsibility
Satisfying all its stakeholders is an explicit priority for
LuxairGroup which does not, however, distract it from
its current societal and environmental challenges.
Many sustainable development initiatives are already
firmly rooted in the company’s corporate values.

Satisfying consumers…
by developing services that put consumers first and meet all their needs by offering them an out-
standing level of service and ensuring their comfort and safety at all times.
Building on the human assets…
by securing jobs through an open and transparent dialogue with employees, by working continuously
to safeguard the health and ensure the safety of employees in the workplace, by building on the skills
and development of employees through training programmes and encouraging internal mobility.
Continuing to serve the local and regional economy…
by providing services that fully live up to the expectations of all the communities in Luxembourg and
the Greater Region, working in preference with local and regional suppliers, while ensuring that our
external service providers’ environmental good citizenship policies are compatible with ours.
Working to safeguard the environment…
by considering this issue while taking decision and while making investments, by improving opera-
tional procedures to minimise the environmental impact as far as possible and to conserve natural
resources.
LuxairGroup’s priorities

33Corporate social responsibility

In spite of the worldwide crisis which has hit
the airline sector hard, LuxairGroup has not
turned its back on current social and environ-
mental issues, whereas many initiatives aimed
at sustainable development were already deeply
rooted within the company.
Corporate governance is integrated in the
global strategy
It was for the purpose of consolidating this daily
commitment and to centralise actions linked
to sustainable development that a CSR Com-
mittee was created in June 2012 with the mis-
sion of developing a global strategy in terms of
social responsibility. The determination to abide
by the UNO Global Compact’s ten ethical princi-
ples gives practical backing to the LuxairGroup’s
approach. This internationally respected charter
binds signatory companies to “ten universally
accepted principles in the areas of human rights,
labour, environment and anti-corruption”. By
officially adhering to these ten principles, Luxair-
Group wants to enhance its commitment to
these values and its position as a responsible
company wanting to contribute to sustainable
and fair development.
LuxairGroup also decided to set down on paper
its ethical procedures and its corporate govern-
ance principles. The introduction of a Code of
Conduct and a Compliance Desk in 2011 thus
paved the way for a responsible procurement
policy as well as internal guidelines relating to
competition law and gift and rewards in 2012.
Like the Code of Conduct, these regulations are
initiated and processed internally by a Compli-
ance Officer charged with ensuring adherence
to these commitments and making sure that the
staff are well briefed in this respect, in particular
by means of in-house training.
LuxairGroup is fully aware that its role as a
responsible tour operator consists in promoting
tourism which respects both the culture of the
destinations served and the local populations,
which are often faced with the negative effects
of mass tourism. This is why LuxairGroup has
developed with Ecpat Luxembourg (End Child
Prostitution, Child Pornography and Trafficking
of Children) a partnership geared to the prin-
ciples of The Code, recognised by the World
Tourism Organization as the reference interna-
tional instrument for combating sexual tourism
involving children.
A sense of values which enables to move
forward even in times of crisis
It is thanks to the commitment of each and every
staff member that LuxairGroup has been able
to progress, offering quality services to meet all
expectations. There is no doubt that the path was
particularly arduous in 2012 because it meant
coming to terms with the new economic reality,
but the values of LuxairGroup have remained
unaffected. Passionate, responsible and caring
towards others: these qualities were demon-
strated by all of the LuxairGroup staff. More so
than ever. On the ground, on-board or at destina-
tion, LuxairGroup and its activities have steered a
steady course and continued to serve the regional
economy and all the communities of Luxembourg
and the Greater Region in the best possible way.
Build on long-term commitments
1
sorce: www.unglobalcompact.org

Likewise, by engaging in a constructive and
open social dialogue with its social partners,
LuxairGroup has not only been able to keep up
the level of employment, but has also partici-
pated in local economic development, through
taxes and social contributions and thanks to an
excellent collaboration with local suppliers and
service providers.
In the field of aviation, quality rhymes with
responsibility. Many measures linked to the
management of safety and security at the
company’s different sites and procedures
which go beyond the legal requirements are
applied for all operations carried out, inter-
nally or while providing services to third party
airlines for instance.
A working environment which favours
a collective dynamic
While LuxairGroup relies on a collective dynamic
to move the company forward, it is well aware
that each employee constitutes a key link in that
dynamic. This is why LuxairGroup wants to offer
its employees a working environment that ena-
bles them to fulfil their potential, find their place
and develop.
In order to enable each employee to juggle their
professional life and private life as best possible,
the company is open to organisational arrange-
ments such as part-time work, unpaid leave,
parental leave and internal mobility.
Particularly in times of crisis, LuxairGroup
attaches great importance to developing its
employees’ skills. Therefore dedicated training
courses have been developed, enabling them to
keep up with developments in the industry in
which LuxairGroup is active; generally speaking,
employees are able to access courses to broaden
the scope of their technical skills or to enhance
their personal development.
One innovation made possible in 2012 thanks
to a partnership forged with the Luxembourg
Red Cross was the implementation of a first aid
course for the animation team members of
LUXiClub, a club specially designed for children
of LuxairTours clients. This course was dispensed
by two certified trainers of the Luxembourg Red
Cross and involved a final test and a certification
recognised by the Ministry of the Interior.
In view of the constraints of very disparate
working hours between the company’s mul-
tiple activities, as well as in some departments
where the employees are obliged to work in
shifts, over the course of 2012 LuxairGroup
invested in a system which enables courses to
be followed online. Access to the courses has
been easier ever since. A complete catalogue of
courses can be consulted via the intranet page
of LuxairGroup.
Aside from the professional framework,
LuxairGroup also offers sports and cultural
activities and enables its employees to ben-
efit from commercial advantages linked to
the company’s industry. In this respect, in
2012 LuxairGroup issued a value booklet set-
ting out these benefits dedicated to LuxairGroup
employees.

Preserving the environment: always at the
heart of LuxairGroup’s concerns
With the aim of promoting greater respon-
sibility in terms of the environment, Luxair-
Group’s objectives in this respect had already
been clearly spelled out within the framework
of an environmental charter published in 2010,
as well as via adhesion to the MyEnergy pro-
gramme and through the SuperDrecksKëscht®
fir Betriber accreditation, aimed at optimising
energy efficiency.
An internal department dedicated to environ-
mental matters was charged with implementing
the principles laid down by the Environmental
Charter, backed by a risk management cell
charged with detecting any shortcomings and
taking the necessary measures to remedy them.
More systematic recourse to renewable ener-
gies and technologies which respect the envi-
ronment for ground operations or for developing
the group’s infrastructures remained a priority in
2012, as did the waste management procedures.
The ecological argument also weighs heavily in
the choice of the fleet. Operating a young fleet
constitutes a conscientious choice inasmuch as
each generation of aircraft or devices serving
to optimise flight operation helps to reduce
the environmental footprint as well as noise
pollution.
In 2012, the Q400 fleet which Luxair Luxem-
bourg Airlines operated up to now was replaced
by a new generation of aircraft of the same
type, but offering superior performance while
reducing environmental impact. The acquisition
of the new Boeing 737-800 in December 2012
was made with this in mind. As for the other air-
craft which make up the Luxair fleet, their inte-
riors have been completely readapted, not only
to offer passengers a better flying experience,
but also to improve energy efficiency. The rede-
sign of the Boeing cabins, for example, entailed
the installation of more comfortable and lighter
new-generation seats as well as the setting up
of a new, more compact audiovisual system,
thereby reducing the embedded weight and
consequently the environmental impact.
Concrete and sustainable social
commitments
Luxair has developed a concept of partnerships
based on the long term and a concrete approach
aimed at providing operational or logistical sup-
port to associations and NGOs. This approach
has demonstrated that humanitarian projects
can easily be integrated in a company’s day-
to-day management without harming its oper-
ation. This form of commitment is moreover
just as much appreciated by the associations as
more ‘classic’ financial support.
LuxairGroup currently has four partners which
are regularly offered various forms of support.
Depending on their needs, their awareness cam-
paigns are relayed on part of the Luxair flights and
via the company’s media tools. Special one-off
actions are carried out within the company and
several mechanisms set up a few years ago are
still in operation and optimised regularly.

The Catering department of LuxairServices, for
instance, continues to supply foodstuffs daily
to the Foyer Ulysse, an emergency reception
centre managed by Caritas Luxembourg.
Two of LuxairGroup’s partners, natur&ëmwelt
and Ecpat Luxembourg, once again benefited
from visibility on the LuxairTours stand at the
2012 Vakanz Fair and were offered the possibility
of relaying their actions and raising awareness
of their causes among several thousand visitors.
On the occasion of Donation Month 2012, an
annual campaign by the Red Cross enabling the
NGO to collect around 40% of its annual funds,
for the 4th year running the Luxair crews trans-
mitted the messages of the Red Cross and organ-
ised a collection onboard flights departing and
arriving in Luxembourg, thereby contributing to
boosting solidarity.
In 2012, LuxairGroup also backed Ecpat Luxem-
bourg within the framework of the organisation
of a conference aimed at presenting the results
of a national survey on the general public’s per-
ception of sexual exploitation of children and the
role of tourism professionals in the fight against
this scourge.
Lastly,thankstoitsconstantandrealsocialcommit-
ment, LuxairGroup was asked by IMS Luxembourg
(Institut pour le Mouvement Sociétal – a network
promoting the development of social responsibility
policies among Luxembourg companies) to pre-
sent a pilot project dedicated to the ‘Part&Act’ plat-
form created in 2012. The latter was intended to
enable companies wishing to contribute together
with non-governmental organisations or associa-
tions, to benefit from exchanges of ideas or good
practices. The LuxairGroup project highlighted on
this platform was that of ‘team building’ sessions
organised jointly with natur&ëmwelt. In 2009,
natur&ëmwelt and LuxairTours launched a part-
nership based on sharing in the financing of land
which the association wished to buy in order to
create biotopes for encouraging biodiversity. To
highlight this financial support, in 2012 LuxairGroup
offered its partner active participation in the reha-
bilitation of this land by means of ‘team building’
sessions. This new type of training, whose primary
aim was the optimisation of team working, at the
same time made it possible to participate actively
in a solidarity action.
In 2012, by becoming involved again with the day-
CARE project, LuxairCARGO strengthened its links
with Luxembourg’s schools and offered 40 pupils
the opportunity to familiarise themselves with
the professional world and discover the diversity
of jobs carried out within the company. In par-
allel, a donation was made for the benefit of the
NGO CARE, corresponding to the hours which the
pupils worked in the company. This initiative will
have made it possible both to contribute to future
training prospects in Luxembourg and to consoli-
date development projects in emerging countries.
Finally, other forms of support were provided on
a one-off basis to associations working for dif-
ferent causes supported by LuxairGroup.

Performance indicators:
for transparent monitoring of a responsible approach
Corporate governance 2011 2012
Number of CSR Committee meetings 0 4
For purposes of formalising and strengthening the LuxairGroup’s social responsibility approach, a CSR Committee
was set up in June 2012. It is due to meet four times per year. Its task is to implement the roadmap laid down by
the management committee, using key performance indicators to show up the changes made possible by means
of this commitment.
Environment 2011 2012
Ground vehicles consumption (fuel in Ltr) 750,052 670,919 -11%
Waste produced by the company (in tons) 2,252 2,177 -3%
Energy used (in Kw/h) 13,609,430 13,953,931 +3%
Water consumption (in m3
) 43,397 42,040 -3%
CO2
Emissions (in kg) 192,667,262 195,100,955 +1%
The gradual introduction of environmentally friendly vehicles into the ground fleet reduced fuel consumption by 11%
against 2011. Similarly, through the meticulous application of a waste management plan and the introduction of waste
sorting on all LuxairGroup sites, the total quantity of waste was cut by 3%. The 3% reduction in water consumption
was mainly the result of more efficient operating procedures within the various departments (cleaning aircraft and
vehicles for example) and raising employee awareness in tandem with daily monitoring. Regarding the operation of
flights, initiatives have been brought in to make flight plans more efficient to reduce fuel consumption. However, we
should note that the airline activities in general have increased, which explains the slight increase in CO2
emissions
against 2011.

Societal commitments 2011 2012
Number of specific programmes established with NGOs 4 4
LuxairGroup chose to develop long-term social partnerships based on concrete and regular actions. In order to allow a
serious and efficient follow-up of projects, the number of partnerships has been limited. LuxairGroup has opted to sup-
port internationally recognised non-governmental organisations with activities connected with those of LuxairGroup.
The types of support offered vary depending on the needs of these organisations, but in general financial support is
always reinforced with logistical support, implemented by passing on information, awareness campaigns, organising
fundraising actions or skills-based sponsorships.
Human resources management 2011 2012
Number of accidents related to work 286 289 +1%
Number of training hours per employee 40 33.5 -16%
Percentage of women in management positions 18 18
Percentage of women in top management positions 6 7 +1%
Number of people with disabilities 7 7
Number of people whose jobs have been adapted
due to a particular situation (e.g. health) 78 82 +5%
Percentage of people, among active staff, with disabilities or
whose jobs have been adapted due to a particular situation 4 4
Percentage of active staff members living in Luxembourg 65 65
Every day, a special health and safety team ensures that the health and safety rules are observed and that the proce-
dures laid down for preventing incidents and accidents are well implemented. It also strives to improve working con-
ditions in the various workplace functions. Amongst the subjects it considers are, for example, improving ergonomics
for physical tasks and improving procedures for handling dangerous goods. In spite of strict application of this policy,
the zero-risk option does not exist given the industry in which LuxairGroup performs. Thus, there may be slight varia-
tions from year to year in the number of accidents related to work. LuxairGroup keeps trainings up to speed and, as in
2011, it still places emphasis on developing its employees’ skills, to ensure everyone keeps their knowledge of industry
best practice up to standard. The difference in the number of trainings between 2011 and 2012 is explained by the fact
that new regulations affecting the whole airline industry were introduced in 2011. These required that additional train-
ings be arranged for the concerned departments. Although LuxairGroup attaches great importance to local and regional
values and cultures, it is also more widely committed to cultural diversity (there are no less than 43 nationalities
within LuxairGroup) and social diversity, while fostering the employment of disabled people and/or where possible
adapting jobs as part of an internal transfer process, for instance. On equality, LuxairGroup wants to commit long-term
to improving its stance. Including this criterion as a performance indicator lays down a formal marker of this determi-
nation. The following page gives an overview of this diversity by means of a snapshot of the business as it was in 2012.

People making up LuxairGroup:
snapshot of the company at 31 December 2012
35-39 years 0.9% / 21
Seniority
Active staff members
Permanent contracts 2,318
Fixed term contracts 39
Apprenticeships 14
Internships 3
ADEM* contracts 13
Grand total 2,387
15-19
35-39
25-29
45-49
55-59
20-24
40-44
30-34
50-54
60-65
Average age
Apprenticeships
4
Determined contracts
10
ADEM* contracts
8
Grand total
22
Change to
permanent contract
0.3%8.8%21.5%16.6%2.5% 3.9%15.6%20.4%10.0%0.3%
238
488
373
211
94
76
514
59
397
0-4 years
420
17.6%
23.5%
30.5%
13.8%
7.6%
5-9years
560
729 10-14 years
329
15-19 years
30-34 years 1.9% / 46
25-29 years 4.1% / 97
4 / 0.2% 40-44 years
Unpaid leave
25
Parental leave, maternity leave, unpaid leave
Maternity leave
47
Part-time
maternity leave
24
Parental leave
39
Grand total 135
Flexible or fixed
working times
FLEX
FIX
20%
80%
181
20-24years
*ADEM stands for employment agency

Ground
staff
88%
Crew
12%
Nationalities
Departures and hirings
Luxembourg
65% Germany
12.4%
Other European countries
0.2%
Belgium
2.6%
France
19.8%
F
B
L
D
EU
32% 22% 7%11% 4%24%
Luxembourgish
772
French
527
Others
170
German
256
Belgian
97
Portuguese
565
Departures
404 365
Hirings
Ground staff and crew Residence
Departures Hirings
Permanent contracts 79 28
Fixed term /
seasonal contracts 91 107
Apprenticeship 2 3
ADEM* contracts 2 13
Internships / students 213 214
Pre-pension / pension 17 -
Grand total
404 365

Consolidated assets LuxairGroup 2012 2011
A. Subscribed capital unpaid 0 0
I. Subscribed capital not called 0 0
II. Subscribed capital called but not paid 0 0
Goodwill of first consolidation 1,302,096 0
B. Formation expenses 2,810 8,430
C. Fixed assets 367,070,334 327,580,708
I. Intangible assets 6,197 6,197
1. Costs of research and development 0 0
2. Concessions, patents, licences, trade marks
and similar rights and assets, if they were 6,197 6,197
a. acquired for valuable consideration and need not be shown under C.I.3 6,197 6,197
b. created by the undertaking itself 0 0
3. Goodwill, to the extent that it was acquired for valuable consideration 0 0
4. Payments on account and intangible fixed assets under development 0 0
II. Tangible assets 238,633,836 188,753,727
1. Land and buildings 40,693,178 43,769,926
2. Plant and machinery 177,858,778 99,364,429
3. Other fixtures and fittings, tools and equipment 4,867,991 6,271,803
4. Payments on account and tangible assets in course of construction 15,213,889 39,347,569
III. Financial assets 128,430,301 138,820,784
1. Shares in affiliated undertakings 0 0
2. Loans to affiliated undertakings 0 0
3. Shares in undertakings with which the company is linked by virtue of participating interests 123,390,526 133,786,662
4. Loans to undertakings with which the company is linked by virtue of participating interests 0 0
5. Investments held as fixed assets 137,821 137,826
6. Loans and claims held as fixed assets 188,358 182,700
7. Own shares or own corporate units 4,713,596 4,713,596
D. Current assets 250,477,282 281,369,967
I. Stocks 2,733,994 1,987,175
1. Raw materials and consumables 774,960 389,246
2. Work and contracts in progress 0 0
3. Finished goods and goods for resale 1,959,034 1,597,929
4. Payments on account 0 0
II. Debtors 29,536,541 27,952,034
1. Trade debtors 17,589,358 15,148,871
a. becoming due and payable after less than one year 17,589,358 15,148,871
b. becoming due and payable after more than one year 0 0
2. Amounts owed by affiliated undertakings 0 0
a. becoming due and payable after less than one year 0 0
3. Amountsowedbyundertakingswithwhichthecompanyislinkedbyvirtueofparticipatinginterests 4,481,902 4,089,320
4. Other debtors 7,465,281 8,713,843
III. Investments 166,498,914 204,517,509
1. Shares in affiliated undertakings and in undertakings
with which the company is linked by virtue of participating interests 0 0
2. Own shares or own corporate units 0 0
3. Other investments 166,498,914 204,517,509
IV. Cash at bank and in hand 51,707,833 46,913,249
E. Prepayments 1,759,637 3,403,275
Total (Assets) 620,612,159 612,362,380

Consolidated liabilities LuxairGroup 2012 2011
A. Capital and reserves 341,674,898 362,549,409
I. Subscribed capital 13,750,000 13,750,000
II. Share premium and similar premiums 0 0
III. Revaluation reserves 0 0
IV. Reserves 307,117,152 311,733,528
1. Legal reserve 1,375,000 1,375,000
2. Reserve for own shares 4,713,596 4,713,596
3. Reserves provided for by the articles of association 0 0
4. Other reserves 242,562,995 242,562,995
5. Consolidated reserve 49,514,378 54,130,754
6. Negative goodwill 8,951,183 8,951,183
V. Profit or loss brought forward 7,622,532 4,038,185
VI. Result for the financial year (21,191,558) 1,443,530
VII. Interim dividends 0 0
VIII. Investment subsidies 0 0
IX. Immunised appreciation 53,932,175 53,932,175
X. Currency translation reserve (19,555,402) (22,348,009)
B. Subordinated creditors 0 0
C. Provisions 120,144,972 108,785,970
1. Provisions for pensions and similar obligations 25,952,927 24,921,625
2. Provisions for taxation 0 0
3. Other provisions 94,192,045 83,864,345
D. Non subordinated debts 137,177,577 118,319,144
1. Debenture loans 0 0
a. Convertible loans 0 0
i. becoming due and payable after less than one year 0 0
ii. becoming due and payable after more than one year 0 0
b. Non convertible loans 0 0
i. becoming due and payable after less than one year 0 0
ii. becoming due and payable after more than one year 0 0
2. Amounts owed to credit institutions 67,715,429 53,462,500
b. becoming due and payable after more than one year 52,642,301 39,675,000
3. Payments received on account of orders in so far as they
are not shown separately as deductions from stocks 0 0
4. Trade creditors 51,974,552 48,249,877
5. Bills of exchange payable 0 0
6. Amounts owed to affiliated undertakings 0 0
7. Amountsowedtoundertakingswithwhichthecompanyislinkedbyvirtueofparticipatinginterests 52,966 34,722
a. becoming due and payable after less than one year 52,966 34,722
8. Tax and social security 11,931,192 10,600,540
a. Tax 7,048,450 5,764,091
b. Social security 4,882,742 4,836,449
9. Other creditors 5,503,438 5,971,505
E. Deferred income 21,614,711 22,707,857
Total (Liabilities) 620,612,159 612,362,380
Expressed in euros.
43

Charges 2012 2011
1. Raw materials and consumables 9,596,467 9,423,670
2. Other external charges 301,041,484 279,928,425
3. Staff costs 143,585,771 139,253,770
a. Wages and salaries 122,071,715 119,168,414
b. Social security costs 17,538,737 16,344,734
c. Social security costs relating to pensions 3,928,497 3,693,427
d. Other social security costs 46,822 47,195
4. Value adjustments 35,309,229 30,272,794
a. on formation expenses and on tangible and intangible fixed assets 35,309,229 30,272,794
b. on elements of current assets 0 0
5. Other operating charges 1,435,791 1,687,201
6. Value adjustments and fair value adjustments on financial fixed assets 220,866 572,057
7. Value adjustments and fair value adjustments on financial current assets.
Loss on disposal of transferable securities 0 0
8. Interest payable and similar charges 2,741,925 2,765,076
a. concerning affiliated undertakings 0 0
b. other interest payable and similar charges 2,741,925 2,765,076
Share of profit of associates 10,173,787 0
9. Extraordinary charges 750,423 51,031,079
10. Tax on profit or loss 1,275 109,029
11. Other taxes not included in the previous caption 1,005,420 1,434,524
12. Profit for the financial year 0 1,443,530
Total Charges 504,857,018 516,486,631
Income 2012 2011
1. Net turnover 446,743,337 428,622,711
2. Change in inventories of finished goods and of work and contracts in progress 0 0
3. Fixed assets under development 0 0
4. Reversal of value adjustments 0 0
a. on formation expenses and on tangible and intangible fixed assets 0 0
b. on elements of current assets 0 0
5. Other operating income 19,721,704 28,086,478
6. Income from financial fixed assets 0 0
a. derived from affiliated undertakings 0 0
b. other income from participating interests 0 0
7. Income from financial current assets 0 0
b. other income 0 0
8. Other interests and other financial income 2,609,663 5,831,717
b. other interest receivable and similar income 2,609,663 5,831,717
Share of profit of associates 0 768,816
9. Extraordinary income 14,590,756 53,176,909
10. Loss for the financial year 21,191,558 0
Total Income 504,857,018 516,486,631
For the year ended 31 December 2012. Expressed in euros
Consolidated income statement

Operational data 2012 2011 2010
Passengers (total LuxairGroup) * 1,374,810 1,302,771 1,247,554
Revenue Passengers-km (RPK) (mio) * (total) 1,660 1,521 1,470
Seat Load Factor 73.4% 72.4% 73.8%
Number of meals served (catering) 1,689,000 1,485,000 1,486,000
Number of passengers assisted at Luxembourg airport 1,919,880 1,795,255 1,630,165
Number of flight hours (for entire LG’s fleet) 37,291 38,147 35,768
Freight handled (tons) 638,068 677,913 735,329
Personnel (on average) 2,309 2,344 2,317
Operational fleet (on 31 December)
Boeing 737-800 2** 1 1
Boeing 737-700 3 3 3
Embraer ERJ 145 6 6 6
Embraer ERJ 135 - 1 2
Bombardier Q400 6 5 4
* The total includes charter flights operated by LuxairGroup
** One plane of XL Airways Germany as wet lease for the summer season
45

Auditor’s report
To the Shareholders of Luxair Société Luxembour-
geoise de Navigation Aérienne S.A.
Report on the consolidated annual accounts
We have audited the accompanying consolidated
annual accounts of Luxair, Société Luxembour-
geoise de Navigation Aérienne S.A., which com-
prise the balance sheet as at 31 December 2012, the
profit and loss account for the year then ended and
a summary of significant accounting policies and
other explanatory information.
Board of Directors’ responsibility for the con-
solidated annual accounts
The Board of Directors is responsible for the prep-
aration and fair presentation of these consolidated
annual accounts in accordance with Luxembourg
legal and regulatory requirements relating to the
preparation of the consolidated annual accounts,
and for such internal control as the Board of Direc-
tors determines is necessary to enable the prep-
aration of consolidated annual accounts that are
free from material misstatement, whether due to
fraud or error.
Responsibility of the “Réviseur d’entreprises
agréé”
Our responsibility is to express an opinion on
these consolidated annual accounts based on
our audit. We conducted our audit in accord-
ance with International Standards on Auditing as
adopted for Luxembourg by the “Commission de
Surveillance du Secteur Financier”. Those stand-
ards require that we comply with ethical require-
ments and plan and perform the audit to obtain
reasonable assurance about whether the con-
solidated annual accounts are free from material
misstatement.
An audit involves performing procedures to
obtain audit evidence about the amounts and dis-
closures in the consolidated annual accounts. The
procedures selected depend on the judgment of
the “Réviseur d’entreprises agréé”, including the
assessment of the risks of material misstatement
of the consolidated annual accounts, whether
due to fraud or error. In making those risk assess-
ments, the “Réviseur d’entreprises agréé” con-
siders internal control relevant to the entity’s

preparation and fair presentation of the consol-
idated annual accounts in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating
the appropriateness of accounting policies used
and the reasonableness of accounting estimates
made by the Board of Directors, as well as evalu-
ating the overall presentation of the consolidated
annual accounts.
We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the consolidated annual accounts
give a true and fair view of the financial position
of Luxair, Société Luxembourgeoise de Navigation
Aérienne S.A. as of 31 December 2012, and of the
results of its operations for the year then ended
in accordance with Luxembourg legal and regula-
tory requirements relating to the preparation of
the consolidated annual accounts.
Report on other legal and regulator requirements
The management report, which is the responsibility of
the Board of Directors, is consistent with the consoli-
dated annual accounts.
Luxembourg, 26 April 2013
PricewaterhouseCoopers, Société coopérative
Represented by Luc Henzig
47

Luxair

Recommended

Recommended

More Related Content

Similar to Luxair

Similar to Luxair (20)

More from Marc Thill

More from Marc Thill (20)

Luxair