Aeroflot announces the results of Board of Directors meeting

09 August 2019

Moscow, 9 August 2019 – Aeroflot announces the results of the Board of Directors of PJSC Aeroflot (Moscow Exchange ticker: AFLT) meeting, which was held on 8 August 2019 and chaired by Evgeny Ditrich.

The work plan of the Board of Directors of PJSC Aeroflot for the period through June 2020 was approved (general issues).

Maxim Yurievich Sokolov, a member of the Board of Directors of PJSC Aeroflot, was approved as Independent Director despite the existence of formal criteria of his affiliation to substantial shareholder of PJSC Aeroflot. The decision was taken on account of the work record, business reputation and professional expertise of Maxim Sokolov, who previously held the position of Minister of Transport of Russian Federation.

The meeting defined the personnel and appointed the heads of the three permanent committees of the Board - the Audit Committee, the HR and Compensation Committee, and the Strategy Committee. Vasiliy Vasilievich Sidorov (an Independent Director) will head the Audit Committee, Maxim Yurievich Sokolov (an Independent Director) - the HR and Compensation Committee, Igor Alexandrovich Kamenskoy (an Independent Director) – the Strategy Committee.

The agenda of the meeting included the following items:

Implementation of Aeroflot Group Strategy. The dynamics of Aeroflot Group passenger traffic is in step with the Strategy, whose main objective is for the airline to carry 90-100 million passengers in 2023. Sheremetyevo hub optimization and route network expansion enable international transit traffic growth up to 90-100 million passengers by 2023. According to the plan specified by the updated Strategy of Aeroflot Group’s development, preparations for launch of international hub in Krasnoyarsk and regional bases are under way. Digitalisation processes at PJSC Aeroflot show sustained positive dynamics.

Shareholder and investor relations. From early 2019 Aeroflot shares have posted positive dynamics and have outperformed indices of global airlines and companies in emerging markets. Positive market reaction to Aeroflot Group’s 1Q 2019 IFRS results and oil price stabilization are among the factors impacting the share price. 2019 has seen ongoing active interaction with the investor community; the number of meetings has remained at the same level as last year. Communications have focused on raising awareness of the investor community on Aeroflot Group’s pace of development as well as the Group’s Strategy of development until 2023.

Service development at Aeroflot Group. Aeroflot Group airlines have continued to win international recognition and maintain their leadership in Russian ratings and awards. A number of onboard service enhancement initiatives were accomplished, including passenger announcements via IFE for transit passengers (on part of the fleet), streaming IFE on a number of Airbus A20 aircraft. Web-service functionality (website, mobile app) was boosted. Complaints and appeals platform of PJSC Aeroflot facilitates assessment and timely response to dynamic status of key operational indicators. A private VIP-zone for business-class and SkyPriority passengers, “Island” was set up at Sheremetyevo Airport (Terminal B). Passengers now get location plans of business lounges at check-in. Passenger information by audio- and video-media is provided on busses (incl. in Chinese). The baggage-handling disruptions in June 2019 on the part of JSC Sheremetyevo Handling affecting PJSC Aeroflot flights were thoroughly examined. PJSC Aeroflot continues dedicated programme roll-out to maintain four star ranking from Skytrax.

Ancillary revenues at Aeroflot Group. Aeroflot introduced a host of new services to increase sources of ancillary revenues. These services include service class upgrade with miles, service class upgrade for extra charge, advance cabin seat selection, online baggage fee payment. Ancillary revenues have been steadily on the rise in terms of volume and share in Aeroflot Group’s structure of earnings. It proves that the strategic goal of increasing the share of ancillary revenues in Aeroflot Group’s structure of earnings is achievable by 2023. Endeavours to enlarge the share of ancillary revenues and develop this area of business are ongoing.

Treasury shares. The Board of Directors of PJSC Aeroflot decided to nominate the price and approve a major deal of sale of treasury shares by PJSC Aeroflot to the benefit of LLC «Aeroflot-Finance». The number of stock for sale totals 47817796 shares.

Plan of transfer of PJSC Aeroflot to predominant use of domestically developed software. The Board of Directors approved the plan of activities until 2021 to facilitate PJSC Aeroflot’s switch to predominant use of domestically developed software.