Alexander Velovich/MOSCOW
Aeroflot shareholders have agreed to drop the suffix "International" from the Russian airline's name, reflecting its success in increasing domestic market share. The carrier, now known as Aeroflot - Russian Airlines, has also confirmed that it aims to join the SkyTeam alliance by 2003.
Aeroflot's domestic market share grew to 8.2% last year from 4% in 1998, and should rise to 10-11% this year. It is to pay an 11.1 million rouble ($394,000) dividend on pretax profits that rose nearly 8% to 1.15 billion roubles, according to Russian accounting standards. Based on international standards, however, Aeroflot lost $33.9 million, although this was a five-fold improvement on 1998.
The shareholders' meeting saw Aeroflot general manager Valery Okulov retain his position despite some uncertainty.
Alexander Zurabov, the airline's first deputy general director, finance and economics, won election to the nine-seat board, as did the first-ever foreigner, US citizen David Herne, a financial expert with Unifund. Associates of notorious tycoon Boris Berezovsky failed to win election.
Aeroflot, still 51.17% state-owned, is looking to launch an American Depositary Receipt (ADR) share programme amounting to a 5% stake in the airline later this year.
It is meanwhile continuing to implement restructuring strategies recommended by consultants McKinsey, having enjoyed a 5.2% growth in profits over the first five months of this year, and a 5.4% rise in seat occupancy. Passenger-side turnover was up 1.4% and cargo up 7.7%.
Future planning includes a new terminal at Moscow Sheremetyevo airport, and joining the Delta Air Lines/Air France-led SkyTeam global alliance (launched last month) by 2003.
Source: Flight International
