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Company News

29 November 2010

In the JSC Aeroflot Russian Airlines Board of Directors

November 29, 2010, Moscow. A regular meeting of the JSC Aeroflot Russian Airlines Board of Directors has taken place today under the chairmanship of Igor Levitin, the Minister of Transport of the Russian Federation.

The Board of Directors took into consideration the report on the performance of the JSC Aeroflot Russian Airlines in the 9 months of 2010 and the projections for 2010. The dynamics of the passenger transportation load in the 9 months of 2010 were higher than the average indicators in the industry. The improved transportation capacity management made it possible to increase the passenger seat occupancy rate in the 9 months of 2010 by 4 percentage points compared to the target and by 9 percentage points compared to the 9 months of 2009. The passenger turnover increased on all the routes; the greatest increase being in the Far and Middle East and Africa (+88.3%), South-Eastern Asia and Japan (+51%). Starting from March 2010 the profit per seat has been increasing on all the routes which has had a positive impact on the results of the 9 months; the biggest increase being in America (+26.3%). The profit from the operational activity in cost accounting is expected to be 9 800 000 000 rubles in the 9 months of 2010. The estimated increase of net income in 2010 is expected to be 6 700 000 000 rubles compared to the target.

The Board of Directors approved the production and financial and economic activity targets as well as the profit and loss target of the JSC Aeroflot Russian Airlines for 2011. The 2011 target provides for the growth of all the operational indicators: passenger turnover by 23%, passenger carrying by 27.7% and sustaining the seat occupancy rate at 76%. The target figures takes into account the start of commercial service of the new Sukhoi Superjets (SSJ) airplanes.

The Board of Directors made a decision to sell the shares of the CJSC Sheremetyevo and CJSC Deit at market prices on a competitive basis.

The Innovative Development Program of the JSC Aeroflot Russian Airlines was introduced in a report presented to the Board of Directors. As the company's management pays considerable attention to innovative development the Chief Executive Officer of Aeroflot Airlines Company Vitali Saveliev was appointed Head of the Innovative Development Committee with the Aeroflot Board of Administration.

According to the Innovative Development Program, the innovative effectiveness of the JSC Aeroflot Russian Airlines is secured by the company's ability to use new technologies in management, production and marketing. It is a medium-term program (5 -7 years) which incorporates the priorities of the state scientific, technological and innovative policy and lists certain measures aimed at development and introduction of new technologies, innovative products and services in keeping with international standards. The Program is integrated into the airline development business strategy, promotes modernization and technological development of the company by means of considerably improving the main operational indicators, including a significant drop in the prices of tickets without negatively affecting the standard of quality, economizing on energy resources, increasing labor efficiency and environmental friendliness of production.

Forming cooperative mechanisms and structures to promote the development and introduction of innovations has been considered when working on the Innovative Development Program. Besides, the Program provides for effective cooperation with the leading higher educational institutions, research bodies of the Russian Federation and other countries. After the Program has been assessed it will be sent to the Ministry of Transport of Russia for expert examination.

The Board of Directors sanctioned the lease of two BC Airbus A330-200 from the ILFC company in the second quarter of 2010.

Aeroflot is a leading air transport company in Russia as well as a member of SkyTeam, a global airline alliance. The cumulative network of routes comprises 898 destinations in 169 countries of the world. In 2009 Aeroflot transported 8.755 ml people while the Aeroflot Group of Companies transported 11.1 ml.

Aeroflot came first among European members of SkyTeam in the quality of its passenger service in economy class on short and medium range flights and in business class on long haul flights. The leadership of Aeroflot was established based on the SkyTeam Onboard Survey over the period of April – September 2009.

Aeroflot is one of the 25 leading world airlines in terms of financial and economic activity in 2009 (operating and net profit), according to the Air Transport World magazine.

Aeroflot was the first Russian carrier to enter the IOSA registry and has kept up the standard ever since. The airline has been successfully audited in terms of its compliance with the ISAGO safety requirements for ground operations. The company complies with ISO 9001:2000.

Aeroflot has one of the youngest aircraft fleets in Europe comprising 103 planes. Aeroflot headquarters are in Moscow in Sheremetyevo International Airport. For more information see www.aeroflot.ru.

Department of public relations and liaison with governmental bodies