OREANDA-NEWS. June 18, 2012. JSC Aeroflot Board of Directors ordinary meeting was held chaired by Kirill Androsov.

The Board of Directors considered preliminary results of operating and financial activities of the Company in the first quarter of 2012. The plan of the reporting period regarding passenger, cargo and mail traffic has been fulfilled. Starting from the last year JSC Aeroflot maintains the tendency of more effective aircraft operation and high traffic volume growth rates, which outperform sector wide level. In the first quarter of 2012 Aeroflot has carried circa 3.6 mln. passengers, which is 29.3% more compared to the corresponding period of the last year. The international passenger traffic amounted to 2.13 mln. passengers (+19%), domestic passenger traffic amounted to 1.47 mln. passengers (+48%). Total passenger turnover amounted to 10.6 bln. passenger-kilometers, 22.6% growth compared to the corresponding period of the last year. Total flight hours amounted to 105.0 th. hours, 22.7% more compared to the corresponding period of 2011. The seat load factor totaled 73.7%, which is 2.8% higher than planned due to the effective capacity utilization.

The Board of Directors considered the question regarding the joint venture for technical maintenance and reparation of aircraft services. High relevance of this question has been pointed out in connection with integration intensification of Aeroflot Group and its aircraft fleet growth.

The Board of Directors approved JSC Aeroflot procurement activities report for the first quarter of 2012. Tender procedures, electronic trading floors for goods and services procurement are widely used in the Company. In the reporting period the percentage of electronic tenders amounted to 98.4%-99.8% of the total amount of tenders, which is in line with 2011 figures.

The question on program for increasing capitalization of JSC Aeroflot has been a matter of discussion at the meeting. The Company is valued at the level of European industry-leaders and key carriers of the Emerging Markets. Company management has been authorized to carry out preparatory arrangements necessary for implementation of selected measures.

The question on minimization of open position in Euro currency has been discussed. The options for reduction of currency risk of JSC Aeroflot have been thoroughly analyzed. Company management has been authorized to organize change of rate-setting currency for international air lines carriage in Russian Federation from Euro to Russian Ruble.

Within the scope of agenda the question on treasury shares of JSC Aeroflot has been considered.

During the discussion on optimization of JSC Aeroflot branches and representative offices operations the fact that the Company currently has more than 100 representative offices (72 representative offices abroad, more than 30 representative offices and branches in Russian Federation), where more than one thousand people is employed has been outlined. The main principles of optimization of this system are: cost cutting, commercial function strengthening, development of sales channels with the lowest cost of goods sold. Main initiatives of the reorganization will be implemented before the end of the year in the majority of countries. Total cost-cutting within the scope of the project will be more than 15 mln. US dollars per annum. Sales growth potential is more than 30 mln. US dollars per annum.

The Board of Directors has approved lease transaction of one new Airbus A320-200 with delivery in 2012.

Within the scope of measures for further consolidation of Aeroflot Group the Board of Directors has approved a range of transactions regarding financial obligations of the companies within the Group: JSC Orenair, JSC Rossiya Airlines, JSC Vladivostok Avia and JSC Donavia.