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Annual report and accounts 2016

228 Operating

228 Operating and financial statistics Total Group operations 2016 2015 1 2014 2013 2012 Traffic and capacity Available seat km (ASK) million 298,431 272,702 251,931 230,573 219,172 Revenue passenger km (RPK) million 243,474 221,996 202,562 186,304 176,102 Cargo tonne km (CTK) million 5,454 5,293 5,453 5,653 6,080 Passengers carried ‘000 100,675 88,333 77,334 67,224 54,600 Tonnes of cargo carried ‘000 849 874 897 928 1,011 Sectors 26,508 660,438 599,624 538,644 453,100 Block hours hours 64,269 1,867,905 1,712,506 1,573,900 1,419,601 Operations Average manpower equivalent 63,387 60,862 59,484 60,089 59,574 Aircraft in service at year end 548 529 459 431 377 Aircraft utilisation – Longhaul (average hours per aircraft per day) hours 13.5 13.5 13.5 13.3 13.6 Aircraft utilisation – Shorthaul (average hours per aircraft per day) hours 8.8 9.1 8.8 8.4 8.2 Punctuality – within 15 minutes % 77.2 80.2 80.9 79.2 77.2 Regularity % 99.3 99.4 99.5 99.0 99.0 Financial Passenger unit revenue per ASK (PASK) €cents 6.68 7.46 7.08 7.05 7.01 Passenger revenue per RPK €cents 8.18 9.16 8.80 8.73 8.73 Cargo revenue per CTK €cents 18.74 20.67 18.19 18.98 20.02 Total revenue per ASK (RASK) €cents 7.56 8.38 8.01 8.10 8.27 Average fuel price ($cents/US gallon) 133.38 175.86 300.16 314.15 320.33 Fuel cost per ASK €cents 1.63 2.23 2.38 2.58 2.78 Operating profit before depreciation, amortisation and rentals (EBITDAR) €million 4,581 4,301 3,137 2,258 1,480 Total operating expenditure excluding fuel per ASK (CASK ex. fuel) €cents 5.08 5.30 5.08 5.18 5.49 Operating margin % 11.2 10.2 6.9 4.1 (0.1) Lease adjusted operating margin % 12.3 11.2 7.8 5.0 0.7 Total operating expenditure per ASK (CASK) €cents 6.71 7.53 7.45 7.77 8.28 Dividend cover times 4.1 3.8 n/a n/a n/a Interest cover 2 times 10.8 8.2 6.4 2.8 (0.2) Net debt €million 2,087 2,774 1,673 1,489 1,889 Equity 2 €million 7,721 7,328 3,793 4,216 2,978 Adjusted gearing % 51 54 51 50 51 Adjusted net debt to EBITDAR times 1.8 1.9 1.9 2.5 3.6 1 Aer Lingus Group plc results have been consolidated from August 18, 2015. 2 Restated for amendment to IAS19 ‘Employee benefits’ accounting standard. n/a: not available INTERNATIONAL AIRLINES GROUP Annual Report and Accounts 2016

Shareholder information Registered office International Consolidated Airlines Group, S.A El Caserío, Iberia Zona Industrial nº 2 (La Muñoza) Camino de La Muñoza, s/n, 28042 Madrid, Spain. Madrid Commercial Registrar tomo 27312, folio 11, hoja M-492129 C.I.F. A85845535 UK Branch registered address International Airlines Group Waterside (HAA2), PO Box 365, Speedbird way Harmondsworth, UB7 0GB Registered in England & Wales: BR014868 Registrar Computershare Investor Services PLC For enquiries relating to shares held through the Corporate Sponsored Nominee (UK share register): Tel: +44 370 702 0110 Email: web.queries@computershare.co.uk Online: www.investorcentre.co.uk/iag IAG Investor relations team UK: +44 20 8564 2900; or Spain: +34 91 312 6440 Institutional investors: investor.relations@iairgroup.com Private shareholders: shareholder.services@iairgroup.com American Depositary Receipt program IAG has a Sponsored Level 1 American Depositary Receipt (ADR) facility that trades on the OTC market in the US (see www.otcmarkets.com). Deutsche Bank is the ADR depositary bank. For shareholder enquiries, contact: Deutsche Bank Trust Company Americas c/o American Stock Transfer & Trust Company Peck Slip Station P.O. Box 2050 New York, NY 10272-2050, USA Email: DB@amstock.com Toll free: +1 800 301 3517 International: +1 718 921 8137 Online: www.adr.db.com Financial calendar Financial year end: December 31, 2016 Q1 results: May 5, 2017 Half year results: July 28, 2017 Q3 results: October 27, 2017 Other key dates can be found on our website: www.iairgroup.com ShareGift UK shareholders with a small number of shares may like to consider donating their shares to charity under ShareGift, administered by Orr Mackintosh Foundation. Details are available from the UK Registrar. Certain statements included in this report are forward-looking and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can typically be identified by the use of forward-looking terminology, such as “expects”, “may”, “will”, “could”, “should”, “intends”, “plans”, “predicts”, “envisages” or “anticipates” and include, without limitation, any projections relating to results of operations and financial conditions of International Consolidated Airlines Group S.A. and its subsidiary undertakings from time to time (the ‘Group’), as well as plans and objectives for future operations, expected future revenues, financing plans, expected expenditures and divestments relating to the Group and discussions of the Group’s Business plan. All forward-looking statements in this report are based upon information known to the Group on the date of this report. The Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. It is not reasonably possible to itemise all of the many factors and specific events that could cause the forward-looking statements in this report to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Further information on the primary risks of the business and the risk management process of the Group is set out in the risk management and risk factors section of the report.

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    INTERNATIONAL AIRLINES GROUP The be

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    Strategic report “2016 was a chal

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    3 Chairman’s letter A firm focus

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    5 Q A And, importantly, we have to

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    7 IAG combines the leading airlines

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    9 Operating highlights British Airw

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    11 Business model and strategy Maxi

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    13 4 5 6 Grow share of Europeto-Afr

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    15 The performance indicators prese

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    17 IT This year significant work ha

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    19 and additional summer aircraft a

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    21 This is why we have recently lau

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    23 Aer Lingus Making the most of ou

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    25 IAG Cargo Resilient performance

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    27 Risk management and principal ri

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    29 Risk Potential impact Management

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    31 Risk Potential impact Management

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    33 Financial overview A significant

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    35 However, continued weakness in t

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    37 Exchange impact before exception

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    39 By supplier cost category: Handl

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    41 Capacity 21% 11% 8% 60% Operatin

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    43 Cash flow € million 2016 2015

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    45 Sustainability Committed to our

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    47 UN Sustainable Development Goals

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    49 Aspect and link to SDGs Noise Wa

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    51 Air quality - electric tug trial

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    “2016 has really tested the Group

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    55 I think we can be very proud tha

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    57 James Lawrence Non-Executive Dir

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    59 The Group operating companies Av

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    61 The Board Secretary is Álvaro L

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    63 Induction programme New director

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    65 Other statutory information Dire

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    67 The significant shareholders of

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    69 Report of the Audit and Complian

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    71 ICFR, which is a Spanish Corpora

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    73 The Committee’s responsibiliti

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    75 Report of the Safety Committee D

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    77 Despite a growth in share price

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    79 The table below summarises the m

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    81 Malus and Clawback Provisions Th

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    83 Service contracts and exit payme

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    85 Annual Remuneration Report Commi

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    87 Additional explanations in respe

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    89 IAG PSP Award 2014 The IAG PSP a

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    91 Statement of Voting The table be

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    93 IAG’s total shareholder return

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    95 The second performance condition

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    97 Incentive Award Deferral Plan Th

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    Strategic Financial Statements Repo

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    101 Consolidated statement of other

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    103 Consolidated cash flow statemen

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    105 Consolidated statement of chang

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    107 the Income statement. All other

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    109 b Other interest-bearing deposi

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    111 Employee leaving indemnities an

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    113 IAG has initiated a project to

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    115 For the year to December 31, 20

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    117 7 Auditors’ remuneration The

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    119 For the year to December 31, 20

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    121 c Reconciliation of the total t

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    123 13 Property, plant and equipmen

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    125 16 Intangible assets and impair

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    127 Basis for calculating recoverab

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    129 19 Trade and other receivables

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    131 2 Floating rate euro mortgage l

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    133 depending on whether the employ

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    135 At December 31, 2016 the Group

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    137 27 Financial instruments a Fina

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    139 The carrying amounts and fair v

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    141 December 31, 2015 Financial ins

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    143 31 Other reserves and non-contr

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    145 Defined benefit schemes i. APS

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    147 d Fair value of scheme assets A

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    149 e Present value of scheme liabi

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    151 33 Contingent liabilities and g

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    Spanish corporate governance report

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    155 Indicate the most significant m

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    157 Explain any significant changes

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    159 B. SHAREHOLDERS’ MEETING B.1

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    161 C.1.3 Complete the following ta

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    163 Individual or corporate name of

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    165 When reviewing board appointmen

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    167 C.1.10 Indicate what powers, if

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    169 Selection of directors In ident

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    171 C.1.20 ter List any business re

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    173 C.1.31 Indicate whether the con

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    175 C.1.36 No Outgoing auditor Indi

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