Aeroflot Board Of Directors

05 May 2010

The Board of Directors considered results of the group activities in 2006 in management bodies of “Aeroflot” subsidiaries.

Consolidated revenues of the group companies established with OJSC “Aeroflot” participation in 2006 exceeded $1 bln; net asset value of the entreprises with OJSC “Aeroflot” participation made $207 mln., i.e. grew as compared with 2005 by 15,5%, operation profit – by 11%.

Investment policy of OJSC “Aeroflot” oriented on support of regional airline companies facilitated “feeding” of the main airline company by regional passenger flows, increase of subsidiaries’ revenues at the expense of cost reduction for main types of activities. Accelerated development of subsidiary airline companies was stipulated by a possibility of use of strong brand of mother company, introduction of uniform standards and approved technologies within “Aeroflot” group, favorable conditions of receipt of loan funds and attractive terms of fleet renewal.

Joint route network of group airline companies will allow increasing volume of passenger carriages to 2010 by 31,5%. Volume of cargo carriages by “Aeroflot – Cargo” to 2010 should grow as compared with 2006 by more than twice (from 151,6 thousand tons to 333 thousand tons). The Board considered corporate activities in enhancement of service competitiveness to the level of five European leaders in terms of all elements. On the whole the company has executed the task of service enhancement for passengers of high classes and ensured stability of services rendered to passengers of other classes. New service classes are being introduced on all Aeroflot flights:  “President” – absolutely new business class of enhanced comfort for long-traveling passengers on Boeings 767; “Premier” –improved business class on new Airbuses  А319, А320, А321 for passengers flying to priority European destinations. “Commersant” class is being tested – improved economy class on new Airbuses A319, A320, A321 flying to Geneva, Nice and Helsinki.

The onboard entertainment program “Video on request” for passengers of business class gives a good account. Last year steps were taken to facilitate passengers’ check-in using a new e-ticketing technology, self check-in stands and “through” check-in of transit passengers through “Sheremetyevo” airport.

Service activities program 2007 stipulates improvement of system of Aeroflot product quality control, achievement of the given level of fulfillment of service standards requirements.

The Board approved the purchase by OJSC “Aeroflot” under lease (operation leasing) of:- four new Airbuses A319-100 and seven new Airbuses A320-200 to be supplied within 2007-2009.   - two Airbuses A330-200 to be supplied in November and December 2008. The Board is informed about preparation of deals for purchase of ten А330-200, 22 long haul Airbuses A350, six cargo IL-96-400Т.

The Board of Directors decided to establish a subsidiary of OJSC “Aeroflot” in Sotchi. Establishment of this subsidiary opens possibilities for strengthening positions of OJSC “Aeroflot” in one of the most dynamically developing regional market of air carriages. Opening of direct flights from Sotchi to destinations in Russia and abroad will allow redistributing passenger flows and controlling a bigger regional market share.