Strategy of Aeroflot Group through 2025

Building on the Group’s position as one by the Top 5 carriers in Europe and of the Top 20 globally by revenue and passenger traffic.
Increasing of passenger traffic to 70 million passengers a year, including 30 million passengers on the domestic market.
Successful business development across market segments based on the Group’s multi-brand platform, including premium, regional, tourist, and low-cost businesses.

Strategic objectives of Aeroflot Group

Continuous improvement of operational efficiency.

Deployment of new technologies and innovative solutions.

Business priorities of Aeroflot Group

Creation of a multi-brand platform

The Group is completing the transition to unified management of all its assets and an integrated policy for rapid development of all of its airlines in their respective market segments. The Group is developing as the largest player in the Russian air transport sector and one of the leaders on the European market.

  • Implementing a unified policy for managing Group assets.

In 2013, the Group took over commercial management of all Donavia flights. A new Far East airline, Aurora, was established from the assets of SAT Airlines and Vladivostok Air, and commercial management of the new regional company will be transferred to the Group. Starting from the 2014 summer schedule flights by Rossiya Airline are to be placed under the commercial management of Aeroflot and will be operated under the SU code.

Developing international partnerships

  • Cooperation with other SkyTeam airlines.

Cooperation with other members of the SkyTeam alliance helps Aeroflot to improve the profitability of its route network by offering customers more destinations, services and privileges.

  • Strategic partnerships with companies in non-aviation market segments.

Aeroflot is developing collaboration with a number of non-aviation companies to expand its range of services and customer base, and to increase brand awareness. Following an agreement with Europcar, airline passengers can book rental cars through a co-branded Internet service on the Aeroflot website. A sponsorship agreement with Manchester United has boosted awareness of the Aeroflot brand among more than 600 million fans of the football club worldwide.

Sustainable profitable growth, increasing investment attractiveness and expanding capital market activities.

Aeroflot is focused on maintaining profitable growth and strengthening its positions on domestic and international air transportation markets.

  • Cost optimisation.

The company works constantly to reduce its costs and increase its operating efficiency, with special focus on fuel efficiency, productivity and best possible use of capacities.

The company aims to maximise the profitability of its carriage operations, helped by segmentation of its service provision.

  • Increased presence in capital markets.

Aeroflot is implementing a consistent strategy to expand its work with the investment community.

Improving the quality of service to passengers

Aeroflot is continuously improving the quality of its services to passengers. The main airline in the Group, Aeroflot -— Russian Airlines, serves premium-segment passengers, offering a high quality of service to the best international standards of leading global airlines. Aeroflot’s customer loyalty, as measured by its net promoter score (NPS), increased for the third year in a row in 2013 to 58%. The company won the prestigious international Skytrax World Airlines award in the category ‘Best Airline in Eastern Europe’ for the second time in 2013.

  • Development of services in all classes.

The Group has a wide range of service classes, from premium to tourist, all of which are undergoing further development. A new comfort service class was introduced in 2013 on long-haul Boeing 777 aircraft. The launch of the low-cost carrier, Dobrolet, will make high-quality service available at discount prices to price-sensitive passengers on routes to popular destinations.

  • High-quality service in the air and on the ground.

The Company is expanding the number of its aircraft that offer in-flight Internet access, and is constantly improving the standards of in-flight menus and entertainment systems. The Company has set up a multilingual group to assist transit passengers at Aeroflot’s base airport (Moscow Sheremetyevo), and a unified call centre now provides services to airline passengers in 12 countries.

Balanced development of the route network

  • The Group is developing a route network, which allocates routes between carriers according to their specialisation and flight geography, avoiding competition between airlines within the Group. Further work has been done to place charter business with Orenburg Airlines.

Expanding the fleet

  • The Group has a well-balanced and modern fleet that helps achieve strategic objectives in various market segments.
  • JSC Aeroflot’s fleet was expanded in 2013, mainly through the commissioning of eight Airbus A320s, five Airbus A321s, three Boeing 737-800s and four Boeing 777-300ERs.
  • New Boeing 777 and Airbus A320 airliners will be added to the JSC Aeroflot fleet in 2014 and the fleets of Group subsidiaries will be substantially modernised.
  • JSC Aeroflot took receipt of its first Boeing 737NG aircraft in 2013.
  • The Group fleet is expected to expand to include 336 aircraft by 2018.

New technologies and innovation

Aeroflot is implementing a programme including technological, managerial and organisational innovation and the development of cooperation with universities, research organisations and businesses specialising in innovative development. In 2013, Aeroflot was named the most innovation-proactive company in the Transport and Machine-building category by judges at the independent Innovation Time-2013 awards.

  • Integrated systems for operation management.

Aeroflot applies innovative technical tools and solutions in the spheres of ground support, maintenance and repair, and aviation security. Use of the latest information technology has enabled the Company to achieve new standards of punctuality, cost optimisation, aircraft servicing and preparation, check-in, and in-flight services.

  • Complex IT projects and the creation of a unified IT infrastructure.

Aeroflot is completing the installation of SAP ERP, working on the introduction of a single IT platform for business processes and combining all IT infrastructure within the Group, automating management of the route network and aircraft fleet, and installing efficient IT solutions for in-flight services to passengers and in airports. The Group has also launched a unified data-processing centre.

Key Tasks for the Group in 2014

  • Complete the integration of subsidiaries into the structure of Aeroflot Group based on the multi-brand platform and best use of synergies;
  • Increase traffic volumes and revenue of Group companies;
  • Develop new airlines (Aurora and Dobrolet);
  • Expand the Group’s aircraft fleet;
  • Improve the quality of service in all segments, and expand the range of services;
  • Implement the Group’s innovative development programme,
    implement and standardise IT technologies.