27 October 2017, Moscow — PJSC Aeroflot (Moscow Exchange ticker: AFLT) announces the results of the Board of Directors meeting held on 26 September 2017. The meeting was chaired by Mikhail Poluboyarinov.
During the meeting the Board of Directors decided to focus on strategically important issues with significant influence on the activities of Aeroflot Group in the coming years.
The meeting agenda included the following items:
Forecast for Aeroflot Group’s operational results for 2018
The conditions have been created for maintaining high operational results. The planned increase in the fleet of Aeroflot Group of approximately 44 aircraft will bring the total number of the Group’s fleet to almost 350 aircraft. In 2018 it is expected that the Aeroflot passenger traffic and ASKs will increase, while the high load factor is expected to be maintained.
Work with shareholders and the investment community
Aeroflot’s share price rose by 20.3% in the first nine months of 2017. The main factors affecting share price were: recovery of the Russian aviation market; operational and financial results of Aeroflot Group; a record level of dividend payments in 2016; the successful sale of quasi-treasury shares in PJSC Aeroflot in September 2017. Analysts and investors expect the business dynamics to improve in the second half of 2017, stressing the long-term attractiveness of Aeroflot’s investment history. In the first nine months of 2017 pro-active interaction with representatives of the investment community continued, including internationally.
Development of IT in Aeroflot Group
The main areas for developing IT for Aeroflot Group 2017-2020 were approved. It is planned to introduce new technologies and approaches that will affect the development of the global aviation industry. Further development of the website is planned (including with the aim of increasing the share of online sales to 40% by 2020). The importance of mobile devices will continue to grow for both passengers and staff. The “Automated Airport” project has been launched, with the goal of simplifying air traffic procedures as much as possible (to the point of using biometric data instead of a passport and boarding pass). Among other important areas for development are: introducing a new system of flight sales using the NDC Standard (competition among product offerings in the agent channel will increase Aeroflot Group’s total income by RUB 3-4 billion in 2017-2020); developing cloud technologies; Big Data and machine learning (two or three new Big Data business cases a year from 2018); creation of a data management centre and further development of the Manager’s Monitor system.
Audit of implementation of Aeroflot Group’s Long-Term Development Programme of Aeroflot Group (LDP) in 2017
The terms of reference were approved for the annual audit of the implementation of Aeroflot Group’s LDP and achievement of KPIs for 2017.
Results of charitable work
The Board of Directors was presented with information on the financial activities of charity projects for the first nine months of 2017. Among the main recipients of Aeroflot’s support are: the Russian Geographical Society; orphanages (Pokrovskoye Orphanage and St. Sergius Boarding School); and vulnerable members of society. The use and purpose of these funds fully comply with the regulations of the procedure for the formation and use of charitable funds, as approved by the Board of Directors.
Organisational structure of PJSC Aeroflot
It was resolved to approve a new organisational structure that will allow implementation of a single strategy for promotions, sales and interaction with customers, and increase the efficiency of the service function.
A transaction to lease three new Sukhoi Superjet 100 regional aircraft between Aeroflot, VEB and GSS was approved. The aircraft will be delivered to Aeroflot in October-November 2017 (the delivery dates may be amended or extended). This transaction is part of the planned delivery of 20 new SSJ 100 aircraft to Aeroflot’s fleet.
Also considered was the issue of the conditions of Aeroflot’s agreement with Rossiya Airlines regarding joint flight operation under a code-sharing / block-seat agreement on regional flights. In future this issue is likely to be submitted for consideration to Aeroflot’s general meeting of shareholders.