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About this report
Reporting standards GRI 4.0
Reporting period 2016.1~2016.12
Reporting boundary Korean Air’s business premises at homeand abroad, including the headquarters in Seoul
Reporting cycle Every year
Third-party assurance Korea Productivity Center
Significant changes •Reporting activities conductedfrom the previous year in line with the UN’s Sustainable
Development Goals
•Issuing the report in an interactive PDF format replacing a printed version
Furtherinformation
Contact information
Korean Air Environment Team
02)2656-5512
4Photo by Jung Hyun-jin in obertraun, Austria – Among selections during the 23rd Annual Korean Air Travel Photo Contest
Introduction 05
06
08
10
11
12
13
BOARDING PASS
Austria is a landlocked country located at the
center of continental Europe. Its total land area is
smaller than that of South Korea, and two-thirds
is a mountainous region spanning the eastern
Alps. With a population of 8.45 million and a per
capita GDP of 37,000 euros, it is one of the richest
countries in the world. obertraun is a quiet Alpine
lake town with a stunning natural landscape.2017 Korean Air sustainability report
Austria
5
Letter from the CEO
Distinguished stakeholders,
In 2016, Korean Air achieved an operating profit of KRW 1.079 trillion thanks in part
to an improved business environment reflecting the downward stabilization of inter-
national oil prices and expansion of air travel demand, but also to the hard work and
dedication of Koran Air employees and the unwavering support from stakeholders.
Despite management challenges posed by global economic uncertainties such as
US interest rate hikes and the UK's Brexit vote, our stakeholders’ ongoing support and
interest helped us to achieve this considerable surplus, for which I am deeply grateful
to all of you.
Korean Air has strived to provide safe air travel and high-quality service to our cus-
tomers. Our unceasing efforts at improvement and innovation have helped to us
grow into a leading global airline.
In 2017, Korean Air is aiming to achieve KRW 12 trillion in sales under a management
policy of establishing a sustainable business structure that generates profits even in a
rapidly shifting business environment. We will continue our pursuit of safety, custom-
er satisfaction, and shareholder value.
Firstly, safety is our top priority, and this is irreplaceable.
We promise to safeguard our customers during flight by focusing all of our capa-
bilities. Our internal safety guidelines have been updated to provide a basis for our
utmost efforts to prevent in-flight disturbances and sternly respond to other acts that
could hamper flight safety.
Customer happiness is the loftiest value that Korean Air pursues.
We will continue our efforts to provide customers with the highest level of satisfaction
by offering segmented and differentiated services tailored to evolving customer needs.
In addition, efforts will also be made through management by communication to cre-
ate a positive corporate culture that can in turn inspire happiness in our customers.
Shareholder value will be further promoted.
This year, concerns remain surrounding US interest rate hikes, fluctuations in the Ko-
rean won exchange rate against major currencies, and rising oil prices. To actively
respond to such challenges, next-generation aircraft will be utilized for operational
efficiency, and productivity will be increased through improved business processes.
The Boeing B787-9, introduced to Korea earlier this year, is a next-generation aircraft
boasting significantly higher fuel efficiency and an improved cabin environment. It
is an eco-friendly airplane with a greatly reduced carbon footprint. The B787-9 is ex-
pected to be used for exploring routes with a high growth potential and to increase
sales, thereby contributing to shareholder value and raising Korea’s national compet-
itiveness.
Sustainability management is every company's responsibility and a com-
mitment we make to society and our customers.
Our efforts to achieve 'Excellence in Flight' will continue based on the establishment
of a stable profitable base by adhering strictly to the fundamentals of safety and ser-
vice and by responding to challenges with agility.
At the same time, we will focus on communicating with our stakeholders so that
social value can be created and shared. Korean Air will remain a trusted friend who
brings happiness and joy, and we look forward to your advice and support. Thank you.
August 2017
Cho Yang-ho
Chairman & CEO Korean Air
6
Company overview
ProfileEstablished in 1969 and celebrating its 48th anniversary this year,
Korean Air has grown into a global carrier with 160 aircraft as of the
end of 2016. In addition to passenger and cargo transportation ser-
vices, its business scope has expanded to now range from in-flight
meals and duty-free shopping to the aerospace industry, including
aircraft parts development and maintenance.
Operating revenue by business(KRW 100 million) Air fleet (aircraft)
Aircraft type Passenger Cargo
A380-800 10 -
B747-8I 7 -
B747-400 6 13
B747-8F - 7
B777-300ER/300/200 38 -
A330-200/300 29 -
B777F - 11
B737-800/900/900ER 39 -
Total : 160 129 31
* Executives, expatriates and locally-hired and temporary employees included
2014 2015 2016
Air Transportation ** 107,929 103,011 105,056
Aerospace 7,965 9,135 8,989
Catering 910 938 984
Total 116,804 113,084 115,029
** The air transportation revenue includes Hotel & Limousine operations, where Ko-rean Air made in-kind contribution through its subsidiary, Aviation Total Services co., ltd. (Same classification applicable to the Audit Report)
Air Transportation
105,056
Aerospace
8,989
Catering
984
Operating Revenue in 2016
KRW 11,502 billion
Transportation in 2016 (10,000 passengers / 10,000 tons)
Passengers Cargo
International routes 1,898 150
Domestic route 786 7
Total 2,684 157
Company name Korean Air Lines Co., Ltd.
Headquarters 260 Haneul-gil Gangseo-gu, Seoul, Korea
Phone number 02-2656-7114
Website http://www.koreanair.com
Business areasPassenger & cargo transportation, aerospace,
catering services and in-flight sales
Sales KRW 11,502 billion
Employees 20,956 *
Air Fleet 160 aircraft
Routes 132 cities in 46 countries
Revenue passengers
carried in 201626.84 million
Revenue freight
carried in 20161.57 million tons
SubsidiariesSee the disclosures by Korean Air on http://
dart.fss.or.kr
(As of Dec. 31, 2016)
7
Sao Paulo
Los Angeles
New York
AtlantaDallas
San Francisco
Seattle
Washington D.C.
Honolulu
Las Vegas
Miami
Lima
Anchorage
Vancouver
Toronto
Houston
Chicago
Brisbane
Auckland
Nadi
MadridZaragoza Rome
GuamCebu
DubaiRiyadh
Jeddah
Nairobi
Male
ColomboKuala Lumpur
JakartaDenpasar
Kathmandu
Mumbai
Irkutsk
Tashkent
Tel Aviv
CairoHanoi
Chiang Mai
Siem Reap
Ho Chi Minh
Da NangPhnom Penh
PhuketPenang
ManilaNha Trang
TaipeiHong Konng
Palau
Navoi
Ulaanbaarar
Singapore
Yangon
Istabul
Vladivostok
Bangkok
London
BaselParis
Amsterdam
oslo
Kobenhavn
Praha
ViennaFrankfurt
ZurichMilan
Moscow
Saint PetersburgStockholm
Sydney
Destinations in Southeast Asia
24 cities
Destinations in Europe, Middle East and Africa
27 cities
Destinations in Americas
19 citiesDestinations in Japan
16 cities
Destinations in Korea
13 cities
Global NetworkSKYTEAM SkyTeam, a global airline alliance formed in June 2000, currently consists of 20 member airlines, including Korean Air, Garuda Indonesia,
DELTA, MEA, Vietnam Airlines, SAUDIA, XIAMENAIR, AerolineasArgentinas, AERoMEXICo, AERoFLoT, Alitalia, AirEuropa, AIRFRANCE, China Eastern, China
Southern, China Airlines, Czech Airlines, Kenya Airways, KLM, and TARoM. Every day, 17,000 SkyTeam flights take off for 1,062 destinations in 177 countries.
This global network allows customers multiple flight options on member airlines and wider benefits, such as earning and redeeming mileage and using
airport lounges and joint services provided by all member airlines. In addition, SkyTeam members clearly recognize the importance of corporate social
responsibility, and are collaborating to promote sustainable, green corporate policies.
Destinations in China
29 cities
Destinations in Oceania
4 cities
Flight Routes As of December 2016, Korean Air is operating passenger
and cargo routes between 13 cities in Korea and 119 cit-
ies in 45 countries worldwide. The infrastructure we have
established around the globe will provide a basis for syn-
ergy effects in related businesses, and furthermore will
raise the international profile of Korea.
Passengers and cargo
Cargo-only
Korean Air Flight Route Map
8
Vision & Management Philosophy
Operational Excellence
•�Putting safety as the first priority
in operation
•�Improving profitability through
year-round cost reduction efforts
•�Modernizing fleet continuously for
higher operational efficiency
• Expanding a global network by
tapping into SkyTeam resources
•�Strengthening management
infrastructure with company-wide
IT integration
•�Promoting education/training
programs for fostering talent from
around the globe
Service Excellence
•�Strengthening service
competitiveness by developing
Korean Air’s original services
•�Offering high-end and differentiated
services
• Providing high-end seats such as
KOSMO Suites and Prestige Sleepers,
and upgrading AVOD/IFE
•�Enhancing corporate image as a
global leading service brand
•�Offering top-tier service on a par
with global standards backed by the
SkyTeam alliance
•�Continuing social contribution
activities through Global CSR projects
Innovative Excellence
• Establishing a corporate culture that encourages creativity and free thinking
•Creating a democratic and collaborative workplace
•Fostering talent from around the globe
•Removing the silo effect and promoting change and innovation
•Developing profitable new business models
Vision Mission
To be a Respected Leader in the World Airline Community
EXCELLENCE IN FLIGHT
OPERATIONALEXCELLENCE
SERVICEEXCELLENCE
INNOVATIVEEXCELLENCE
9
Vision & Management Philosophy
Management Philosophy
Change-embracing Management
Creating an innovative and change-embracing corporate culture•�Encouraging to have a progressive and aspiring mind
•�Creating an organizational culture that embraces change
•�Pursuing future-oriented business reform by focusing on core competences
System-based Management
Operational management based on expertise and autonomy
•�Promoting a mutual respect of expertise
in different fields
•Making a system-based decision
•�Building a harmonious atmosphere
for creative solutions
Adhering to standards and principles•Establishing globally-recognized standards and principles
•Pursuing standard and principle-based flexibility in business
•�Eliminating shortcuts and inefficiency in business operations
Principle-based Management
Developing future growth engines with competent human resources
•Attracting the best and brightest from around the globe
•Continuing a bold investment in nurturing talent
•�Creating a corporate culture that pairs individual
competency-building with organizational growth
Talent Recognition
Enhancing customer loyalty with highest possible customer satisfaction
•�Taking a comprehensive and systematic
approach toward customers
•�Responding promptly to changing customer needs
•�Maximizing the customer value through Management by
Wandering About (MBWA) practices
Customer-oriented Management
10
Sustainable Value Chain
Output • Monthly operating hours per
aircraft: 346 hours/month
•operation ratio
80.7%•Sales
KRW 11,502 billion
•operating profit
KRW 1,079 billion
•Benefits distributed to stakeholders
KRW 6,797.2 billion
•Personal information leakage:
Zero case
•A ban on transportation of shark fins
•Greenhouse gas (GHG) emissions
13,394,508tCo2
•Amount of reduced GHG emissions
413,613 tCo2
•Global afforestation
- Baganuur, Mongolia 44ha
110,000trees
- Kubuqi, China 461ha
1,360,000 trees
R & D Planning Scheduling Marketing & Sales Pre-departure In-flight Arrival After-sales service & analysis
Major Activi-
ties
•New routes (aviation agreements, slot, market research, demand forecast, and profitability analysis)•Customer service• Special cargo service • In-flight meals•Aerospace R&D
•Flight route planning•Maintenance planning•Material planning•Flight operation planning•Crew planning
•Aircraft scheduling•Scheduled maintenance•Flight Planning•Crew scheduling
•Pricing policy/strategy•IT service offering• Load factor management•Cargo sales•Advertisement •Marketing•Branding strategy•Travel agency programs
•Maintenance •Refueling• In-flight meals loading•Cargo loading• Baggage loading•Passenger check-in •Airport lounge service• Dangerous goods handling
•operational control - Air traffic control - Aviation weather - Aviation communication• In-flight service
- In-flight meals - In-flight entertainment - In-flight duty-free shop
•Baggage check-in service• Transfer service•In-flight cleaning/disinfection
•Lost/delayed/damaged baggage service•Addressing service complaints
Sustain-ability Activi-
ties
•Better accessibility and connectivity for people/logistics•Promotion of exchanges between
countries and of the regional economy, and job creation•Product design considering
environmental impacts (ex. Sharklet)•Global promotion of Korean
in-flight meals•Contracts with local farms
for fresh food supply
•Procurement of next generation aircraft and engines
•Employee safety and human rights protection•Balance between work and life•Employee training • Fair performance evaluation
•Compliance with fair trade•Cause-related marketing•Customer-engaged programs
•Internet mobile service system implementation•Service for passengers with special
needs and Family Care Service•Airfare discount for patriots and
veterans •Customer’s personal data protection•Biodiversity protection
•Strengthened product responsibility and safety•In-flight disturbance management•In-flight first aid•Response to climate change issues•Environmental impact reduction
•Infectious disease control •Customer rights protection•Customer service improvement •Corporate social responsibility
activities
Input •R&D expenses: KRW 110,324 million (0.96% of sales)
•Aircraft investment: KRW 1,366.9 billion •Average fleet age: 9.2 years
•Training hours per employee: 89 •Employees who received scholarships
for graduate schools: 140
•Ethics management training: 72,996 employees
• Jet fuel consumption 4,174,377 ton•Energy consumption 2,054,635 GJ
•Employee volunteer hours: 1.9•Social contribution expenses:
KRW 9,227 million
Service development Planning & Scheduling Flight operation Post-flight operation
11
UN’s Sustainable Development Goals (SDGs)
Korean Air’s efforts for SDGs
As the United Nations announced Sustainable Development Goals (SDGs) following Millennium Development Goals
(MDGs) that the global community should achieve, Korean Airline has developed and implemented solutions to achieve
SDGs* thereby discovering new opportunities for a sustainable growth.
*SDGs are global agenda spearheaded by the UN from this year to 2030, consisting of 17 goals, such as climate action, economic growth, job creation, gender equality and women's empowerment, and 169 targets.
Goal 3. Ensure healthy lives and promote wellbeing for all at all ages
Goal 4. Ensure inclusive and quality education for all and promote lifelong learning
Goal 5. Achieve gender equality and empower all women and girls
Goal 7. Ensure access to affordable, reliable, sustainable, and modern energy for all
Goal 8. Promote inclusive and sustainable economic growth, employment and decent work for all
•Supporting speedy cargo transportation such as vaccines and medicines: transportation for organ transplants
•Making efforts to prevent the spread of infectious disease
• Training air logistics specialists in Jungseok College, Korea’s first tech school run by a private company
• Working on the‘愛心 (Caring Mind)’ project in China to build and donate libraries to underdeveloped provinces
•Promoting gender equality in employment and promotion
•operating a maternity protection system
• Launching a pink ribbon campaign to fight against breast cancer
•Responding to ‘CoRSIA (Carbon offsetting and Reduction Scheme for International Aviation)’ for carbon-neutral growth after 2020
•Reviewing the introduction of sustainable alternative fuels (biofuel)
• Implementing activities to encourage sustainable tourism by promoting local culture and products
•Contributing to economic growth and value creation through tourism, employment, and cargo transportation
Goal 11. Make cities inclusive, safe, resilient and sustainable
Goal 12. Ensure sustainable consumption and production pattern
Goal 13. Take urgent action to combat climate change and its impacts
Goal 15. Sustainably manage forests, combat desertification, halt and reverse land degradation, halt biodiversity loss
•Conducting Habitat activities
•Implementing activities to protect the world’s cultural and natural heritage
•Conducting activities to reduce air pollution, waste and noise nearby the airport
•Transporting relief items to areas hit by natural disasters
• Improving traffic safety for passengers with special needs (women, children, people with disabilities, and the elderly)
•Recycling resources related to in-flight service
•Applying eco-design to in-flight service items
•Adopting advanced eco-friendly aircraft and making aircraft lightweight
•Conducting activities to respond to climate change through fuel management
•offsetting GHG emissions by purchasing permits
• Designing and manufacturing aircraft structures with improved fuel efficiency such as Sharklets
• Implementing standards to prevent illegal transportation of wildlife
•Banning the transportation of shark fins
•Afforestation in Baganuur, Mongolia and in Kubuqi, China
12
Materiality Assessment Process
Reporting issue selection process
2017 Material issues
2016issues
2017issues
Management
Employees
Customers and Safety
Environment
Local communities
*GRI and ISo 26000 applied
Ensuring operational safety
1 Enhancing safety checks and security
2Developing and offering customer-oriented service
4
Managing energy use and GHG emissions
5
Conducting social contribution activities reflecting industry characteristics
6
Adopting eco-friendly aircraft and equipment
9
Creating a flexible and family-friendly corporate culture
7
Enhancing brand reputation and corporate image
3
Protecting customers’ personal data and tightening information security
10
Further involvement of employees and stakeholders in social contribution activities
8
Leve
l of s
take
hold
er in
tere
st
•Review of internal data including company vision and strategy
•Media research and analysis
•Identifying industrial issues
•Benchmarking of best practices on sustainable management
•Value chain activities
• Impact on stakeholders and sustainability
•Impact on business
•Validation of selected material issues
•Level of impact
•Potential impact
•Level of stakeholder interest
Level of impact on business
STEP 1. A pool of selected issues STEP 2. Materiality assessment STEP 3. Assessment validation
Stakeholder interviews Survey of stakeholders (Mar.22 - Apr. 5, 2017; 307 participants) Third-party assurance
Step 1 Level of interest
Step 2 Level of impor-tance
13
Stakeholder Engagement
Stakeholder Groups
Subsidiaries
SuppliersLabor unions
Central government
Local governments
Customers
The disadvantaged
Non-profit organizations
Local communities
Temporary employees
and Interns
Research institutes
(business-related)
Media
Legally,
fi nancially or operationally responsible for Korean Air
Aff ecting the perform
ance of Korean Air
Aff ected by the business
operatio
n of
Kor
ean
Air
Stakeholder Communication Channel
Customers
Websites, blogs, Twitter
SNS channels such as twitter, VoC,
a 24-hour chat service,
1588-2001, and Family Care Service
Employees
Communication Plaza, Labor-Management Council,
Grievances Resolution Channels, Mentoring Program,
Intranet ‘Hanway’, and occupational Safety and
Health Committee
Suppliers
Grievances handling and suggestions
(Supplier management system),
training, meetings, complaints and feedbacks
Local
communitiesSponsorship, and social contribution activities
Central
government
Public hearings, association activities, and meetings
with related agencies
ShareholdersGeneral shareholder’s meeting, IR sessions, and
public announcement
Labor unions Labor-Management Council
Employees
Shareholders
14
Stakeholder Engagement
S t a k e h o l d e r I n t e r v i e w s
“ By setting operational safety
as our first priority, we will
enhance both aviation safety
and passenger convenience”
Korean Air, Corporate Safety, Security
and Compliance, Senior Vice President
Michel Gaudreau
As someone in charge of aviation safety and security at Korean Air, I believe it is very important to establish a system
for safety management and spread a culture of preventive safety. Korean Air’s Safety Management System (SMS),
which I am confident is worthy of worldwide recognition, enables us to proactively identify and control risk factors in
a systematic and organized manner rather than responding to incidents simply as they occur.
In recent years, the importance of aviation security has become more emphasized as incidents, such as in-flight
disturbance and terror threats, are increasing. Korean Air not only has cooperated closely with the MoLIT and related
organizations to respond proactively against any security threats, but has also
strengthen cabin security training and introduced/loaded new
cabin security equipment on board.
Moreover, Korean Air has been operating the Accident Free
Campaign since 1995 to promote safety awareness and
establish preventative safety culture. Job Hazard Analysis
has also been implemented to further involve employees
in the assessment of potential risks on the job.
Going forward, Korean Air will continue to work hard to
heighten safety and security awareness and
ensure the highest level of operational
safety.
15
“ As a leading global airline
in the aviation industry,
I hope Korean Air will take
the initiative in minimizing
its environmental impact and
pursuing eco-friendly business
practices.”
Kim Dae-geun,
Lead Auditor at DNV GL
Environmental issues such as climate change are today considered to be major issues that need to
be addressed not just at the national level but internationally. They also serve as benchmarks for the
sustainability efforts of companies. In this regard, as the largest airline in Korea, Korean Air needs to
consider the following.
Firstly, going beyond implementing eco-friendly business practices on its own, the company
should cooperate with its business partners, including suppliers to create synergy in environmental
management. If Korean Air and its partners work together to conserve energy in the aviation sector,
they can come up with a variety of measures to deal with climate change issues.
Secondly, considering the growing importance of sustainability, Korean Air should be more
proactive in sustainable procurement. As the company at the top of the aviation industry supply,
its purchasing practices significantly influence others down the chain. Eco-friendliness should be
considered in purchasing so as to gradually increase the ratio of green products in procurement.
Lastly, I hope Korean Air will take the lead as friendly green company by actively
participating in initiatives for GHG emissions reduction and energy conservation,
which will greatly contribute to realizing the company vision of creating upgraded
lifestyles through the achievement of a healthy dynamic between aviation and the
environment.
Stakeholder Engagement
16
“ Habitat for Humanity Korea
looks forward to Korean Air’s
continued support for our
efforts for low-income families
to gain hope as well as housing,
helping them stand on their
feet as healthy members of the
local community.”
Kim Hee-yoon,
Team leader of Habitat
for Humanity Korea
Habitat for Humanity Korea is a non-profit housing organization that has helped low-income families
in need of housing through home construction, rehabilitation and repair. As a donor to Habitat
since 2001, Korean Air has been supplying support to house-building projects every year. Due to the
support, fifteen families have been provided with a home. In addition to offering financial support,
Korean Air employees have volunteered for construction work, giving families (Home Partners) hope as
well as houses and contributing to the local community. What Korean Air has done for those families is
right line with its goal of continuing social contribution activities through Global CSR projects under its
mission of Service Excellence.
Having a decent place to live positively affects the lives of all family members. Children become
heathier, show improved personal adjustment, and do better at school. Conditions for family income
and safety are enhanced. Habitat is working in many countries around the world to improve the
housing environment along with providing training on hygiene, drinking water and awareness
raising. If Korean Air seeks ways to involve its customers as well as employees in Habitat activities,
it will help even more families to live in a better environment. We look forward to Korean Air’s
continued support for laying a foundation to help low-income families to break the vicious circle
of poverty and stand on their feet.
Stakeholder Engagement
17
The reason I use Korean Air is that it offers various routes and great schedule that make
transfer faster and more convenient, and it provides tickets with a wide range of price
options. In addition, its high-end and customized services that meet customer's needs and
help passengers to relieve the fatigue and tension from frequent business trips and other
types of travel. In particular, the introduction of "Prestige Suites" that allow passengers
to fly in complete privacy, and the wide variety of services and resting space to enhance
convenience and allow passengers to have special in-flight experiences.
At a time when aviation safety and in-flight security have become social issues, the news
on Korean Air's efforts to ensure safety have really impressed me. According to the news, its
cabin safety instructors have completed the same safety training provided to the Presidential
Security office, the first private company to do this. I believe training in cabin safety
expertise is the most fundamental activity to protect the safety of passengers as well as of
the cabin crew themselves. Customer service and in-flight safety are the key to the success
of air transportation business. I look forward to Korean Air’s continued efforts to provide
high-end services while keeping their priority on safety.
“ I expect Korean Air to continue
to provide excellent service while
maintaining a high level of safety.”
Nam Jeong-min,
Korean Air customer
Stakeholder Engagement
18Photo by No Ui-za in Val d'orcia, Italy – Among selections during the 23rd Annual Korean Air Travel Photo Contest
KAL’s Issue Report
19
23
31
35
BOARDING PASS
Italy is among the countries with the world's richest
cultural heritage, as represented by influential
Renaissance figures such as Leonardo da Vinci and
Michelangelo. Val d'orcia, a region of Tuscany with a
medieval agricultural landscape, was added to the
UNESCo list of World Heritage Sites in 2004.2017 Korean Air sustainability report
Italy
19
Changes in the Business Environment and Korean Air at Present
In recent years, aviation safety has become increasingly important as incidents such as aircraft en-
gine fires and in-flight disturbance have emerged as social issues in Korea. Accidents and terrorist
threats that have been taking place in many countries have lead the International Civil Aviation
organization (ICAo) to approve recommendations for strengthening aircraft safety regulations.
Meanwhile, the Korean government has been conducting comprehensive safety audits for airlines
as part of efforts to ensure operational safety and security in the aviation industry.
Stakeholder Views
According to the stakeholder materiality assessment in 2017, operational safety has been identified
as the single most important issue for sustainability. For Korean Air, safety is without hesitation the
top priority. Therefore, we are continuing to upgrade our safety management, building upon our
accomplishment of no fatal accidents over the last 18 years.
ISSuE 01Strengthening aviation safety and securityWhat is Korean Air's commitment to flight safety and information security?
WHERE
WE STAND
HOW WE
LISTEN
WHAT
WE DO
Stakeholder Views Enhancing safety check-ups and security
Category
Social and product
responsibility
Relevance to GRI Customer health and
safety
Reporting Issues•Ensuring operational safety
•Reinforcing safety check-ups and security
Where the impact comes from
Where the issue impacts
Internal External Cost Profit Risk
Indicator 2014 2015 2016 2017 Goals
ongoing
efforts to
ensure
operational
safety
Achieved
15-year
fatal-
accident-
free flight
operations
Achieved
16-year
fatal-
accident-
free flight
operations
Achieved
17-year
fatal-
accident-
free flight
operations
Improving company-wide safety
management with the extended
scope of the Safety Management
System covering both headquarters
and regional offices, and
strengthening operational safety
through on-site training
20
Ensuring operational Safety
Extending the scope of Safety Management System (SMS)Korean Air’s safety management system takes on a three-phase approach including ex-post
response, ex-ante prevention and prediction. The ex-post response involves an investigation
of events that have already occurred and an analysis of the causes; the ex-ante prevention fo-
cuses on minimizing the impact of risks by identifying safety risks through safety reports and
safety examinations; and prediction is based on an analysis of flight data and regular flight
monitoring data to keep a close watch on safety. This multi-layered safety management sys-
tem is a critical component of our effort in safety management.
The Corporate Safety, Security & Compliance is under the direct control of the president.
The director in charge of safety and security keeps a direct hotline to the president so as to
ensure that the reporting channel remains independent from the organization and that the
top management can be fully informed of all safety and security issues. In May of 2015, a SMS
Group dedicated to safety management was newly set up within the Corporate Safety, Secu-
rity & Compliance in order to reinforce the practice of SMS programs. The SMS Group evalu-
ates safety risk factors and monitors the performance results of risk countermeasures, keeps
abreast of the safety report trends, analyzes safety data and upgrades the SMS IT Systems. It
also arranges and organizes company-wide online SMS training programs and workshops
for SMS executives, teams and staff in support of employee safety management practices at
their respective duty levels according to their roles and responsibilities.
In 2017, the scope of the Safety Management System (SMS), which previously covered Cor-
porate Safety, Security & Compliance, and seven other business divisions, was expanded ex-
tended to include regional offices at home and abroad. By strengthening on-site safety man-
agement and establishing a reporting channel between headquarters and regional offices,
it is expected that safety issues can be properly managed at the company level and safety
management at Korean Air will be further enhanced.
Material Issue Report
Cabin Cargo
AerospacePassenger
Corporate Safety, Security & Compliance
(Company-wide SMS)
The scope of SMS has extended
to add regional offices at home and abroad
operations Control
Flight operations
Mainte-nance &
Engineering
Mainte-nance &
Engineering
Cabin
Domestic regional offices
overseas regional offices
operations Control
Flight operations
Cargo
Passenger
Corporate Safety, Security & Compliance
(Company-wide SMS)
21
IOSA-Certified AirlinerKorean Air was the nation’s first airliner to be certified by the IATA
operational Safety Audit (IoSA) in January of 2005, qualifying more
than 900 safety criteria of the international safety audit program
developed by the IATA. Since then, Korean Air has been re-audit-
ed and certified every other year. In the sixth audit for certifica-
tion conducted in october 2016, all of the safety criteria were met
without any issues. The current certification will be effective until
January 21, 2019.
ISAGO ProgramKorean Air monitors its ground operation partners under the IATA
Safety Audit for Ground operations (ISAGo) as a member of the
program since April of 2009. In addition, as a member of the ISAGo
Pool Advisory Group, we share information and collaborate with
peers and related organizations to standardize international safe-
ty practices and to promote the safety and operational quality of
ground handlers around the world. According to the IATA’s annual
Audit schedule, Korean Air is scheduled to conduct seven audits
in 2017.
Safety committees and councils
MSSM : Monthly Safety & Security Meeting
•Irregular flight data analysis and recurrence prevention
•Close cooperation between related teams on pending safety issues
CSC : Central Safety Committee
•Review and approval of
comprehensive safety plans
EAC : Executive Action Council
•Revision and approval of safety
regulations/procedures
•Review and approval of safety-related projects
Safety & Security
Flight operations
Maintenance & Engineering
Cabin Passenger Cargooperations
Control Regional
Headquarters
Enhancing Safety Checks and Security
Top Management (Held annually)
Heads of Related
Divisions (Held semi-annually)
Heads of Related Teams (Held monthly)
Material Issue Report
22
DOD safety certificationSince 2001, Korean Air’s operational safety has been recognized by
the U.S. Department of Defense (DoD), also the head of the Air-
lift Transportation Program. This safety initiative uses evaluation
results, which are acquired every six months, to assess the safety
of private air carriers in order to determine whether they are safe
enough for its employees to fly on business trips along with on-
site inspections conducted every two years. Korean Air has met all
the safety standards under the Airlift Transportation Program and
earned its latest certification following the 2017 on-site inspection.
Company-wide Safety & Security Training Course for ManagersIn order to ensure operational safety, the Company-wide Safety
& Security Training Course for Managers program was conducted
from September 2016 to April 2017 for with 543 executives and
business division managers at home and abroad. The four-day
course consists of two-day training on regulations, principles and
procedures, and case studies, and two-day on-the-job training in
passenger, cargo, maintenance, and operations control. The course
aims to heighten awareness of the responsibility of safety and se-
curity thereby further strengthening competitiveness in terms of
safety.
Response to in-flight disturbancesKorean Air has carefully devise a range of countermeasures to
in-flight disturbances that allow flight crews to promptly and
effectively respond to unruly or violent passengers, minimize in-
convenience to other passengers, and maximize safety on flights.
As aviation security laws and airline operational guidelines for se-
curity personnel in airplanes have recently been strengthened, a
zero-tolerance policy will be applied to any acts that might jeopar-
dize safety on airplanes, and stricter punishments will be imposed.
Korean Air has been providing cabin crews with security training
and education, including special training in partnership with the
Presidential Security office, and has introduced new security
equipment education that will allow them to promptly manage
in-flight disturbances.
In the second half of 2017, greater focus is placed on practical
matters during annual cabin safety training. We will do our utmost
through training and education for the crew to keep all our pas-
sengers safe.
Material Issue Report
23
ISSuE 02Responding to new climate regimesWhat efforts is Korean Air making to address climate change?
Stakeholder ViewsManaging energy use and GHG emissions , Adopt-
ing eco-friendly aircraft and equipment
Category
Environment
Relevance to GRI Energy, emissions
Reporting Issues •Introducing cutting-edge aircrafts with improved
fuel efficiency •Reducing GHG emissions through lightweight
aircraft and eco-friendly flight operations •Manufacturing eco-friendly aircraft structures
and reviewing the feasibility on jet bio fuel
Stakeholder Views
our stakeholders believe GHG emissions by the international aviation sector, which stand at 2% of
the worldwide total, are expected to sharply increase, and it is important for airlines to use energy
efficiently and be held responsible for managing GHG emissions. Korean Air will report on strategies
and activities for reducing GHG emissions as material issues and will continue to manage them
appropriately
WHERE
WE STAND
HOW WE
LISTEN
WHAT
WE DO
Indicator 2014 2015 2016 2017 Goals
Fuel efficiency for international routes
(ℓ/100RTK)*35.41 34.4 35.24 34.65
GHG emission reduction in the
aviation sector(tCo2)431,874 445,790 413,613 406,223
*Fuel efficiency = Fuel consumption (liter) / Transportation (100RTK)*RTK(Revenue Ton Kilometer)means a single ton of passengers/cargo for one kilometer. It is used as a unit for sales of an airliner.
Changes in the Business Environment and Korean Air at Present
Governments, industries, and the private sector as a whole are all striving to address global environ-
mental issues. The Paris Agreement within the United Nations Framework Convention on Climate
Change (UNFCCC) was adopted in December 2015 and represents a major step forward the efforts
by the global community to overcome these challenges. Higher income level and a more global-
ized world have led to a rapid increase in air travel and cargo transportation. For the past years, the
ICAo has devising approaches to climate change issues that relate to international aviation. As a
result, CoRSIA (Carbon offsetting and Reduction Scheme for International Aviation), the first global
framework covering an entire industrial sector, was adopted by the ICAo Assembly.
Where the impact comes from
Where the issue impacts
Internal External Cost Profit Risk
24
Fuel efficiency in 2016 recorded 1.6%p below the target
Fuel Efficiency Note
Base Years 36.49(ℓ/100RTK) Base years: 2011-2013
Target 35.76(ℓ/100RTK) 2.0% improvement from the average fuel efficiency in the base years
Actual 35.24(ℓ/100RTK) 3.6% improvement compared to the average fuel efficiency in the base years
37.00
34.00
35.50
35.00
36.50
36.00
34.50
2011
36.40
2012
36.75
2013
36.34
2014
35.41
2015
34.40
2016
35.24
Base-year Average 36.49ℓ/100RTK
Target 35.76ℓ/100RTK
Target improvement
rate
Actual improvement
rate
Target
2.0%↑Actual
3.6%↑
Year
Fuel efficiency
Material Issue Report
25
Introducing Cutting-edge Aircrafts with Greater Fuel Efficiency By contracting for 100 new aircraft, B737MAX-8 and A321NEO models will be introduced from 2019 through 2025.Korean Air is continuing its fleet modernization by adopting
next-generation aircraft such as Boeing B747-8i and B787-9 models
to improve flight operation, safety and fuel efficiency. In particular,
the B787-9, introduced in February and April 2017, provides a new
level of comfort. Since pressure and humidity in the B787-9 can be
set higher than in existing aircrafts, passengers can feel more com-
fortable during flight. The B787-9, also known as the Boeing 787-9
Dreamliner is equipped with the state-of-the-art GEnx-1B engine
and is made from 50% carbon composite materials and 20% of alu-
minum alloy, making it more lightweight and durable. As a result,
its fuel efficiency is 20% higher and carbon emissions are 20% low-
er than comparable models.Aircraft Investment (KRW 100 million)
2014
2015
2016
13,340
32,428
13,669
2014 2015 2016
Passenger 9.7 9.5 9.7
Cargo 8.7 9.1 7.4
Average Age 9.6 9.4 9.2
Average Age of Aircraft(years)
2017 Aircraft adopted
•Three B747-8i (Jan., May, and June)
•Two B777-300ER (May and June)
•one B747-8F (Dec.)
•Six B777F (June, Aug., Sept., oct., and Dec.)
Aircrafts retired
•Five B747-400 sold (Apr., June July, and Dec.)
•one B777-200 leased to JINAIR (July)
•Four B777-200 sold (Aug., oct., Nov., and Dec.)
*Two B737-800 leased to JINAIR right after being introduced (Mar. and June)
Material Issue Report
26
Dream flights offering comfort and pleasant experience
|SPECIAL PAGE | Dream Flight with Korean Air B787-9
DREAM SPACE, SEATWider passenger space, Comfortable seating
DREAM VIEW, WINDOWlarger passenger windows, window with adjustable transparency
DREAM LIGHTLED lighting to produce various atmosphere
DREAM CABIN Improved cabin pressure, Comfortable cabin humidity
Pleasant cabin environment Dizziness, headache, and dryness of the eyes are reduced.
HEPA filterBacteria, viruses and mold are removed.
Ozone reduction
outside air
Cabin air
Gas filterodors, polluted gas substances, etc. are removed.
DREAM CABIN Improved cabin pressure, Comfortable cabin humidity
The B787-9 has a separate compressor (Cabin Air Compressor)
that converts the outside air to high temperature / high
pressure, then cools it and supplies it to the cabin. In
addition, the humidification system installed in the upper
part of the cabin increases the humidity of the air supplied
inside the cabin (about 1.5 times compared with other
airplane) to create a more comfortable cabin environment.
Material Issue Report
27
Material Issue Report
5. Dream Flight - Smoother Ride TechnologyIn comparison to the B777, the B787-9 is equipped with two additional system
sensors under the cockpit, which allows the aircraft to be adjusted up and
down, enables detection when turbulence is encountered, and improves flight
stablity by controlling elevators and its rudder.
Droopable spoilers
Aircraft efficiency is
increased through
improved airflow on
the wing during
takeoff and landing.
Variable Camber
Improves aircraft efficiency
by adjusting posture to
optimize the center of
gravity during cruising.
Raked Wing Tip
Improves aircraft
efficiency by
reducing the vortex
from wing tip.
Ailerons
Multifunctional Ailerons
optimize wing efficiency
during takeoff, landing
and cruising.
Flap Fairing
Smaller Flap Fairing reduces drag.Eco-friendly flight
through reduced
fuel consumption.Increases customer
convenience
by reducing the
amount of engine
noise that enters
the cabin.
Minimizes carbon footprint
by reducing the emission of
harmful gases.
Dream technology of benefiting the environment and people
|SPECIAL PAGE | Dream Flight with Korean Air B787-9
1. Dream Material - Carbon Fiber FuselageUnlike conventional airplanes, which are made by assembling various pieces,
the single-piece, composite barrel technology that makes a carbon fiber
fuselage from an oven called an <autoclave> enables a comfortable cabin
pressure to be maintained, while also allowing for larger windows. This can
lead to innovative improvements in the aircraft's structural performance.
2. Dream Technology - State-of-the-art Digital Flight DeckThe use of state-of-the-art high-speed digital wireless communication
technology improves the safety of navigation by allowing all aircraft operations
to be monitored from the ground during flight. As well, it incorporates the
latest digital technology that enables pilots to check all of the manuals for flight
operations and maintenance on the computer screen inside the cockpit.
3. Dream Engine - Eco-friendly EngineThe B787-9 engine is an eco-friendly engine that has significantly reduced
emissions of harmful gases such as carbon dioxide compared to other engines.
In addition, it reduces the noise of the engine entering the cabin by 30%,
allowing passengers to enjoy a more comfortable flight.
4. Dream Wing - Advanced WingThe efficiency of the aircraft was improved by applying the optimized wing
shape to the flight environment. As a result of this increase in aircraft efficiency,
fuel consumption has been reduced to enable eco-friendly flights, and Korean
Air has participated directly in the production of Raked Wing Tip at the wing end.
28
Reducing GHG emissions through Lightweight Aircraft and Eco-friendly Flight operations
Fuel Management Process Korean Air’s fuel management process is based on ten years of ded-
icated infrastructure that includes the management of fuel and en-
hancement of operational flight efficiency through eco-flight pro-
cedures and upgrades to fuel-loading policy. The process is being
implemented through cooperation among business divisions in
flight operations, maintenance, flight planning and transportation.
2014 2015 2016
Eco-flight 141,168 143,019 149,606
Performance improvement 97,793 93,346 56,628
Flightplanning 168,039 181,159 179,332
Weight management 24,873 28,266 28,047
Total 431,873 445,790 413,613
GHG emissions reduction performance results(tCo2)
•Using economical
ground equipment while parking
•Engine Water washing
• Enhancing performance with
maintenance on engine fan blades
• Raising fuel efficiency by installing
winglets on B737s
•Loading adequate amount
of potable water
•Reducing pay load variance
•Using lightweight containers
•Balancing out aircraft center of
gravity
Weight
Performance
Operations
Flight plan
FuelManagement
Material Issue Report
Maintenance and fuel management tasks
Ground handling
•Using designated equipment •Carrying optimal amount of
potable water•Managing over-fueling
Maintenance process improvement
•Improving static leak test procedures for engines•Changing a fan blade trim
method
Aircraft/Engine performance enhancement
•Engine Water Washing•Installing winglets on B737s •Running a maintenance program
on aircraft drag reduction
Weight management
•Removing or adjusting FAK (fly-away-kits)•Removing unused parts and
maintenance manual
•Refraining from unnecessary reverse
thrust when landing
•one engine-powered Taxi In/out
•operating a flight at optimal speeds
considering fuel/operation costs
•Ensuring the optimal use of flaps
during takeoff/landing
•Developing the nearest alternate
airports and shortcut routes
•Amending fuel loading regulations
•Loading fuel based on a statistical
analysis of fuel consumption patterns
• Loading fuel considering oil prices at
departure and destination airports
29
Material Issue Report
Engine Cycles
EGT M
argin
1000 Cycle-Wash Deterioration Curve
Un-Washed Deterioration Curve
500 Cycle-Wash Deterioraion Curve
500 Cycle-Wash Cumulative-Benefit
1000 Cycle-Wash Cumulative Benefit
Engine water washing and engine performance
Maintenance program on aircraft drag reductionWe have implemented various programs to improve fuel efficiency by eliminating factors
aggravating aerodynamics, and reducing the drag that opposes an aircraft's forward motion.
88-inch pallet uLD locking devices removed on Korean Air Cargo Boeing 777sFor cargo aircraft, ULDs (unit load device) are used to bundle large quantities of cargo in to
a single unit for loading. They come in 96-inch and 88-inch versions, but 96-inch pallet ULDs
are mainly used in Korean Air for their greater capacity. Installed locking devices for 88-inch
pallet ULDs were removed since they were not frequently used. As a result, 350,000 pounds
(154.2 tons) of fuel was saved in 2016.
Engine water washingEngine water washing is continuously conducted for Korean Air
aircraft. The method is effective at improving fuel efficiency and
reducing GHG emissions as it increases the performance of the
compressor and improves air flow. Fan blades (engine fan blades)
are cleaned as well using custom nozzles. In 2016, engine water
washing was conducted a total of 429 times, saving 13.05 million
pounds of fuel (5,918 tons) annually, and 640 are planned for 2017.Two dents on a door
Drag due to dents
on the fuselage surface
A gap on the control surface
Drag created by a gap
on the control surface
Repair of fuselage surface area
A flush repair is recommended
that smoothes the surface to
minimize drag
Contaminated fuselage surface
Drag caused by pollutants
on the fuselage surface
Crushed Seals Deformation of Seals
attached to the fuselage
led to drag
Rough paintingDrag occurring on a
roughly painted surface
30
Sharklets diminish wingtip
vortices
with reduced air
resistance.
Conventional wingtipsgenerate wingtip
vortices
with high air
resistance
Eco-friendly Aircraft Structures and Jet Bio-Fuel
Designing and manufacturing eco-friendly aircraft structures Korean Air leverages its original technology to perform the designing, manufacturing and
certification of Sharklets, elements of the wing structure used on A330NEo (New Engine
option) for the Airbus, in addition to its supply of Sharklets for the A320. Made of high-tech
composite materials, a Sharklet is a winglet measuring 2m in width and 4m in length that
is installed on the tip of the main wings of an aircraft while aiding in air resistance at the tip
of the wings, giving way to a rise in fuel efficiency by 4% and the simultaneous reduction of
Co2 emissions. Korean Air is expected to deliver more than 600 A330 NEo Sharklet wingtips
and will continue to do its best to design, manufacture, and deliver eco-friendly fuselage
and main components to promote aircraft fuel efficiency worldwide.
Reviewing the feasibility on jet bio-fuelRecently, the development of jet bio-fuel as sustainable energy has been promoted
throughout the aviation industry. The technical feasibility of jet bio-fuel has been proven
by several air carriers through test flights, and numerous studies on its economic feasibility
and sustainability are being conducted. Multiple airlines, including KLM and Lufthansa, are
currently operating regular flights using bio-fuels on select routes. Since Korean researchers
succeeded in developing a prototype jet bio-fuel for the aviation sector in 2013, R&D and
production efforts have continued in Korea. The government is also reviewing the feasibility
of introducing jet bio-fuels in domestic aviation sector and considering test flights. In order
to achieve the CNG 2020 (carbon-neutral growth after 2020) set by the ICAo, alternative
fuels, including bio jet-fuel need to be utilized. However, as the cost of this fuel is approxi-
mately three time higher than that of conventional alternatives, it is not yet feasible for the
market. Keenly aware of the needs for introducing bio jet-fuel over the long term, Korean Air
is seeking cooperation with the government and research institutes to proactively address
sustainable energy issues.
Model Structure Property
B737MAX Winglets 1.5% improved fuel efficiency
B747-8Raked Wing Tip
Significantly enhanced aerodynamic performance compared to conventional wingtips (Improving fuel efficiency by 6% by increasing wing area)
A320Sharklet 4% improved fuel efficiency
A330NEo
Manufactured eco-friendly aircraft structures
A330 Sharklets•Winglets measuring 2m in width and 4m in length
•Made of lightweight, high-tech composite materials
• Sharklets help to reduce wingtip vortices that occur
when air on the upper wing surface has lower pressure
relative to the bottom.
•4% improvement in fuel efficiency.
Material Issue Report
31
ISSuE 03Providing customer-oriented serviceHow does Korean Air provide services to promote its customers’ wellbeing?
Stakeholder ViewsDeveloping and offering customer-oriented
service, Promoting responsible advertising and
marketing, Protecting customers’ personal data
and tightening information security
Category
Social and
product
responsibility
Relevance to GRIProduct and service labelling,
Marketing communications,
Customer data protection
Reporting Issues•Developing and offering customer-oriented service•Protecting customers’ personal data and
tightening information security
Where the impact comes from
Where the issue impacts
Internal External Cost Profit Risk
Changes in the Business Environment and Korean Air Today
Airline services are rapidly evolving to meet the needs of customers by offering a wide range of ameni-
ties, such as in-flight meal menus created by master chefs, more comfortable seats and hotel-like interi-
ors, and links to video Spanish lessons for passengers traveling to Mexico. The level of customer experi-
ence is rising higher than ever due to cultural awareness, economic growth and technological advances.
People have also come to expect the convenience of ‘one-stop’ service on a seamless digital platform.
In addition, with the spread of new devices and media, has come a demand for better web accessibility
to the visually impaired and the elderly. Also, improved flight services for those who with special travel
needs are increasingly required. In response, Korean Air is working hard to pinpoint what customers
want, communicate clearly with them, and ensure they receive services tailored precisely to their needs.
Stakeholder Views
The stakeholder materiality assessment indicates that travelers with special needs, including the visual-
ly- and hearing-impaired, the elderly, pregnant women, and children still experience difficulties access-
ing flight services and stakeholders clearly recognize the importance of improving flight services for
those who with unique travel requirements. In addition, there is a need to quickly respond to customer
needs by using big data and diverse communication channels and to enhance interoperability with
mobile devices to raise customer convenience and satisfaction. Developing and offering customer-ori-
ented service was selected as one of the material issues for 2017 and will be thoroughly reflected in
our business activities. We will continue to improve in this regard.
WHERE
WE STAND
WHAT
WE DO
HOW WE
LISTEN
Indicator 2014 2015 2016 2017 Goals
Customer data leakage (cases) 0 0 0 0
Information security training (persons) 15,941 30,764 30,465 -
Voice of Customer (cases) 56,126 36,789 41,719 -
Global Customer Satisfaction Index (GCSI) 1st rank 1st rank 1st rank 1st rank
Stakeholder ViewsManaging energy use and GHG emissions , Adopt-
ing eco-friendly aircraft and equipment
Category
Environment
Relevance to GRI Energy, emissions
Reporting Issues •Introducing cutting-edge aircrafts with improved
fuel efficiency •Reducing GHG emissions through lightweight
aircraft and eco-friendly flight operations •Manufacturing eco-friendly aircraft structures
and reviewing the feasibility on jet bio fuel
32
Material Issue Report Developing and offering Customer-oriented Service
Airport service
In-flight services
Pre-departure services
Hover here to see details.
33
Service improved by VOCs one of our key management policies is reflecting customer feed-
backs in customer services. ‘Voice of the Customer (VoC)’ serves as
an important tool to monitor the ‘moments of truth’.
VOC Management(cases)
2014 2015 2016
Compliments 7,359 8,132 11,489
Complaints 4,158 4,098 4,785
Suggestions 568 477 522
Inquiries 44,041 24,082 24,921
Total 56,126 36,789 41,717
Material Issue Report
Service forum
*A category of others in the previous year's report is excluded as it is considered insignificant.
Feedback
Service forum (intranet bulletin
board)
Reply
Posting complaints and compliments
Customer Korean Air Policy and system improvements
Customer needs analysis
VoC system (automatically sorting out customer
complaints and generating responses)
Company-wide awareness raising on customer compliments and complaints •�Understanding front-end customer services
and sharing information •Feedback and service Improvements
Transportation for organ transplants increasing on domestic flightsPreviously, only
one human organ could be transported per domestic flight. However, after reviewing cus-
tomer feedback about difficulties faced with receiving needed organs at local airports with
only a small number of flights, such as Sacheon airport, related regulations were revised.
As of November 29, 2016, the allowed number of human organs transported per domestic
flight has been increased to two.
Information on bibimbap for foreign passengersMenu descriptions of bibimbap have
been improved, and an explanation on how to eat it is provided passengers who might be
unfamiliar with Korean cuisine.
Day of week specified on E-ticketBased on a customer suggestion to add the day of
the week to the departure and arrival information on the Itinerary Ticket Receipt (ITR), the
day has been specified on ITRs issued by Korean Air and by travel agencies using ToPAS as
of June 28, 2016.
CBBG(CabinBaggage)CBBG refers to bulky of fragile items that must occupies a sepa-
rate seat in the aircraft. Unpaid baggage was not accepted as CBBG under IATA regulations,
but after reviewing customer suggestions we have been accepting unpaid baggage as of
September 19, 2016.
34
Information security training(Information security training)
Year 2014 2015 2016
Training•First half : our company’s
information security•Second half: Personal data protection
•First half: Understanding of personal data and how to protect PCs•Second half: our company’s data protection
First half
Domestic 7,402 17,116 17,176
First half 656 3,002 2,962
Second half
Domestic 7,284 7,727 7,470
First half 599 2,919 2,857
2014 2015 2016
Leakage of customer information 0 0 0
Officially confirmed leakage of customers’ personal data(cases)
Protecting Customers’ Personal Data and Tightening Information SecurityMaterial Issue Report
Integrated information security managementWith growing social and policy requirements to ensure data securi-
ty and privacy protection, Korean Air has established a department
responsible for information security and has conducted preven-
tion-focused activities to combat cyber terrorism and leakage of
personal information. After being reorganized as an independent
entity to strengthen information and security competency in octo-
ber 2014, the department has come under the direct control of the
president. The department is currently monitoring employees’ com-
pliance with information security and privacy protection procedures.
once issues are identified, immediate corrective action is taken to
protect the intellectual and physical property of the company. At the
same time, a lot of efforts are being made to prevent security inci-
dents by proactively managing and responding to related issues.
Customer data protection To protect customers’ personal information, penetration tests are reg-
ularly conducted and customer data collected from SKYPASS mem-
bership, the Korean Air website, customers call centers, and offices at
airports and in cities are being securely managed in accordance with
related laws, including the Personal Data Protection Act and the Act
on the Promotion of Information and Communications Network Utili-
zation and Information Protection. Furthermore, technical, administra-
tive, and physical safeguards are firmly in place to ensure the highest
possible level of security.
Information Security Management System (ISMS)Korean Air, as a member company of the Korea online Privacy Association, a leading private
organization dedicated to personal information protection, is actively conducting activities
on personal data protection. Korean Air became the first company in the aviation industry
certified for the Information Security Management System (ISMS) by the Korea Internet &
Security Agency (KISA) in 2005, and has been accredited since then.
Information security training All domestic and overseas employees handling customer information are required to un-
dergo training on information security and personal data protection twice per year with
some programs available year-round. Information security training covers the full process
from the collection of customer data to its secure destruction, as well as security precau-
tions to be taken when using PCs, thereby heightening employee awareness of security.
35
Changes in the Business Environment and Korean Air Today
No company can survive in isolation from society. In order to ensure competitiveness and to grow
together with society, clusters of enterprises, local communities, and infrastructure should be
formed as a means to provide shared value. Instead of cookie-cutter, one-off events, social contri-
bution activities are being transformed toward a strategic paradigm in which long-term corporate
vision and strategic goals are interconnected with economic, social and environmental issues to
provide organizational vitality, an improved corporate image, and better economic performance.
Shareholder Views
According to the materiality assessment, promoting major social contribution activities conducting
social contribution activities that reflect industry characteristics, and measuring the effectiveness
of social contribution activities, and ongoing performance management are all considered
important issues. Korean Air will continue its related efforts in reflection of the characteristics of the
aviation industry, create shared value with stakeholders, and grow together with society toward a
sustainable future.
ISSuE 04Creating shared value with societyWhat efforts is Korean Air making to create shared value?
WHERE
WE STAND
HOW WE
LISTEN
WHAT
WE DO
Stakeholder Views Promoting major social contribution activities,
Measuring the effectiveness of social contribution
activities and ongoing performance management
Category
SocietyRelevance to GRI Local community
Reporting Issues •Conducting social contribution activities
reflecting industry characteristics
•Further involvement of employees and
stakeholders in social contribution activities
Indicator 2014 2015 2016 2017 Goals
Volunteer hours per employee (hours/employee)
1.9 1.7 1.9 -
Social contribution expenses (KRW 1 million)
9,679 12,562 9,227 -
Afforestation* (trees) 80,000 90,000 90,000 90,000
*Total number of trees planted in Baganuur Mongolia and Kubuqi Desert in China
Where the impact comes from
Where the issue impacts
Internal External Cost Profit Risk
36
1998 Transportation of disaster relief goods to flooded areas in Hubei Province, China
Aug. 1999 Disaster relief goods and aids to flooded areas in North Gyeonggi Province, Korea (Multi-purpose helicopters and trucks deployed)
Aug. 1999 Transportation of disaster relief goods to earthquake areas in Turkey (with B747-400F)
oct. 1999 Transportation of disaster relief goods to earthquake areas in Taiwan (with A300F)
oct. 2000 Donation of disaster relief goods to the earthquake victims in Nigata, Japan (A330 freighter deployed)
Sept. 2002 Transportation of disaster relief goods to victims of typhoon Rusa in Gangneung, Korea (with A300-600)
April 2004 Transportation of disaster relief goods to the North Korean refugees of the Ryongchon Station explosion (with two B747-400)
Jan. 2005 Transportation of disaster relief goods to tsunami victims in Southwest Asian countries
Aug. 2005 Transportation of disaster relief goods to the refugees of hurricane Katrina in the U.S.
June 2007 Transportation of victims’ coffins in the Cambodian plane crash
May 2008 Transportation of disaster relief goods to victims of cyclone Nargis in Myanmar
May 2008 Transportation of disaster relief goods to earthquake victims in Sichuan Province, China
Mar. 2011 Donation of bottled water to earthquake victims in Christ Church, New Zealand
Mar. 2011 Donation of bottled water and blankets to earthquake victims in the northeastern province in Japan
oct. 2011 Donation of bottled water and disaster relief goods to flooded areas in Thailand
Jan. 2012 Monetary donations to victims of typhoon Washi in the Philippines
Nov. 2013 Donation of bottled water and disaster relief goods to victims of typhoon Haiyan in the Philippines
Apr. 2014 Donation of bottled water and blankets to victims and volunteers of the Saewol Ferry disaster in Korea
May 2015 Transportation of disaster relief goods and employee donations to earthquake areas in Nepal
Sept. 2015 Donation of bottled water and disaster relief goods to flooded areas in Myanmar
Mar. 2016 Donation of bottled water and disaster relief goods to victims of cyclone Winston in Fiji
Apr. 2016 Donation of bottled water to victims of Kumamoto earthquakes in Japan
Apr. 2017 Donation of bottled water to floods victims in Peru
Social Contribution Activities Reflecting Industry CharacteristicsMaterial Issue Report
Going beyond financial support and employee volunteer efforts,
Korean Air strives to fulfil its corporate social responsibility by utiliz-
ing our logistics and transportation resources. We have been pro-
viding support for the transportation of needed relief supplies to
earthquakes and tsunami disaster areas and to refugees, and have
offered free flight service to Korean expatriates in difficulty.
Relief aid for Fiji cyclone and Japanese earthquake victims Utilizing its logistics and transportation resources, Korean Air has
been offering no-cost transportation of relief supplies in the event
of disasters. In 2007, a dedicated disaster relief team was created to
increase the efficiency of rescue activities, aircraft and helicopter
deployment, and relief goods support. In March 2016, Korean Air
provided emergency support, including dry biscuits and bottled
water, to the victims of the deadly Cyclone Winston that ravaged
Fiji, and dispatched clothes collected by the Fiji Embassy. Emergen-
cy relief supplies were also delivered to victims of Kumamoto earth-
quakes in Japan in April 2016.
Free flights to Korea for Korean adoptees Korean Air has been offering free tickets to Korea to international Korean
adoptees attending events in Korea arranged by the International Kore-
an Adoptee Service (InKAS). Since 2010, a total of 40 adoptees aged 18
or older have been given the opportunity to visit and experience their
country of birth. The program helps them to understand the history and
culture of Korea while serving as a bridge connecting the nation where
they were born with the one where they grew up and call home.
37
oct. 2008 Book donation to Hongshan Elementary School in Beijing
2009 Book donation to an elementary school in Wuhan
June 2010 Dream Library at an elementary school in Xian
July 2013 Korean Air Dream Library at an elementary school in Liaoning Province through
piggy bank relay fund-raising on the A380 as part of the Caring Mind Project in
China
oct. 2014 Donation of 2,000 books, bookshelves, computers and other educational and
sports equipment to an elementary school in the Hunan Province
June 2015 Donation of 2,000 books, bookshelves, computers and other educational and
sports equipment to Phudong Elementary School in Liping County of the
Qiandongnan Prefecture within Guizhou Province
July 2016 Donation of 2,000 books, bookshelves and sports equipment to Jingfu
Elementary School in Huachuan County of the Hei Long Jiang Province
Material Issue Report
As part of its efforts to protect local ecosystem, Korean Air transports only live animals with
valid permits in accordance with the Convention on International Trade in Endangered Spe-
cies of Wild Fauna and Flora and IATA’s Live Animal Regulations. It has banned the transporta-
tion of shark fins and monkeys destined for laboratory use.
Caring Mind, the Dream Library project for children in ChinaStarting in 2010 as part of Korean Air’s social contribution project in China, eh-shim, roughly
translated as “caring mind,” the Dream Library project builds and donates libraries to under-
developed provinces in China. To date, Korean Air has donated libraries in six cities, including
Xian, Huangshan, Kunming and Shenyang. In 2016, the beneficiary was the Jingfu Elementary
School in Huachuan County of the Hei Long Jiang Province, where we donated 2,000 books,
bookshelves, and sports equipment.
Books and library donation
The program helps them to understand the history and culture of
Korea while serving as a bridge connecting the nation where they
were born with the one where they grew up and call home.
Transportation of a Korean expatriate in a coma In September 2016, Korean Air helped a Korean expat in Brazil
who had been in a coma for a year after being shot in the street,
but whose family could not afford the flight to Korea to for medi-
cal treatment. Since the patient needs to remain prone during the
flight, a stretcher taking up six seats must be used. The airfare for
such a stretcher is six times higher than the average cost. Despite
fund-raising efforts of the association of Korean expatriates in Brazil,
the family of this patient still suffered from serious financial difficul-
ties. Korean Air covered all the transportation expenses while ensur-
ing his safe travel from departure in Sao Paulo to arrival in Incheon.
Transportation of pandas with a special Aircraft Since it provides a suitable environment through the temperature
control and ventilation systems and requires less time compared to
other methods, air transportation is one of the safest transportation
methods for live animals. In March 2016, Korean Air securely trans-
ported a pair of pandas from Qingdao, China to Incheon using a spe-
cial cargo aircraft. Pandas are endangered animals with only 2,000
or so remaining in the wild. Based on our years of experience and
know-how in live animal transportation, the temperature in the car-
go compartment was set at 18℃ and a veterinarian and zookeeper
were in attendance to oversee their health conditions. A non-vibrat-
ing vehicle was used to minimize stress.
38
Further Involving Employees and Stakeholders in Social Contribution Activities
Volunteer group Registration date Members (persons) Major activities
Alliance of Christian gatherings
2003.12.01 Christian gatherings•New year’s concert, and overseas volunteer
activities
Crew Christian gathering
2003.12.01 Cockpit and cabin crew (80) •Counseling for teenage runaways
Didimdol volunteer group
2003.12.01Gimpo maintenance Christian gathering (30)
•Facilities for the mentally-/physically-impaired•Local child centers
Yesarang volunteer group
2003.12.01General sales Christian gathering (30)
•Nursing home for the elderly suffering from dementia
Sanasa (People sharing love)
2003.12.01 Bucheon motor plant (41)•Bathing support, and helping child breadwinners•Picnic with those with disabilities
Silver wing supporters
2003.12.01Cockpit crew and trainees (1,202)
•Supporting child breadwinners•Volunteering at social welfare centers•Improving residential environment
Korean Air Stewardess Alumni (KASA)
2003.12.01 Stewardess alumni (600)•Helping child breadwinners•Scholarship programs
Dasom Nanumhoe 2003.12.01 Cabin crew (150)•Visiting centers for children with disabilities•Visiting orphanages
Sarang Naumhoe 2004.01.14Busan civil aircraft manufacturing plant (60)
•Bathing support for those with disabilities•Cleaning dormitories and cafeterias
Sky Love 2004.09.10Customer service branch at Incheon int’l airport (100)
•Running English classes•Visiting senior care centers
Geumgwanhoe 2005.03.03Busan aerospace business division (100)
•Supporting the elderly living alone, underprivileged children and multi-cultural families•Environment cleaning event
Gonihoe 2005.04.28 Female cabin crew•Food distribution support at senior welfare centers•Sponsoring the elderly living alone and children
from low-income families
Dasom Maru 2006.03.10Customer service branch at Jeju airport (65)
•Sponsoring those with disabilities
Seoungwoohoe 2006.05.09 Male cabin crew •Sponsoring those with disabilities
Employee volunteer groups
Material Issue Report
Employees volunteer activitiesGuided by the belief of founding chair-
man Cho Joong-hoon, ‘Profits made by a
company must be returned to the society
that made it possible,’ Korean Air takes
part in social contribution activities in a
variety of areas. Since December 2003,
all employees of Korean Air have volun-
tarily donated up to KRW 1,000 from their
monthly salary (up to KRW 10,000 for ex-
ecutives), and the company matches its
employees’ charitable contributions.
There are 27 volunteer groups consisting
of employees working in various fields
and locations, and regularly conducting a
wide range of activities. Part of the funds
collected through employee donation
is used to support the activities of these
groups.
39
Volunteer group Registration date Members (Persons) Major volunteer activities
Fountain of Love 2006.06.09 Maintenance training team (200)•Improving the living environment for those with disabilities•Donating daily necessities
Little Dream Tree 2007.04.09 Busan aerospace business division (13) •Teaching volunteer work at elementary schools
Hanbat Saranghoe 2007.10.02 R&D center (10)•Visiting orphanages and donating supplies•Helping underprivileged children and youth
Do Dream 2008.04.21 operations control division (280)•Supporting low-income families•Supporting the elderly living alone
Medical volunteer group 2008.09.05 Korean Air Aeromedical Center (67) •Providing medical service to people in need in local communities
Catholic volunteer group 2009.12.22 Cockpit crew department (20)•Bathing support for those with disabilities•Improving residential environment
Gosari 2011.02.11 Busan civil aircraft manufacturing plant (7) •Helping the mentally-impaired
Sky Angels 2011.03.02Association of cabin crew volunteer groups(Seungwoohoe, Gonihoe, Christian gathering, and Dasom Nanumhoe)
•Conducting volunteer activities with those with disabilities•Sky Love Bazaar•Kimchi-making events for the underprivileged and those with disabilities
in Ganseo-gu, Seoul
Dubit Narae 2011.03.08Labor-management cooperation office (26)
•Conducting volunteer activities with those with disabilities•Helping neighbors in need
Love Sharing 2014.02.05 Catering business division (36) •Sharing activities through talent donation (such as cooking)
Jeongseok University 2014.02.05 Jeongseok University student council (15) •Mentoring for students in orphanages
KALMAN Singers 2014.03.07 In-house choir (65) •Donating daily necessities to neighbors in need in Ganseo-gu, Seoul
Buddhist gathering 2014.06.02 Flight operations division (15)•Helping neighbors in need in Ganseo-gu, Seoul•Promoting a lotus lantern hanging event praying for safe flight operations
2013 2014 2015 2016
Company donation 10,201 9,419 12,390 9,067
Voluntary donation* 203 260 172 160
Total 10,404 9,679 12,562 9,227
Social contribution expenses(KRW 1 million)
*Humble monthly donation from employees
2013 2014 2015 2016
Employee (persons) 4,129 4,102 3,851 4,370
Average volunteer hours per employee (hours)
2.0 1.9 1.7 1.9
Employee volunteer hours
Material Issue Report
40
Korean Air Green Ecological Park’ in the Kubuqi Desert in
China(10,000 trees)
2016
4.61million m2
136
2014
4.01million m2
120
2010
2.84million m2
89
2007
1.67millionm2
56
Material Issue Report
Social contribution activities with stakeholdersKorean language audio guide service at the world’s three
most famous museums and other locationsWith its various
cultural sponsoring activities including underwriting Korean lan-
guage service at the Louvre, British Museum, and Hermitage Muse-
um, as well as Le Musée d'orsay, Korean Air is striving to fulfill cor-
porate social responsibility. Going forward, Korean Air will continue
to support the world’s leading museums by serving as a conduit to
promote the beauties of Korean culture worldwide and raises the
international profile of the Korean language.
Global tree planting projectThe ‘Korean Air Green Ecological
Park’ in the middle of the Kubuqi Desert in China is a restoration
project in partnership with the Future of Forest of Korea and the
All-China Youth Federation that has been conducted for 10 years
since 2007. In 2016, 70 Korean Air employees and 50 college stu-
dents from China planted trees, totaling 1.36 million trees growing
on an area size of 4.61 million square meters.
Since 2004, the Korean Air Forest project has been underway in Baganuur, Mongolia with
Korean Air employees and locals planting trees every year. In the first year of tree planting,
the extreme daily temperature rage, dry weather, and a lack of understanding of local for-
estry knowledge made it difficult for the trees to survive. However, Korean Air trained local
residents in caring for the trees in an organized manner, and hired local experts to improve
irrigation and fertilizer. As a result, the survival rate of the trees has surpassed 80%. In 2016,
more than 10,000 trees were planted, including poplar, golden trees and sea buckthorn.
In particular, the profits from sea buckthorn fruit sold to make vitamin drinks is benefitting
local communities. A former desert wasteland has been converted into a forest of 110,000
trees spanning an area of 44 hectares. Meanwhile, Korean Air has been donating education-
al computers every year to Bolovsrol and Gun Galutai national schools, which take part in
the project.
Korean Culture Promotion agreement with the National Museum of KoreaKorean
Air has been sponsoring the Nat’l Museum of Korea for the promotion of Korean cultural
heritage and history since first signing an agreement in 2012. In July 2016, both parties
held a ceremony extending the agreement. Under the renewed understanding, Korean Air
will sponsor eight exhibitions in museums at home and abroad over the next two years. It
will also provide transportation of artifacts, discounted flight tickets for exhibition staff, and
exhibition promotions.
Korean Air pop-up cafe for sharingSince 2011, Korean Air has been holding a bi-month-
ly event called ‘Pop-up Café for Sharing’ with its SNS subscribers. As part of its global sharing
activities, this event aims to help the children in need around the world. The proceeds from
this event are donated to the ‘United Help for International Children organization’.
41
Dream Maker
•Talent fostering (Jeongseok/Inha
Academic Institutions)
•“Dream Library” Project in China
•Korean Air Future Artist olympiad
•“Make Your Dream Come True in Jeju”
•Haneul Sarang (Sky Love)
English Class
•Fascinating Travels
with Korean Air
Environmental Protector
• ‘Korean Air Forest’ in Baganuur Mongolia
•Kubuqi Desert in China
•Sapling distribution event
on Arbor Day
Cultural Sponsorship
•Sponsorship to Korean language
audio guide service at the world’s
three most famous museums and
other locations
• Ilwoo Space (gallery) & Ilwoo
Photography Awards
Sport Sponsorship
•official sponsorships for international sports
•Excellence Program
(Sports player patronage program)
•Women’s table tennis team
•Korean Air Jumbos volleyball team
•Korean Air Chairman, Cho Yang-ho,
serving as the official chairman of the
Korea Table Tennis Association
•Korean Air President, Cho Won-tae,
serving as the commissioner
of Korean Volleyball Federation
Material Issue Report
Sharing
Community Volunteering
•Humble monthly donations
•Sky Angels’ volunteering activities
(such as bazaars and kimchi-sharing
events)
•Habitat for Humanity
•Sisterhood ties with rural villages
•Community volunteering around
the globe
Disaster Relief
•Transportation of disaster relief goods
•Disaster relief aids
Global Community Volunteering
•Global Community Volunteering
in the Philippine and Malaysia
42
Activities 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Humble monthly donation from employees
Afforestation in Mongolia
Rice donation
Sisterhood ties with rural villages
Sky Love Bazaar
Sponsorship of Korean language audio guide service at international museums
Love & Care Plans
Medical volunteering of the Korean Air Aeromedical Center
Inviting underprivileged children to Jeju Island
Free flight tickets to Korea for internationally adopted ethnic Koreans
Sisterhood ties with military units
Major social contribution activities
Global Community Volunteering
Material Issue Report
Korean language audio guide service at the world’s three most famous museums
(the Louvre, British Museum, and Hermitage Museum)
Global project to provide medical treatment to children patients
(Iraq)
Global volunteer activities
(Bicol in the Philippines /
Penang and Gopeng in Malaysia)
Love & Care Plans in ChinaGlobal tree planting activities
(Baganuur, Mongolia)
43Photo by Kim Jeong-nam in Udaipur, India – Among selections during the 22nd Annual Korean Air Travel Photo Contest
2017 Korean Air sustainability report
SustainingExcellence
BOARDING PASS
India
India is the cradle of civilization in South Asia and the
birthplace of Buddhism. The name of the country
is derived from the Indus river. It is the seventh-
largest city in the world in terms of area, and with a
population of 1.3 billion, the second-most populous.
Udaipur, also known as the City of Lakes or India’s
Europe, is located in Rajasthan State. It is a popular
honeymoon destination among Indians.
44
49
56
60
61
44
Major Performance
Flight hours(1,000 hours)
1969
20
1980
105
1990
202
2000
385
2010
582
2016
625Fleet(aircraft)
1969
11
1980
37
1990
72
2000
112
2010
128
2016
160
Cargo transportation (10,000 tons)
1969
0
1980
14
1990
51
2000
128
2010
180
2016
157
Passengertransportation (10,000 persons)
1969
70
1980
360
1990
1,226
2000
2,207
2010
2,274
2016
2,684
Operating profit (KRW 100 million)
1969
36
1980
5,587
1990
16,791
2000
55,590
2010
112,788
2016
115,029 Capital stock(KRW 100 million)
1969
15
1980
284
1990
1,740
2000
3,378
2010
3,668
2016
3,698 Total assets(KRW 100 million)
1969
57
1980
7,374
1990
29,033
2000
107,480
2010
178,885
2016
227,060
Creating Economic Value
45
Investment Performance Results
2014
13,340
2015
32,428
2016
13,669
2014
3,102
2015
2,358
2016
4,919
2014
16,442
2015
34,786
2016
18,618
Aircraft (KRW 100 million) General(KRW 100 million) Total (KRW 100 million)
Stakeholders 2016
EmployeesLabor expenses 15,216
Welfare benefits 2,893
Shareholders Dividends -
Creditors Interest expenses 4,002
Tax serviceCorporate tax
expenses14
Local Communities Donations 101
Suppliers
Rental 2,880
Fuel expenses 21,901
Manufacturing
expenses8,768
Airport expenses 12,199
Total 67,974
Economic value distribution to stakeholders(KRW 100 million)
Creating Economic Value
46
2017 Business strategies and key tasks
Establishing a sustainable business structure that generate profits even in a rapidly changing business environment
•Comply with all safety regulations and processes
• Avoid attempts at excessive savings on safety-related costs
•optimize route and fleet operations and increase the operation rate
•Enhance productivity per employee
•Maintain cost per supply under increased profit per supply
•Devise emergency measures to minimize the impact of sudden changes in oil prices or the exchange
•Forecast shifts in market trends by efficiently utilizing our management system
•Proactively respond to issues through the speedy and flexible decision-making process
•Respond to changes in the industry by diversifying the revenue base
Ongoing efforts to ensure operational safety
Improving unit cost with better resource
productivity
Ensuring stable profits through anticipating changes in the business environment and
taking proactive measures
Business Goals and StrategiesAccording to statistics from the Ministry of Justice, the number of
outbound Korean air travelers increased by 16.3% and the number
of inbound foreign passengers rose by 33.0% year on year, while
the total number of inbound and outbound international passen-
gers went up by a record 23.0%.With the total international pas-
senger traffic growth forecast by International Air Transport Associ-
ation (IATA) to be 5.9% for 2016 and 5.1% for 2017, a robust growth
similar to that of 2016 is expected for 2017. Continued growth is
also expected in cargo traffic, with predicted gains of 3.4% in 2016
and 3.3% in 2017.
Creating Economic Value
In 2017, Korean Air aims to achieve
KRW 12,220 billion in sales and KRW 840 billion in operating profit under a management policy of establishing a sustainable business structure that generate profits even in a rapidly changing business environment.
47
| MINI C ASE | New and future routes in 2016 and 2017
In a bid to secure a new growth momentum, Korean Air is actively expanding its network and exploring new markets.
In 2016, we added new routes including Busan-Taipei in January, and Incheon-okinawa and Incheon-Guiyang in May. In December,
flight service was launched between Incheon and Delhi, a center of trade and commerce in northern India. Going forward,
we will continue developing new routes with growth potential.
New routes added (2016) The Northeast Asian network was expanded and new
long-distance routes added
RouteOperating
carrier
Flight frequency per week
Service launch
Busan-Taipei B737 7 2016.01
Incheon-Okinawa B777 7 2016.05
Incheon-Guiyang B737 7 2016.05
Incheon-Delhi A330 7 2016.12
New routes planned (2017)Expanding the network by adding high-demand routes
RouteOperating
carrier
Flight frequency per week
Service launch
Incheon-Barcelona B777 3 2017.04
Increasing high-class ticket sales
Increasing high-class ticket sales with new high-tech aircraft models featuring cutting-edge first- and business-class seats while pursuing the premium and economy-class markets through efforts in alliance marketing
Expanding new markets
Developing new markets with high growth potential, such as operating non-scheduled flights in cities where there are no scheduled services, thereby expanding the joint operations network and securing additional revenue sources
Strengthening cooperation
between airlines
Expanding flight schedules in cooperation with SkyTeam members such as through code-sharing and revenue management (with Delta airline), thereby enhancing customer convenience
Promoting customer relations
marketing
Improving flight reservation features on the website and through mobile devices, as well as refining the reservation/ticketing process
Passenger Business StrategiesIn 2017, it is expected that the domestic aviation market will con-
tinue to grow with a rise in the number of Korean passengers fol-
lowing that of 2016 and with demand for international air travel
remaining strong. However, potential risk factors for increasing
cost still exist, such as a decrease in travel demand caused by in-
ternational political events and instability in oil prices and the Ko-
rean won exchange rates due to concerns over protectionist US
trade policy. In order to meet these challenges head-on, Korean Air
has put in place four operational strategies to achieve sustainable
growth in this sector.
Creating Economic Value
48
Cargo Business StrategiesKorean Air’s cargo business boasts of outstanding transportation
services, global network and a broad range of products and ser-
vices. These advantages propel the cargo business into imple-
menting the following strategies to further accelerate growth
following the steady recovery of the global economy and our in-
creased presence in new markets
Aerospace Business StrategiesAs Korea’s leading systems integration company for unmanned ae-
rial vehicles (UAV), Korean Air is actively developing its UAV lineup
and channeling its R&D resources toward entering domestic and
overseas markets. After acquiring Korea’s first UAV certification, the
midrange surveillance UAV known as KUS-DUAS, is currently in pro-
duction. Meanwhile, the development for a large, strategic-grade
unmanned reconnaissance aerial vehicle system is scheduled to
be completed in 2017.
Achieving quality growth focused on internal strengths
and stability
• Developing a UAV lineup and channeling its R&D resources toward entering domestic and overseas markets
•Completing the development for a large, strategic-grade unmanned reconnaissance aerial vehicle system in 2017
Increasing sales of high-profit
products
•Increasing sales capabilities and profitability by focusing on selective highly profitable service items, such as mailing and fresh cargo transportation
Continuing aggressive market
development
• Maximizing profitability in growth markets by increasing supply in Mexico, Canada and Vietnam while accelerating entry into South America in pursuit of a new revenue source and increasing a third-party transportation service in overseas markets including Southeast Asian/China and Europe/Middle East markets via Uzbekistan and Navoy.
• Improving profits through structure optimization to expand revenue from cargo service of passenger flights while taking full advantage of new aircraft models with flexible operation of cargo flight schedules
Enhancing efficiency in
supply operation
•Maximizing profitability putting the available supply to full use while enhancing the quality of service through enhanced transportation business management
Other Business StrategiesKorean Air operates other businesses ancillary to its core business-
es of air transportation and aerospace, including catering and in-
flight sales.
Catering•Developing various new menu items to better
serve customer needs
In-flight sales• Increasing sales efficiency and maintaining
higher quality of products
Creating Economic Value
49
Talent Management
Human Rights and Employee CommunicationLabor-management cooperation Korean Air ensures its em-
ployees the right to freedom of association or collective bargaining
as stipulated by the ILo. In addition to annual labor-management
council meetings (four times), annual wage negotiations (one), and
biennial collective bargaining (one), additional collective bargain-
ing or labor-management councils are held as necessary. When
there is a need for a new system or for changes to existing ones,
a labor-management project team is established to cooperate on
the related issues.
Communication Plaza Driven by the chairman Cho Yang-ho’s
commitment to improving the corporate culture and structure
through interactive communication and consensus, Korean Air
opened the Communication Plaza as a virtual venue for commu-
nication in March 2015. It serves as an online channel for sharing
ideas and ventilating grievances among employees. The anonym-
ity policy guarantees the free exchange of ideas and comments
on issues among individuals and teams. Plus, suggestions and
questions are addressed by relevant departments with replies and
corrections, which further promote interactive, real-time commu-
nication within the organization.
Major Performance
In 2016, a total of
228 suggestions and inquiries from employees were addressed through the Communication Plaza. offline programs designed to help relieve the psychological stress of those working in front-end customer services were provided to 627 employees. Scholarships were delivered to
140 employees whobegan work on a master’s degreein aviation or logistics.
The industrial accident rate has remained at a low level of 0.06%.
Communication Plaza statistics in 2016(cases)
Suggestions 131
Inquiries57
others26
Compliments14
Total 228
union members
Non -unionized employees Total
Membership rate
General 10,577 4,104 14,681 72.0%
Flight operations
Pilots’ union
1,094
558 2,282
47.9%
Pilots’ new union
630 27.6%
Labor unions(persons)
Grievances resolution channels Korean Air has a Grievances
Resolution Committee and HR Counseling office to more effec-
tively deal with employees’ grievances and suggestions in order
to raise morale. In 2016, all of 15 grievances received through the
channels were appropriately dealt with and concluded.
50
Happiness campaignFollowing the 2016 campaign, the theme
for 2017 is ‘happiness’ and various programs are being operated
under the slogan of ‘HAPPY ToGETHER’. The campaign is designed
to help employees to find small moments of happiness in their ev-
eryday working environment, inspiring a positive corporate culture
that in turn uplifts our customers and local communities.
Happy HourAt 3 p.m. on the last Wednesday of every month, all
employees take an hour off to relax with colleagues over some re-
freshments for ‘Happy Hour'. It is valued as a time for employees to
bond with one another. Employees leave comments on this event
and the team of the best comment receive refreshment supplies
as a prize.
Happiness Sharing EventSince 2015, Korean Air has held a ‘Hap-
piness Sharing Event’ where employees find small happiness in
their everyday working environment, boosting the organization as
a whole. At each event, we select local delicacies and bring them
to different work sites as a surprise, and have received a positive
response from employees.
Hanjin Expedition Team We have been hosting a quarterly
program called the Hanjin Expedition Team focusing on employ-
ees the Hanjin Group and their families. With participants in the
Improved recruitment procedures Starting in 2014, Korean Air
discontinued its own job adaptability test (KALSAT) for a new sys-
tem of recruitment, placing primary weight on the statement of
purpose (SoP) and interviews. We also operate recruitment pro-
cedures considering the characteristics of each job. For example,
applicants for cabin crew positions are put up against on-the-job
situations to assess their resourcefulness and job adaptability.
Female employees As of the end of December 2016, Korean Air’s
total workforce is 20,844 and female employees accounted for
44 percent, or 9,189. Korean Air has increased the ratio of female
employees while setting the industrial standard to promote the
welfare of female employees at work through customized benefits
plans. In addition to the legally required benefit programs, female
flight attendants are allowed to take maternity leave on the day
they become aware of their pregnancy. All female employees are
program gaining a chance to experience state-of-the-art aviation
equipment and logistics facilities, it provides as an opportunity for
the children of employees to satisfy their curiosity about aviation
and logistics and better understand their parents’ workplaces. Cur-
rent employees are encouraged to develop a sense of proud in
their company.
also given the freedom to take leave for fertility treatment at any
given time. As a result, the retention rate after their returning to
work is rising every year, and the percentage of male employees
taking parental leave is also gradually increasing.
Localization of employment Keenly aware that localization is
imperative to successful global expansion, Korean Air actively em-
ploys and develops high-caliber local residents from global mar-
kets. Job applicants are not discriminated against on the basis of
their nationality, cultural background, religion or other factors. our
human resource development (HRD) policy is grounded in both
merit and performance, while multiple programs exist that are de-
signed to enhance the competency of local employees with the
objective of managerial promotion.
Locally-hired employees at managerial level
※As of Dec. 31, 2016. Expatriates are included in ‘overseas employees’ (executives not included).
Overseas employees
Percentage of locally-hired employees
Percentage of locally-hired
managers
2,449 persons
90.8% 13.7%
Talent Management
51
Employee Competency BuildingKorean Air is developing and operating various programs to foster
global talent based on its management philosophy that "the foun-
dation of corporate management is people, and positive changes
in people start from education".
Training programs To nurture talent with global competitive-
ness, Korean Air’s specialized education system consists of a broad
range of multi-level courses on business administration, specific
job skills, and services targeting all employees in all positions and
job duties. The business management course helps all employees,
from new employees to executives, develop job skills required for
their respective positions, while job skill courses and service cours-
es offer different levels from beginner to advanced job skills.
Execu-tives
Gen-eral
man-agers
Dep-uty
gen-eral
man-agers
Man-agers
Assis-tant
man-agers
Rank-and-file em-ploy-ees
KEDP
orientation for new executives
KTDP
Job competency improvement
programs
(mandatory online pro-
grams by job position)
Airline Management
School (AMS)
LeadershipSchool
HarmonyWorkshop
KLDP
overseas (local)
employ-ees dis-patched
to the head-
quarters
overseas employ-ees with excellent perfor-mance
overseas manager training
overseas oJT
program
MBA
Program for new career-
employ-ees
Internal instruc-
tor training
orientation for new employees and basic course on air transportation
Business management (new employee/manager training) programs
Sales & Transportation
Mainte-nance &
Engineer-ing
Aero-space
CabinFlight opera-tions
Man-age-ment
Expert
Prac-tice
Service clinic
Regular training
by aircraft model
Civil/military aircraft
R&D advanced
Training for line/
team managers
Aircraft transition training for cap-
tains
Sales man-age-ment
Cargo man-age-ment
Pas-senger man-age-ment
Expert training
by aircraft model
Civil/military aircraft
R&D expert
Expert training
for upper class
Promo-tional
training for
captains
Sales expert
Cargo expert
Pas-senger expert
Aircraft mechanic training
Aircraft basics
Basic training for new employ-
ees
Aircraft initial/
transition training for first officers
Sales prac-tice
Cargo prac-tice
Pas-senger prac-tice
Service management
Service practice
Service Basic
Specialized programs by job
Talent Management
52
Scholarships for graduate to school employees(persons)
2014
189
2015
341
2016
481
New and upgraded programs In 2016, various courses were
newly added and/or improved. The Korean Air Leadership School,
a new course for newly-promoted deputy general managers and
captains, offered various programs to raise awareness of their new
roles, enhance their leadership capacity, improve teamwork, and
help them train subordinate staff. The Harmony Workshop for em-
ployees recently promoted to assistant managers has significant-
ly adjusted its curriculum and added a program on cultivating a
mindset to promote a culture of communication and harmony, as
well as of achieving mutual growth.
Awareness-raising for strengthening aviation safety and
security A training course for managers was designed in order to
raise awareness of safety and security and enhance risk manage-
ment competencies throughout the year. Executives of Korean Air
and affiliates of Hanjin Group, as well as managers at home and
abroad joined the course consisting of safety management sys-
tem, safety by division, on-the-job training in aviation security and
ground handling, and on-site experiences.
Global talent development Korean Air also devotes itself to
training talented, locally-hired international employees. A variety
of experience programs are in operation to help international em-
ployees better understand Korean culture and traditions as well as
providing job skills and management competency-building cours-
es. The Human Resources Development Center plays a pivotal role
in developing and providing training courses to serve the specific
needs of international employees, while the close collaboration
between the HRD Center and overseas regional headquarters fa-
cilitate developing special training courses customized to specific
needs of local markets overseas. At the same time, we foster and
support job and service lecturers for each regional market and have
reinforced the English-based education portal, providing 260 edu-
cational content in English for the convenience of overseas learners.
Lifelong learning support Korean Air established Jungseok
College, Korea’s first tech school run by a private company, for its
employees in 2000 in order to support the lifelong learning. All
employees attending the university get full-tuition scholarships
with national certificated degrees upon their graduation and can
transfer to other universities or graduate schools. A total of 1,292
students received a degree, including 861 bachelor’s degrees and
431 associate’s degrees, over the 16 years from its foundation up
through 2017. The company has also prepared a scholarship pro-
gram to support its employees who wish to attend the graduate
schools of Korea Aerospace University, Inha University and other
schools to pick up more specialized skills and knowledge in avia-
tion and logistics transportation industries.
Online training on human rights Korean Air is conducting a
range of training programs to encourage a healthy and positive
working life for employees. Based on our belief that sound bodies
and minds among employees leads to the best customer service
and work performance, we provide over 50 online programs relat-
ed to human rights and health. At the same time, a curriculum to
promote self-esteem as an employee of a global airline and raise
awareness of the importance of self-management is provided on
a regular basis.
Talent Management
53
Employee HealthOccupational health management In order to prevent industrial accidents and to maintain a health working environment, the Korean Air
Aeromedical Center* carries out the following activities.
Category Activities
occupational
health
• Conducting health checkups and medical examinations according to the Aviation Safety Act and occupational Safety and
Health Act
• Tracking employee health status after screening
• Planning and operating various health promotion projects for disease prevention
- Providing psychological counseling as well as advice on nutrition, exercise, and diabetes from experts
- Publishing a newsletter on mind health as well as health information sheets on infectious and chronic disease prevention
Industrial health
training
• Conducting online heath training four times per year to provide various health information
• operating collective training programs tailored to job characteristics
- Cockpit crew: aviation physiology, and health management
- Cabin crew: CPR and first-aid treatment, and prevention of muscular skeletal disease as well as of industrial accidents
- General and maintenance employees: basic knowledge of health at work, and CPR
- All employees: mental health and stress management
Working environment
management
• Assessing the level of harmful factors exposed to employees (such as noise and dust) to protect their health, and creating a
healthy working environment through improvement activities
• Monthly rounds of worksite visits by a group of doctors, nurses and industrial hygiene management engineers in order to
provide health training and counseling and to check the working environment
Muscular skeletal
disease prevention
• Investigating harmful factors for musculoskeletal system, including heavy cargo handling and VDT** syndrome, and
conducting ergonomic improvement activities
• Measuring basic physical fitness regularly and providing counseling for customized exercise programs to help cabin crew
improve their physical strength thereby preventing musculoskeletal diseases
*In Korean Air Aeromedical Center is equipped with examination facilities, equipment, and medical computer systems certified by the US Federal Aviation Administration. Forty specialists from a range of medical fields, such as aviation medical examiners, nurses, professional counselors, and hygiene management engineers, are in charge of the health management of all Korean Air employees including cockpit and cabin crew.
** VDT(Visual Display Terminal Syndrome) It refers to symptoms such as headache and vision problems caused by electromagnetic waves from computer screens.
Employee mental health management Employees’ mental
health affects the quality of life of individuals as well as work effi-
ciency and productivity within the company. Korean Air is provid-
ing mental health care programs for employees, including those
working in service fields.
online education programs are being operated to help all employ-
ees to take an interest in mental health care, and intensive offline
training is provided to employees working in front-end customer
service. In the “Take a Rest” Psychological Counseling Center, full-
time professional counselors help employees thorough one-on-
one counseling on job stress, emotional issues and family con-
cerns, as well as offering psychological tests to help illuminate
personality traits, emotions and interpersonal relations.
We ensure that strict confidentiality is always maintained so em-
ployees can access the center in a more comfortable and trusted
environment. In addition, an anonymous online bulletin board is
available for employees who find it difficult to visit in person. If a
case requires in-depth examination or treatment, it is transferred to
a consulting psychiatrist at a partner university hospital.
Talent Management
54
Employee SafetyKorean Air has been striving to secure employees' safety and
health and to create a healthier workplace without any industri-
al accidents. Job Hazards Analysis, introduced in 2008, to focuses
on job tasks as a way to identify hazards beforehand. It has since
allowed us to reinforce risk prevention, while getting employees
involved in the assessment of potential risks on the job. By scru-
tinizing risk factors, we take systematic steps to deal with safety
issues. The measures taken are not limited to management aspect
such as training and compliance with regulatory procedures, but
on engineering measures such as introducing equipment and im-
proving facilities until the required safety level is met. In addition,
periodic check-ups are implemented to ensure effective safety
management. In 2016, the Job Hazards Analysis was conducted for
both Korean Air and its suppliers, and in 2017 we will continue to
provide training and on-site support to help suppliers to promote
their occupational safety.
Curriculum Lecture Audience 2014 2015 2016
Service practice
Stress management to promote mental health
Employees in passenger and cargo transportation fields
85(7th)
502(22nd)
291(17th)
Under -standing of our partners
Health management: Stress
New call center employees from service suppliers
266(13th)
366(19th)
237(14th)
Captain leadership
Understanding of mental health
Cockpit crew to be promoted to captains
71(4th)
64(3rd)
99(4th)
Offline mental health education(persons)
Efforts to promote the emotional and mental health of em-
ployees Emotional labor refers to jobs that requires workers to
manage their emotions when responding to customers. As greater
awareness of emotional labor has developed in recent years, relat-
ed bills have been submitted to the National Assembly in Korea. In
this area, Korean Air is providing intensive mental health care sup-
port, such as customized mental health education and periodic
stress evaluation, to call center employees and cabin crew whose
jobs include emotional labor. In recognition of these efforts, Kore-
an Air was selected as one of leading companies at an emotional
labor workplace inspection by the Ministry of Labor in 2016.
Moreover, from 2017, we are including a mental health checkup
as part of regular health examinations for employees. Employees
fill out a checklist on which customized mental health information
is provided, and psychological counseling is offered to employees
classified as falling into the high-risk group.
Offline mental health education
Sleeping and
health
Wisely coping
with an illness of
the mind
20152014
How to overcome
job stress
2016
our accident-free campaign has motivated employees to stay fully
aware of risk factors on the job since 1995. A merit-based reward
system also encourages furthered safety awareness and on-the-
job prevention. Additionally, the targets are revised to reflect actu-
al safety performance grounded in the past five-year track record.
The latest revision was made in 2014.
Industrial accident rates per 100 employees(%)
National Average
Korean Air
1.00
0.80
0.60
0.20
0.40
0.00
0.49
0.77
0.16
0.71
0.11
0.65
0.08
0.53
0.08
200720042001 2010 2013 2016
0.77
0.49
0.06
*Accident (injury) Rate = Number of injured workers x 100/Annual average number of workers
Talent Management
55
Category Description
Medical and health
subsidies
• Health Insurance Program
• Self-insurance subsidies
(Allowances for the sickness/accidents/death of employees and/or their spouses)
• Subsidies for flu shots
• Medical bill subsidies for overseas flight attendants and any employee on business trips
ranging between USD 200 and 30,000
Leisure life
• 25 to 35 free flight tickets annually
• 252 condominiums located domestically
• Discount for prestigious hotel chains in Korea and overseas
• Sponsoring 28 club activities
Everyday life
• Corporate housing (2,237 households)
• Housing loans
• Scholarships for employees’ children going to high school and college
• Tuition subsidies for employees’ children going to prestigious international universities
• Scholarships and language course tuition subsidies for children of expatriates
• Scholarships to employees going to college and/or graduate schools to study job-related
subjects
Financial stability of
retirement
• Subscription to the National Pension Plan
• KRW 50,000 subsidies to all employees’ personal pension plans
• Korea’s largest size of corporate credit union, and subsidization of contribution to Korea’s
largest corporate credit union upon retirement
Incentives•Merit-based incentives
•Safety incentives
Welfare benefit programsBalance between Work and LifeKorean Air’s welfare benefit programs are available so that employ-
ees can choose benefits from several options. This ensures a more
practical application of employee support for the sake of their bal-
ance of work and personal life. Employees and their families can fly
on any of the routes operated by Korean Air at discounted fares,
which is intended to promote travelling while gaining a global
perspective. other benefit programs include housing, financial
support for the child educational expenses, medical bills, leisure
programs and financial security for retirement.
2016 Major Financial Support
Health insurance premium subsidies KRW 44 billion Allowances for the sickness/accident/ death of employees and /or their spouses KRW 1.73 billion
2014 2015 2016
National pension 349.1 358.5 374.9
Personal pension 101.4 101.1 101.0
Contribution to credit union 111.5 114.0 117.3
Total 562.0 573.6 593.2
Pension funds and contributions(KRW 100 million)
Talent Management
56
Customer Satisfaction Management
Customer CommunicationCommunication on SNSSNS is one of the most efficient interac-
tive communication channels through which companies can be-
come more familiar with their customers. Korean Air makes full use
of SNS to deliver up-to-date flight information in several languages.
It is also an effective channel for marketing, promotion and events
along with travel tips. When major issues arise, it serves as a plat-
form to directly and efficiently express the company’s situation to
communicate and build trust with customers.
Customer-Engaged MarketingGuest House, France (January 8 to June 30, 2016) <Guest
House, France> is Korean Air’s advertising campaign promoting
the value of ‘slow travel’ to contemporary people who are used to
staying busy and doing everything quickly. The campaign shows
the charms of different destinations around France, from Paris,
one of the most popular tourist destinations in the world, to Avi-
gnon, known for its Festival d'Avignon, Moustiers-Sainte-Marie with
Sainte Croix lake and Verdon Canyon, Châteaux in the Loire Valley,
Chamonix-Mont-Blanc, the fairytale village of Colmar, and Hôtel
du Palais in Biarritz. It promoted an event recruiting residents for
guesthouses in each area. over 16,000 applications were received,
each with a 1 in 2,400 chance of winning. The selected residents
were announced through TV commercials and provided with flight
tickets and accommodation to stay in the respective guesthous-
es. Their travel stories were posted online in real time, drawing a
good response. Meanwhile, an "All That France" app offering useful
and in-depth information encompassing art, culture, and gourmet
dishes in France received a high number of downloads.
Guided to India (November 28, 2016 to March 26, 2017) An
advertising campaign celebrating the launch of a new Incheon-Del-
hi route created a new perception of India as a travel destination. In
the Guiding Service series, different messages about healing were
delivered through 15 video postcards featuring scenic tourist des-
tinations in India. and an event sharing the campaign to SNS was
also held drawing a good response.
on the website, an India travelogue competition was held to find
experts on India. To Introduce three types of trips with different
themes for enjoying India, various events were held for each theme
on the website. In the 'Questioning Trip’ section, a daily question
about life was posted for visitors leave their thoughts. The ‘800-ru-
pee Trip’ theme offered information on how to travel India on 800
rupees per day. The ‘Local Trip’ included a Q&A section where the
experts selected through the travelogue competition offered tips
about traveling India.
SNS channel subscribers(persons)
366,283
39,805
194,305
(As of Dec. 31, 2016)
News Twitter
5,065
Google+
38,636
57
Culture MarketingKorean Air Travel Photo Contest Korean Air holds an annual
Korean Air Travel Photo Contest that is open to anyone who likes
traveling and photography. As the nation’s biggest travel photo
contest for amateur photographers, high quality photographs cap-
turing beautiful scenes and natural landscapes as well as the mo-
ments of our daily lives around the globe are submitted every year.
The growing number of international entries is proof of increasing
awareness regarding our contest as an international event. The
23rd contest in 2016 awarded main and special prizes among ap-
proximately 22,000 entries.
College student design contest Korean Air has been hosting
annual design contests targeting university students based on the
theme of “Airplanes in Art” since 2013. Applicants can enter their
work under one of the following four categories: Visual, Product,
Space and Apparel. The event offers aspiring designers the oppor-
tunities to submit their artwork to the contest, helping promote
the Korean art industry.
Ranked 1st in NCSI *
Ranked 1st in GCSI**
Customer satisfaction management awards
**NCSI National Customer Satisfaction index*GCSI GCSI refers to Global Customer Satisfaction Competency Index developed
by Global Management Association (GMA).
2014
Ranked 1st in GCSI
2015
Ranked 1st in GCSI
2016
Rated ‘Excellent’ in a MLIT air transportation service eval-
uationAccording to an air transportation service evaluation by
the Korean Ministry of Land, Infrastructure, and Transport (MLIT)
announced in 2016, Korean Air was rated as "Excellent (A)" in the
full-service carrier category. The evaluation was based on two years
of air transportation service from 2014 to 2015. In terms of evalu-
ation items, liability for damage and user satisfaction were rated
relatively lower compared to safety and on-time operation.
Airline TotalOn-time
operation SafetyLiability for
damage user
satisfaction
Korean Air
Excellent (A)
Excellent (A)
Excellent (A)
Very good(B)
Very good(B)
Air transportation service evaluation: Full-service carrier category
*The evaluation results are classified into six ratings: Excellent (A), Very good (B), Good (C), Fair (D), Poor (E), and Very bad (F).
Korean Air Future Artist Olympiad Korean Air Future Artist
olympiad is a contest geared toward talented elementary stu-
dents who are interested in art and paintings. Since 2009, the
event has been operated as part of our effort to contribute to
the development of art education for future generations and to
awaken others to the joy of their creation. The contest has evolved
into a global event, where both Korean elementary students and
international elementary students from Korea and around the
world participate. The grand prize winner is then printed on the
exterior of Korean Air’s airplanes as the planes go about their daily
routine around the world.
Bibimbap cooking demonstrationKorean Air has been intro-
ducing Korean food at international travel expos in France, Spain,
the USA, New Zealand, China and Hong Kong. on March 8-9,
2017 at the ITB Berlin 2017, visitor to world’s leading travel trade
show were presented with a history of bibimbap and a recipe.
Large numbers of visitors were left with a positive opinion of the
healthy flavors of bibimbap and took a great interest in Korean
food.
Customer Satisfaction Management
58
Efforts to Promote Customer HealthIn-flight air quality management Stakeholders’ interest in in-
door air quality has grown higher than ever due to yellow dust,
particulate matter, and infectious diseases. Considering that aircraft
are operated in a closed environment, in-flight air quality manage-
ment is crucial. Korean Air aircrafts equipped with the state-of-the
art air circulation systems completely sterilize the cabin and filter
our fine particles, providing a clean atmosphere at all times.
Air from outside is sterilized at 200℃ by passing through the en-
gine compressor before entering the interior. The heated com-
pressed air then passes through an ozone purification system that
converts ozone into oxygen, is adjusted at a comfortable tempera-
ture, and then supplied to the cabin. Every two to three minutes,
the air enters an inlet at the top of the cabin to pass through HEPA
filters capturing dust, smoke, bacteria and even microscopic virus-
es down to 1.01-100 micrometers. It is returned through an outlet
at the bottom of the cabin. As fresh air moves from top to bottom
like air curtain, dusts, odors, and carbon dioxide from passengers
are also removed vertically, maintaining a pleasant cabin environ-
ment.
All Korean Air aircraft are disinfected once a month. The operation
of disassembling and cleaning aircraft parts or intensive cleaning is
carried out in a 15-day to two-month cycle.
Air cleaning system in Korean Air aircrafts
5 5
Air flowing out
6
Cabin
4
HEPA filtersAir flowing in
1
2
HEPA filters
3
Air-conditioning & heating system
Customer Satisfaction Management
59
Response to infectious diseasesVarious efforts are being made
to prevent the spread of infectious diseases in response to global
epidemics and expanding overseas travel. In order to quickly re-
spond to outbreaks of infectious diseases, Korean Air has estab-
lished a network with the Korea Centers for Disease Control and
Prevention, and Incheon National Quarantine Station, set up a de-
tailed response plan synched with the nation’s epidemic alert*, and
devised measures for before, during and after flights. We are also
monitoring global health trends through the World Health organi-
zation, US Centers for Disease Control and Prevention, and the Eu-
ropean Centers for Disease Control and Prevention in order to pro-
actively address concerns in the international health environment.
* Epidemic alert stages: Caution – Attention – Alert – Serious
Measures Details
operating
equipment
to prevent
infection
• Loading preventive equipment in aircraft
- A set of protective gear
(N95 mask and protective clothing)
- Hand sanitizer and masks
• Emphasizing hygiene management
including disinfection
- Strengthened quarantine guidelines for
facilities, including airplanes
Establishing
guidelines on
suspected cases
of infection
• Conducting screening procedure prior to
boarding to check for fever
• Implementing a process of managing
suspected cases of infection during flight
Preventing
and protecting
employees from
infection
• operated guidelines for action on
preventing the spread of MERS
- Precautions, how to respond to suspected
cases, and employee management, such
as the quarantine and return to work of
employees subject to observation
• Providing information on MERS and training
on its prevention
- online training, and on-site inspection
and training
• Frequent checks of the health status of all
employees to prevent the spread of disease
Measures taken to respond to MERS in 2015
Measures Details
Strengthening
airplane quarantine
• Quarantine activities for airplanes
departed or arrived from affected
cities
operating equipment
to prevent infection
• Loading preventive equipment in
aircraft
- A set of protective gear (N95 mask
and protective clothing)
Preventing and
protecting employees
from infection
• Providing information on the virus
and precautionary measures for
employees, in particular, the crew and
employees working in affected areas
Measures taken to respond to Zika virus in 2016
Customer Satisfaction Management
60
Win-Win Management
Shared Growth Policy Korean Air strives to promote win-win management that enhanc-
es cooperation and competitiveness and allows mutual benefit by
seeking shared growth with its business partners. We are operat-
ing programs for shared growth based on mutual trust, such as full
cash payments to suppliers, condensing the payment cycle, dis-
patching experts to suppliers. In particular, our aviation and logis-
tics know-hows is being utilized to help SMEs improve their export
competitiveness while seeking cooperation with related industries.
We will continue to develop programs for achieving shared growth
based on cooperation with partner SMEs and relate industries.
Major programs and performanceAs of 2016, Korean Air made all payments to all its 634 suppliers
in cash in a bid to help improve their liquidity. Korean Air’s Sale
& Leaseback program helps ease manufacturing partners’ financial
pressure and management issues as the company purchases ex-
pensive manufacturing equipment and leases them back to the
partners. We also share the gains on cost-savings from joint tech-
nological development with partners on a quarterly basis under
the Cooperation Benefit Sharing program.
In particular, 'local production of advanced aircraft wing parts
(A320 Shacklet)' in partnership with Samwoo Metal Industries was
selected as the "2016 Best Practices in Fair Trade Agreements" by
the Korean Fair Trade Commission, which served as an opportunity
to further strengthen competitiveness of Korean Air and its supplier
Major Performance
'Local production of advanced aircraft wing parts (A320 Shacklet)' in partnership with Samwoo Metal Industries was selected as the
"2016 Best Practices in Fair TradeAgreements" by the Korea Fair Trade Commission.
All payments to allits 634 suppliers (as of 2016) were made in cash to help them to improve liquidity.
through shared growth. In addition to the technology training
programs to enhance our partners’ technological competitiveness
and self-reliance, we also subsidize our partner employee vaccina-
tions and work to secure the most stable of working conditions.
Regular meetings with the CEos of our partners and Quality Sym-
posiums serve as effective communicative channels with partner
to promote shared growth. In accordance with fair business prac-
tices and compliance with the Fair Transaction and Shared Growth
Agreement as recommended by the Fair Trade Commission (FTC)
in 2013, agreements with aircraft manufacturing partners are in
effect accompanied by implementation of the four primary FTC
Standard Subcontract Agreement forms and operation of a Re-
porting Center for Transaction Irregularities.
Major shared growth programs
Paying partners in cash instead of issuing notes to improve liquidity
Leasing expensive equipment in Korean Air’s possession to manufacturing partners
Sharing the profits from joint technological development and resultant cost savings
•An oJT on-site training course for lesser-skilled employees of partner companies• Technological and educational support of
business partners• Meetings with CEos of partners and Quality
Symposiums
Cash settlements
Sale & Leaseback
Cooperation Benefit Sharing
OJT Support
61
Environmental Management
Green Management Policy
We, at Korean Air, are concerned about the sustainable future of the earth and respect the universal values as a member of the global society, and we declare the following Green Management Principles to fulfill our social responsibilities as a leading global airline. We will
1. Improve flight procedures and introduce new aircraft in order to reduce noise and greenhouse gases.
2. Abide by national and international environment laws and all relevant regulations, and apply stricter internal standards.
3. Minimize environmental load through proactive measures and improvement in our performance.
4. Seek to make constant improvement in our performance in order to conserve resources and energy, and manage them efficiently.
5. Carry out training and provide education so that our staff and employees clearly acknowledge environmental goals and actively join the environment protection effort.
6. Promote mutual cooperation with partner firms to execute green management through communication on environmental issues.
7. Openly share all of our green management efforts and the results to the public. 8. Endeavor to protect the natural environment and contribute to the development
of local community through international cooperation.
•Certification standard: ISO14001 certificate•Date of acquisition: Dec. 13, 1996•Date of last issue: Nov. 13, 2014•�Certification body: BSI
(British Standards Institution)•Scope: All divisions (overseas offices excluded)
1) General (flight operations, passenger/cargo transportation, cabin service, and administrative headquarters
2) Maintenance & Engineering (Gimpo, Incheon, and Bucheon bases)
3) Catering (Gimpo and Incheon catering centers)4) Aircraft manufacturing
(Aerospace business division)
Environment Management Strategies & Goals Certification of Environment Management System
Vision
‘Creating value to promotequality of life in harmony with the environment’
2017 Key Tasks
To respond to climate change issues
To have ISO14001 certification conversion evaluation
To conduct preventive checks of environmental facilities
To prepare for chemical substance regulations
Promoting communication
Preparing for new regulations
Enhancing environmental management
Proactively responding to regulations and strengthening green management
62
Energy Consumption and GHG EmissionsJet fuel for aircraft operations accounts for 99% of energy
consumed by Korean Air. In 2016, 420,000 tons of jet fuel
were used at a cost of KRW 2.2 trillion, comprising 22.1% of
total expenditures.
Korean Air burned 4.17 million tons of fuel for aircraft op-
erations in 2016, and the total amount of GHG emissions,
including ground operations, was 13.39 million tons.
Fuel consumption by air transportation (Tons)
2016
4,174,377
2015
4,083,989
2014
4,006,984
GHG emissions(Tons)
Facilities
Total
Air transportation
201620152014
13,283,08612,995,05212,750,860
107,344116,939
13,102,39612,867,799
110,688
13,393,774
2011 2012 2013 2014 2015 2016
Co2 12,186,003 12,662,272 12,361,107 12,625,927 12,868,556 13,152,944
CH4 18 18 18 17 17 17
N2o 387 403 393 401 409 419
Co2eq 12,306,351 12,780,177 12,483,403 12,750,860 12,995,052 13,283,086
GHG emissions by air transportation (Scope1) (Tons)
*2006 IPCC Guidelines for National Greenhouse Gas Inventories Tier 2 are applied in estimating GHG emissions.*GHG emissions from aircraft engine tests (on the ground) and the use of helicopters for non-business purpose are not included.
Environmental Management
2014 2015 2016
Air transportation (MJ/RTK) 12.26 12.28 12.36
Facilities
(GJ/KRW 1billion)179.22 176.8 178.62
Energy intensity
63
Responding to the Eu Emissions Trading SystemWith the
2012 inclusion of the aviation sector in the EU Emissions Trading
System, Korean Air (which serves cities in the EU) became subject
to this program. Airlines are being allocated a limited number of
permits to discharge pollutants from 2012 to 2020 based on their
2010 transportation performance. If they wish to increase emis-
sions, they must buy permits on the open markets. Korean Air cal-
culates annual emissions using the ETS-oMS system, has the re-
sults verified by a third party, and buys carbon offsets for any excess
emissions. As B777s with high fuel efficiency are replacing B747s in
the EU region, GHG emissions have actually been declining.
Responding to the Korea Emission Trading Scheme (KETS)
Since 2015, Korean Air has been subject to the Korea Emission
Eu Emissions Trading System Carbon offsets (tons)
Emissions
20,094Permits
offsets
25,59831,069 24,095
2016
4,001
2015
5,504
2014
10,975
Waste In 2016, increased passenger traffic (5.9% based on RTK)
led to a 4% rise in waste generated in the cabin, and the recycling
rate dropped by 2.1% as the use of recycled plastic fell due to de-
creased cargo.
2015 2016
Incineration/Landfill (%) 60.1 62.2
Recycling (%) 39.9 37.8
2015 2016
Discharged8751,019
Designated811754
Total 26,488 27,478
Municipal
24,715 25,792
Waste disposal(tons)
Environmental Management
Trading Scheme (KETS) for GHG emissions from domestic aircraft,
buildings, and vehicles. Due to its efforts to cut GHG emissions, in-
cluding the GHG Target Management System prior to the launch of
the KETS, 79,431 tons of carbon reduction has been recognized as
an early reduction credit. In 2016, Korean Air consequently received
the highest number of additional permits in the entire domestic
aviation industry. Nevertheless, aviation is the only transportation
sector to which the KTES is applied, and at a higher-than-indus-
try-average rate. Since the implementation of the KTES, Korean Air
has produced more GHG emissions than its annual permits allow,
mainly because domestic routes operating at a loss are being main-
tained as part of efforts to promote public convenience. Additional
permits were purchased in June 2017 to balance Korean Air’s status,
and its efforts to responsibly manage carbon emissions will continue.
64
Water
Air
Water and air pollutantsWater and air pollutant emissions are
stably managed within internal standards, which are applied at a
level of 50% stricter than the legal requirements.
Pollutant emission level*
*Emission intensity ÷ Legal limit × 100
50
Emission
intensity (%)Legal limit 100
0
50
Emission
intensity (%)Legal limit 100
0
Maximum50
Average10Minimum
1
Maximum70
Minimum1
Average15
Biodiversity protectionAcknowledging the role played by air
carriers, Korean Air is participating in international efforts to pro-
tect biodiversity. The air transport of protected animals and plants,
rare animals, primates, and endangered species is banned under
company policy. In 2010, the International Year of Biodiversity, vid-
eos under the theme of "Many Species, one Planet” were run in
the cabin to urge global citizens to take part in biodiversity pres-
ervation efforts.
In 2013, we banned the shipment of shark fins, which had been
partially conducted, in an effort to protect these at-risk creatures.
In the past, Korean Air transported them only with valid permits
and exclusively in accordance with the Convention on Interna-
tional Trade in Endangered Species of Wild Fauna and Flora. How-
ever, as the movement to curb their distribution and transporta-
tion caught our attention, the decision was made to ban all such
transportation. Korean Air submitted its regulation on this ban to
the International Air Transport Association (IATA) and continues to
participate in various programs to protect the global ecosystem.
Aircraft noiseKorean Air is making every effort to reduce incon-
venience of people residing near airports by minimizing flight
operation noise. Although such noise inevitably occurs, Korean
Air has been seriously implementing countermeasures by aircraft
manufacturers and the International Civil Aviation organization
(ICAo).
Area of noise benefitRunway
Establish on the
Instrument Landing
System(ILS)
Basic continuous
descent approach profile
Conventional
approach profile
Environmental Management
65
All Korean Air aircrafts meet the criteria of the ICAo Chapter 4 and
the 6th level criteria, the lowest noise level under Korea’s airport
noise-related laws. The new models, such as the A380, B787, A321
NEo and CS300, that Korean Air plans to introduce, generate less
pollution and noise, essentially making for a more environmental-
ly-friendly model than the current aircrafts in service. This will help
create a more pleasant environment for the community inhabi-
tants within the vicinity of an airport.
Payments of surcharge by domestic airports in 2016 (KRW 100 million)
합계
28.4
Gimpo airport
13.8
Jeju airport
7.2
Busan airport
6.9
Ulsan airport
0.3
Yeosu airport
0.2
-10
-15
-20
-25
-30
1990 1995 2000 2005 2010 2015 2020 2025
-5
0
Chapter 3
Chapter 4
747-400p
A330-300A330-200
737-800W(Winglet)
777-200
737-900 737-900ER
CS300
A321 neo
777-300ER777F
747-8F
A380-861787
777-300747-400F
747-400ERF
Noise level of Korean Air aircraft
Korean Air pays a noise surcharge for every flight according to the
regulations set by individual airports. The noise surcharge paid by
airlines is used to reduce aircraft noise and to support noise-affect-
ed areas in accordance with the designated agenda of the speci-
fied airport.
Korean Air’s aircraft operation regulations and Aircraft Model
Guidebooks stipulate noise-reducing flight procedures. All flight
operations at Korean Air follow these procedures to alleviate noise
from takeoff and landing. The compliance with internationally im-
posed airport noise-reduction procedures is accompanied by the
Noise Abatement Departure Procedure (NADP) and the Contin-
uous Descent Approach (CDA) of the ICAo adapted to different
needs.
NADP1 It is intended to provide noise reduction for noise-sensitive areas in close proximity to the departure end of the runway-in-use.
NADP2 It provides noise reduction to areas more distant from the runway end.
CDA
• Aircraft maintains a fixed descending speed until it reaches the final altitude upon approaching a runway
• This approach produces positive effects on flight safety in the approach phase.
• It is designed to reduce fuel consumption and noise compared to other conventional descents such as approaching an airport in a stair-step fashion.
Environmental Management
66
2017 Korean Air sustainability report
Governance
BOARDING PASS
67
69
71Myanmar
Yellow fields at harvest
time, gold-painted
temple roofs and monks
in saffron robes.... In
Myanmar, a golden
country located on the
border between Southeast
Asia and the Indian
subcontinent, about 90%
of the people are Buddhists. The
spirit of the Buddhist traditions can be
felt in a mysterious cave temple in Hpa An
in southern Myanmar.
Photo by Zaw Zaw Tun in Hpa-An of Myanmar – Among selections during the 23rd Annual Korean Air Travel Photo Contest
67
Corporate Governance
Board of Directors Korean Air’s board of directors consists of four standing directors,
including the CEo, and six non-standing directors with proficiency
in different fields of academia, law, government and finance. out-
side directors are appointed by the general shareholders’ meeting
from the candidates nominated by the Non-Standing Director
Nomination Committee, the majority of which are composed of
non-standing directors. Some qualifying shareholders can recom-
mend a candidate for a non-standing director position provided
that he/she follows procedure. Information on the non-standing
directors and candidates are disclosed on the DART website in the
run-up to the general shareholders’ meeting.
Type Name Position/Career backgroundDate of appointment
Term (years) Note
Standing directors
Cho Yang-ho Chairman & CEo 2016.03.18 3Chairman of the board
Cho Won-tae President & Coo 2015.03.27 3 -
Woo Kee-hong Executive Vice President 2017.03.24 3 -
Lee Soo-keun Executive Vice President 2017.03.24 3 -
Non- standing directors
Kim Seung-yu Former CEo of Hana Financial Group 2015.03.27 3 -
Lee Yun-woo Chairman of Geoje Big Island Asset Management 2015.03.27 3Chief of the AuditCommittee
Kim Jae-il Professor of Seoul National University Business School 2016.03.18 3 -
Bahn Jang-shick Dean, Graduate School of Management of Technology, Sogang University 2015.03.27 3 -
Ahn Yong-seok Lawyer (Lee & Ko Law Firm) 2017.03.24 3 -
Jeong Jin-su Lawyer (Yoon & Yang Law Firm) 2017.03.24 3 -
Members of the board (As of Mar. 24, 2017)
Committees in the BODIn order to ensure efficient operation of the Board of Directors and
to comply with related laws and regulations, Korean Air has es-
tablished and operated four committees, namely the Audit Com-
mittee, Non-standing Director Nomination Committee, Affiliate
Transactions Committee, and Management Committee. Since all
members of the Audit Committee are non-standing directors, they
can independently monitor the performance of the directors' du-
ties and the company operations with senior executives in the fi-
nancial and auditing divisions attending to assist members as they
deliberate the agenda.
Name Members Name Purpose and Role
Non-standing Director Nomination Committee
Standing directors 2 Cho Yang-ho,Woo Kee-hongNominating non-standing director candidates according to governing laws, including the company’s Articles of Association and the Board of Directors Regulations
Non-standing directors 4
Kim Seung-yu, Kim Jae-il, Bahn Jang-shick,Jeong Jin-su
Audit Committee
Non-standing directors 3
Lee Yun-woo,Bahn Jang-shick,Jeong Jin-su
Auditing the account books and business operations while dealing with matters commissioned by the Board of Directors according to governing laws, including the Articles of Association and the Board of Directors Regulations
Management Committee
Standing directors 3 Cho Yang-ho, Cho Won-tae, Woo Kee-hong Making decisions pertaining to the agenda as commissioned by the Board of Directors and significant issues other than those subject to the resolution by the general shareholders’ meeting as stipulated in the relevant laws and the Articles of Association
Non-standing directors 3
Kim Seung-yu, Ahn Yong-seok, Jeong Jin-su
Affiliate Transactions Committee
Standing directors 1 Lee Soo-keun Performing previews of major inside transactions involving affiliated persons under the Fair Trade Act, and making suggestions for corrections to any transactional activity pointing out possible legal violations
Non-standing directors 2
Lee Yun-woo,Jeong Jin-su
Committee Information(As of Mar. 24, 2017)
68
Preventing conflict of interests within BOD Korean Air’s articles of association and BoD regulations stipulate
“directors with vested interests in any particular agenda are disqual-
ified from the voting rights on the item in question and are there-
fore unable to partake in the quorum at the meeting”. Members
of the board are notified of this rule prior to making a resolution.
Date Agenda
Attendance of non-standing directors
2016.2.2Five agenda including the FY2015 Account Settlement
5/5
2016.2.24Three agenda including the 54th Annual General Shareholders’ Meeting
5/5
2016.3.18Ten agenda including appointment (proposal) of CEo
6/6
2016.4.22Agenda on applying for voluntary agreement of Hanjin Shipping
5/6
2016.5.12Seven agenda including the first quarter of FY2016 Account Settlement
6/6
2016.7.21Four agenda including the first half of FY2016 Account Settlement
6/6
2016.9.8~9.10*
Agenda on loan to Hanjin Shipping 6/6
2016.9.18/9.21**
Two agenda including loan (proposal) to Hanjin Shipping
6/6
2016.11.3Two agenda including the third quarter of FY2016 Account Settlement
6/6
2016.12.13Five agenda including 2017 business plan (proposal)
5/6
2016 BOD Activities
* After the meeting was adjourned on Sept. 8-9, it was conditionally approved on Sept. 10 (on condition of securing collateral first).
** After the meeting was adjourned on Sept. 18, A resolution was made by BoD on Sept. 21 (replacing the resolution on Sept. 10).
Stakeholder communication channelsKorean Air makes use of various channels such as annual reports,
semi-annual and quarterly reports, postings of IR information on
the website, general shareholders’ meetings, IR sessions, and the
DART(https://dart.fss.or.kr) to swiftly establish communication on
major business issues of pertinence to stakeholders and share-
holders, and to receive stakeholder feedback. In particular, the
sustainability report is the major channel of communication with
stakeholders and is published with the approval of the president,
vice president and heads of divisions.
Decision-making hierarchy and socially responsible management The CEo and chairman of Korean Air concurrently holds the po-
sition of chairman of the board so as to deal with major business
issues more efficiently and is entrusted with the management of
all business matters, including economic, environmental and so-
cietal, to ensure the timeliness of decision-making. The high-level
council, a standing body composed of executives, who are heads
of key divisions or higher in position, makes decisions on strategic
business and sustainability management. This council functions as
an effective decision-making body by actively responding to the
expectations and demands of stakeholders on economic, environ-
mental, and social trends, and by reviewing and reaching a con-
sensus on issues from a company-wide perspective. The council
meets regularly to monitor and evaluate the resolution progress of
issues discussed at meetings.
BOD performance resultsKorean Air’s board of directors convened seven regular and six ex-
traordinary meetings to discuss and vote on 39 different agenda in
2016. The BoD holds regular meetings at least once every quarter
to ensure the informed discussion and review of major agenda and
convene extraordinary meetings whenever necessary. The annual
BoD meeting schedule is published in advance to ensure a higher
rate of attendance each year. In 2016, the average rate of atten-
dance stood at 92 percent (97 percent being non-standing direc-
tors), i.e. the meetings were attended by 9.2 directors on average.
Senior-level executives from each business divisions including Pas-
senger and Cargo Flights and Finance and Technology, may attend
the BoD meetings whenever deemed necessary in order to assist
the directors in informed decision-making. Executives in charge of
individual business areas also present relevant issues to the board
and answer questions pertaining to the agenda.
2014 2015 2016
Frequency of BoD meetings (times) 9 9 13
Number of approved agenda (items) 51 43 39
BoD participation rate (total) (%) 80 87 92
BoD participation rate
(non-standing directors) (%)89 90 97
BOD performance results
Corporate Governance
69
Risk management system
•Whistle blowing system•Compliance officer•Voluntary reporting on family members or relatives who work
for companies associated with or related to Korean Air
Ethics Management
Charter of Ethics and ethics management organizationKorean Air proclaimed its commitment to business ethics by an-
nouncing the incorporation of its Charter of Ethics in January 2001,
as the guiding principles in all business activities. Additionally, all
employees at Korean Air pledged to follow the underlying princi-
ples and values in their daily business activities. In addition to the
in-house ethics secretariat, the heads of each business division and
executive officers in charge are serving as chief ethics officers who
encourage and assist ranks-and-files with making rightful deci-
sion-making and behavior. Based on the Charter of Ethics, we have
developed business ethics programs for all employees to abide by,
including guidelines on the implementation of the code of ethics,
on dealing with ethics issues and the whistle blowing program.
Korean Air’s Charter of Ethics
Korean Air regards transparency and responsibility as core management values. We respect free market principles and abide
by relevant rules and regulations in our business practices. With these principles, we strive to promote prosperity for the company
and society as a whole. As a result, Korean Air institutes a Charter of Ethics, which we vow to observe at all times.
•We regard customer satisfaction and safety as our highest priority.
•We increase investment value for our investors.
•We respect all employees and their right to an enhanced quality of life.
•We promote joint development with our business partners based on mutual trust.
•We respect the principles of free competition and maintain front-runner status in the development of the airline transport industry.
•We contribute strongly to the development of society and to the preservation of the environment.
•We acknowledge the corporate principles set forth by the company and uphold all obligations and responsibilities.
Guidelines on Code of Ethics’ implementation
•Setting forth principles on
how to make the right value
judgments and demonstrate
proper behavior
Guidelines on dealing with ethics issues
• Providing specific guidelines and clear standards on how to respond to problems
70
Fair transactions and legal compliance Korean Air has been running the Compliance Program and signed
up to the ‘Fair Trade and Shared Growth Agreement” with business
partners in the aircraft manufacturing industry as recommended by
the Fair Trade Commission. Committed to establishing fair transac-
tion practices within the organization, we have also adopted the
Fair Trade Commission’s Four-Action Plan while operating the Unfair
Transactions Report Center in the promoting of self-compliance.
Raising ethical awarenessWe provide detailed guidelines on business ethics on our intranet
through the exclusive bulletin board. All our executives and employ-
ees are mandated to complete business ethics training on a regu-
lar basis via the internal learning network and submit a pledge of
ethics upon completion of each course. This helps keep everyone
well-versed in the importance of ethical management practice as a
strategy for sustainable growth and remind them the importance of
having an ethics code to begin with.
Whistle blowing procedureThe whistleblowing procedure has been in place to eradicate per-
sonal and business favors requested and/or provided by employ-
ees, illegal acts, corruption and other irregularities that often arise
in deals involving suppliers. Anyone can report any of the above
via e-mail at jebo@koreanair. com. All received reports go through
fact-finding investigations for appropriate measures to determine
appropriate punishments or corrective action. Reporters are strictly
protected according to the internal rules and procedures, and are
kept up to date with the progress of the investigation.
Course 2014 2015 2016
Compliance with anti-trust laws 2,778 928 1,110
Sexual harassment-free workplace 18,339 18,286 19,234
Ethics management in Korean Air 19,202 928 17,558
Compliance officer program 1,027 18,084 17,038
Understanding of Improper Solicitation and Graft Act - - 18,056
Ethics management training performance(persons)
1. Training performance is the sum of those have completed the course.2. ‘Ethics management in Korean Air’ is provided biennially (domestic/overseas).3. ‘Understanding of Improper Solicitation and Graft Act’ was launched in Aug. 2016.
Ethics Management
71
Risk Management
Financial Risks
Exchange rate riskKorean Air conducts transactions in foreign
currencies and is exposed to risks arising from exchange rate vol-
atility. To manage these risks, we strive to maintain a balance be-
tween revenue and expenses per currency while making use of
currency swaps within the limits set by policy.
Interest rate riskKorean Air borrows funds at fixed and variable
interest rates, which exposes the company to interest rate risks. In
this regard, we maintain an optimal ratio between fixed-rate bor-
rowing and floating-rate borrowing and enter into interest rate
swaps. Risk aversion activities are regularly assessed to adjust in-
terest rate trends and define the risk profile appropriately, ensuring
that an optimal hedging strategy is applied.
Oil price riskMarket prices for petroleum products such as jet
fuel change with various factors influencing supply and demand
of the global oil market. These factors also impact the sales perfor-
mance and cash flow of the air transportation business, our largest
business segment. To respond to oil price risks, oil option contracts
are utilized in accordance with internal policies.
Non-financial Risks
Strategic/Operational risk We have in place the Communication
Plaza to promote active communication and suggestions about
how to avoid risks originating from inadequate decision-making
and changes in the business environment. Regular internal audits
also evaluate the potential for risk per department while also audit-
ing the efficiency the deployment of corporate resources.
Regulatory riskA regular monitoring system is in place to ensure
compliance with laws and regulations, and a considerable portion
of our resources, including the legal department and in-house le-
gal experts, are allocated to proactively manage regulatory risks.
We also have the Compliance Program as a means to prevent the
risk of unlawful transaction.
Event risk The Corporate Safety, Security & Compliance was set up
under the direct control of the president to ensure integrated and
effective management of all safety and security matters in prevent-
ing aircraft accidents, hijacking and other accidents while minimizing
losses. Regulations, guidelines and manuals pertaining to accident re-
sponse are available. The emergency response system is additionally
evaluated periodically along with company-wide drills and training.
Environmental risk In a bid to counter climate change and envi-
ronmental accident risks, we have devised bylaws on company-wide
environmental risk prevention and environmental accident response
while developing short-cut routes and adopting high fuel-efficiency
aircrafts to minimize negative impact on the environment.
Crisis Management Korean Air has identified risk factors that affect the company and
established internal rules and guidelines for the organization, its
mission and the emergency measures required to cope with cri-
ses, based upon which all employees can respond in a systematic
manner that minimizes economic loss, damages on the corporate
image and disturbances within the company.
Identifying risks
Producing adequate countermeasures
Continuous monitoring
Monitoring changes in the business environment
Responding to risks by function/
team
72Photo by Lee Gwang-jin in the Lake Khubsgul of Mogolia – Among selections during the 21st Annual Korean Air Travel Photo Contest
2017 Korean Air sustainability report
Appendix
BOARDING PASS
Mongolia is the birthplace of Chinggis Khan, who
built the Mongolian Empire into the largest in history
in the early 13th century. This landlocked Central Asia
country is known for its pristine nature, including vast
green steppes, a starry night sky, and crystal-clear
lakes. Lake Khubsgul, also called the Mother Sea, can
appear more like a sea than a lake due to its vastness.
Mongolia
73
80
82
87
88
73
Key Sustainability Indicators
2014 2015 2016
Sales
Sales 11,680,398 11,308,423 11,502,877
Cost of sales 10,171,068 9,286,479 9,218,012
Gross profit 1,509,330 2,021,944 2,284,865
Selling and administrative expenses 1,136,822 1,162,726 1,205,861
operating profit (loss) 372,508 859,218 1,079,004
Non-operating operating profit and loss -914,597 -1,358,198 -1,821,094
Net profit (loss) before tax -542,089 -498,980 -742,090
Tax expense (profit) -181,513 -91,298 -150,729
Net profit (loss) -360,576 -407,682 -591,361
Assets
Current assets 2,392,892 2,873,563 2,875,642
Non-current assets 19,027,555 20,175,377 19,830,397
Total assets 21,420,447 23,048,940 22,706,038
Current Liabilities 6,350,693 8,428,114 8,269,323
Non-current liabilities 13,090,042 12,324,532 12,783,569
Total liabilities 19,440,735 20,752,646 21,052,892
Capital stock 298,931 369,753 369,753
other paid-in capital 11,248 776,179 1,153,265
other capital components 206,894 332,917 327,977
Retained Earnings 1,462,639 817,445 -197,849
Total capital 1,979,712 2,296,294 1,653,146
Total liabilities and equity 21,420,447 23,048,940 22,706,038
Economic Performance (million won)
74
Key Sustainability Indicators
unit 2014 2015 2016
Employees
Total employees persons 20,428 20,815 20,844
Gender Male persons 11,719 11,737 11,655
Female persons 8,709 9,078 9,189
Age Below 30 persons 4,865 5,071 4,761
30~39 persons 6,475 6,539 6,617
40~49 persons 6,243 6,183 6,141
50 and above persons 2,845 3,022 3,325
Region Domestic persons 18,232 18,481 18,620
overseas persons 2,196 2,334 2,224
Permanent Male persons 10,961 10,990 10,956
Female persons 7,367 7,517 7,620
Non-permanent Male persons 758 747 699
Female persons 1,342 1,561 1,569
Administrative positions
Male persons 2,750 2,722 2,798
Female persons 975 1,104 1,294
General positions Male persons 8,211 8,268 8,158
Female persons 6,392 6,413 6,326
Domestic employees Male persons 10,784 10,790 10,731
Female persons 7,448 7,691 7,889
overseas employees Male persons 935 947 924
Female persons 1,261 1,387 1,300
Social Performance
75
Social Performanceunit 2014 2015 2016
New Employment and Turnover
New employment Male persons 573 504 438
Female persons 848 1,012 690
Below 30 persons 1,146 1,264 900
30~39 persons 241 194 205
40~49 persons 24 41 16
50 and above persons 10 17 7
Domestic persons 975 1,037 813
overseas persons 446 479 315
Turnover Male persons 551 550 503
Female persons 555 574 674
Below 30 persons 411 366 411
30~39 persons 325 336 386
40~49 persons 99 143 201
50 and above persons 271 249 179
Domestic persons 743 789 767
overseas persons 363 335 410
Recruitment from Local Communities
Local employment No. of overseas employees persons 2,459 2,599 2,449
Ratio of locals % 89.3 89.8 90.8
Ratio of locals in manager positions % 13.9 13.0 13.7
Female persons 1,261 1,387 1,300
Key Sustainability Indicators
76
unit 2014 2015 2016
Maternity Protection
Use of the maternity protectionsystem
Maternity leave before and after child birth case 702 856 682
Rate of return to work after the maternity leave % 100 100 100
Pregnancy leave persons 403 463 446
Childcare leave persons 670 735 670
Rate of retention for one year after returning to work from childcare leave
% 78.6 81.5 84
Ratio of male employees % 2.1 3.3 4.3
Employee Education
Training performance No. of employees who took education programs persons 20,428 20,815 20,844
No. of hours per person hour 114 103 89
Lifelong learning support Scholarships for graduate school to employees persons 189 152 140
Social Contribution
Social Contribution Volunteering hours per person hour 1.9 1.7 1.9
Social contribution expenses million won 9,679 12,562 9,227
Information Security
Corporation information security education
Domestic persons 14,686 24,843 24,646
overseas persons 1,255 5,921 5,819
Customers’ personal data Personal data leak case 0 0 0
Key Sustainability Indicators
Social Performance
77
Environment Performanceunit 2014 2015 2016
Fuels and Energy
Fuel consumption for air transportation
Jet oil tons 4,006,984 4,083,989 4,174,377
Ground operations B-C oil GJ 174,124 -* -
Direct energy consumption
B-B oil GJ - - -
Gas/Diesel oil GJ 245,097 122,781** 114,988
Boiler kerosene GJ - - -
By product fuel No. 1 GJ 9,675 8,464 14,939
By product fuel No. 2 GJ 82,427 256,037*** 276,276
Gasoline GJ 10,509 11,072 11,114
Jet oil GJ 33,157 29,715 22,471
LNG GJ 241,459 246,072 260,097
LPG GJ 3,786 5,676 6,246
Ground operations Electricity GJ 1,267,959 1,295,423 1,320,069
Indirect energy consumption
Medium-temperature water (steam) GJ 25,152 24,077 28,435
Energy Intensity Air transportation MJ/RTK 12.26 12.28 12.36
Ground operations GJ/sales amount:1 billion won
179.22 176.8 178.62
GHG emissions
GHG emissions from air transportation
Scope1 tCo2eq 12,750,860 12,995,052 13,283,086
GHG emissions from ground operations
Scope1 tCo2eq 54,201 43,650 45,309
Scope2 tCo2eq 62,738 63,694 65,379
GHG emissions intensity Air transportation kg_Co2e/100RTK 85.56 91.29 91.85
Ground operations ton_Co2e/1 billion won
10.01 9.52 9.68
* No consumption starting from 2015** Consumption drastically dropped after the transfer of
the Limousine operation.*** Consumption amount increased as the Tech Center
fuel changed from B-C to C-9
Key Sustainability Indicators
78
Environment Performanceunit 2014 2015 2016
GHG emissions reduction
Greenhouse gas reduction
Economic flight tCo2 141,168 143,019 149,606
Performance enhancement tCo2 97,793 93,346 56,628
Flight planning tCo2 168,039 181,159 179,332
Weight management tCo2 24,873 28,266* 28,047
Water Resources
Water use Total water intake tons 1,300,020 1,407,453 1,475,831
Recycled amount tons 19,390 22,450 25,117
Recycling rate % 1.49 1.6 1.7
Water discharge BoD tons 42.293 52.832 47.157
CoD tons 25.643 27.725 14.929
SS tons 34.691 40.95 16.768
T-N tons 4.05 4.025 2.213
T-P tons 1.041 0.933 0.616
Air
Air emissions Dust tons 27 23 16
THC tons 29 30 32
Nox tons 67,190 68,543 70,155
Sox tons 11.2 4.6 6.7
So2 tons 3,987 4,063 4,152* Data errors are corrected after re-validation.
Key Sustainability Indicators
79
Environment Performanceunit 2014 2015 2016
Waste
Waste generation Municipal tons 23,825 24,253 25,792
Discharge tons 1,032 995 875
Designated tons 602 771 811
Waste disposal Incineration tons 14,357 15,128 16,600
Landfill tons 621 474 326
Recycling tons 10,481 10,417 10,552
Environmental education
Environmental education
Basic training man-hour 3,398 3,652 3,032
Job skill training man-hour 890 1,434 1,256
Practical training man-hour 2,954 2,610 3,296
Key Sustainability Indicators
80
Third-Party Assurance Statement
To the Stakeholders of Korean Air
The Korea Productivity Center (hereinafter ‘the Assurer’) was requested
by Korean Air to perform a third-party assurance of 2017 Korean air Sus-
tainability Report (hereinafter ‘the Report’), and provides the following
assurance statement.
Responsibility and Independence
Korean Air is entirely responsible for all information and opinions pre-
sented in the Report. The Assurer is solely responsible for providing a
third party verification of the contents of the Report. As an independent
assurance agency, the Assurer neither was involved in the process of de-
veloping the Report with Korean Air, nor is in any conflict of interest that
may undermine our independence.
Assurance Standards
The assurance was performed in accordance with the Assurance Type 1
and Moderate Level based on the AA1000AS (2008). The Assurer also veri-
fied the compatibility of the Report to the Principles of Inclusivity, Materi-
ality, and Responsiveness according to the AA1000APS (2008) and to the
GRI G4 Guideline. Moreover, the Assurer checked whether Korean Air com-
plied with Global Reporting Initiatives (GRI) G4 Guideline and ISo26000.
Limitations
The assurer conducted an assurance of Korean Air’s performance in 2016
in accordance with the standards above, and does not include the verifi-
cation of the reliability of the financial performance, GHG emissions and
information on ERP system and so on. Moreover, the on-site inspection
was limited to the headquarters in Seoul, and any further assurance pro-
cedure may change the result accordingly.
Methodology
The independent assurance of the Report was conducted following the methods below:
1. Verified whether the Report fulfilled the requirements of GRI G4 Guidelines’ Core option’.
2. Verified whether the Report was in compliance with the principles dictating the reporting contents and quality based on GRI G4 Guidelines.
3. Verified objectivity and appropriateness of all selected key issues and content in the Report by reviewing various analysis.
4. Verified the suitability of the reporting contents and errors in expression through the comparative analysis with other sources.
5. Verified the evidence of key data and information along with the internal process and system through the on-site inspection at the headquarters in
Seoul.
Findings
The Assurer verified that the Report fairly and accurately displayed Korean Air’s sustainability management activities and performances. Furthermore, it
is verified that the Report fulfilled requirements of GRI G4 Guideline’s Core option. In addition, the Assurer verified the Core option requirements for the
GRI G4 Guidelines General Standard Disclosures, and reviewed all specific standard disclosures of material issues against the disclosure on management
approach(DMA) and indicators as identified from the process of determining report content as follows:
Contents Material Aspect DMA & Indicators
Strengthening aviation safety
and security occupational Health and Safety DMA, LA5, LA6, LA7, LA8
Customer Health and Safety DMA, PR1, PR2
Responding to
new climate regimesEnergy DMA, EN3, EN4, EN5, EN6, EN7
Emissions DMA, EN15, EN16, EN18, EN19, EN20, EN21
Providing
customer-oriented serviceCustomer Health and Safety DMA, PR1, PR2
Product and Service Labeling DMA, PR5
Customer Privacy DMA, RR8
Creating shared value
with societyIndirect Economic Impacts DMA, EC7, EC8
Local Communities DMA, EC8, So1
81
Inclusivity: Stakeholder Engagement
The Principle of Inclusivity refers to the principle that an organization
is ought to involve stakeholders in the process of developing and ac-
complishing responsible, strategic response measures to sustainability.
The Assurer confirmed that Korean Air put various efforts to comply with
and improve the Principle of Inclusivity. Korean Air categorizes its major
stakeholders into 7 groups: customers, employees, partner companies,
local communities, government, shareholders and labor unions. Korean
Air maintains organic relations with its stakeholders and actively oper-
ates communication channels for each group.
Materiality: Identification and Reporting of Material Issues
The Principle of Materiality refers to the principle that an organization
should identify material issues that are related to relevant stakeholders
of the organization. The Assurer could verify that Korean Air selected is-
sues that are significant and important to its stakeholders. Korean Air
attempted to identify key issues in its sustainability aspect through di-
verse methods including global initiatives, media analysis, stakeholder
communication, business principles, and benchmarks. It also showed
its efforts for continuously managing and improving the key issues by
offering exclusive departments in charge, performance in 2016, future
plans and goals specifically. Furthermore, the Assurer could confirm that
the key issues are evenly reflected and reported throughout the Report.
Responsiveness: Organization's Responsiveness to Issues
The Principle of Responsiveness means that an organization must respond to the issues that may have effect on the performance of its stakeholders.
The Assurer verified that Korean Air identified major expectations that are influential to stakeholders’ performance, took corresponding measures, and
properly presented them in the Report. Especially, Korean Air’s efforts toward enhancing safety by operating SMS (Safety Management System) and IOSA
(IATA Operational Safety Audit) etc. in order to ensure safety on flight is recognized as an outstanding practice.
Recommendations
Upon highly valuing Korean Air’s various actions and performance to enhance its sustainability, the Assurer proposes below for continuous growth in
future report publications and sustainability standard.
1. Korean Air operates a communication channel to the characteristics of its stakeholders and actively promotes its response activities. In order to more
systematically manage the major discussions and issues raised by stakeholders, we recommend that Korean Air established a stakeholder engagement
policy that can manage key issues and strengthen the management reporting system.
2. In order to improve the quality of management and to ensure continuous management, Korean Air has to report on key activities, data trends and
future goals from a long-term perspective. In addition, we recommend that you continually review performance and goals (KPIs) through a manage-
ment system.
Aug 2017
Korea Productivity Center CEO Hong, Sun-Jik
Director Kim, Dong-Soo Team manager Lee, Yang-Ho Researcher Jeong, Ae-Jin
The Sustainable Management Center of Korea Productivity Center is an assurance agency certified by AccountAbility, an institution that establishes global international standards AA1000 for stakeholder participation and verifications, thereby qualified to conduct assurance on an independent basis. Moreover, our Assurance Committee is consisted of competent experts, who have ample experiences in sustainability management consulting and assurance and have completed relevant professional training.
* AA1000AS(2008): AA1000 Assurance Standard(2008) is an international assurance standard, set by AccountAbility, that provides method of reporting sustainability management issues by evaluating the organization management on performances, compliance with principles, and reliability of performance information
* AA1000APS(2008): AA1000 AccountAbility Principles Standard(2008) is an international assurance standard set by AccountAbility that provides principles of AA1000 standards.
000-81
Third-Party Assurance Statement
82
GRI G4 Index
GENERAL STANDARD DISCLOuSuRES Page(s) Material issue
Strategy and Analysis
G4-1 Statement from the most senior decision maker of the organization (e.g., CEo, chair, or equivalent senior position) regarding the relevance of sustainability to the organization and its strategy for addressing sustainability
5
G4-2 Description of major impacts, risks and opportunities 19,23,31,35
Organizational Profile
G4-3 Name of organization 6
G4-4 Primary brands, products, and services 6
G4-5 Location of the organization’s headquarters 6
G4-6 Number of countries where the organization operates and names of countries where the organization has major operations or which are specifically relevant to the sustainability topics covered in the report
7
G4-7 Nature of ownership and legal form 6
G4-8 Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries 7
G4-9 Scale of the organization 6,44,45
- Total number of employees 6,44,45
- Total number of operations 6,44,45
- Net sales (private company) or net profit (public company) 6,44,45
- Total capitalization broken down in terms of debt and equity (private company) 6,44,45
- Quantity of products or services provided 6,44,45
G4-10 a. Total number of employees by employment contract and gender 74,75
b. Total number of permanent employees by employment type and gender 74,75
c. Total workforce consisting of employees and supervised workers by gender 74,75
d. Total workforce by region and gender 74,75
e. Clarification of the substantial portion of the organization’s work being performed by workers legally recognized as self-employed or by individuals other than employees or supervised workers, including employees and supervised employees of contractors
74,75
f. Any significant variation in employment numbers 74,75
G4-11 Percentage of total employees covered by collective bargaining agreements 76
83
GRI G4 Index
GENERAL STANDARD DISCLOuSuRES Page(s) Material issue
Organizational Profile
G4-12 Description of the organization’s supply chain 60
G4-13 Any significant change during the reporting period regarding the organization’s size, structure, ownership, or supply chain No significant changes
G4-14 Clarification of precautionary approach or principle being addressed by the organization 71
G4-15 List of externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or which it endorses
11,86
G4-16 List of memberships in associations (such as industry associations) and national or international advocacy organizations 88
Identified Material Aspects and Boundaries
G4-17 a. List of all entities included in the organization’s consolidated financial statements or equivalent documents 2
b. Clarification of inclusion of any entity in the organization’s consolidated financial statements or equivalent documents not covered in the report 2
G4-18 a. Process of defining the report content and aspect boundaries 12
b. Explanation on how the organization has implemented the Reporting Principles for Defining Report Content 12
G4-19 List of all material aspects identified in the process of defining the report content 12
G4-20 For each material Aspect, the Aspect Boundaries within the organization are as follows 12, 19, 23, 31, 35
* Clarification of the relevancy of the Aspect material within the organization 12, 19, 23, 31, 35
* If Aspect is not material for all entities within the organization (as described in G4-17), select one of the following two approaches and report one of them:
12, 19, 23, 31, 35
- G4-17 List of entities or groups of entities included in G4-17 for which Aspect is not material 12, 19, 23, 31, 35
- G4-17 List of entities or groups of entities included in G4-17 for which Aspects are material 12, 19, 23, 31, 35
* Any specific limitation regarding Aspect Boundary outside the organization 12, 19, 23, 31, 35
G4-21 For each material Aspect, the Aspect Boundary outside the organization is as follows 12, 19, 23, 31, 35
* Clarification of relevancy of the Aspect material outside of the organization 12, 19, 23, 31, 35
* If Aspect is material outside of the organization, identify entities, groups of entities, or elements for which Aspect is material and describe the geographical location where Aspect is material for the entities identified
12, 19, 23, 31, 35
* Any specific limitation regarding Aspect Boundary outside the organization 12, 19, 23, 31, 35
G4-22 Effect of any reiteration of information provided in previous reports and reasons for such reiteration Specified on the corresponding page
84
GENERAL STANDARD DISCLOuSuRES Page(s) Material issue
Economic
G4-22 Effect of any reiteration of information provided in previous reports and reasons for such reiteration Specified on the corresponding page
G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries No significant changes
G4-24 List of stakeholder groups engaged by the organization 13
G4-25 Basis for the identification and selection of stakeholders to engage 13
G4-26 organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group 13
G4-27 Key topics and concerns that have been raised through stakeholder engagement as well as the organization’s response; report stakeholder groups raising each key topic and concern 13
Report Profile
G4-28 Reporting period for the information provided 1
G4-29 Date of the most recent previous report 1
G4-30 Reporting cycle 1
G4-31 Provide a contact point for questions regarding the report or its contents 1
G4-32 a. “In accordance” option chosen by the organization 80
b. Report GRI Content Index for the chosen option 80
c. Report reference to the External Assurance Report (if the report has been externally assured) 80
G4-33 a. The organization’s policy and current practice with regard to seeking external assurance for the report 80
b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance 80
c. Relationship between the organization and assurance providers 80
d. Clarification of involvement of the highest governance body or senior executives in seeking assurance for the organization’s sustainability report 80
Governance
G4-34 Governance structure of the organization, including committees of the highest governance body Identify committees responsible for decision making regarding the economic, environmental, and social impacts 67
Ethics and Integrity
G4-56 The organization’s code of conduct and code of ethics 69
GRI G4 Index
85
SPECIFIC STANDARD DISCLOuSuRES Page(s) Material issue
Material Aspect DMA and Indicators
Economic
EconomicPerformance
G4-EC1 Direct economic value generated and distributed 45
G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change 23,62,63
G4-EC3 Coverage of the organization’s defined benefit plan obligations 55
Market Position G4-EC6 Proportion of senior management hired from the local community at major locations of operation 75
Market Position G4-EC7 Development and impact of infrastructure investments and services supported 35~42
G4-EC8 Significant indirect economic impacts, including extent of impacts 45
Environmental
Energy G4-EN3 Energy consumption within the organization 77
G4-EN4 Energy consumption outside of the organization 77
G4-EN5 Energy intensity 77
G4-EN6 Reduction of energy consumption 28~30
G4-EN7 Reductions in the energy requirements of products and services 28~30
Emissions G4-EN15 Direct greenhouse gas (GHG) emissions (SCoPE 1) 77
G4-EN16 Indirect greenhouse gas emissions (SCoPE 2) 77
G4-EN18 Unit of greenhouse gas emissions 77
G4-EN19 Reduction of greenhouse gas emission 78
G4-EN20 ozon depleting substances (oDS) emissions 78
G4-EN21 Nox, Sox, and other significant air emissions 78
Social
Labor Practices and Labor Rights
Employment G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender, and region 75
G4-LA2 Benefits provided to full-time employees not provided to temporary or part-timeemployees according to the major locations of operation
54,55,76
GRI G4 Index
86
SPECIFIC STANDARD DISCLOuSuRES Page(s) Material issue
Material Aspect DMA and Indicators
Social
Labor Practices and Labor Rights
Employment G4-LA3 Return to work and retention rates according to maternal or paternal leave 76
Labor- Management Relations
G4-LA4 Minimum notification period for significant changes to business (includingclarification of inclusion in the collective bargaining agreement)
50 days for layoff, and 30 days for dismissal
When changes in business operations occur.
occupational Health andSafety
G4-LA5 Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs
21
G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism;total number of work-related fatalities by region and by gender
19
G4-LA7 Workers with high incidence or high risk of diseases related to their occupation 53,54
G4-LA8 Health and safety topics covered in formal agreements with trade unions 53,54
Social
Local Communities
G4-So1 Percentage of operations with implemented local community engagement,impact assessments, and development programs
33~42
Anti-Corruption G4-So4 Communication and training on anti-corruption policies and procedures 70
G4-So5 Confirmed incidents of corruption and actions taken No cases of legal violations or fines
Product Responsibility
Customer Health & Safety
G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement
21
G4-PR2 Total number of incidents of noncompliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle by type of outcomes (treatment of violations)
No cases of legal violations or fines
Product and Service Labeling
G4-PR5 Results of surveys measuring customer satisfaction57
Customer Privacy G4-PR8 Total number of substantiated complaints regarding breach of customer privacyand loss of customer data
34,76
GRI G4 Index
87
Area Principles Page(s)
Human Rights 1. We support and respect the protection of internationally proclaimed human rights69~70
2. We make sure that we are not complicit in human rights abuse
Lobor 3. We uphold the freedom of association and effective recognition of the right to collective bargaining
49~554. We uphold the elimination of all forms of forced and compulsory labor
5. We uphold the effective abolition of child labor
6. We uphold the elimination of discrimination in employment and occupation
Environment 7. We support a precautionary approach to environmental challenges
23~30,
61~658. We undertake initiatives to promote greater environmental responsibility
9. We encourage the development and diffusion of environment friendly technologies
Anti-Corruption 10. We work against corruption in all its forms, including extortion and bribery 69~70
UN Global Compact
The UN Global Compact is an international agreement initiated by the United Nations that calls on companies to align strategies and operations with ten principles
on human rights, labor, the environment and anti-corruption efforts. Korean Air joined the program in support of these principles in July 2007, and will continue to
work on their implementation.
88
2016 Awards Organization Date
ToP 10 Airlines National Geographic Traveler 2016.01.21
Best International Airlines for Business Travel Travel & Leisure 2016.01.21
Safety Achievement Award Korea occupational Safety & Health Agency 2016.03.15
Readers’ Choice Best Airlines Conde Nast Traveler 2016.04.01
Gold Medal in the 2016 Buryatia Tourism Expo Ministry of Economy of the Republic of
Buryatia 2016.04.23
Ranked 1st in the air passenger transport service category of the Global
Customer Satisfaction Index (GCSI)Global Management Association 2016.06.23
Grand prize in the 2016 Travel Agent Friendly Airline Award Korea Association of Travel Agents (KATA) 2016.06.28
2016 Social Contribution Corporate Awards (environment and disaster relief category) The Korea Economic Daily 2016.07.12
Most Popular Airlines 21st Century Business Herald 2016.09.02
Russian Business Travel & MICE Award -Best Airline for Business Travelers 1 Business Travel 2016.09.29
2016 Best Transfer Service TRAVEL+ 2016.10.26
Grand prize in the integrated media category and silver prize in the radio category
in the 2016 Korea Advertising Awards
Korea Federation of Advertising Associations
(KFAA)2016.11.23
Silver prize in the 2016 AEo Best Practice Competition Korea Customs Service 2016.11.29
USD 700 million Export Tower Award Korea International Trade Association (KITA) 2016.12.05
Top 4 Foreign Airlines selected by Chinese GLoBAL TIMES 2016.12.13
CSR Creative and Innovative Company Award Embassy of the Republic of Korea in China 2016.12.16
SVo Awards Sheremeteyvo Airport 2016.12.19
2016 Excellent Foreign Ground Handlers of Xiamen Airlines Xiamen Airlines 2016.12.21
Major Awards and Memberships
89
Major Awards and Memberships
Category Associations and Organizations
Aviation IATA(International Air Transport Association) AAPA(Association of Asia Pacific Airlines) Sky Team, Korea Civil Aviation
Development Association (KADA) Federation of Korea Aeronautics, Korea Aeronautical Engineers Association, Korean Society for
Aeronautical & Space Sciences, Korean Association of Air and Space Law, Aviation Management Society of Korea
Economy Federation of Korean Industries, Korea Economic Research Institute, Korea Employers Federation, Korea Chamber of Commerce
and Industry, Federation of Economic organizations, Korea-Japan Economic Association, Korea Listed Companies Association,
Korea Exchange, Korea Customs Logistics Association, International Management Institute of the Federation of Korean
Industries, Korea International Trade Association, Korea-US Economic Council
Environment Green Companies Council, Business Council for Green Growth, Gangseo Business Group for Environmental Practices,
Voluntary Agreement of the Aviation Industry on GHG Reductions
Society Nanum Korea, Korean Council on the Protection of Personal Information, Korea Forum for Progress, Asia Society Korea
Center, Korea-Mongolia Forum, US Tourism Promotion Council, Seoul International Forum, Korea Mecenat Association, Korea
Management Association, Takamadonomiya Memorial Foundation, Korea Support Committee for the International Vaccine
Institute