On November 4, 2004, there was held a meeting of Aeroflot board of Directors elected on the Company special general stockholders meeting on October 23, 2004.
Ivanov Viktor Petrovich, a member of the Company Board of Directors, RF President's Advisor was unanimously elected the Chairman of Aeroflot Board of Directors.
At the meeting the Company’s preliminary operating results for 9 months of 2004 were considered.
For the period operating volumes have increased according to all indicators of the airline company main activity vs. 9 months of 2003:
As a result for 9 months of 2004 the company yields 1391.9 mln USD for air carriages and services made; this exceeds the income of the same period of 2003 by 261 mln USD or by 23.1% due to increasing operating volumes and carriages profitability.
Costs amounted to 1295.5 mln USD for the period and exceeded the level of 2003 by 236.7 mln USD of by 22.4%. Costs increase was mainly caused by operating volumes growth and air fuel price rise by 26%.
As a result the income from operation activity amounted to 96.4 mln USD and exceeded the level of 9 months of 2003 by 24.4 mln USD.
At the same time deep anxiety was expressed about world price rise for air fuel. The airline company takes measures to reduce risks affecting negatively the financial results by hedging purchases of partial volumes of the fuel consumed as well as by costs reduction.
According to the operating results of the airline company for 9 months of 2004 net income amounted to 119.3 mln USD exceeding the same period of the last year by 18.1 mln USD or by 17.9%.
The Board of Directors approved “Provisions on Aeroflot Personnel Bonuses from net income according to the company’s operating results for the year” presented by the Company’s Board. The main principle of this paper is the higher quality and operating results are, the higher net income is, and the higher net income is, the higher bonuses are. The stimulus for the efficient and initiative work of every employee of the company is obvious.
Finance terms of purchasing five Tu-154 planes were approved (till the end of 2004 4 planes are to be included into the flight schedule).
To develop decisions adopted earlier and to execute investment agreements there was made a decision on starting financing the deal with Ilyushing Finance &Co. to acquire 6 Il-96 planes by Aeroflot that is to provide production acceleration and planes supply as well as their putting into operation.
Aeroflot purchase of these planes is undoubtedly a significant support of aircraft producers of our country.
The Board of Directors supporting the decision of the Company’s Board on Aeroflot operation Sabre software decided to extend the contract with Sabre for the next period (for 5 years at this stage).
The arguments for the decision are very convincing:
The Board of Directors approved the list of three permanent Committees of the Board of Directors: on Audit, Personnel and Bonuses. Shipil N.V., Uvarov A.K. and Fyodorov A. V. were elected the Chairmen of these Committees.
