31 August 2017, Moscow. - PJSC Aeroflot (MOEX ticker: AFLT) announces the results of the meeting of the Board of Directors held on August 31, 2017.
The newly elected Board convened for the first time following the Annual General Meeting of shareholders (AGM) that took place on June 26, 2017. Mikhail Poluboyarinov, First Deputy Chairman and member of the Board of Directors of Vnesheconombank (VEB), was elected as new chair of Aeroflot’s Board of Directors. Alexey Melekhin, Director of the Corporate Governance Department of PJSC Aeroflot, was elected as new Executive Secretary of the Board of Directors. Mr.Melekhin has held this position at Aeroflot since 2011.
Work plan of the Board of Directors
The Board of Directors considered its duties as well as the structure of its work. A plan for the Board of Directors’ work for the period July 2017 through June 2018 (main issues) was approved.
Members and management of the permanent committees of the Board of Directors were elected at the meeting. Vasily Sidorov (CEO of Arida LLC) was elected head of the Audit Committee; Alexey Germanovich (member of the Management Board of the Foundation for the Development of St. Petersburg State University) was elected head of Personnel and Remuneration Committee; Igor Kamenskoy (Managing Director of Renaissance Capital LLC ) was elected head of the Strategy Committee.
The following issues were also discussed during the meeting:
Results of Aeroflot Group’s consolidated budget for the first quarter of 2017.
Total passenger traffic for the Russian air travel market, including international carriers flying to and from Russia, in the first quarter of 2017 amounted to 22.6 million passengers. Aeroflot Group’s market share declined by 1.8 percentage points compared to the first quarter of last year, from 47.3% to 45.5%. PJSC Aeroflot achieved 101.2% of its passenger traffic targets and the Group achieved 100.6% of its targets.
PJSC Aeroflot’s incentive system. Decisions were made regarding remuneration of members of the Board of Directors, as well as PJSC Aeroflot personnel, based on results for the period from July 1, 2016, to June 30, 2017.
Organizational structure of PJSC Aeroflot. In connection with the launch of a number of innovative projects, it was advised that the company structure be optimized. This includes mass digitalization and automation of various processes, advanced implementation of Big Data technologies, and large-scale improvements of the product and service. Additionally, special emphasis was placed on improving customer service. Taking these aspects into account, a new organizational structure of PJSC Aeroflot was approved.
Aeroflot Group’s fleet
A number of issues regarding the formation of Aeroflot and Aeroflot Group’s fleet were considered, including the terms of the lease contract for the delivery of 20 new Sukhoi Superjet 100 regional aircraft signed between PJSC Aeroflot, VEB-Leasing and Sukhoi Civil Aircraft. The lease term is no more than 144 months from the date of transfer of aircraft to Aeroflot. The planned delivery date of the aircraft is August 2017 to July 2018. Details of the transaction were submitted for consideration at the PJSC Aeroflot Annual General Meeting of Shareholders.
The Board of Directors also approved the purchase of six new Boeing 777-300ER aircraft from The Boeing Company. The purpose of the transaction is to significantly strengthen Aeroflot’s long-haul transport capacities, improve accessibility to remote regions in Russia, as well as strengthen Aeroflot’s position internationally, especially with regard to transit between Europe and Asia. The aircraft are expected to be delivered between the second quarter of 2018 and first quarter of 2021.