Aeroflot Announces Results of Board of Directors Meeting

Published on : Friday, October 28, 2016

aeroflotPJSC Aeroflot announces the results of a regular meeting of the Board of Directors which was held on October 27, 2016. The meeting was chaired by Kirill Androsov.

The 2017 performance indicators forecast for Aeroflot Group. Aeroflot Group expects an increase in the key performance indicators for 2017 in comparison with the projected 2016 results. An increase in passenger traffic is expected given a recent expansion of passenger capacity. Fleet expansion will continue. As of now Aeroflot Group operates 300 aircraft (approximately 200 of which are operated by PJSC Aeroflot).

Aeroflot Group investment programme. The Board of Directors reviewed the 2017 investment programme of Aeroflot Group. Investment growth is expected (with a significant share of investments being made into PJSC Aeroflot). The 2017 investment programme will be funded with Aeroflot Group’s own resources.

Aeroflot Group service development. Aeroflot Group continues to secure leading positions in international consumer and expert ratings. Aeroflot received a 4-star rating from the independent international agency Skytrax, and is now implementing a programme to maintain the rating and comply with all Skytrax recommendations. The airline’s NPS loyalty index is growing steadily, and in 2016 it reached 72.019%. Activities aimed at improving service quality are regularly carried out to ensure leading positions amongst global peers. A special focus is given to the on-board menu, particularly in business class where the company with the help of a crowdsourcing platform has identified passengers’ favourite meals. Additionally, it has introduced Asian-themed cuisine on flights to and from China, Korea, Thailand, Vietnam and Japan. The use of portable electronic devices is allowed in all service classes at all flight phases if devices are switched to flight mode. Together with internet provider OnAir, Aeroflot updated software on all Airbus A330 aircraft (22 aircraft) in order to improve the quality of communications services and to offer new on-board internet tariffs. Website and mobile-app functionality was expanded. Among planned projects are the enhancement of the in-flight entertainment system, the improvement of service provided to disabled people (the introduction of on-board hip and shoulder support belts), the improvement of food options and quality (strengthening cooperation with world’s best chefs).

Investor relations. The share price increase in the third-quarter of 2016 was 36.8%. Since the start of the year shares have increased by 108.4% (as of September 30 2016). The market capitalisation of PJSC Aeroflot on 30 September 2016 (USD 2.1 billion) exceeded that of Air France and is a step away from the capitalisation of Air Canada. Among the main factors that affected the share price are strong operational results of Aeroflot Group, which led to strong IFRS financial results in 2015 and in the first 6 months of 2016. The company regularly met with representatives of the investor community. On October 18, the company held a Capital Markets Day which was attended by investment banking analysts and fund managers. During the event the management team made presentations followed by tours of the company’s facilities. On top of the ongoing cooperation with investor community, over the past 9 months of 2016 the company has implemented one of the most important investor relations projects – it has relaunched the IR section of its corporate website.
PJSC Aeroflot dividend policy. The company’s dividend policy is based on specific quantitative benchmarks and is one of the leading policies in the Russian corporate world. International investors recognise the company’s policy as transparent and predictable. During the meeting the Board of Directors reviewed implementation of the current dividend policy and the possibilities for its refinement.

 
Incentive programme of PJSC Aeroflot. Judging by the results of the second quarter of 2016 it can be said that the company delivered strongly on key performance indicators (KPI). The KPI target of the long-term development programme of Aeroflot Group and the KPIs of the CEO of PJSC Aeroflot were adjusted to the revised 2016 Aeroflot Group budget. The Board of Directors adopted a resolution to approve the changes to the clause regarding the KPI of PJSC Aeroflot and its formula for calculating the “Integral key performance indicator of innovation activity”.

 

PJSC Aeroflot museum. The Board of Directors considered the creation of an Aeroflot Museum. The main idea behind it is to create an innovative interactive museum for historic and educational purposes. The main subjects of the exposition will be defined along with the development of the conception (due in 2017). Aeroflot Museum could be turned into a space for developing new ideas and demonstrating the company’s achievements, growth areas and values. It could also be used for marketing and public relations purposes. The company also considers the commercial side of the project and the potential to attract partners to the project.

The Board of Directors adopted a resolution to sell two Airbus A321-211 aircraft with the following serial numbers: 2330 and 2337. The lease agreement for both aircraft expires in November 2016.

 
The Board of Directors also considered a number of questions regarding the company’s financial activity.

 

 

Source:- Aeroflot Airlines

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