Türk Hava Yollari Anonim Ortakligi : 2021 Sustainability Report

2021 SUSTAINABILITY REPORT

CONTENT

CHAPTER	00

CHAPTER	01 MANAGEMENT FUNDAMENTALS

CHAPTER	02

19

CHAPTER

CHAPTER

CHAPTER

03

04

05

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3	INTRODUCTION		MANAGEMENT FUNDAMENTALS		RESPONSIBLE COMPANY		RELIABLE OPERATOR		FAIR EMPLOYER		ANNEXES

ABOUT THE REPORT

This report is the eighth sustainability report published by Turkish Airlines Inc. ("Turkish Airlines" or "the Incorporation") as to inform its stakeholders about its sustainability policies and strategies, the social, environmental and economic impacts of its activities, and its projections for the future.

The main content of the Turkish Airlines Sustainability Report is the issues determined as a result of the materiality studies carried out in accordance with international standards, the issues expected to be declared in line with stakeholder requests and compliance requirements.

This report has been prepared in accordance with the GRI Standards: Core option. The content of the 2021 Turkish Airlines Sustainability Report consists of data on the Incorporation's activities between 01.01.2021 and 31.12.2021. The fully owned subsidiaries of the Incorporation which are included in the consolidated financial statements of Turkish Airlines, are not included in the scope of this report unless otherwise indicated.

You can access the 2021 Turkish Airlines Sustainability Report and previous reports at https://investor.turkishairlines.com/en/corporate- governance/sustainability.

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4	INTRODUCTION		MANAGEMENT FUNDAMENTALS	RESPONSIBLE COMPANY	RELIABLE OPERATOR	FAIR EMPLOYER	ANNEXES

Message from the Chairman of the Board of Directors

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In 2021, Turkish Airlines operated flights to 25 of the 46 countries included in the United Nations' least developed countries category and carried approximately 1 million 110 thousand passengers. Only Turkish Airlines operates flights to 142 of our current international routes.

Dear Stakeholders,

Thanks to the vaccination efforts in Turkey and around the world, we experienced a decrease in the impacts of Covid-19 pandemic in 2021. During this period, as the national flag carrier airline of Türkiye, we performed above the industry average and became among the leaders of the recovery in the aviation industry.

We managed to increase our revenues with growing cargo demand and a lively tourism season, while keeping the impact of financial negativities at the lowest level with our rapid decision- making competence and effective capacity management. With an operating profit of 1.4 billion USD and a profit margin of 13.2%, our Incorporation achieved a profitability above the industry average in 2021. Available Seat Km (ASK) increased to 127.8 billion km, the number of landings increased to 357,189 while cargo and mail carried reached 1,879,552 tons.

Our investments on fleet modernization made a significant impact on our success. With the 3 A350-900 aircraft received in 2021, the total number of

A350-900 aircraft in our fleet increased to 5. With 15 B787-9 Dreamliner aircrafts in our fleet, the number of new generation wide-body aircraft in our fleet reached 20 by the end of 2021. Through these investments, we have strengthened the status of Turkish Airlines as one of the youngest and most modern fleets in the world, by achieving a fleet of 370 aircraft, 246 of which are narrow-body, 104 of which are wide- body and 20 of which are cargo aircraft, with an average age of 8.5 years.

Thanks to the flexibility provided by our fleet structure, we increased the number of destinations to 333 in 2021. As the airline company that flies to the highest number of destinations in the world, we give an incomparable support to international development. In 2021, Turkish Airlines operated flights to 25 of the 46 countries included in the United Nations' least developed countries category and carried approximately 1 million 110 thousand passengers. Only Turkish Airlines operates flights to 142 of our current international routes. The connectivity we provide, has a significant importance for these countries to develop their economic and social relations with the rest of the world.

Pandemic has been a process that once again revealed the significance of our approach. Contributing to the access to vital resources, primarily medical supplies and vaccines, for several countries through our cold chain cargo capacity meant a great deal for us.

The gains in environmental impact management such as fuel efficiency and noise reduction provided by our new generation aircraft are among the most important returns of our fleet investments. According to the manufacturer's data, we achieved fuel savings of 15% per seat in the new generation narrow-body aircraft and 20-25% in the wide-body aircraft and

1. corresponding reduction in flight- related greenhouse gas emissions. With our comprehensive fuel efficiency practices including fleet modernization studies, in 2021, we saved 37,082 tons of aviation fuel and prevented 116,808 tons of carbon emissions.

One of the most prominent indicators of our Incorporation's determined stance on combating climate change is our efforts to increase the use of sustainable aviation fuels. In this context, we will first start using biofuels in our flights to

5	INTRODUCTION	MANAGEMENT FUNDAMENTALS	RESPONSIBLE COMPANY	RELIABLE OPERATOR	FAIR EMPLOYER	ANNEXES

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various European destinations in 2022. We do not limit our efforts to increase the use of sustainable aviation fuel to the use of biofuels, and we continue to support R&D projects. With the Microalgae Based Sustainable Bio-Jet Fuel R&D Project which we carried out together with Boğaziçi University and supported by TÜBİTAK, we aim to become one of the few global companies that can use sustainable aviation fuel which does not compete with agricultural activities, without polluting water, soil and other resources.

As an indication that we aim more than complying with the legal requirements while carrying out our activities, we have strengthened the ISO 14001 Environmental Management System that we have been implementing since 2013, by participating to the IATA Environmental Assesment (IEnvA) Management System Program, which was particularly designed for airline companies by the International Air Transport Association. As a result of the audit carried out by an independent third-party organization authorized by IATA, Turkish Airlines became the first airline company which is directly entitled to receive the IEnvA Program Stage 2 certification, the highest certification level of the program.

We continue to fulfill our responsibility for the correct management of greenhouse gas emissions with several studies such as fleet modernization, technology investments, increasing resource efficiency, fuel efficiency, and development of the environmental management system. In 2022, we will increase our efforts by launching the CO2mission program, which allows our passengers to offset their flight-related carbon emissions. Through the digital platform of CO2mission, which is a voluntary carbon offsetting program, our guests will be able to offset the carbon emissions occurred due to their flights with Turkish Airlines or other airlines, by supporting sustainable development projects conducted in line with international standards.

2021 has been a year in which our sustainability management efforts were evaluated and appreciated by various organizations. During the period, besides maintaining our position in the Borsa Istanbul Sustainability Index, our efforts were rewarded. Our environmentally friendly packaging practices were rewarded with the Best Onboard Sustainability Award

by Onboard Hospitality and with the Sustainable Packaging Initiative Gold Award by the Travel Plus Awards. The

Forrest Stewardship Council (FSC) certified wooden toy sets we offer to child passengers were rewarded by Travel Plus with the Child Health Initiative Gold Award. The Sustainability Report, which we have published last year, has received the Gold Award

in the Sustainability and Corporate Social Responsibility Report categories, following the evaluation made by the League of American Communications Professionals (LACP).

We increase our sustainability performance every year with our investments, projects and practices, and we work hard to increase our positive impact on the world and humanity. In this context, we would like to underline the actual support we give to the UN Sustainable Development Goals. In the upcoming period, we

will reinforce our commitment to sustainability by becoming one of the participants of the UN Global Compact, the world's largest corporate sustainability initiative.

We have completed another period in which we increased our success with our employees, who are our most valuable asset, the strength we derive from our 88-year history, the unwavering support of our nation, and

the responsibility of being the national flag carrier airline of the Republic of Türkiye. We would like to express our gratitude to our President, Mr. Recep Tayyip Erdoğan, who did not spare us his support in passing through this difficult period successfully, to our government, especially to our Ministries of Health, Transport, Tourism, Interior, Foreign Affairs and Trade, to our affiliates, partners, and stakeholders.

With the awareness that sustainable development can only be achieved together, we will continue to develop greater cooperation and establish a transparent and constructive dialogue with all our stakeholders. We see that a new era will begin in aviation with the year 2022, which we hope that the negative impacts of the pandemic will disappear. As the Turkish Airlines family, we will continue to work with the aim of reaching the peak of the aviation industry in this new period, and we will proudly share our achievements with our entire nation.

Prof. Ahmet BOLAT

Chairman of the Board of Directors and

the Executive Committee