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Company News

29 January 2009

At the board of directors

AT AEROFLOT’S BOARD OF DIRECTORS

January 29 2009, Moscow. – January 28 2009, the Board of Directors of JSC Aeroflot – Russian Airlines at its regular meeting revised the results in the Flight Safety (FS) sphere in 2008.

The presented documents show that the implementation of the flight safety management strategy has driven the FS absolute and qualitative indicators up to satisfy the world’s highest standards. In particular, Aeroflot’s safety management now fully meets the requirements of European Civil Aviation Conference (ECAC), the SAFA program. In 2008, the flight safety index amounted 99.955%, which corresponds to the ‘high’ level in the international classification and to the levels of the world’s leading carriers.

The Board considered the company’s estimated financial-economical and operational performance. It was noted that the 2008’s passenger flow of 9.272 million and its growth of 13.5% correspond to the planned level.

In the last year, Aeroflot Group established itself as a leading passenger carrier both on international and Russia’s domestic lines. In 2008, Aeroflot flew about 12 million passengers, 14% more than in 2007. This in fact accounts for a quarter of the entire industry performance.

On domestic lines, Aeroflot carried over 5 million passengers, 19% more than in 2007. According to the estimates, the Group’s share in the industry’s total passenger flow grew by 3% as compared to 2007 and amounted to 20% of all passengers carried in Russia. On domestic lines, JSC Aeroflot flew 3.6 million passengers (27% more than in 2007); JSC Aeroflot-Don flew 567,000 passengers; JSC Aeroflot-Nord carried 922,000 passengers.

On international lines, Aeroflot Group carried over 6.5 million passengers – 10% more than in 2007. The Group’s share in the industry’s total passenger flow grew by 1% as compared to 2007 and amounted to 29%. On international lines, JSC Aeroflot flew 5.7 million passengers (6.5% more than in 2007); JSC Aeroflot-Don flew 750,000 passengers; JSC Aeroflot-Nord carried 100,000 passengers.

Aeroflot expects the 2008’s income from services and carriage to amount to 95,651 million RUB, which is 28.6% higher than in the previous year.

The estimated maintenance expenditure is 88,352 million RUB. Estimated income after taxes and mandatory payments in 2008 is 6,044 million RUB.

These positive results have been reached due to the implementation of a strict budgetary policy, despite the 2008’s fuel prices explosive growth of 25.7% against the budget level, or extra 6,663 million RUB, the expenditure growth of 314 million RUB resulting from growing prices for air navigation facilities, and the losses resulting from fluctuating RUB exchange rate against foreign currencies. 

The Board Members approved the stock option plan for the company management aimed at a better commitment to the company’s higher financial performance. The Board reviewed the report on Aeroflot’s preparation for participating in the “Czech Airlines” privatization tender.