Aeroflot announces results of Board of Directors meeting

14 March 2019

Moscow, 14 March 2019 — PJSC Aeroflot (Moscow Exchange ticker: AFLT) announces the results of a meeting of the Board of Directors held on 14 March 2019. The meeting was chaired by Evgeny Ditrich.

The agenda of the meeting included the following items:

The results of implementation of Aeroflot Group's consolidated budget for the full year 2018. In the full year 2018, growth rates of Aeroflot Group’s key operating metrics (ASK and RPK) exceeded those of international peers. Aeroflot Group delivered 100.4% of its passenger traffic targets. Aeroflot Group’s international market share increased by 0.2 percentage points year-on-year – from 40.5% to 40.7%. The Group’s 2018 revenue totalled RUB 411.6 billion (+14.8% year-on-year) exceeding the target by 0.2%. In accordance with International Financial Reporting Standards (IFRS), the Company’s 2018 net profit was RUB 5.7 billion. Rapidly rising fuel costs had a significant impact on these results. If not for the pressure of fuel costs, the Group would have delivered a profit comparable to that budgeted for the year.

The PJSC Aeroflot Auditor Report on the Group’s IFRS financial statements for 2018. Based on the results of the audit, an unqualified audit report was issued on PJSC Aeroflot's consolidated IFRS financial statements for 2018. The audit report addresses Aeroflot Group’s introduction of the new IFRS 15 "Revenue from Contracts with Customers" standard. It is noted that the conducted procedures revealed neither any significant inconsistencies between the current accounting policy and the new standard requirements nor any other significant reporting errors in the Group's consolidated financial statements.

Annual accounting statements, including the Company’s financial results for the 2018 financial year. Under Russian Accounting Standards (RAS), PJSC Aeroflot’s revenue totalled RUB 504.7 billion, with an increase of RUB 58.0 billion (+13.0%) year-on-year, mainly due to increased revenue from passenger traffic. The Company's net profit under RAS was RUB 2.8 billion. The key factors were: an 8.9% increase of passengers carried and a 12.3% increase in the number of flights. Rising fuel costs and changes to the exchange rate influenced the Company's financial results. The Board approved and recommended that the upcoming Annual General Meeting of PJSC Aeroflot’s shareholders approves the annual accounting statements, including PJSC Aeroflot's financial report for 2018.

PJSC Aeroflot Auditor Report on the Group’s RAS financial statements for 2018. The audit report noted that the conducted procedures did not reveal the need for any significant adjustments to the financial statements. The report noted that accounting processes were of a high standard, resulting in high quality and speed of preparation of financial statements.

PJSC Aeroflot’s incentive programme. The results of KPI’s under PJSC Aeroflot’s Long-Term Development Programme and management’s delivery on KPIs for the fourth quarter and full year 2018 were approved.

Charitable and sponsorship initiatives (including allocation of funds). PJSC Aeroflot’s sponsorship programme for 2018 prioritised the most popular sports, as well as the sports that were gaining popularity, with the aim of increasing target audience reach, strengthening the brand and engendering cutomers' brand loyalty. Charity and sponsorship funds allocated their resources in accordance with plans approved by the Board of Directors. The main recipients of Aeroflot’s charitable support were orphanages. Spending was fully consistent with the Board-approved policy on expenditure of charitable funds.

Innovative ideas related to ancillary revenue and customer service. Aeroflot Group is successfully introducing additional services in line with global best practice. Per the Board of Directors' request, a list of innovative proposals has been prepared to increase the Group’s ancillary revenue. Taking into account the innovative nature of the services proposed for consideration, further detailed analysis of the proposed initiatives needs to be carried out.