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Company News

06 May 2009

In the Board of Directors

MEETING OF JSC AEROFLOT’S BOARD OF DIRECTORS

The regular meeting of JSC Aeroflot’s Board of Directors was held on May 05, 2009 with the Russian Federation minister of transport Igor Levitin as a chairman.

The issue of the Company’s profit distribution was considered at the meeting. Taking into account the 2008 financial performance the Board is recommending a dividend to the General Shareholders Meeting. In 2009 capital investments shall be funded at the expense of net profit. The prior investment goals are the purchase of aircrafts, training centres development, and Sheremetyevo-3 operation launch.

The Board of Directors approved the Managing Committee proposal to amend Aeroflot’s 2009 production plan and budget due to the passenger carriage decrease at the period of the global financial crisis. Over the first months of 2009 Russian passenger carriage market reduced by more than 22 per cent (as compared with 2008). Aeroflot’s passenger carriage reduced by 14.2 per cent. Thus, the action taken by the Managing Committee to amend production plan and budget provides for financial stability. Margin improvement and costs reduction are reported, expenditure budget is reduced preventively.

The Board of Directors studied the details of its branch establishment CJSC “Aeroflot Cargo” position and prospective performance. In 2007 and 2008 “Aeroflot Cargo” reported the loss and accounts receivable accumulation due to the delay with the air fleet reconstruction. The performance of the company in 2009 is unprofitable due to the cargo market decrease by 30 per cent.

The Board of Directors studied the proposal of the Managing Committee to re-organize the company's operations in order to minimize the cargo loss and recommended an active dialog for debts restructuring. The prospective performance of the company is dependant on the results of the active dialog, the possibility of the company’s liquidation via bankruptcy is considered.

The Audit Committee resume on Blue Wings airlines acquisition was studied. The Board resolved to proceed with the study of the airline acquisition advisability.

The Board of Directors studied the 2009 plans for acquisition and operation of A321 aircrafts with due respect to the fact that A321 aircrafts are acquired simultaneously with TU-154 withdrawal. It is recommended to adhere to the approved Aeroflot air fleet modernization strategy.

The Board of Directors instructed the Managing Committee to elaborate the proposal on training/retraining centre establishment to meet the demand of the industry.