Moscow, 29 April 2016 – PJSC Aeroflot (Moscow Exchange ticker: AFLT) announces the results of the Board of Directors meeting held on 28 April 2016.
The meeting was chaired by Kirill Androsov. The meeting agenda included the following items:
PJSC Aeroflot's 2015 Annual Report
The draft Annual Report notes the strong operational and financial results achieved by Aeroflot Group in 2015. Key milestones for the year included further development of the Group’s multi-brand platform and participation in the settlement of the situation with Transaero Airlines, forced to exit the market. Throughout 2015 Aeroflot Group achieved growth rates significantly ahead of the Russian aviation market as a whole. The Group increased market share organically by 5.5 percentage points to 36.7% (including domestic and international airlines). The Group flew scheduled flights to 319 destinations in 54 countries. Throughout the year the Group continued to improve its route network, improving connectivity at Sheremetyevo airport and increasing transit traffic. The increase in international transit traffic compensated for the decline in direct travel from Russia to international destinations. Group consolidated revenue increased 29.8% year-on-year, primarily as a result of an active approach to yield management and strong domestic traffic growth. Despite a challenging economic backdrop, Group profitability improved markedly, thanks to a strong focus on efficiency and cost control. The Board provisionally approved the Annual Report and recommended its approval by the PJSC Aeroflot Annual General Meeting of Shareholders on 27 July 2016.
Aeroflot Group strategy implementation
After reviewing the results of an audit of the Group’s Long-Term Development Programme, the Board determined that the programme was executed effectively in 2015. The following key tasks were successfully completed in 2015:
• Increase of Group traffic and revenues
• Intensive development in the low-cost segment (Pobeda Airlines)
• Implementation of measures to improve economic efficiency
• Began flying new Sukhoi Superjet 100 aircraft
• Overcame capacity constraints at Sheremetyevo airport (expanded the domestic flight sector, achieved planned operational programme without transferring a portion of flights to an alternative airport).
The Board reviewed the Auditor’s Report on the 2015 results of the Group’s Long-Term Development Programme, and approved the Report on implementation of the Long-Term Development Programme and on achievement of approved key performance indicators for 2015.
Aeroflot Group’s IT development strategy
The Board reviewed progress made over the last five years in the digital development of Aeroflot. Since 2009, a substantial number of business processes have been automated, and the Group has implemented and transferred to three vendor platforms (Sabre, SAP and Lufthansa Systems), which have considerably reduce costs. A number of other key initiatives were carried out, including the implementation of: an integrated system of enterprise resource planning (ERP), a modern system of book-keeping, a new customer relationship management (CRM) system, a hub management system, and an electronic flight bag (EFB) for pilots. In addition, Aeroflot updated its website and mobile applications running on iOS, Android and Windows Phone. In 2015, more than USD 1 bln of tickets were ordered through the website, and Aeroflot became the first airline to take payments from the Mir national payment system. Aeroflot was the first airline in Russia to offer Wi-Fi on board its planes. More than 50% of Aeroflot’s passengers use online services, and more than 45% of passengers use online check-in. Incentivisation system It was acknowledged that the current system should be adapted to align the parameters for the option programmes for members of the Board of Directors as well as for senior management. The Board approved parameters for assessing the results of the option programme for 2015, as well as a resolution setting out the Key Performance Indicators relating to the Group’s activities.
Annual management accounts, including a report on the Group's financial results for 2015
A report on the Group’s management accounts was reviewed, and Aeroflot’s external auditor also presented its report on the financials (RAS and IFRS) for FY 2015. The auditors acknowledged that the Group’s management accounts are a true reflection of its financial position as at 31 December 2015. A decision was taken to sign off on the accounts and recommend to the AGM on 27 June 2016 to approve the annual management accounts, including the report on Aeroflot’s financial results for 2015.
The Board of Directors also approved the Roadmap for implementing the Risk Management System and internal controls aimed at preventing or counteracting corruption within Aeroflot.
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