Intended to be used with [1.02+] Flag Decals (v2.2) (http://www.curse.com/ksp-mods/kerbal/222813-flag-decals-v2-2)
but will work just fine on their own
Simply copy the flags from the .rar file into gamedata/squad/flags and they will appear in game just like any other flag.
If there is an airline not in the pack that you think should be, let me know and I'll see about implementing it.