Annual Report 2009
Total Page：16
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2009 ANNUAL REPORT Aeroflot's 2009 Annual Report was approved on 19 April 2010 by the Board of Directors of the Company. Protocol #16. CONTENTS Aeroflot Group at a Glance 4 Letter from the Chairman of the Board of Directors 9 Letter from the General Director 11 Key Events 2009 12 1. Aeroflot’s Strategy 15 2. Overview of the Air Transport Market 23 3. Operations 31 4. Overview of Financial Results 46 5. Risk Management 53 6. Corporate Governance and Securities 59 7. Corporate Social Responsibility 79 8. Consolidated Financial Statements 84 Appendixes 140 2 3 AEROFLOT GROUP AT A GLANCE OperatiONAL PERFORMANCE AEROFLOT 2009 2008 Change, % Passengers, thousands 11,062 11,600 -4.6 Cargo and mail, thousand tonnes 148,949 159,162 -6.4 GROUP AT A GLANCE Passenger load factor, % 70 71 -0.8pp Cargo load factor, % 58 58 - Cost-based turnaround to drive solid long-term growth Flight hours 363,272 391,202 -7.1 Last year was one of the most challenging in the history of the airline industry. FiNANCiAL PERFORMANCE Aeroflot demonstrated its ability to react quickly to a changing business environ- USD millions 2009 2008 Change, % ment by rapidly implementing a major cost-cutting program. This both triggered Total revenue 3,346 4,603 -27 a cost-based recovery and created solid foundations from which to increase Traffic revenue 2,819 3,950 -29 profitability. Despite the difficult conditions, Aeroflot was one of the few major Operating costs 3,068 4,273 -28 global carriers to be profitable in 2009. Profit before taxes 206 167 +24 Net profit 86 24 +261 EBITDA* 461 516 -11 Operating costs, USD million Net profit, USD million EBITDA margin, % 14 11 +3pp EBITDAR** 747 723 +3 2008 4,273.3 2008 23.8 EBITDAR margin, % 22 16 + 6pp 261% Net debt/EBITDA ratio 3.9 2.5 +56 – 28% 2009 3,068.1 2009 85.8 * EBITDA=Operating profit+Depreсiation and amortization+Custom duties expenses ** EBITDAR=EBITDA+Operating lease expenses CAPital MARKETS iNDicators First place in the Russian market for A total of million passengers carried 11.1 2009 2008 Change, % international and domestic air transportation Earnings per share, US cents 8.1 4.0 +103 Market capitalization at year-end, USD billion 1.9 1.1 +73 EBITDAR margin Price/Earnings ratio 22.1 45.8 - 52 Aeroflot Group has increased increased by 6pp by the end its 2009 IFRS net profit of 2009 due to effectiveness of anti-recession 3.6 times to USD 85.8 million measures implemented by the management AEROFLOT TRAFFiC REvENUE STRUCTURE Europe 38% Overall operating expenses Fitch rates Aeroflot at ; ‘BB+’ were reduced by 28.2% outlook Stable due to effective cost-reduction program, the fall in world oil prices and currency fluctuations Other 4% Russia 37% As a member of SkyTeam, Aeroflot belongs to a network offering Asia 17% more than 13,100 daily flights to more than 850 destinations in 169 countries America 4% 4 5 AEROFLOT GROUP AT A GLANCE FLEET BUSiNESS SEGMENTS Aeroflot operates one of the most modern and 15 Airbus A-319 Tupolev Tu-154 youngest fleets in Europe. 26 Aeroflot is the key asset of the Aeroflot Group, 32 Airbus A-320 12 Tupolev Tu-134 accounting for 85% of the Group’s business Average age of the Aeroflot’s fleet is 5 years. 8 Airbus A-330 3 Ilyushin Il-86 At the end of 2009, the fleet of Aeroflot Group The group has 4 reportable segments: airline, catering, numbered 166 aircraft, most of which are 16 Airbus A-321 6 Ilyushin Il-96 modern, efficient airliners. terminal, and hotels. There are also other operating segments 26 Boeing B-737 5 Antonov An-24 The Group adheres to the highest environment, safety and noise standards. 11 Boeing B-767 1 Antonov An-26 Airline business accounts for 99% of Group revenue Aeroflot’s fuel consumption declined by 9% 3 McDonnell Douglas 2 Yakovlev-42 in 2009. MD-11 Airline business includes Aeroflot, Donavia, Nordavia, Aeroflot Plus ROUTE NETWORK Catering and Terminal business seg- Aeroflot aims to maintainonly profitable ments receive the largest part of their Extensive route network of Aeroflot Group allows business segments; the inefficient 162 destinations in 48 countries revenues from inter-segment sales transporting over 11 million passengers Aeroflot-Cargo operation was liquidated in 2009, and its assets were integrated into Aeroflot The share of scheduled flights is An average frequency of 7.1 flights more than of all flights AIRLINE CateriNG a week per route 94% USD million USD million Revenue 3,312.1 Revenue 88.3 of which external revenue 3,312.1 of which external revenue 12.2 In 2009 Aeroflot opened 11 new routes Aeroflot has28 code-sharing agree- Operating result 279.5 Operating result 12.4 to the most profitable destinations ments with other airline companies Segment assets 3,141.3 Segment assets 33.8 Segment capital expenditures 499.2 Segment capital expenditures 2.6 BRAND AND QUALiTy HOTELS TERMiNAL USD million USD million Revenue 19.9 Revenue 1.7 of which external revenue 15.1 of which external revenue 0.7 Founded in 1923, Aeroflot is one of the Operating result 3.7 Operating result -18.0 Segment assets 15.2 Segment assets 964.0 best-known Russian brands Segment capital expenditures 0.5 Segment capital expenditures 270.1 OTHER First place among SkyTeam alliance airlines USD million for service quality in economy class on short- and medium-haul routes and in business Revenue 8.3 class on long-haul flights of which external revenue 5.8 Operating result -1.2 Segment assets 49.9 Segment capital expenditures 0.2 6 7 letter From the Chairman Dear colleagues, Aeroflot’s results for 2009 are those of a crisis year. They are mixed and require deep reflection. Nonetheless, the most important issue is clear: amid conditions of a major crisis oF the board oF direCtors engulfing the entire industry worldwide, our airline endured and strengthened its position in the air-travel market. Effective anti-crisis measures enabled Aeroflot to preserve its profitability and financial sta- bility and deliver financial results that exceeded the industry average notably. The Company’s importance as the flagship of the Russian civil aviation industry remains unchanged. In 2009 Aeroflot and its subsidiary airlines transported 11.1 million people. This represents nearly eve- ry fourth airline passenger in the Russian market. The slowdown in passenger flows due to the crisis was around half of the industry average at Aeroflot. The Airline is one of the few in the world to have finished last year with a positive balance sheet. Aeroflot is an actively developing carrier and has one of the youngest fleets in Europe, with leading standards of service, an extensive domestic and international route network, the latest technology, and a modern approach to business. The airline competes on equal terms with the leading players in the international air transportation business, and has successfully integrated itself in the market, including by participating in the global SkyTeam alliance. Last year the construction of Sheremetyevo’s Terminal D – the most modern and technologically advanced facility of its type in Russia and Eastern Europe – was completed, and trial operations began at the facility. Aeroflot is an integral part of Russia’s economic structure, without which it would be impossible to maintain mass access for Russians to air transportation services. The Airline possesses great economic and political significance. The state does not simply view Aeroflot as a strategic asset and a world-recognised brand closely identified with Russia. Today the Company is the bearer of certain hopes and respon- sibilities during the consolidation of domestic aviation industry. As set out in a government resolution, Aeroflot is receiving assets that will enable it to substantially increase operations on its priority domestic routes. By 2011 Aeroflot plans to double its passenger flow and control at least one-third of the domestic market. Such an outlook is fully realistic. In early 2010 there were signs that the industry was emerging from the crisis. Aeroflot began the new year with high growth rates, and strong pas- senger numbers have been seen on domestic routes. This year air passenger numbers are forecast to recover to 2008 levels. A gap exists between forecasts and reality that can be overcome only with efficient, coor- dinated and dedicated work. Last year Aeroflot’s employees demonstrated their ability to carry out such work. Today the national carrier has all of the necessary resources to carry out the major tasks set before it in the interests of passengers and shareholders. Yours sincerely, Minister of Transport of the Russian Federation Igor Levitin 8 9 Dear shareholders, Last year was full of major events for Aeroflot. A change in management took place follow- ing a resolution by the shareholders, we renewed our development priorities and we embarked letter From on a thorough modernization of the Company. In 2009 we not only confronted the global economic crisis successfully but also made sig- nificant advances in numerous key areas, increasing our competitiveness in both Russian and the general direCtor international markets. Aeroflot has maintained its clear leadership among Russian airlines for regularly scheduled flights. Its operational results exceeded the market averages in 2009. Overall, the Aeroflot group, including subsidiaries, transported 11.1 million passengers last year, which is practi- cally one-quarter of all passengers carried by the entire domestic aviation industry. The main financial result was that Aeroflot finished the year in profit. Amid the crisis facing the aviation industry, very few global carriers can say the same.