1. Nature of the business
Joint Stock Company Aeroflot – Russian Airlines (the “Company“ or “Aeroflot“) was formed as an opened joint stock company following the Russian Government decree in 1992 (hereinafter - the “1992 decree“). The 1992 decree conferred all the rights and obligations of Aeroflot – Soviet Airlines and its structural units upon the Company, including inter-governmental bilateral agreements and agreements signed with foreign airlines and enterprises in the field of civil aviation. Following the Decree of the Russian President No. 1009 dated 4 August 2004, the Company was included in the List of Strategic Entities and Strategic Joint Stock Companies.
The principal activities of the Company are the provision of passenger and cargo air transportation services, both domestically and internationally, and other aviation services from Moscow Sheremetyevo Airport. The Company and its subsidiaries (the “Group“) also conduct activities comprising airline catering and hotel operations. Associated entities mainly comprise aviation security services and other ancillary services.
As at 31 December 2013 and 2012, the Government of the Russian Federation (the “RF“) represented by the Federal Agency for Management of State Property owned 51.17% of the Company. The Company’s headquarters are located in Moscow at 10 Arbat Street, 119002, RF.
The principal subsidiaries are:
|
Company |
Registered |
Principal activity |
31 December 2013 |
31 December 2012 |
|---|---|---|---|---|
|
OJSC Donavia (“Donavia“) |
Rostov-on-Don, RF |
Airline |
100.00 % |
100.00 % |
|
OJSC AK Rossiya (“AK Rossiya“) |
|
|
75% minus one share |
75% minus one share |
|
OJSC Vladivostok Avia (“Vladavia“) |
Primorsk Region, RF |
Airline |
52.16% |
52.16% |
|
OJSC AK Aurora (“AK Aurora“) |
Yuzhno-Sakhalinsk, RF |
Airline |
100.00% |
100.00% |
|
OJSC Orenburgskie Avialinii (“Orenburgavia“) |
Orenburg, RF |
Airline |
100.00% |
100.00% |
|
CJSC Aeroflot-Cargo |
Moscow, RF |
Cargo transportation services |
100.00% |
100.00% |
|
LLC Dobrolet (“Dobrolet“) |
Moscow, RF |
Airline |
100.00% |
– |
|
LLC Aeroflot-Finance (“Aeroflot-Finance“) |
Moscow, RF |
Finance services |
100.00% |
100.00% |
|
CJSC Aeromar |
Moscow Region, RF |
Catering |
51.00% |
51.00% |
|
CJSC Aerofirst (“Aerofirst“) |
Moscow Region, RF |
Trading |
– |
66.67% |
|
CJSC Sherotel |
Moscow Region, RF |
Hotel |
100.00% |
100.00% |
In October 2013 Aeroflot incorporated Dobrolet, a new 100% subsidiary, in order to operate low-cost flights. The start of Dobrolet operations is scheduled for the second quarter of 2014.
In 2013, following an order of the Russian Prime-Minister, AK Aurora was founded based on two Far East airlines – OJSC Sahalinskiye Aviatrassi and Vladavia. The company’s main goal is to support the social and economic development of the Far East through a more efficient and affordable passenger transportation system. The route map was designed taking into account the needs of passengers from all Russian Far East regions. The Company will own at least 51% of shares of AK Aurora. The remaining shares will transferred to the governments of the Russian Far East regions which will take an active part in the project development in 2014. An important step in this direction was the Agreement on Cooperation and Joint Participation in AK Aurora Operations signed on 6 November 2013 between Aeroflot and the Government of the Sakhalin Region (the “AK Aurora Agreement“).
During 2013, the Group sold its share in Aerofirst with a gain on disposal of USD 10.6 million which was recorded within financial income for 2013 (Notes 10 and 16). As of 31 December 2012, assets and liabilities of this entity were classified as held for sale (Note 16).
The Group’s major associate is (Note 17):
|
Company |
Registered |
Principal activity |
31 December 2013 |
31 December 2012 |
|---|---|---|---|---|
|
CJSC AeroMASH–AB (“AeroMASH–AB“) |
Moscow Region, RF |
Aviation security |
45.00% |
45.00% |
The table below provides information on the Group’s aircraft fleet as at 31 December 2013 (number of items):
|
Type of aircraft |
Ownership |
Aeroflot |
Donavia |
AK Rossiya |
Orenburgavia |
Vladavia |
AK Aurora |
Group total |
|---|---|---|---|---|---|---|---|---|
|
(no. of items) |
||||||||
|
Il-96-300 |
Owned |
6 three of these aircraft are not operated as at 31 December 2013. |
– |
– |
– |
– |
– |
6 |
|
An-24 |
Owned |
– |
– |
– |
– |
– |
1 |
1 |
|
Mi-8 |
Owned |
– |
– |
– |
– |
3 one of these aircraft is not operated as at 31 December 2013. |
– |
3 |
|
Total owned |
6 |
– |
– |
– |
3 |
1 |
10 |
|
|
|
Finance lease |
4 |
– |
9 |
– |
– |
– |
13 |
|
|
Finance lease |
1 |
– |
– |
– |
– |
– |
1 |
|
|
Finance lease |
21 |
– |
– |
– |
– |
– |
21 |
|
|
Finance lease |
8 |
– |
– |
– |
– |
– |
8 |
|
|
Finance lease |
– |
– |
– |
– |
– |
2 |
2 |
|
|
Finance lease |
4 |
– |
– |
– |
– |
– |
4 |
|
An-148 |
Finance lease |
– |
– |
6 |
– |
– |
– |
6 |
|
Tu-204 |
Finance lease |
– |
– |
– |
– |
6 all these aircraft are not operated as at 31 December 2013. |
– |
6 |
|
Total finance lease |
38 |
– |
15 |
– |
6 |
2 |
61 |
|
|
SSJ 100 |
Operating lease |
10 |
– |
– |
– |
– |
– |
10 |
|
|
Operating lease |
8 |
8 |
7 |
– |
– |
3 |
26 |
|
|
Operating lease |
51 |
– |
9 |
– |
6 four of these aircraft are not operated as at 31 December 2013. |
– |
66 |
|
|
Operating lease |
5 |
– |
– |
– |
– |
– |
5 |
|
|
Operating lease |
14 |
– |
– |
– |
– |
– |
14 |
|
|
Operating lease |
3 |
2 |
21 one of these aircraft is not operated as at 31 December 2013. |
– |
2 |
28 |
|
|
|
Operating lease |
5 |
– |
3 |
– |
– |
– |
8 |
|
|
Operating lease |
– |
– |
– |
3 |
– |
– |
3 |
|
MD-11 |
Operating lease |
3 all these aircraft are not operated as at 31 December 2013. |
– |
– |
– |
– |
– |
3 |
|
|
Operating lease |
– |
– |
– |
– |
– |
3 |
3 |
|
|
Operating lease |
– |
– |
– |
– |
– |
2 |
2 |
|
Total operating lease |
99 |
10 |
19 |
24 |
6 |
10 |
168 |
|
|
Total fleet |
143 |
10 |
34 |
24 |
15 |
13 |
239 |
|