Creating a multi-brand platform for Aeroflot Group

  • In 2013 Aeroflot Group set up a new airline, Aurora, combining the assets of two carriers, Vladivostok Air and SAT Airlines. JSC Aeroflot will own at least 51% of shares of the new company. The first passenger-carrying flight by an aircraft of the new company took place on 14 November 2013 on the Vladivostok-Khabarovsk-Magadan route.
  • In 2013 Aeroflot announced the creation of a budget airline. The new company was incorporated under the name Dobrolet on 4 October, 2013, and flights are scheduled to begin in 2014.

Balanced development of the route network

  • The Group added 25 new regular routes to its overall route network in 2013.
  • JSC Aeroflot started flight operations on nine new routes.
  • Aeroflot commissioned a Hub Control Centre (the first of its kind in Russia) to coordinate connections for transit passengers and baggage and to manage aircraft turnover at Aeroflot’s base airport, Moscow Sheremetyevo.

Fleet expansion and moderniSation

  • Aeroflot put four new long-haul Boeing 777-300ER airliners into operation in 2013. The Group also took receipt of 22 aircraft from the Airbus A320 family and five Boeing 737s. Four Sukhoi Superjet 100 in ‘light’ configuration were exchanged for ‘full’ configuration craft.
  • The General Meeting of Shareholders of JSC Aeroflot approved the acquisition of up to 50 new Boeing 737-800/737-900ER on an operating lease basis, to be delivered in 2013-2017. Approval was also given for the acquisition in 2013 of five Airbus A321-200s on a leaseback basis.
  • The Board of Directors of JSC Aeroflot approved a transaction with JSC VEB-Leasing for the financial lease of 10 new Sukhoi Superjet 100 regional jets, equipped to Aeroflot’s specifications (full configuration). The jets will replace 10 Sukhoi Superjet 100s already received in a simplified (light) version. The Board also approved lease transactions to acquire 10 medium-range craft in the Airbus A320 family for delivery in 2014, as well as a transaction to purchase 10 new Airbus A320s and four new Airbus A321s for delivery in 2016-2017.

Safety and security

  • Aeroflot successfully passed regular inspections to confirm compliance with industry standards of flight safety and security, including the Operational Safety Audit of the International Air Transport Association’s (IATA) Operational Safety Audit (IOSA).

Greater presence on capital markets

  • JSC Aeroflot redeemed series BO-01 and BO-02 bond loans, with a total value of RUB 12 billion.
  • JSC Aeroflot placed series BO-03 bonds with a value of RUB 5 billion for a period of three years at an interest rate of 8.3% per annum.
  • JSC Aeroflot obtained permission from the Financial Markets Service of the Bank of Russia for shares of Aeroflot to be traded outside Russia as part of a Level 1 ADR programme.
  • Shares of JSC Aeroflot were transferred to the Moscow Exchange’s top-level A quotation list.
  • JSC Aeroflot has been included in the list of partly state-owned companies that are eligible for privatisation in 2014-2016. A final decision will be taken by the Russian Government.

Improving the quality of service to passengers

  • A new Comfort class was introduced on long-haul routes flown by Boeing 777-300ER aircraft. This service class offers seats with superior levels of comfort, an entertainment programme on builtin Thales monitors, individual travel sets, an increased baggage allowance and new standards for in-flight meals.
  • Aeroflot unified its telephone services for passengers in 12 countries at a single call centre.
  • Aeroflot signed an exclusive partnership agreement with Europcar, one of the world’s largest car rental companies.
  • The Company further expanded its on-board Internet programme. Internet access is now available to passengers on 15 Airbus A330s and four Boeing 777s.
  • Both international and domestic flights offered a revamped summer menu, designed by a world-class team of professionals under the direction of Thierry Mona, head chef at LSG Sky Chefs, the world’s leading in-flight caterer.
  • Aeroflot is constantly improving its Aeroflot Bonus loyalty programme for frequent flyers. The Arkady Novikov restaurant chain has joined the programme as a new partner.

The latest technology and innovation

  • Aeroflot announced the results of an international innovation competition to develop an in-flight entertainment platform.
  • Aeroflot commissioned Russia’s first Full Flight Simulator (FFS) for the A330, made by the Canadian manufacturer CAE Inc., and an FFS for the Sukhoi Superjet 100. Aeroflot and Irkut Corporation gave the first presentation of the PT-MS-21-300 simulator at the Moscow Air Show (MAKS-2013).
  • Aeroflot carried out a full upgrade of its Sabre ACSI registration system, achieving conversion to Sabre Sonic Check-in (SSCI).

90th anniversary of Aeroflot

  • Aeroflot celebrated its 90th birthday in 2013. Dobrolet Russian Voluntary Air Fleet Company, subsequently transformed into JSC Aeroflot, was established on 17 March 1923, and was Russia’s first provider of civil aviation services.

Charitable and sponsorship activities

  • Aeroflot launched a new programme to help children in need, entitled ‘The Heart has Two Wings’.
  • Aeroflot was the official airline of the 27th World Student Games in 2013.
  • Aeroflot was appointed official carrier of the Russian team and the national delegation to the XXII Olympic Winter Games and XI Paralympic Winter Games, held in Sochi in 2014.
  • Aeroflot was appointed the official carrier for Manchester United Football Club.
  • Aeroflot was technical partner of the Olympic Torch Relay in 2013 and carried the Olympic flame from Athens to Moscow. The Torch Relay team crossed Russia from west to east on an aircraft provided by Aeroflot, lighting the Olympic flame in 20 Russian cities located north of the Arctic Circle.
  • Aeroflot held its traditional Comrades in Arms action for veterans of World War II to mark the 68th anniversary of VE Day.

Events since the reporting date (2014)

  • The U.S. Securities and Exchange Commission announced the activation of Aeroflot’s Level 1 ADR programme. The depositary bank for the ADR programme is Deutsche Bank Trust Company Americas.
  • Aeroflot transferred a 49% stake in Aurora Airlines to Sakhalin Region under terms of a cooperation agreement with the regional administration. The agreement calls for the phased transfer of shares in Aurora from Sakhalin Region to other regional administrations in Russia’s Far Eastern Federal District.
  • Aeroflot introduced a new elite Platinum level for the Aeroflot Bonus loyalty programme, as well as a new brand identity for the programme.
  • Aeroflot became the first Russian airline to commission the most advanced modification of the Airbus A320, equipped with new aerodynamic Sharklet wingtips, which improve aerodynamic performance and reduce operating costs.
  • Aeroflot held four-day auctions for sales of block freight reservations on scheduled flights in the summer 2014 season to destinations in the Urals, Siberia and the Far East. The revenue realised exceeded the asking price by 6.7%. The average yield rate at the auctions was 15% higher than in 2012.
  • Aeroflot opened ticket sales at subsidised rates in its programme to provide affordable air transport to passengers travelling from the Russian Far East to European Russia and back.
  • Aeroflot reviewed its operations to serve the 22nd Winter Olympic Games and 11th Winter Paralympic Games in Sochi in 2014. Aeroflot made 500 return flights between Moscow and Sochi in the period from 20 January to 18 March 2014, carrying 133,887 passengers, as well as 20 return flights between Frankfurt and Sochi carrying 2,915 passengers.
  • Fitch Ratings confirmed Aeroflot’s BB- credit rating, leaving the ‘Stable’ outlook unchanged, following its annual credit rating review.