OREANDA-NEWS. PJSC Aeroflot (Moscow Exchange ticker: AFLT) announces the results of the Board of Directors meeting held on 24 November 2016. The meeting was chaired by Kirill Androsov.

The meeting agenda included the following items:

Implementation of Aeroflot Group’s strategy. The market outlook reviewed by the Board of Directors in February 2016 is still regarded as relevant. A set of measures defined as part of previously approved strategies has proved to be effective. It was resolved to confirm the feasibility of accelerating the growth of Aeroflot Group through the parent company Aeroflot (including through active development of transfer connections on the international market), and low-cost carrier Pobeda. A number of key objectives have been revised, including passenger traffic objectives: in 2021 Aeroflot Group plans to carry 66 mln passengers and PJSC Aeroflot 41.8 mln. It is envisaged that the number of aircraft will increase to 380. The fleet development strategy assumes an increase in the share of Russian aircraft. The increase will be provided for by contracts for 50 Sukhoi Superjet 100 aircraft and 50 MC-21 aircraft.

Implementation of Aeroflot Group’s long-term development programme for the period 2016-2021. A number of amendments has been approved and should be included in the updated long-term development programme of Aeroflot Group for the indicated period. The amendments come as a result of a request by the Board of Directors and Russian government directives.

During the meeting decisions were adopted which aim at organisational improvement of accounting systems for the implementation of a long-term development programme and organisation of the annual audit of the implementation of the long-term development programme of Aeroflot Group.

Aeroflot Group’s IT development strategy.

It was agreed that Aeroflot Group will continue its active IT development on par with the best world practices. Significant results have been achieved in automatization and digitalisation processes. All projects planned in this field for 2016 have been implemented. Best IT practices of Aeroflot are also implemented at subsidiaries (considering their specificities). Aeroflot’s IT achievements have been recognised by professional awards and high rankings in international ratings (fourth place among major airlines in the digitalisation rating by Bain & Company). As of now, the main priorities in IT field are Big Data, mobile app and innovative projects.

Implementation of Aeroflot Group’s marketing strategy. A range of measures aimed at implementing Aeroflot Group’s marketing strategy includes the following:

  • increase of competitiveness and services provided by Aeroflot Group on the international, domestic and CIS markets;
  • increase of Aeroflot Group’s online operational efficiency;
  • development of related services sales;
  • increase of Aeroflot Group’s competitiveness on the corporate and agent sale markets.

Aeroflot Group’s multi-brand strategy fulfils the need of all market segments. At the same time, the airlines’ strategic positioning allows them to consider the specific needs of target segments thereby avoiding competition within the Group. Aeroflot Group’s updated 2017-2021 marketing strategy for Russia and CIS was approved.

Aeroflot Group’s consolidated IFRS budget for 2017.

In the coming year the Group expects growth of all main operational indicators. It was resolved to approve the plan of operational indicators of Aeroflot Group for 2017, the budget of PJSC Aeroflot and the consolidated budget of Aeroflot Group in accordance with IFRS for 2017, as well as the investment programmes of PJSC Aeroflot and Aeroflot Group for 2017.

PJSC Aeroflot incentive scheme. The list and weightings of KPIs under the Aeroflot Group Long-Term Development Programme and the KPIs of the CEO of PJSC Aeroflot for 2017 were approved, along with updated principles of the Regulation on Remuneration of Employees from Net Profit Under the Tariff System of Payments Based on the Company’s Results for the Year.

Implementation of measures to reduce operational costs of Aeroflot Group as of the end of 9M 2016. Since 2011 Aeroflot Group has successfully introduced various programmes to optimise operational costs across all areas of the business. Possible economies of scale have been achieved from integrating the Group’s airlines (MRO, fuel, other expense lines). Best sector practices have been introduced to boost efficiency. Aeroflot has achieved among the highest levels of operational efficiency not only among leading global airlines, but also among low-cost carriers. The goals of the Company’s approved growth strategy are also being achieved, and the level of service is constantly improving (including achievement of Four Star Airline status from Skytrax for service quality). Given the pace of implementation in the first nine months of 2016, Aeroflot Group’s programme to reduce operating costs will be fulfilled for the full year.