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Airlines

Name: AEROFLOT RUSSIAN AIRLINES
7JetSet7 Code: ARO
Status: Operational
Region: CIS
City: MOSCOW
Country: RUSSIA
Employees 15500
Web: aeroflot.ru
Email: info@aeroflot.ru
Telephone: +7 (495) 155 6643
Fax: +7 (495) 155 6647
Sita: MOWDDSU
Background
(definitions)

Click below for data links:
ARO-2003-01 PROFIT
ARO-2003-12 TU-154
ARO-2004-01 AD
ARO-2004-02 767-36NER-A
ARO-2004-02 A320
ARO-2004-03 MD-11F
ARO-2004-04-A
ARO-2004-04-B
ARO-2004-04-C
ARO-2004-04-D
ARO-2004-05 STM MEMBER
ARO-2004-07 STM MEMBER
ARO-2004-08 TU-134A
ARO-2004-11-A321-211
ARO-2004-WORLD-RPK
ARO-2005-01 767-300ER
ARO-2005-01-CHARTER OPS
ARO-2005-11-A321 ORDER DELAY
ARO-2005-12-SUKHOI RRJ ORDER
ARO-2006-03-TAKEOVERS
ARO-2006-06 STM MEMBER
ARO-2007-STATS
ARO-2009-08 SUKHOI SUPERJET 100
ARO-2009-12 CLOSES CARGO DIV
ARO-2011-11 RVSM INTRO
ARO-2012-10 - TO MIAMI
ARO-2013-11-AURORA FLEET
ARO-2013-12 - DOBROLET START
ARO-2014-01 - 787 ORDER STATUS
ARO-2014-01 - DME AIRPORT EXPANSION
ARO-2015-09 - Top 15 Russian Airlines.jpg
ARO-2015-09 - TRANSAEROFLOT.jpg
ARO-2017-01 - INCDT A321.jpg
ARO-AIRPORT ROUTE MOSCOW TO SHEREMETYEVO
ARO-LOGO - 2012-01
ARO-MAP
ARO-NEWS SKYTEAM MEMBER
ARO-NEWS TU-154 BALLET DANCERS
ARO-NEWS-1ST A319
ARO-NEWS-1ST A319-A
ARO-TAIL LOGO - 2011-11

ESTABLISHED AND STARTED OPERATIONS IN 1923. "DOBROLET" IS THE ORIGINAL NAME OF THE AIRLINE USED FOLLOWING ITS FORMATION IN 1923 (SEE DECEMBER 2013, WHEN AEROFLOT REVIVES THE DOBROLET NAME FOR ITS LOW COST CARRIER (LCC) NEW SUBSIDIARY). A K A AEROFLOT - RUSSIAN INTERNATIONAL AIRLINES (ARIA). DOMESTIC & INTERNATIONAL, SCHEDULED, PASSENGER & CARGO, JET AIRPLANE SERVICES.

ADDRESS:
LENINGRADSKY AVENUE 37, BLDG 9
MOSCOW 125167, RUSSIA

Russia (Russian Federation) was established in 1991, it covers an area of 17,075,400 sq km, its population is 148.4 million, its capital city is Moscow, and its official language is Russian.

JUNE 1993: AEROFLOT (ARO) FLIES TO >130 COUNTRIES. OWNERS: 51% GOVERNMENT, 49% EMPLOYEES.

1992 = -48.1% (RPK) (PASSENGER TRAFFIC), -51.3% PASSENGERS (PAX), -35.85 (FTK) (FREIGHT TRAFFIC).

(ARO) ALREADY SERVES SAN FRANCISCO (SFO), AND NOW FLIES TO LOS ANGELES (LAX), VIA ANCHORAGE (IL-62, 22F, 40C, 173Y, 235 PAX).

MAINTENANCE CENTER AT MOSCOW (SHEREMETYEVO).

104 AIRPLANES CANNOT MEET 1995 NOISE RULES. NEEDS $1.5 BILLION FOR REPLACEMENT TO AVOID BANKRUPTCY.

FEBRUARY 1994: NONSTOP TO SEATTLE (IL-96, OR TU-154) & ON TO ORLANDO (IL-62).

15,000 EMPLOYEES (INCLUDING 1,749 FLIGHT CREW (FC), 2,079 CABIN ATTENDANTS (CA), & 2,907 MAINTENANCE TECHNICIANS (MT)).

$300 MILLION, 4 ORDERS (1ST 2 IN JUNE 1994) 767-3YOER'S (VN561; VN562), (GUI) 5 YEAR LEASED, 90 MINUTES EXTENDED TWIN-ENGINE OPERATIONS (ETOPS).

MARCH 1994: ACCDT: AEROFLOT (ASRO) A310-300 CRASHED AT NOVOKUZNUTSK, SIBERIA, RESULTING IN ALL 12 (FC)-(CA)/63 PASSENGER FATALITIES. THERE WAS A PROBLEM WITH TEENAGERS BEING ALLOWED ON THE FLIGHT DECK.

MAY 1994: WEEKLY KHABAROVSK & MAGADAN FLIGHTS TO SEATTLE.

JANUARY 1995: 1994 = +$160 MILLION (+$171 MILLION) (NET PROFIT).

MARCH 1995: APPLIED TO IRISH REGULATORY AUTHORITY FOR 120 MINUTES (ETOPS) APPROVAL.

2 767'S TO DELTA AIRLINES (DAL), DALLAS FOR 1ST "C" CHECKS.

APRIL 1995: RECEIVED 1ST TU-204C (RA64010), EX-(ORL).

JUNE 1995: (CFM) SIGNED AGREEMENT TO REPLACE ENGINES ON 20 IL-86'S, FOR $50 MILLION & LEASE BACK TO AEROFLOT (ARO).

2 A310-324'S, EX-SAKHALEN AIR (SAK) DELIVERIES (NOW TOTAL 6), WITH MAINTENANCE BY SWISSAIR (SWS).

JULY 1995: 105 MINUTES EXTENDED TWIN-ENGINE OPERATIONS (ETOPS) APPROVAL FROM RUSSIAN REGULATORY AUTHORITY. STARTED (ETOPS) SCHEDULED FLIGHTS TO MONTREAL, CANADA.

THE RUSSIAN GOVERMENT ANNOUNCED ITS SHARE SALE FOR AUGUST - OCTOBER, 1995.

1 +1 OPTION DC-10-30F, MCDONNELL DOUGLAS (MDF) LEASED. 1 A310-300 (PW4152), LEASED.

AUGUST 1995: 3 TU-154C'S TO BE REPLACED WITH 4 TU-204C'S.

OCTOBER 1995: 3 NEW ROUTES TO ALMATY, KHABAROVSK AND NOVOSIBIRSK. TO FRANKFURT, MOSCOW, SEOUL (DC-10).

NOVEMBER 1995: TRANSPORTATION MINISTRY HELD PRIVATIZATION, WITH 49% TO AIRLINE EMPLOYEES, GOVERNMENT 51%.

MARSHALL ERGENI SHAPOSHNIKOV, FORMER SOVIET DEFENSE MINISTER & COMMANDER-IN-CHIEF OF SOVIET FORCES, IS THE NEW GENERAL DIRECTOR REPLACING VLADIMIR TIKHONOV.

DECEMBER 1995: TO BRATISLAVA, SHANNON, CHICAGO (ORD). NONSTOP TO LOS ANGELES (LAX) (IL-96).

ACCDT: (ARO) TU-154M FROM SAKHALIN ISLAND MISSING, AND PRESUMED ALL FATALITIES.

JANUARY 1996: 1995 = +$57 MILLION: 3.5 MILLION PASSENGERS (PAX) (3.0 MILLION).

FEBRUARY 1996: USA GOVERNMENT LENDS AEROFLOT (ARO) $1 BILLION FOR 20 ORDERS IL-96M'S (P&W), COLLINS AVIONICS, 350 PAX.

MARCH 1996: USA DEPARTMENT OF TRANSPORTATION (DOT) OK'S FLIGHTS TO ATLANTA (GEORGIA) USA OLYMPICS (767, IL-62, IL-86, & IL-96).

4 ORDERS (1996) A310-300'S, 5 YEAR LEASED, EX-DELTA AIRLINES (DAL).

APRIL 1996: OPENS 3RD HANGAR, 7,000 SQ M SIZED FOR 747, 767 AND IL-96-300'S. THE DESIGN HAS STARTED ON A 4TH HANGAR, ALSO AT THIS LOCATION.

MAY 1996: KANSAI - MOSCOW - PARIS (A310-300).

JUNE 1996: NEXT MONTH TO ATLANTA (767) FOR USA OLYMPICS.

1ST BOARD MEETING ATTENDED BY DIRECTORS: MARSHAL EVGENY SHAPOSHNIKOV GENERAL DIRECTOR; VLADIMIR POTAPOV ADVISOR TO GENERAL DIRECTOR; & ANATOLIY KARASYOV CHIEF, #1 SHOP.

5 MAINTENANCE TECHNICIANS (MT) AT BOEING (TBC), SEATTLE FOR NON-DESTRUCTIVE TESTING (NDT), WHO LIKED THE (NDT) TRAINING. TO SEND +15 IN AUGUST 1996.

767 CURRENTLY OPERATES TO NEW YORK (JFK) & CHICAGO (ORD). +4 A310-300LR'S LEASED, EX-DELTA AIRLINES (DAL) FOR EUROPE - MOSCOW - ASIA ROUTES.

JULY 1996: TU-204 FUTURE IN DOUBT, WITH AEROFLOT (ARO) LEAVING THE RUSSIAN AVIATION CONSORTIUM (ALTHOUGH ALREADY INVESTED $10 MILLION IN IT). PROBABLY WILL DROP 40 ORDERS TU-204'S.

10 ORDERS 737-400'S, LEASED.

AEROFLOT (ARO), PULKOVO AIR (STG), KRASAIR (ZXD), SIBAVIA (SBR), AND AIR KAZAKSTAN (KAZ) TO MODERNIZE IL-96'S WITH (CFM56) ENGINES INSTALLATION AT $25 MILLION/AIRPLANE, WHICH INCREASES RANGE 5,000 TO 7,000 KM, AND IMPROVES FUEL CONSUMPTION +28%.

TO EUROPE, ASIA & USA.

1ST 6 MONTHS = 1.7 MILLION PASSENGERS.

LUFTHANSA TECHNIK (LTK) (DLH) CONTRACT FOR HEAVY MAINTENANCE & SPARES FOR 8 A310-300'S. CUT ANNUAL MAINTENANCE & REPAIR COSTS BY -$30 TO -40 MILLION.

DELIVERY OF LAST OF 4 A310-300'S, FOR TOTAL 10, 5 YEAR LEASED @ $525,000/MONTH.

SEPTEMBER 1996: ANNOUNCED 10 ORDERS 737-400'S AT FARNBOROUGH, DESPITE INDIGNATION BY TUPOLEV PRODUCER FROM TATARSTAN (EXPRESSED BY FARID MUKHAMETSHIN TO THE PRIME MINISTER) AND TO YEVGENY SHAPOSHNIKOV, (ARO) DIRECTOR GENERAL.

AEROFLOT (ARO) SENT 2 GROUPS OF 7 INSPECTORS TO BOEING (TBC) FOR NON-DESTRUCTIVE TESTING (NDT) TRAINING, TO BRING (NDT) INSPECTIONS ON 767'S UP TO WESTERN STANDARDS. ALSO, REVIEWING WHAT (NDT) EQUIPMENT TO BUY AND HOW TO QUALIFY THEIR DEPARTMENT TO WESTERN CERTIFICATION STANDARDS.

OCTOBER 1996: TO WASHINGTON DC & MIAMI (A310), TO CHICAGO (ORD) (767), & RESUME HAVANA (IL-96). NOW 352 INTERNATIONAL FLIGHTS/WEEK, TO 94 COUNTRIES. CODE SHARE WITH CONTINENTAL AIRLINES (CAL) TO NEW YORK (DC-10-30).

ACCDT: (ARO) AN-124 CRASHED SHORT ON LANDING AT TURIN'S CASELLE AIRPORT GOING INTO HOUSES KILLING 2 ON GROUND = 2 PILOT (FC) FATALITIES OF "24" CREW. OWNED BY AYAKS CARGO, MOSCOW, WAS TO PICK UP ITALIAN LUXURY CARS FOR MIDDLE EAST MARKET.

DECEMBER 1996: BOTH 767'S TO DELTA AIRLINES (DAL) DALLAS MAINTENANCE CENTER FOR "C" CHECKS.

JANUARY 1997: 1996 = 3.9 MILLION PASSENGERS (PAX) (3.5 MILLION): +27% (FTK) FREIGHT TRAFFIC.

LUFTHANSA TECHNIK (LTK) (DLH), RENEWS MAINTENANCE CONTRACT FOR A310-300'S THROUGH 2002, INCLUDING SUPPORT FOR NEW MAINTENANCE CENTER AT SHEREMETYEVO AIRPORT.

4 IL-62M'S BROKEN UP.

FEBRUARY 1997: PLANNING 1ST A310 "C" CHECK THIS SUMMER, WITH LUFTHANSA (DLH) ASSISTANCE AT MOSCOW, SHEREMETYEVO MAINTENANCE BASE.

MARCH 1997: YELTZIN'S SON-IN-LAW VALERY OKULOV, NEW HEAD. THE GOVERNMENT STILL OWNS 51%!

APRIL 1997: NIKITA KHARKOV, HEAD FOREIGN (767/DC-10/A310) AIRCRAFT MAINTENANCE; MR SVIRIDOV, DEPUTY MAINTENANCE BASE DIRECTOR; REPORTS TO MR ISAKOV, SHEREMETYEVO MAINTENANCE BASE DIRECTOR.

CONFIRMS $440 MILLION, 10 ORDERS (APRIL 1998) 737-400'S, 131 PAX, 2 CLASS (BOEING AS PART OF SALE, WILL BUY 4.8 MILLION TITANIUM INGOTS OVER 2 YEARS FROM VERKHNAYA SALDA METALLURGICAL PRODUCTION ASSOCIATION).

MAY 1997: MAY TAKE OVER MOSCOW REGIONAL AIRLINES, LIKE VNUKOVO (VNU), TO COMPETE WITH TRANSAERO (TRX).

TO FARO, PORTUGAL (A310) AND MONASTIR, TUNISIA (IL-86).

JUNE 1997: SELECTS COLLINS AVIONICS FOR 10 737'S, INCLUDING NAVIGATION/COMMMUNICATIONS RADIOS & SENSORS, FORWARD LOOKING RADAR, TRAFFIC ALERT & COLLISION AVOIDANCE, AND DATA LINK. ALSO, COLLINS AVIONICS FOR 20 ORDERS (DECEMBER 1997) IL-96'S M/T, (4 ENGINE WIDE BODY) (1ST FLIGHT LAST MONTH).

JULY 1997: "AIR TRAVEL ASSOCIATION" GIVES AEROFLOT (ARO) A REPORT CARD "F" RATING FOR SAFETY, USING DATA FROM AIRCLAIMS UK.

FISCAL YEAR (FY) 1996 = +$22 MILLION. +9% PASSENGERS (PAX), 90,500 TONS CARGO (+28%) (FTK) FREIGHT TRAFFIC.

14,400 EMPLOYEES.

AUGUST 1997: ANDREY TIMONCHKINE, CHIEF 737-400 MAINTENANCE DEPARTMENT.

EXPRESSED INTEREST IN ACQUIRING BOEING ON LINE DATA (BOLD).

COMPLETES 1ST "C" CHECK ON A310-300, WITH LUFTHANSA TECHNIK (LTK) (DLH) ASSISTANCE AT MOSCOW, SHEREMETYEVO MAINTENANCE FACILITY.

SEPTEMBER 1997: CODE SHARE WITH AIR FRANCE (AFA) TO PARIS.

TO INTRODUCE IL-96T IN DECEMBER 1997, TO SINGAPORE, DUBAI AND TOKYO. NOW FLIES TO 147 AIRPORTS IN 94 COUNTRIES.

14,368 EMPLOYEES (INCLUDING 2,431 FLIGHT CREW (FC), 2,394 CABIN ATTENDANTS (CA), & 2,976 MAINTENANCE TECHNICIANS (MT)).

OCTOBER 1997: TO ACQUIRE 15 AIRPLANES THROUGH LEASING BY END OF 1998, INCLUDING 8 737-400'S, 2 777'S, 2 A310'S, AND 3 IL-96T'S. NOW OPERATES 115 AIRPLANES, AND FLIES TO 166 DESTINATIONS, IN 93 COUNTRIES. 777'S @ $150 - 170 MILLION EACH, & IL-96T @ $63 MILLION.

NOVEMBER 1997: CODE SHARE WITH CONTINENTAL AIRLINES (CAL).

STILL OWNED 51.7% BY THE GOVERNMENT.

GENNAY ANIKAEV MOVES FROM CHIEF EXECUTIVE TECHNICAL TO AN ADVISORY POSITION. HAS BEEN REPLACED BY VLADIMIR KLIMENKO.

AT ANNUAL STOCKHOLDERS MEETING, AEROFLOT (ARO) STATED THAT DURING 1996, IT OPERATED INTO 147 AIRPORTS IN 94 COUNTRIES, AND CARRIED 3.81 MILLION PASSENGERS ON 90% REGULARLY SCHEDULED FLIGHTS.

NEW FLIGHTS TO CHIMKENT, KAZAKHSTAN (TU-154). NEW ROUTES: TO ROSTOV, - TUNIS - JOHANNESBURG, ST PETERSBURG - NEW YORK. STARTED VLADIVOSTOCK TO ANCHORAGE AND SEATTLE (IL-62M). LATER, TO USE A310 OR IL-96.

BY DOING ITS OWN "C" CHECKS ON A310'S, (ARO) EXPECTS TO SAVE APPROXIMATELY -$2 MILLION IN 1997.

DECEMBER 1997: 2 A310-304'S (472, EX-ROYAL NEPAL AIRLINES (RNA); 475 EX-LLOYD AEREO BOLIVIANO (LAB), (GUI) LEASED.

JANUARY 1998: VLADIVOSTOK - (ANCHORAGE) - SEATTLE (IL-62 DEPENDING ON DELIVERY OF MORE IL-96-300'S). NOVOSIBIRSK - HANNOVER (A310-300).

2 TU-154'S BROKEN UP. PLANS FLEET +150 PAX & +50 CARGO AIRPLANES BY 2015.

FEBRUARY 1998: 1ST 777 TO FLY NEW YORK 5/WEEK & 1/WEEK TO LAONDON HEATHROW (LHR).

MARCH 1998: 737-400 TO BE REGISTERED IN BERMUDA.

APRIL 1998: VLADIMIR KLIMENKO CHIEF EXECUTIVE TECHNICAL. ANATOLY RYBALCHENKO DEPUTY DIRECTOR TECHNICAL DEPARTMENT.

15,000 EMPLOYEES. (http://www.aeroflot.org).

NEW ROUTES TO HO CHI MINH CITY, JAKARTA, AND CALCUTTA, VIA DELHI.

1ST 747-400 DELIVERY TO REPLACE TU-134 & TU-154 ON EUROPEAN ROUTES. LETTER OF INTENT (LOI) 4 ORDERS 767-300ER (GE), (GEH) LEASED. 1 ORDER (JUNE 1998) A310-300 (PW4152) (453), AIRBUS (EDS) 5 YEAR LEASED.

MAY 1998: TO TIVAT, MONTENEGRO.

2 737-4MO'S (PW441) DELIVERIES. LETTER OF INTENT (LOI) 3 ORDERS (AUGUST 1999) 767-300ER'S.

JUNE 1998: 737-4M0 (29201), 131 PAX, IN NEW COLOR SCHEME. 777-200 DELIVERY IN NEW COLOR SCHEME (GE90-90B) IGW. 1 A310-300 (CF6-80C2A2), GECAS (GEH) LEASED, TO SAKHA (SKH).

JULY 1998: Code share with Royal Jordanian Airlines (RJA) on (RJA) operations, Amman - Moscow Sheremytevo.

ANATOLIY RYBALCHENKO DIRECTOR TECHNICAL DEPARTMENT; YOURI EVDOKIMOV MAINTENANCE BASE DIRECTOR; & SERGEI SCHETCHIKOV TECHNICAL PRODUCTION DEPARTMENT HEAD.

777 STARTS FLIGHTS TO NEW YORK (JFK). LUFTHANSA TECHNIK (LTK) (DLH), HAS 777 TECHNICAL/MAINTENANCE SUPPORT CONTRACT.

AUGUST 1998: 1 737-400 (CFM56-3C-1) DELIVERY. SIGNS AGREEMENT FOR 20 ORDERS (DECEMBER 1998) IL-96M (P&W), PASSENGER & CARGO AIRPLANES AND COLLINS AVIONICS FROM VORONEZH. MANUFACTURER HAD HALTED PRODUCTION ON 12 LONG-RANGE IL-96-300'S.

SEPTEMBER 1998: NOW HAS 6 737-400'S. 2 +2 ORDERS (DECEMBER 1998) A310-300'S, 5 YEAR LEASED.

OCTOBER 1998: FISCAL YEAR (FY) 1997 = +$34 MILLION (+$55.5 MILLION).

GERMAN REGULATORY AUTHORITY BANS AEROFLOT (ARO) 737'S FROM FLYING INTO GERMANY, BECAUSE THEY ARE REGISTERED UNDER BERMUDA'S REGULATORY AUTHORITY.

TO INNSBRUCK (737-400).

2ND 777-2Q8 (27608) DELIVERY.

NOVEMBER 1998: SIGNS ALLIANCE WITH UZBEKISTAN AIRLINES (UZB), INCLUDING CODE SHARE MOSCOW TO BUKHARA, SAMARKAND, TASHKENT, & URGENCH + JOINT FREIGHT SERVICE DELHI - TASHKENT - MOSCOW.

737-4MO DELIVERY.

DECEMBER 1998: 2 737-4MO'S (29208; 39209) DELIVERIES.

JANUARY 1999: 1998 = >4 MILLION PASSENGERS (PAX) (+13.9%), 16.42 BILLION (RPK) TRAFFIC, 57.8% LF LOAD FACTOR, 1.99 BILLION (FTK) FREIGHT TRAFFIC (-7.9%).

FEBRUARY 1999: VLADIMIR SVIRIDOV TECHNICAL DIRECTOR, FOREIGN MADE AIRCRAFT; REPLACES NIKITA KHARKOV, WHO RESIGNED TO JOIN LUFTHANSA TECHNIK (LTK) (DLH).

MARCH 1999: 1998 = +$12.2 MILLION (+$3 MILLION).

APRIL 1999: 15,000 EMPLOYEES. SITA: MOWDDSU.

10TH 737-4MO (29210, VP-BAR) DELIVERY.

MAY 1999: A VOLYMERETS 1ST DEPUTY GENERAL DIRECTOR OPERATIONS & TECHNICAL. V KLIMENKO CHIEF ENGINEER TECHNICAL DEPARTMENT. YOURI EVDOKIMOV MAINTENANCE CENTER DIRECTOR (FOREIGN MADE AIRPLANES).

11TH A310-324 (453, F-OGYQ), LEASED, EX-AEROLINEAS ARGENTINAS (ARG).

JUNE 1999: LETTER OF INTENT (LOI) FOR 40 AN-140'S FOR USE IN WESTERN RUSSIA. (FAA) CERTIFIES IL-96T FREIGHTER.

JULY 1999: FISCAL YEAR (FY) 1998 = +$12.2 MILLION (X4): 16.45 BILLION (RPK) TRAFFIC (+12.6%), 1.99 BILLION (FTK) FREIGHT (+7%), 84,600 T CARGO (92,000 T), 4.45 MILLION PASSENGERS (PAX0 (+14%) (DOMESTIC (PAX) = 1 MILLION (PAX) (210,000); 50% LF (-3). DOMESTIC MARKET SHARE 68% (60%).

51.17% OWNED BY GOVERNMENT, EMPLOYEES 20%, REST BY INVESTORS.

2 A310-300'S (PW4152) (457; 458), RETURNED TO LESSOR, LEASED TO KHALIFA AIRWAYS, ALGERIA (KHZ). HAS 22 WESTERN AIRPLANES OF TOTAL 121.

AUGUST 1999: 1 767-36NER (30107, VP-BAV), (GEH) LEASED.

SEPTEMBER 1999: RECEIVES REGULATORY APPROVAL FOR DOING "C" MAINTENANCE CHECKS ON 737-400, AND STARTS (PW441) WITH LUFTHANSA TECHNIK ADVISER SUPPORT.

IN 1999-11, SHANNON - WASHINGTON DULLES (A310/767).

767-36NER (BOEING'S 767TH 767!) DELIVERY. TO BE USED ON ROUTES TO CHICAGO (ORD), NEW YORK, WASHINGTON (IAD), LOS ANGELES (LAX), SAN FRANCISCO (SFO), & SEATTLE.

OCTOBER 1999: 7-YEAR MAINTENANCE, ENGINEERING, & COMPONENT SUPPORT CONTRACT TO AIR FRANCE INDUSTRIES (AFA) FOR 4 767-300ER'S (PW4000).

TOTAL 120 MINUTES EXTENDED TWIN ENGINE OPERATIONS (ETOPS) FLIGHTS (FLIGHTS/MONTH) NORTH ATLANTIC: 3 767'S 4,922 (86); 2 777'S 1,630 (52).

767-300ER (EI-CKE) RETURNED TO (GEH).

DECEMBER 1999: HIRES INDEPENDENT CONSULTANTS, MCKINSEY COMPANY FOR HIGH LEVEL AUDIT OF FINANCIAL AND ORGANIZATIONAL ISSUES.

2 767-36NER'S (30110, VP-BAY; 30111, VP-BAZ), (GEH) LEASED. +6 ORDERS (2001-01) IL-96-300'S.

JANUARY 2000: CODE SHARE WITH BELAVIA (BLV) FOR MOSCOW - MINSK, PLUS CONNECTIONS FROM BELARUS, TO SIBERIA, THE MIDDLE EAST, & SE ASIA.

FEBRUARY 2000: CODE SHARE WITH AIR KAZAKHSTAN (KAZ) TO ALMATY.

2 767-300ER'S (PW4000) (26205; 26208), RETURNED TO GECAS (GEH), LEASED TO (TWA). IL-86 (51483208071, RA-86103), LEASED TO AIR SIBIR (SBR).

MARCH 2000: TO UFA (737-400). MOSCOW (SHEREMETYEVO) TO MINERAL VODY (TU-154M, 3/WEEK).

BUYS 51% CONTROLLING STAKE IN DONAVIA (DOV) AND LEASES 5 TU-154M'S FOR OPERATIONS TO WESTERN EUROPE.

BY 2003, POSSIBLE GLOBAL ALLIANCE WITH DELTA AIRLINES (DAL), AIR FRANCE (AFA), AEROMEXICO (AMX), AND KOREAN AIR (KAL).

APRIL 2000: 14,384 EMPLOYEES. (aeroflot@www.russia.net).

HUBS: ST PETERSBURG, NOVOSIBIRSK, AND VLADIVOSTOK.

MAY 2000: 1999 FISCAL YEAR (FY) = +$15 MILLION.

PLANS REDUCED INTERNATIONAL ROUTE NETWORK WITH NEW DOMESTIC FEEDER SYSTEM. RENEWAL OF REGIONAL FLEET INCLUDES +50 AN-140 (PW127).

1999 = 4.6 MILLION PASSENGERS (21.5% OF RUSSIA'S TRAFFIC).

JUNE 2000: TO BUILD NEW TERMINAL 3 AT MOSCOW, SHEREMETYEVO AIRPORT FOR DOMESTIC & INTERNATIONAL FLIGHTS SHARING 70% TO 75% OF $250 TO $300 MILLION. IN 1999, HAD >10 MILLION PASSENGERS, WITH OPENING IN 2003. PROJECT +7.8 MILLION PASSENGERS.

IN 1999 = 4.6 MILLION PASSENGERS BY AEROFLOT (ARO) WITH 116 AIRPLANES (36 WESTERN BUILT).

JULY 2000: CHANGES ITS NAME FROM "AEROFLOT-RUSSIAN INTERNATIONAL AIRLINES" TO "AEROFLOT-RUSSIAN AIRLINES," TO REFLECT ITS PLANS TO EXPAND ITS DOMESTIC SERVICES.

IRKUTSK - SHENYANG (IL-62, WEEKLY).

1999 = +$4.5 MILLION: 16.41 BILLION (RPK) TRAFFIC; 59.4% LF LOAD FACTOR; 4.61 MILLION PASSENGERS (PAX) (+3.55); 14,050 EMPLOYEES.

EXPECTS TO RECEIVE $4.3 MILLION CREDIT, FROM STATE-OWNED SBERBANK, TO HELP FINANCE 10 ORDERS IL-96-300'S. MEMO OF UNDERSTANDING (MOU) 20 ORDERS (2002-06) TU-334-120'S (BR715), TO SUBSTITUTE FOR 737-400'S, ON SELECTED SERVICES, & REPLACE 12 TU-134'S.

AUGUST 2000: CODE SHARE WITH AIR INDIA (AIN) ON AEROFLOT (ARO) OPERATIONS DELHI AND MUMBAI TO MOSCOW SHEREMETYEVO.

(http://www.aeroflot.com).

SEPTEMBER 2000: CHARTER SERVICE TO TEL AVIV. TO CHELYABINSK (3/WEEK).

IL-62M (4255152, RA-86566), TO SAKHALEN AIR TRANSPORT (SKH). 1 IL-86 (51483204033, RA-86066) TO VASO AIRLINES.

NOVEMBER 2000: TO TASHKENT (737).

DMITRY MIRGORODSKY, CHIEF SPECIALIST - MANAGER (ETOPS) DEPARTMENT.

DECEMBER 2000: NIKOLAI GLUSHKOV, DEPUTY DIRECTOR, ARRESTED ON FRAUD CHARGES, MONEY-LAUNDERING, & ILLEGAL ENTREPRENEURSHIP RELATED TO DEALS IN 1999. NIKOLAI BOSYKH, CHIEF ENGINEER.

JANUARY 2001: CARGO SERVICES TO INDIA (IL-76F).

PROJECTS 2000 = 5.1 MILLION PASSENGERS (PAX) (4.6 MILLION). IN 2001, PROJECTS +20% (RPK) TRAFFIC.

NEGOTIATING TO TAKE STAKE IN VIRGIN EXPRESS IRELAND (VEI).

EUROPEAN UNION (EU) "OPEN SKIES" AGREEMENT, ALLOWS (EU)-LICENSED CARRIERS, TO FLY TO ANY EUROPEAN DESTINATION, IF THE ROUTE GENERATES SUFFICIENT TRAFFIC, AND AIRPORT SPACE IS AVAILABLE.

1 TU-154M (88A-772, RA-85640), LEASED TO AEROFLOT-DON (DOV).

FEBRUARY 2001: IN A VICTORY FOR SMOKERS' RIGHTS, AEROFLOT (ARO) HAS OVERTURNED A USA BAN ON SMOKING ABOARD AIRPLANES. RUSSIA HAS ONE OF THE HIGHEST RATES OF TOBACCO USE IN THE WORLD. THE COMPROMISE OVER A BAN (WHICH WAS SEEN AS AN INFRINGEMENT OF NATIONAL SOVEREIGNTY), ALLOWS (ARO) TO RESERVE UP TO 16% (Y) PAX, 40% (C) PAX, & NO LIMITS ON (F) PAX, OR IN THE PILOTS' CABIN, BUT USA (DOT) REQUIRES (ARO) TO NOTIFY PASSENGERS WHEN THEY PURCHASE THEIR TICKETS, THAT SMOKING WILL BE ALLOWED ON THE AIRPLANE.

MARCH 2001: MAKES 10 MILLION POUNDS BID FOR 59% STAKE IN VIRGIN EXPRESS IRELAND (VEI) WITH 41% HELD BY PUBLIC SHAREHOLDERS.

1 IL-76TD (0083485561, RA-76750), TO AIRSTAN.

APRIL 2001: POSSIBLE MERGER WITH SIBIR AIR (SBZ), WHO HAVE 90% OF DOMESTIC MARKET AND IN 2000 CARRIED 2.1 MILLION PASSENGERS, WHEREAS AEROFLOT (ARO) IN 2000, CARRIED 5.9 MILLION PASSENGERS.

JUNE 2001: PLANS 3RD PASSENGER TERMINAL AT MOSCOW (SHEREMETYEVO) TO HANDLE 9M PASSENGERS STARTING 2003. IN 2000, EXISTING 2 TERMINALS HANDLED 10.8M INTERNATIONAL PASSENGERS.

FISCAL YEAR (FY) 2000 = +2.7 BILLION ROUBLES (+111 BILLION ROUBLES): 5.1 MILLION PASSENGERS (PAX) (+10.7%) (4.6 MILLION); 107,000 T FREIGHT (+20%).

-5 AIRPLANES: 2 IL-62'S; 2 TU-134'S; 2 TU-154'S; 1 IL-76; +2 767-300ER'S FOR FLEET OF 111 AIRPLANES. POSSIBLE 4 DC-10-30F'S LEASED FROM BOEING (ZMF) TO REPLACE IL-76'S.

JULY 2001: WILL RETURN ITS DC-10-30F IN 2001-08, BUT WILL LEASE 4 OTHERS. STATES IT WILL BUY ONLY WESTERN-BUILT AIRPLANES IN THE FUTURE BECAUSE OF CUSTOMER PREFERENCE. CANCELS ORDERS FOR TU-204'S AND 20 ORDERS TU-334-100'S BECAUSE OF DELIVERY DELAYS.

AUGUST 2001: FISCAL YEAR (FY) 2000 = +$8.6 MILLION.

DROPS OFFERS OF ACQUISITION OF VIRGIN EXPRESS (EBA). NOW INTERESTED IN AER LINGUS (ARL).

EUGENY DOBRY, TECHNICAL DIRECTOR; REPLACES MR KLIMENKO. VASILY BOBROV, MAINTENANCE CENTER DIRECTOR.

MOSCOW (SHEREMETYEVO) TO ASKTRAKHAN (TU-134, DAILY).

5-YEAR TOTAL TECHNICAL SUPPORT CONTRACT TO LUFTHANSA TECHNIK (LTK) (DLH) FOR 4 DC-10-30F'S.

HAS HIRED IDENTICA, A LONDON BRAND AGENCY, TO GIVE AEROFLOT (ARO) A NEW IMAGE. IDENTICA WILL WORK WITH MCKINSEY, A MANAGEMENT CONSULTANCY FIRM, WHICH HAS A 3-YEAR PLAN TO DOUBLE THE NUMBER OF PASSENGERS FLYING ON (ARO).

SEPTEMBER 2001: SHAREHOLDER, CARROLL TRADING NOW HAS 26.3% STAKE IN AEROFLOT (ARO) AND HAS VOTED 3 MEMBERS ON BOARD.

TO CHELYABINSK (TU-134, 3/WEEK).

IL-86 (51483205041, RA-86074) DAMAGED AT DUBAI, AND PARTED OUT. 1 TU-134B3 (63235, RA-65694) DELIVERY. TU-154M (88A-772, RA-85640) TO AEROFLOT-DON (DAU).

OCTOBER 2001: FREIGHTER SERVICE HAHN - BEIJING (WEEKLY); HAHN - SHANGHAI (2/WEEK); LUXEMBOURG - BEJING (DC-10-30F, WEEKLY).

NOVEMBER 2001: YOURI BELYKH TECHNICAL DIRECTOR, EX-TRANSAERO (TRX). EUGENI DOBRY DEPUTY TECHNICAL DIRECTOR.

STOPS OPERATING RUSSIAN-MADE AIRPLANES: IL-62; IL-76; & IL-86 ON SCHEDULED SERVICES. WILL ONLY BE USED FOR CHARTER FLIGHTS. 1 TU-154M (87A-753, RA-85626) TO AEROFLOT-DON (DAU).

DECEMBER 2001: EXTENDS LEASES ON 4 A310-300'S (442; 660; 687; 689), EX-DELTA AIRLINES (DAL) THROUGH 2006 WITH (AFIS).

JANUARY 2002: CARGO SERVICE TO HAHN, GERMANY.

2001 = +$29 MILLION: 18.94 BILLION (RPK) TRAFFIC (+8.6%); 65.8% LF LOAD FACTOR (+.1); 2.26 BILLION (FTK) FREIGHT (+.8); 5.83 MILLION PASSENGERS (PAX) (+14%).

FORMER DEPUTY (CEO) ALEXANDER KRASNENKER, + FORMER DEPUTY DIRECTOR NIKOLAI GLUSHKOV, ALONG WITH HIS BODYGUARD AND CHAUFFEUR, IN COURT CHARGED WITH DEFRAUDING AEROFLOT (ARO) OF $252 MILLION. MAJOR SHAREHOLDER, BORIS BEREZOVSKY, ALSO FACES CHARGES OF MASSIVE EMBEZZLEMENT, BUT HE HAS FLED THE COUNTRY AND A WARRANT HAS BEEN ISSUED FOR HIS ARREST.

FEBRUARY 2002: 1 DC-10-30 FOR FRANKFURT - MOSCOW - SEOUL AND FRANKFURT - MOSCOW - BEIJING. TU-134, 70 PAX, WILL BE REMOVED FROM EUROPEAN SERVICES DUE TO (ICAO) CHAPTER 3 NOISE REGULATIONS IN 2002-04. WILL LEASE WESTERN AIRPLANES BELOW 100 PASSENGERS UNTIL THE TU-334, 102 PAX, IS AVAILABLE.

MARCH 2002: PLANS TO RETURN DC-10-30 AND REPLACE IT WITH A DC-10-40 LEASED FROM TEN-FORTY. EVENTUALLY PLANS TO ACQUIRE 4 DC-10-40'S (47823; 47855), EX-JAPAN AIRLINES (JAL) & CONVERT TO FREIGHTER BY AERONAVALI (ARP).

APRIL 2002: CODE SHARE WITH MALEV (HGA) TO BUDAPEST.

15,351 EMPLOYEES.

July 2002: May merge with Belavia (BLV) - - aimed at forming a union between the two countries.

2001 = +$44.3 Million (+$43.7 Million): 18.94 Billion (RPK) traffic (+8.7%); 65.8% LF load factor; 5.83 Million passengers (PAX) (+14.3%); 554 Million (FTK) freight (-17.5%); 15,265 employees (-0.6%).

In 2002-10, code share with Air France (AFA) (SkyTeam (STM) Alliance partner, Paris Charles de Gaulle (CDG) - Moscow Sheremetyevo.

Letter of Intent (LOI) for 25 orders An-74TK-300's. Possible +6 Il-96-300's, leased from Ilyushin Finance Comapny. 1 Tu-204-100 (1450743164010, RA-64010) delivery.

August 2002: Receives (ISO) 9001 2000 International Quality certification (1st airline in Eastern Europe).

9 orders 767-300ER's and 18 orders A319/A320'S, GECAS (GEF) leased. These airplanes will replace existing fleet of 10 737-400's, 2 777-200ER's, and 11 A310'S. 2nd DC-10-40F delivery. 1 Il-62M (2546812, RA-86565) to Aerofreight.

November 2002: 2001 = +$43.2 Million (+$17.3 Million): 4.2 Million passengers (PAX); 69.5% LF load factor (+2.4). +ve results from its capacity and cost-reduction program, which cut unprofitable routes, increased airplane utilization rate, and phased out obsolete airplanes. Aeroflot (ARO) operated 72% of its services, with a fleet of 25 Western-built airplanes, and 6 IL-96-300's. (ARO) projects +$74 Million for domestic services in 2002.

December 2002: Projects 2002 = +$75 Million: 5.5 Million PAX (5.7 Million).

Sberbank, the Russian savings bank, believed to be the largest bank in Russia, signed an agreement with Aeroflot (ARO) to open a credit line for $27 Million on a LIBOR-based interest rate. This is the 1st such loan made by a Russian bank to a Russian airline.

In 2003, will change its corporate image from dark blue and red, to a lighter blue, orange, and silver. Will also change its emblem from the Soviet-era, hammer and sickle.

In 2003-01, code share with Skynet (SNF), Shannon - Brussels - Moscow (Sheremetyevo).

February 2003: 2002 = +RBL 3.198 Billion/+$101.9 Million (+143%) (+$45 Million): -6% (RPK) traffic; 5.49 Million passengers (PAX) (-6%) (attributable to eliminating unprofitable routes). Projects 2003 = +$114 Million: 5.7 Million passengers (+5%).

March 2003: 15,990 employees.

June 2003: Code share with Czech Airlines (CSA) to Prague. Aeroflot (ARO) is a potential candidate for the SkyTeam (STM) alliance, to which (CSA) belongs.

July 2003: 2002 = +$100.70 Million (+$21.60 Million): 17.65 Billion (RPK) traffic (-6.9%); 68.4% LF load factor; 5.49 Million passengers (PAX) (-5/9%); 563.1O Million (FTK) freight (+1.6%). 1st 6 months = +$20.93 Million (+$19.97 Million).

August 2003: 767-38AER (29618, VP-BDI), ex-Air 2000 (ATZ), (GECAS) (GEF) leased. A310-324 (453, F-OGYQ) returned to Airbus (AFIS).

September 2003: 2002 = +$74 Million (+$20.1 Million): 17.65 Billion (RPK) traffic (-2.3%); -8.3% (ASK) capacity; 68.4% LF load factor (+3.1); 5.5 Million passengers (PAX) (-5.9%); 543 Million (FTK) freight (+9.6%); 14,802 employees (-7.4%).

2002 TOP WORLD AIRLINES PASSENGER TRAFFIC RPK (Billion):
33 (ANZ) 21.48; 34 (SAA) 21.28; 35 (ASA) 21.23; 36 (SVA) 20.80; 37 (AAT) 19.93; 38 (EVA) 19.51; 39 (CEA) 18.63; 40 (BRI) 18.43; 41 (ARO) 17.65; 42 (CDF) 17.41; 43 (AUL) 17.34; 44 (AAR) 17.33; 45 (GIA) 16.72.

A310-304 (472), returned to (GECAS) (GEF). 2 IL-62M's (1241314, RA-86520; 3242321, RA-86524) to VIM.

October 2003: Code share with Adria Airways (ADR), Ljubljana - Moscow.

Aewroflot (ARO) has taken over the passenger operations of Rossiya (SDM), adding 1 Il-62M, 3 Tu-154M's, 3 Tu-214's, & 2 Yak-40's to its fleet.

1st 2 A319-111's (2052, VP-BWA; 2069, VP-BWB) & 2 A320-214's (2106, VP-BDK; 2116, VP-BWD) deliveries. 1 IL-76T (0013430901, RA-76780) delivery. 1 Tu-134A3 (3352101, RA-65612) to UT Air (TYU). 1 Tu-134A3 (12095, RA-65618) to Kolavia.

November 2003: Code share with Air France (AFA), Moscow - Paris (CDG).

Renewed its contracts with (DLH) (LTK) for maintenance & pilot training to include its new A319/A320's.

All 10 737-4MO's will be returned to (GECAS) (GEH) and leased to Garuda Indonesia (GIA), all delivered by 6/04.

December 2003: A310-325 (660, F-OGYT) returned to Airbus (AFIS).

January 2004: 2003 = +# RBL 3.98B/$139.5 Million (+24.4%) (+$99 Million): 18.2 Billion RPK (+3.2%); 69.4% LF (+.6); 5.84 Million (+6.5%) PAX; 614.4 Million FTK (+9.1%); 114,200 tonnes of Freight (+4.4%) & mail (+.1%). Projects 2004 = +$140 Million.

Resumes Moscow (Sheremetyevo) - Mumbai (Tu-214, 5/week).

737-4MO (29204) returned to (GEF). DC-10-40 (46966), ex-Centurion Air Cargo, (CHA), Air Lease Three International leased. Will replace its DC-10's with MD-11F'S in 2005. A320-214 (2151, VP-BWH), (GEF) leased. Retired its 10 Il-76F's in 2003, 4 sold & 6 scrapped. Plans to retire its Il-86 fleet in 2004, leaving 13 Tu 134's and 20 Tu 154Ms.

February 2004: Code share with Bulgaria Air (BUL), Moscow - Sofia, with Finnair (FIN), Moscow - Helsinki, and with Cathay Pacific (CAT), Moscow - Hong Kong (767, 6/week).

2 737-4M0's (29206; 29207) returned to (GEF). A320-214 (2179, VP-BWJ), (GECAS) (GEF) leased. 6 orders (7/04) Il-96's, Ilyushin Finance leased.

March 2004: Plans to take a stake in Samara Airlines (SMR).

Plans to replace its DC-10-40F's with 6 MD-11F's. Converted 2 orders A319's & 1 A320 to 1 A320 & 2 A321's.

April 2004: Code share with Adria Airways (ADR), Ljubljana - Moscow (SVO), and with Royal Jordanian Airlines (RJA), Amman - Moscow, replacing its own service. Moscow (SVO) - Kazan, Krasnotarsk, Surgut, & Ufa. In 5/04, Moscow (SVO) - Kemerovo, and Tyumen (Tu-154M, daily). Plans to add service to Barnaul, Dushanbe, Lipetsk, & Minsk.

14,802 employees.

(Telephone: +7 095 155 6643). (FAX: +7 095 258 0684).

737-4MO (29210) returned to (GECAS) (GEF).

May 2004: Contract with Sabre for the SabreSonic suite, which includes passenger reservations, a website that allows potential travelers to shop and book travel on Aeroflot (ARO) and airport check-in, along with a number of other key passenger service modules.

Code share with Tarom (TRM), Moscow - Bucharest (Tu-154M, 2/week). Code share with Lithuanian (LIJ), Vilnius - Moscow (SVO).

Intends to buy Kuban, owned by the Krasnodar government and Samara (SMR), of the Samara region, when those airlines are privatized this year.

(MOU) to join SkyTeam (STM), most likely in 2005, once it has fulfilled the group's "quality standards."

SkyTeam (STM): Aeroflot (ARO) (applicant); Aeromexico (AMX); Air France (AFA)/(KLM); Alitalia (ALI); (CSA) Czech Airlines; Continental Airlines (CAL) (agreed to join); Korean Air (KAL); & Northwest Airlines (NWA) (agreed to join).

(ARO) serves 88 destinations in 42 countries with a fleet of 92 airplanes.

737-4MO's (3087-29209; 3091-29210) returned to (GEF), leased to Garuda Indonesia (GIA). A319-111 (2222, VP-BWK), (GECAS) (GEF) leased.

June 2004: Signs a maintenance agreement with Finnair (FIN) Technical Services for technical support of 4 DC-10-30F's based at its hub at Frankfurt-Hahn, including maintenance planning & equipment support, overhauls, and line maintenance support.

International accounting standards adjusted 2003 = +$126.7M.

Discusses possible purchase of Air Georgia (GEI).

Agreement with the Alfa Group to jointly develop Moscow-Sheremetyevo airport, including negotiations for a 3rd terminal.

A319-111 (2243, VP-BWL), (GEF) leased.

July 2004: Code share with Finnair (FIN), Helsinki - Moscow.

A320-214 (2233, VP-BWM) delivery.

August 2004: 1st 6 months = Aeroflot (ARO) 3.1 Million PAX (+20%); Sibir (SBR) 1.5 Million (+17.1%); KrasAir (ZXD) 765K (+46.6%); UTAir (TYU) 634K (+9.3%); Transaero (TRX) 607,000 (+124%).

Bought Arkhangelsk Airlines (AVL), which is based in the northern Russian city of that name, for approximately $3.4 Million, plus the assumption of its debts of $10 Million. (AVL) has a fleet of 22 airplanes, carried 289K passengers & 1,569 tonnes of freight in 2003. (AVL)'s name will be changed to Aeroflot-Nord. The purchase also gives Aeroflot (ARO) the responsibility of running the city's airport. (ARO) is also negotiating to acquire Samara Airlines (SMR).

Tu-154M (87A-756, RA-85627), returned from Gazpromavia.

September 2004: 1st 6 months = +$83.6 Million (+1,210%).

Selected (APS) digEplayer 5500 portable VOD entertainment unit for ist first (F) & business (C) classes on its Airbus mid-range fleet and its IL-96's.

767-341ER (774-30342, VP-BWQ), (GEF) leased.

October 2004: Code share with Lithuanian Airlines (LIJ), Moscow to Vilnius.

November 2004: 9 months = +$119.3 Million (+17.9%) (+$100.8M).

Victor Ivanov, Chairman, is adviser to Russian President Vladimir Putin.

Will swap 3 orders A321's to 2 orders A319's & 1 A320.

3 A321-211's (2330, VP-BWN "A. Skriabin;" 2337, VP-BWO; 2342, VP-BWP), deliveries.

January 2005: A310-304 (475) returned to (GEF), leased to Sibir (SBR).

March 2005: Tu-154M (942), ex-Continental Airways.

April 2005: Code share with Air Malta (MLT), on (MLT) operations Malta - Moscow Sheremeyevo.

14,714 employees.

Had 26% of its shareholding acquired by the National Reserve Bank (NRB) from Millhouse Capital, for a reported $135 Million. (NRB) is a private bank, who owns 37% of Ilyushin Finance.

4 757-23N's (27598; 30232; 30233; 30735), ex-ATA (AAT).

June 2005: Codeshare with Alitalia (ALI), Moscow Sheremetyevo - Milan Malpensa.

August 2005: In 10/05, code share with (JAT) Airways, Belgrade - Moscow (13/week).

14,755 employees (+.3%).

September 2005: Aeroflot Russian International Airlines (ARO) reported that earnings for the 1st half to June 30 fell -14.3% to $69.3 million from $83.6 million in the year-ago period, largely owing to higher fuel prices. The results were presented without accompanying commentary on the airline's website, but in a briefing in Moscow, Deputy General Director Mikhail Poluboyarinov told reporters that the carrier expects full-year profits to be down around $20 million from 2004 earnings of $172.1 million. In addition to soaring fuel prices, (ARO) has been hit by the Russian government's August 22 grounding of the IL-96-300 fleet over production-related safety defects, which caused the airline to remove six of the airplanes for repair, reducing its long-haul fleet by -40%. It cancelled some flights and has been using older IL-86s and IL-62s, plus shifting some 767s and A320 family aircraft to other routes.

October 2005: USA and Russia agreed yesterday to open up more polar routes for USA airlines as part of a broader package of amendments to the 1994 USA - Russia air agreement. According to the USA Department of Transportation (DOT), the changes "significantly [increase] the rights of USA carriers to fly over Russian airspace on flights between the USA and Asia," including using polar routes for services to China. And for the 1st time, the agreement allows USA airlines to transit Russian airspace on nonstop flights between the USA and India. The agreement, reached after 2 days of talks in Washington, also expands opportunities for carriers of the 2 countries to codeshare on services between the USA and Russia by providing additional points to be served on a code share-only basis. (DOT) said this "was a key goal for the Russian government" as Aeroflot (ARO) prepares to join the SkyTeam (STM) alliance.

Aeroflot (ARO) entered into an agreement October 7 with Mail of Russia - - the Russian post office - - to load and transport and domestic and international mail on regular, added and charter flights. Previously, Aeroflot (ARO) carried only international mail, according to the airline. Some 36% of its mail service now will occur inside Russia.

Russian domestic airlines are not keeping up with their foreign competition, an Aeroflot (ARO) official told parliament Friday, according to the Russian News and Information Agency. The number of passengers on foreign carriers operating in Russia is expected to grow 12% year-over-year compared to 2% on domestic carriers. "Under these conditions, it is ultimately impossible to make cost-effective flights; for example, the Tu-154M uses 4.8 tons of fuel per hour, whereas its foreign counterpart A320 uses only 2.3 tons," Aeroflot (ARO) General Director Valery Okulov said. Steep duties on the importation of Western airplanes make it difficult for Russian airlines to acquire more fuel efficient types.

Russia lifted the ban on operation of Il-96-300 passenger jets, which were grounded for safety checks in August after problems with the braking system. Aeroflot (ARO), which has 6 of the 13 wide bodies in use, or 40% of its long-haul fleet, said on Monday it will comply with the decision straight away. According to Reuters, 1st flights were scheduled for Tuesday to Shanghai and New Delhi. (ARO) plans to acquire 12 A320s and 2 - 5 767s, it said last week. The Boeing planes are likely to be acquired in about a year. (ARO) will add 7 A321s to its medium-haul fleet. Deliveries of the newly ordered airplanes are scheduled to begin in fourth-quarter 2006. Each will feature a 2-class cabin configuration seating 170 and will be powered by 2 (CFM56-5)s. The airplanes are intended for (ARO)'s Russian and European networks. (ARO) already has a significant investment in the A320 family, operating 8 A319s, 7 A320s and 3 A321s prior to the new purchase.

November 2005: Aeroflot Russian Airlines (ARO) will add a total of 50 flights from Moscow to Novosibirsk, Samara, Ufa, Kemerovo, Paris, Rome, Milan, Venice, Bucharest, Sofia, Zagreb, Belgrade, Geneva, London, Nice, Vienna (10 new flights), Beijing, Baku and Tbilisi in its winter schedule October 30 - March 26.

(ARO) failed to get permission from the Italian government to resume daily service to Milan. According to "Reuters," (ARO)'s authority expired November 1 and Italian authorities are in no hurry to renew it owing to Russia's refusal to permit Alitalia to add another daily flight. Aeroflot (ARO)'s Milan service accounts for 45% of its traffic to Italy, Reuters said.

Moscow Domodedovo Airport (DME) plans to invest $500 million over the next 5 years to continue its dynamic growth and become a major transfer point between East and West. "Our goal is to have all quality carriers which serve Moscow here at Domodedovo Airport (DME)," Director-Business Development Daniel Burkard said. The addition of Thai Airways (TII) on November 1 means that the airport is served by 15 foreign airlines, up from just one in 2001.

Domodedovo Airport (DME), which is celebrating its 40th anniversary, will become Moscow's busiest airport this year with a 47% share of passenger traffic. Sheremetyevo will fall to No 2 with a 41% share, with Vnukovo bringing up the rear at 12%.

With Aeroflot (ARO) invited to join the SkyTeam (STM) Alliance, Burkard believes the search by major alliances for other Russian partner airlines will accelerate and (DME) plans to cooperate wherever it can. "If an alliance, such as (STM), decides to come to (DME) and needs more space, we are able to offer that we would build a separate terminal for them," he said.

From January to September, 10.7 million passengers used Domodedovo Airport (DME). For the full year, Burkard expects at least 13.6 million, ranking it No 18 among European airports. Management believes that by 2010 some 24 million passengers will use it. Currently, traffic is split 45% domestic and 55% international. Around 30% of users are transfer passengers.

The airport is weighing seeking foreign investors or an Initial Public Offering (IPO) to raise development funding estimated at $120 - $150 million per year. Priority projects include doubling the size of the passenger terminal, extending parking facilities and certifying all runways in accordance with (ICAO) Category III requirements. Nevertheless, until 2013 capacity of the current two runways should be enough to handle increased traffic, Burkard said.

December 2005: Aeroflot Russian Airlines (ARO) carried out successful e-ticket trials on its Moscow - Los Angeles and Moscow - Delhi routes. The tests demonstrated that from a technical perspective, Aeroflot (ARO) is ready to introduce e-tickets and can comply with (IATA)'s timetable for 100% transition to e-tickets in 2007. However, the carrier said "a practical introduction of this technology is impeded by absence of regulatory and legal framework on electronic tickets circulation in Russia."

Aeroflot (ARO) signed to buy 30 95-seat Sukhoi regional jets RRJs in a deal worth $820 million, according to media reports. Deliveries of the (SaM146)-powered airplanes will begin in November 2008. The jet will be usable on international routes, as Sukhoi Civil Aviation and partners Finmeccanica and Boeing intend for it to conform to Western safety and environmental standards.

January 2006: Aeroflot (ARO) reported 2005 passenger traffic of 20.75 billion (RPK)s, an "average -1% to -2% decline" from 2004 "mainly due to reducing passenger load as prices rose as a result of rocketing fuel prices." Passenger load factor was 69.1%LF. Cargo volume grew +1.4% to 2.74 billion (FTK)s.

Aeroflot (ARO) is targeting a +6.7% rise in enplaned passengers, a +4.2% growth in (RPK)s, a +5.4% increase in (FTK)s and a +12.2% gain in revenue for 2006. It will launch scheduled service to Krasnoyarsk and Yuzhno-Sakhalisnk and increase frequencies domestically to St Petersburg, Ekaterinburg, Volgograd, Irkutsk and Novosibirsk and internationally to Beijing, Shanghai, Simferopol, Baku, Athens, Belgarde, Dusseldorf and Vienna. It will "consider" adding service to Hanoi. It also said it will continue work on "restructuring and replenishment" of its fleet and improving customer service.

Aeroflot (ARO) transferred its Paris (CDG) flights from Terminal 2B to Terminal 2C. Departure and arrival times are unchanged.

(IATA) announced the launch of its (IATA) Catering Quality Assurance (ICQA) program, which it called "the industry's first global food processing safety and quality assurance" initiative. The association will partner with Medina Quality Assurance Services, which will audit catering facilities in compliance with (ICQA) standards on a contractual basis for program participants. Medina will conduct two types of audits: Unannounced on-site Validation Audits and Web-based e-Audits, which are "customized questionnaires designed to identify deficiencies." An (ICQA) Council will be established to oversee the program, approve the audit schedule and update standards, guidelines and audit procedure. (IATA) said Air Canada (ACN), Aeroflot (ARO), Japan Airlines (JAL), (KLM) and Northwest Airlines (NWA) have confirmed their participation in (ICQA).

Boeing may have landed another significant Dreamliner order just after Christmas as Aeroflot (ARO) officials revealed that the Russian carrier has chosen the 787 for its long-haul fleet renewal and will purchase up to 22, according to media reports. "If everything goes well, the contract will be signed before the end of March," Aeroflot (ARO) Deputy General Director Lev Koshlyakov told Reuters.

February 2006: Aeroflot (ARO) has resumed 2x-weekly Il-96-300 service between Moscow Sheremetyevo and Hanoi. It has, however, given up plans to launch a new Moscow Sheremetyevo - Hanover route.

Aeroflot (ARO) is interested in taking over regional carrier Yamal Airlines (YL/Salekhard) as part of its regional expansion strategy.

March 2006: Russian airlines reported a combined -RUB2.2 billion/-$78.7 million drop in net profit in 2005, according to a statement from the Federal Air Transport Agency cited by Russian media. Revenues increased +10% to RUB180 billion against a +20% lift in costs. The number of passengers grew +3.9% to 35.1 million and passenger revenues rose +3.4%.

Aeroflot (ARO) and AirBaltic (BAU) announced a code share deal covering Moscow - Riga services. Aeroflot (ARO) operates 5x-weekly flights and AirBaltic (BAU) flies 6x-weekly.

Aeroflot (ARO) named Sergei Belov director of its new St Petersburg branch.

Aeroflot (ARO) signed a Letter of Intent (LOI) with Boeing for the purchase of 6 MD-11Fs with a final contract due to be signed on March 31st. The airline will create Aeroflot Cargo which will operate the freighter airplanes and is expecting deliveries in 2007 - 2008.

April 2006: Employees: 14,755.

The UK and Russian governments signed a new aviation agreement that will lead to "a significant expansion" in air services between the 2 countries, the UK government announced. The bilateral grants bmi (BMA) the right to operate alongside British Airways (BAB) on the principal London - Moscow route and doubles the number of services permitted to 70 per week (35 from each country). The number of flights permitted on the Manchester - Moscow route will increase to 14x-weekly. The agreement also opens new destinations and routes, including Moscow to Liverpool and Birmingham, London to Kaliningrad and Krasnoyarsk, from London through Ekaterinburg to points beyond Russia and from any point in the UK to any additional new point in Russia to be nominated by the UK. UK airlines will receive a substantial increase in the number of flights they are permitted to operate through Russian airspace on routes to the Far East, and UK and Russian carriers may enter into code share agreements on each other's services. The deal also entitles 2 airlines from each side to operate up to 14 all-cargo services per week between the countries.

Aeroflot (ARO)'s summer schedule will include frequency increases of +30% to (CIS) countries, +28% to SE Asia, +20% to the Americas, and +15% to Africa and the Middle East, the airline announced. Flights in Russia and Europe will go up by +14% and +9%, respectively. New services will be introduced to Karlovy, Vary and Bratislava. In total, it will operate flights to 87 cities in 47 countries.

Aeroflot (ARO) will inaugurate nonstop service from Moscow Sheremetyevo to Bratislava (Slovakia) on April 13th. (ARO) will operate 1 flight a week, on Thursdays, using a Tu-154. (ARO) will inaugurate nonstop service from Moscow Sheremetyevo to Karlovy Vary (Czech Republic) on April 17th. (ARO) will operate 1x-weekly, on Mondays, using an A319. (ARO) will inaugurate nonstop service from Moscow Sheremetyevo to Khabarovsk (Russia) on June 2nd. The airline will operate 6x-weekly, daily except Saturday, using an IL-96. Aeroflot (ARO) will inaugurate nonstop service from Moscow Sheremetyevo to Yuzhno Sakhalinsk (Russia) on July 2nd. (ARO) will operate 2x-weekly, departing Moscow on Wednesdays & Sundays and Yuzhno on Mondays & Thursdays and using 767-300.

Aeroflot (ARO) became the 10th member of SkyTeam (STM) Alliance during a ceremony in Moscow at which Air France (AFA) Chairman & (CEO) Jean-Cyril Spinetta called the alliance's expansion strategy "simple," saying it is "committed to serving the destinations our customers want to travel to most." (STM) carriers now will operate nearly 15,000 daily flights to 728 destinations in 149 countries. (ARO) and (STM) signed a Memo of Understanding (MOU) in May 2004 and (ARO) passed its (IATA) Operational Safety Audit last October. By the end of 2007, (ARO) will complete construction of the new Terminal 3 at Moscow Sheremetyevo. It operates 302 daily flights with a fleet of 81 airplanes.

(ARO) said that it soon will sign a deal with Boeing for the delivery of 6 MD-11F freighters through 2008. The agreement comes ahead of the result of a $3 billion tendering competition for 22 787s or A350s. (ARO) is expected to announce a decision at the end of this month, according to press reports. Deputy Director General Igor Desyatnichenko said financial terms of delivering the MD-11Fs will depend upon whether Boeing wins the passenger airplane contract. (ARO) currently operates 4 DC-10Fs.

After announcing that it would add 6 MD-11Fs to its fleet, (ARO) Cargo now announced it would increase its fleet of DC-10Fs from 4 to 6 later this year.

May 2006: Aeroflot (ARO) reported a -4.7% year-over-year decline in annual profit to +RUB6.03 billion/+$220.3 million, according to a company statement cited by press reports. Revenues for 2005 increased +11.5% to RUB62.85 billion. (ARO) carried 6.7 million passengers, -2.3% fewer than in 2004. (ARO) also posted a Reuters story on its website saying that Russia's State Property Agency intends to transfer all of its stakes in Russian airlines to (ARO), which would boost its share to at least 75%. The government now holds a 51% share in the flag carrier.

Aeroflot (ARO) will operate 3x-weekly, Moscow - Krasnoyarsk service, using an Tu-154M airplane from May 15 through October 28.

June 2006: Aeroflot (ARO) will resume nonstop service from Moscow to Hanoi on July 3rd. The airline will operate 2 flights a week departing (SVO) Airport on Mondays & Thursdays, and Hanoi on Mondays & Fridays, and using a 767-300. Aeroflot (ARO) is increasing its St Petersburg operation. It intends to boost its summer service to Moscow to nine daily flights, including night flights. It also will introduce A320s onto routes to Europe and plans to restore long-haul flights to destinations in North America and Japan.

The Aeroflot (ARO) board elected Viktor Ivanov as chairman.

Nine SkyTeam member carriers signed a Memo of Understanding (MOU) with the British Airports Authority (BAA) confirming their co-location at London Heathrow (LHR)'s Terminal 4 in 2008, when the new T5 opens and the airport reorganizes. The alliance said nearly 3.5 million passengers travel through (LHR) each year aboard Aeroflot (ARO), Air France (AFA)-(KLM), Alitalia (ALI), (CSA) Czech Airlines, and Korean Air (KAL). (KLM) already operates out of T4. AeroMexico (AMX), Delta Air Lines (DAL), and Northwest Airlines (NWA) are parties to the agreement and will have the option to take a place in T4 should they serve Heathrow (LHR) in the future.

The alliance will upgrade the terminal to include 32 check-in desks, additional luggage drop-off locations, lounges and space for self-serve kiosks.

Aeroflot (ARO) stockholders overwhelmingly approved the previously announced purchase of 30 new regional jets from Sukhoi Civil Aircraft. Sukhoi's 75/95-seat aircraft program has lined up an impressive list of partners including Honeywell, Parker, Thales and Goodrich, with Boeing serving in an advisory role. The company also is negotiating with Boeing for customer support, warehousing of spare parts and a joint-venture training facility based in Moscow. "Up until now, it's been in the role of consultant," said Sukhoi representative Svetlana Issaeva at last week's Regional Airline Association conference in Dallas. She said Boeing does not have a financial stake in the program. Sukhoi is a member of USA-based (RAA).

PowerJet, a joint venture between Snecma and NPO Saturn, will supply the RRJ engine. In addition to launch customer Aeroflot (ARO), Sukhoi has signed Russian Financial Lease Company to 10 airplane orders. In other company news, Issaeva said an agreement with Finmeccanica's Alenia Aeronautica for a 25% stake in Sukhoi is expected to be finalized soon. She said the price of the RRJ75 is $26.3 million, with the RRJ95 priced at an estimated $27.6 million. First flight is scheduled for September 2007 with certification and delivery in 2008. The program was launched in October 2004.

Aeroflot (ARO) said it has enabled its website to allow customers to pay for tickets using credit cards.

July 2006: Aeroflot (ARO) and (CSA) Czech Airlines launched a codeshare agreement that will place Aeroflot (ARO)'s code on (CSA) flights from Prague to Dublin, Cork, Manchester and Edinburgh while (CSA) will expand its network to Irkutsk, Barnaul, Kemerovo and Omsk via Moscow.

Aeroflot (ARO) started a twice-weekly Moscow - Yuzhno Sakhalinsk flight aboard a 767-300ER.

Aeroflot (ARO) plans to increase its increase its fleet of nine 767-300ERs and is looking to lease +three from ILFC (ILF). It would take delivery in the last quarter of this year and the first quarter of 2007.

August 2006: Aeroflot (ARO) will launch thrice-weekly on Tuesdays, Thursdays, & Saturdays, Moscow Sheremetyevo - Hannover service on September 5 aboard a 131-seat Tu-154M. The flight will become daily in summer 2007. The airline said the route "confirms the Aeroflot (ARO) strategy on increasing the number of regular flights on European routes and winning the leading position in the market of transit transportations between Europe and Asia."

Aeroflot (ARO)'s privatization appears back on track following the Russian government's decision to exclude the carrier from a list of enterprises protected from foreign control, according to press reports. The government still holds a 51% stake in the airline, but is willing to part with it, now that construction of a new terminal at Moscow Sheremetyevo is set to be completed next year. "This is not a sale yet; we are just making steps in this direction," an economic ministry official told Bloomberg News. "In the midterm future, the ministry sees it as expedient for the government to walk out of the equity in airlines."

September 2006: Aeroflot (ARO) announced that Accenture has completed an audit of the carrier's organizational structure, Information Technology (IT) systems, and management processes. Aeroflot (ARO) said the examination "determined key priorities and tasks in a field of information technologies and pointed out perspectives for future development."

Aeroflot (ARO) inaugurated nonstop service from Moscow Sheremetyevo to Hanover with 3 flights a week, on Tuesdays, Thursdays, & Saturdays, using a Tu-154M. The airline will increase that frequency to 7 flights a week on March 25th, initially with Tu-154s, however, later with A320s.

Aeroflot (ARO) unveiled a winter schedule that includes a new Moscow Sheremetyevo - Mineralnye Vody - Jeddah service, that is the first direct flight between Russia and Saudi Arabia. It will increase a number of domestic frequencies and operate more flights to Beijing, Dusseldorf, Rome Fiumicino, Milan Malpensa, Prague, Warsaw, Toronto, Los Angeles and Nice.

Aeroflot (ARO) opened a new office in Yekaterinburg, which it serves four-times-daily at a 76% load factor LF. The airline said it "considers the Ural region as the priority one in implementing of the company's strategy aimed at development of domestic conveyances."

Aeroflot (ARO) Cargo will focus on continuing to build up operations at its European freight hub at Frankfurt Hahn (HHN), which recorded a +20% year-over-year increase in cargo traffic for the first six months of 2006.

(HHN) expects to handle 245,000 tons of cargo this year. Aeroflot (ARO) carried 42,017 tons in the first three quarters, up +13% from the same period last year and +12 times more than in the first nine months of 2002, when it still hubbed in Luxembourg. It operates an average of 13 flights a week from (HHN) to points in Russia and the Far East, and accounts for an average of 50% of cargo flights arriving at and departing from the airport.

"The establishment of Aeroflot (ARO) Cargo and associated plans for expansion, require that we collaborate even more efficiently in the future with Frankfurt Hahn airport," new CEO, Andrej Goryashko said in a statement.

Aeroflot (ARO) said that it now will operate its cargo unit as a separate, wholly owned subsidiary and will lease six MD-11 freighters for delivery in 2008 to replace four aging DC-10s that will be relegated to domestic duty.

Aeroflot (ARO) announced that it intends to split its order for 44 250/300-seat airplanes between the 787 and A350 XWB. The number of airplanes is double the original stated requirement. The split order follows what is perceived to be a new balanced approach to Russia's relationship with Boeing and Airbus. Aeroflot (ARO) had indicated a preference for the 787 prior to the re-launch of the A350 in June and Vneshtorgbank's purchase of 5% of EADS (EDS)last week.

Later, Russia's National Reserve Corp, a major stakeholder in Aeroflot (ARO), signed a preliminary agreement for 22 787s, according to Russian daily Kommersant, which reported that the airline has transferred rights on the 787s to the shareholder because Russian authorities have not yet approved the deal for Aeroflot (ARO).

It is understood that terms for the 787 purchase were due to expire Friday. The transaction, which has been underway for 12 months, has been affected by political considerations following Russian state-owned bank Vneshtorgbank's purchase of more than $1 billion worth of Airbus parent EADS (EDS) shares and indications from Moscow that it is interested in playing a management role in the aerospace giant. Aeroflot (ARO) indicated that it will buy both the 787 and A350 XWB.

Aeroflot is forging ahead with its fleet renewal plan, announcing in Moscow that it will pull its nine IL-86s from service next month, and revealing yesterday that it has finalized a lease agreement for the seven A321s ordered a year ago.

The Associated Press reported that ABN Amro, Calyon and Natexis Banques Populaires are financing the lease arrangement. Aeroflot (ARO) took delivery of the first airplane this week. It placed the order last October. The carrier refused to disclose terms.

Meanwhile, Deputy Director General, Igor Desyatnichenko told reporters that the IL-86s "will not be in use starting November 15, and it is too costly to keep them through the winter and fly just two or three months in the summer." The airline will look to sell them or lease them out, Reuters reported.

2 A320-214's (2875, VP-BQP, 9/06; 2920, VP-PQV, 10/06), RBS leased. A321-211 (2903, VP-BQR "I. Repin"), delivery.

November 2006: Aeroflot (ARO) Chairman and CEO, Valery Okulov said that the carrier will post a 2006 profit of more than >+$200 million (it earned +$220 million in 2005) and that there are no plans for an Initial Public Offering (IPO) despite the Russian government's August hint that it was prepared to part with its interest in the flag carrier.

Aeroflot (ARO) is looking to consolidate the domestic airline industry further, according to Valery Okulov, and will launch a regional carrier in eastern Russia, that will combine several smaller airlines and "quickly help to better organize air traffic in this area . . . on both long-haul and local routes," he said on the company's website.

"This year we will grow +9% on international routes and +16% on the domestic network," Okulov said. "So we see our biggest growth within Russia, where we currently serve 25 destinations and where we want to increase our transport activity by +25%." That aim is behind the launch of a new regional carrier called "Aeroflot East," which will be based in Khabarovsk and combine smaller carriers Dalavia Far East Airways (KHV) and SAT Airlines (SKH). SAT (SKH) flies from Yuzhno-Sakhalinsk to eight Siberian, three Japanese, one Chinese, and two Korean destinations. Data on Dalavia (KHV) was unavailable. "We realized that foreign carriers have increased their activities in Russia by +14% and in the Far East by +18%. As a result, airlines from Russia have lost market share," he explained. Aeroflot East will operate both short- and long-haul routes. "First we have to bring the new carrier to Aeroflot (ARO) standards. The program should be fully working within two years," Okulov said. (ARO) already operates subsidiaries Aeroflot-Don (DAU) in Rostov, and Aeroflot-Nord (AEN) in Arkhangelsk. It also has opened branches in Saint Petersburg and Magadan. It has a total market share in Russia of 60% on international routes but just 12% of the domestic market. "By 2010, we want to have a 30% share within Russia," he noted.

"The Russian airline industry is definitely fragmented. There are far too many airlines in the market, and that is why one of our goals is to take part in the consolidation of the industry," Okulov said. Aeroflot (ARO) currently holds 14% of the domestic market and flies to 25 destinations in Russia. Okulov said it is aiming for a 30% share by 2010. The next step is to expand European services and connect them more effectively via Moscow Sheremetyevo to the Far East. "We want to build a bridge between Europe and Asia. Our investment in the new Sheremetyevo 3 terminal is $150 million," he said. Russian banks have chipped in another $300 - $400 million. By November 30, 2007, all flights operated by (ARO) and its partners will transfer to the new facility.

The European Union (EU) and the Russian Federation finally agreed to phase out costly Siberian overflight fees by 2013. "This is a big success. The agreement will significantly improve the competitive situation of our European airlines and ease their operations between Europe and the growing markets in Asia," European Commissioner for Transport, Jacques Barrot said.

In 2005 - 2006, (EU) carriers paid about $331 million to Aeroflot (ARO) for the right to fly over Russia on the way to Asia. In 2003 - 2004, the amount was $250 million. The (EC) always has maintained that these royalties, which were in addition to normal air navigation charges, contravened the Chicago Convention.

The Soviet Union introduced the fees in 1986 to compensate for traffic that Aeroflot (ARO) lost to foreign carriers and the payments effectively were made part of commercial agreements that (EC) carriers were obliged to sign with Aeroflot (ARO) as part of the bilateral air services agreements between member states and the Russian Federation.

Under the new agreement, (EC) carriers no longer will have to conclude mandatory commercial agreements with Aeroflot (ARO) for the use of trans-Siberian routes and all royalty payments will be abolished by December 31, 2013, meaning airlines will pay only air navigation charges, which will be cost-based and transparent. Existing fees will be reduced gradually from 2010, and operations launched by (EC) carriers during the transition period will be free of overflight charges. (EC) airlines will be able to keep overflight frequencies currently leased from Aeroflot (ARO), while Russia committed to grant new frequencies in bilateral negotiations.

All principles agreed by the (EU) and Russia will have to be implemented in bilateral air services agreements between the 25 member states and Russia before May 2007.

Finnair (FIN), which has a heavy investment in its Asian services, said the deal will lower annual costs by more than -€20 million/-$26.2 million after 2013. It pays nearly €30 million per year in overflight charges and more than half of the sum consists of extraordinary royalty payments on services to China and Japan. Its Asian traffic is increasing by more than +20% per year.

Russian billionaire, Alexander Lebedev, the owner of 30% of Aeroflot (ARO) had signed an agreement with Boeing to reserve production times for the 787. The airline's board needed to confirm the order, but failed to do so in time, and the reservation accord expired November 1.

Bloomberg News reported that Aeroflot (ARO) has lost its delivery slots for 22 787s because the Russian government and the carrier's board have not signed off on the order and the slot transfer to SU shareholder Russian National Reserve Corp (NRC). "We will now be looking for other alternatives. We remain in contact with Boeing," Aeroflot Deputy CEO, Lev Koshlyakov said. (NRC) CEO, Anatoly Danilitsky told Bloomberg that Boeing has returned a $40 million down payment and that a 787 order now "will be at higher prices and different time slots. The deal will have to be negotiated practically from scratch."

Later, Aeroflot (ARO)'s deal to buy up to 22 787s which expired on November 1st, was extended by Boeing (TBC) till early December. This would allow the airline to get the earlier price and delivery slot.

Aeroflot (ARO)'s board said that production of the Sukhoi Superjet 100 (RRJ), for which the Russian flag carrier became the launch customer with an order for 30, "is being realized in conformity with the schedule and working plan." The (RRJ) is scheduled to be certified and delivered in 2008. Regarding the fleet, Okulov said that until 2010, the carrier will operate 30 Russian Regional Jets and 65 A320 family airplanes. "We want to increase our long-haul fleet dramatically, up to 45 airplanes," he said, adding that the carrier will talk with Airbus and Boeing about the A350 and 787 respectively. "But I don't know when we can make a decision. Aeroflot had $180 million in airplane leasing costs in 2006." He hopes that if and when Russia joins the World Trade Organization (WTO), taxes on Western-built airplanes will be reduced for Russian airlines, which he said "gives us a better chance to compete with Western carriers."

A320-214 (2947, VP-BQW), RBS leased, & A321-211 (2912, VP-BQS), delivery.

December 2006: (KLM) will launch a second daily Amsterdam - Moscow Sheremetyevo service March 25 aboard a 737. Flights are in codeshare with Aeroflot (ARO).

Sabre Airline Solutions extended its relationship with Aeroflot (ARO) to include revenue and data management products, hosting services and support.

2 A321-211s (2957, VP-BQX; 2965, VP-BQT), deliveries.

January 2007: Aeroflot (ARO) announced that it increased its share in its OJSC Aeroflot-Don (DAU) subsidiary from 51% to 100%. Aeroflot-Don (DAU), based in Rostov-on-Don, carried 600,000 passengers in 2006 and has a fleet of 15 airplanes, including 737-500s and Tu-154s.

February 2007: Aeroflot (ARO) is committed to phasing out its remaining Tu-134 and Tu-154 airplanes by 2010, according to press reports. Fourteen Tu-134s are scheduled to leave the fleet this year and be replaced by A320s and Sukhoi RRJs. The Tu-134 served the carrier for approximately 40 years. Aeroflot (ARO) Chairman & CEO, Valery Okulov said in November that Aeroflot (ARO)'s fleet plan calls for 65 A320 family airplanes and 30 Sukhoi RRJs on its short- and medium-haul network. It currently operates 88 airplanes.

March 2007: (ARO) transported 517,700 passengers in February, up +21.7% from the year-ago month. International passenger numbers were up +10% and domestic rose +51.9%. Load factor was 65.4% LF.

Aeroflot (ARO) said it expects to report a 2006 net profit of +RUB6.98 billion/+$267.1 million, which would represent a +15.6% improvement over the +RUB6.03 billion earned the year before, when it suffered a slight drop in net earnings. Revenues grew +13.5% to RUB71.32 billion. The airline carried 7.3 million passengers last year, up +8.9%. Load factor rose +1 point to 70.1% LF.

In conjunction with the announcement, the Aeroflot (ARO) board issued a plea to the Russian government to expedite the implementation of e-ticketing. "The current regulatory framework of the Russian Federation does not allow Aeroflot (ARO) to realize its potential in full, for full value introduction of technology of e-ticketing, similar to existent international practice. This deprives domestic customers of many conveniences," the carrier said in a statement. The board said it instructed (ARO) management and executives to make "suggestions on improving the legal framework of the Russian Federation."

The company said it sold more than >40,000 tickets on its website last year and attracted 200,000 "prospective customers" to its site each month. It added functionality in six European and three Asian languages and said it hopes to sell more than 1 million tickets through the Internet by 2009, and 25% to 30% of all tickets through the Web by the following year.

Aeroflot (ARO) said it will open an office in Malaga and launch thrice-weekly A320 service from Moscow during the summer schedule.

The carrier unveiled more details about its new Aeroflot (ARO) Cargo subsidiary, which it first announced last fall and which eventually will operate six MD-11s. It also will order six Il-96-400-Ts, the first of which will arrive toward the end of next year. The cargo airline launched March 10 with a weekly Moscow Sheremetyevo - Khabarovsk flight. Twice-weekly service to Novosibirsk commenced three days later. Both routes initially will be operated by four DC-10-40Fs and will increase to thrice-weekly and five-times-weekly respectively. The company said it is working on establishing a trucking network to serve its two destinations. It also will take over mainline cargo flights to Shanghai and serve Frankfurt Hahn and an unidentified airport in Finland. The first MD-11 will arrive in July, and initially will be used on thrice-weekly flights to Tokyo and Seoul, (ARO) said. A second airplane will enter service on September 15 and fly twice-weekly from Khabarovsk to Chicago via Anchorage, a route the company said will be "a new chapter of the Russian air cargo services industry." Last year (ARO) carried 140,300 tonnes of cargo on both passenger and freighter flights.

Airbus (EDS) appeared to be on the verge of winning a significant order as reports from Moscow indicated that Aeroflot (ARO) is close to announcing a major buy. Aeroflot (ARO) CEO, Valery Okulov said that (ARO) was planning to sign a contract for 22 A350 XWBs with deliveries beginning in 2015. Reuters reported that Okulov said, "The deal will be done." The airline intends to acquire at least 10 A330s as well, several major news agencies reported from Moscow. It was unclear whether these would be purchased or leased. (ARO) lost its negotiated 787 delivery positions in November and revealed that its pending deal with Boeing (TBC) was "frozen." In addition, Okulov said (ARO) is preparing to firm options on 20 Sukhoi SuperJet 100 RRJs. It already had 30 on order.

Aeroflot (ARO) said it will take delivery of two A320s this month and will take three A319s and three A321s by year end. Next year, it expects to take delivery from Airbus (EDS) of 11 purchased A320s. It currently operates 26 A320 family airplanes.

Later, Aeroflot (ARO) followed up on its verbal commitment to the A350 XWB by signing a Memo of Understanding (MOU) with Airbus (EDS) for the purchase of 22 of the model. CEO, Valery Okulov promised reporters at a news conference that the carrier was close to a deal. Neither Airbus (EDS) nor Aeroflot (ARO) specified the type(s) of A350s ordered. Deliveries are scheduled to begin in 2015, (ARO) said.
Airbus (EDS) also confirmed that the 10 new A330-200s to which (ARO) committed will be acquired on operating lease. Those airplanes will begin arriving in the fourth quarter of 2008. Airbus (EDS) said the number of orders and commitments for the A350 XWB now stands at 248.

Aeroflot (ARO) said it launched interline e-ticketing with SkyTeam partners Aeromexico (AMX), Continental Airlines (CAL), Korean Air (KAL), (KLM), and Delta Air Lines (DAL), plus it will link up with Alitalia (ALI), Air France (AFA), (CSA) Czech Airlines, Northwest Airlines (NWA) and the alliance's associate members in the second quarter. The announcement came soon after (ARO) issued a statement criticizing Russian regulations against e-ticketing. The carrier appears to have gotten its way. It said that "in consideration of currently available legislation," it expects to launch "full-scale" e-ticketing through its website and ticketing office in June. Foreign travel agents will be able offer (ARO) content on e-tickets next month. In January, the Russian Ministry of Justice approved a Transport Ministry order establishing e-ticketing in Russia, (ARO) said, without elaborating on the reason for its frustration earlier this month. "Implementation of this service in our country provides Russian aviation companies with equal competitive positions on the international lines," it said.

A320-214 (3052, VP-BRY), (GEF) leased and A320-214 (3063, VP-BRX), RBS Aerospace leased.

April 2007: Aeroflot (ARO) transported 604,500 passengers in March, up +23.4% from the year-ago month. Traffic grew +20.5% to 1.86 billion (RPK)s and load factor was 67.2% LF.

Aeroflot (ARO) said it posted a +RUB7.9 billion/+$306.3 million profit in 2006, which would mark a +31% increase over 2005 earnings of +RUB6.03 billion and was the company's second revision of its full-year performance. In late February, it said it earned +RUB6.98 billion and it claimed a +RUB7.3 billion profit in an April 10 statement.

This was accompanied by a release in which the carrier announced that e-tickets on (ARO) flights became available on Sabre, Amadeus, Galileo and Apollo in "almost 50" countries. Its e-tickets are available through interline agreements with SkyTeam partners Aeromexico (AMX), Continental Airlines (CAL), Delta Air Lines (DAL), (KLM), Korean Air (KAL), and Northwest Airlines (NWA). It said "broad sale" of e-tickets in Russia will start in June.

Alitalia (ALI) has attracted the interest of SkyTeam partner Aeroflot (ARO), Italy's Ministry of Economy and Finance confirmed. The Russian carrier will team up with Italian bank UniCredit, which will control 5% of the bidding group, although UniCredit and Aeroflot (ARO) reportedly are open to another airline joining the consortium. The "Moscow Times" reported that (ARO)'s bid is worth up to €700 million/$934.5 million. Two other consortia still are showing interest in bidding for Italy's troubled flag carrier: AP Holding, which is the holding company of Air One (ADH) Chairman & Owner, Carlo Toto, and a group comprising Mediobanca, Italy's largest investment bank, and USA-based Texas Pacific Group (TPG) and MatlinPatterson Global Advisers.

Initially, (TPG) and MatlinPatterson submitted separate expressions of interest. Italian private equity fund Management & Capitali, the investment company of Italian financier Carlo De Benedetti, withdrew Friday. The government set an earlier deadline for new partners to join the shortlisted group qualified to bid for the loss-making carrier. The ministry must approve the addition of Mediobanca and Aeroflot (ARO), employing the same criteria it used to select the shortlist of five bidders from the 11 expressions of interest it received initially. Demands include, among others, that the buyer commit to retaining Alitalia (ALI)'s identity for at least eight years. The government set an April 16 deadline to submit nonbinding offers and a business plan. It seeks to reduce its 49.9% stake in the airline to around 10% and aims to complete the privatization process by the end of June.

Aeroflot (ARO) launched weekly Sochi - Frankfurt flights.

Aeroflot (ARO) announced an agreement with Joint Aircraft Building Corp for the 15-year lease of six new IL-96-400T freighters. The airplanes have a range of 5,700 km and a payload of 92 tons. Two will be delivered in 2008, one the following year, and three in 2010.

May 2007: Aeroflot Russian Airlines (ARO) confirmed that it achieved a +RUB7.98 billion/+$309.4 million profit in 2006, a figure nearly identical to a third revision reported last month, and representing a +32.3% increase from 2005 earnings of +RUB6.03 billion. "Reliability of annual financial statements is confirmed by the conclusions of the auditing commission and corporate auditor," (ARO) said. Revenue rose +13.5% to RUB71.35 billion on a +8.7% gain in passenger numbers to 7.3 million. Pre-tax profit climbed +36.7% to +RUB11.43 billion.

Aeroflot (ARO) posted a +$69.3 million profit in the first quarter under (IFRS), more than double the $32.2 million earned in the year-ago quarter, Russia's "AK&M" reported. Revenue rose +37% to $662.8 million and costs were up +21% to $52.8 million, lifting operating profit to +$110 million from +$24.4 million in the first three months of 2006.

(ARO) announced an expansion of its St Petersburg operation, which it considers "one of the priority directions of development." From June 1, it will operate flights to Munich (thrice-weekly), Berlin Schoenefeld (twice-weekly), and Hamburg (twice-weekly) aboard A320 family airplanes. "With respect to priority development of tourism in St Petersburg in 2008, Aeroflot (ARO) plans to resume regular flights from St Petersburg to North America and Japan," it said. It also announced the May 18 launch of five-times-weekly, Moscow Sheremetyevo - Surgut service aboard Tu-154Ms. Starting June 5th, St Petersburg - Berlin (SXF), using A319s.

Italy's Treasury Dept cleared all three bidders for Alitalia (ALI) to remain in the running. They will have access to Alitalia (ALI)'s financial books on May 24 and be able to submit binding bids at the end of June for the troubled airline. Remaining bidders are a consortium led by Texas Pacific Group and MatlinPatterson, a partnership between Air One (ADH) parent AP Holding and Intesa Sanpaolo, and a recently formed tie-up between Aeroflot (ARO) and UniCredit.

Aeroflot (ARO), which remains alive in the bidding for SkyTeam (STM) partner Alitalia (ALI), also has made an offer to buy Serbia's Jat Airways (JAT), according to press reports. Serbian Minister of Infrastructure, Velimir Ilic told reporters in Belgrade that (ARO) offered to settle Jat (JAT)'s debts, purchase new airplanes and maintain the carrier's workforce. The Russian carrier reportedly is not the only interested buyer. "So far, Aeroflot (ARO) has made the best and the most concrete offer," a Jat (JAT) official told Reuters. The airline reported a +$5 million profit in 2006, according to the news agency.

(ARO) told Reuters that it planned to borrow €800 to €900 million/$1.08 to $1.21 billion to finance its bid for the Italian government's stake in Alitalia (ALI) and is considering Eurobonds to refinance the debt.

As the Russian national carrier, Aeroflot Russian Airlines (ARO) operates domestic and international passenger services to nearly 90 cities in 47 countries in Europe, the Americas, Africa, the Middle East, and ASia. Domestic services and flights to several (CIS)-countries are also flown. More than >30 additional international destinations are served through codesharing agreements with more than >20 foreign airline partners. The airline is also the country's largest cargo carrier.

Employees = 14,900.

(IATA) Code: SU - 555. (ICAO) Code: AFL - AEROFLOT.

Parent organization/shareholders: Russian government (51.17%); National Reserve Corporation (NRC) (27%); employees & others (19%).

Shareholdings/Subdidiaries: Aeroflot-Don (DAU) (51%); & Aeroflot-Nord (AEN) (51%).

Alliances: Adria Airways (ADR); Aeroflot-Don (DAU); Aeroflot-Nord (AEN); Air-India (AIN); Air Malta (MLT); Austrian Airlines (AUL); Belavia Belarussian Airlines (BLV); Bulgaria Air (BUL); Cathay Pacific (CAT); Cubana (CUB); Cyprus Airways (CYP); Estonian Airlines (ENA); Finnair (FIN); FlyLal (LIJ); Iran Air (IRN); (JAT) Airways; (LOT) Polish Airlines; Malev (HGA); Rossiya (SDM); Royal Jordanian Airlines (RJA); Slovak Airlines (SLO); & Tarom (TRM).

Main Base: Moscow Sheremetyevo airport (SVO).

Domestic, Scheduled Destinations: Adler/Sochi; Anapa; Arkhangelsk; Astrakhan; Barnaul; Belgorod; Chelyabinsk; Ekaterinburg; Irkutsk; Kaliningrad; Kemerovo; Khabarovsk; Krasnodar; Mineralnye Vody; Moscow; Murmansk; Naryan-Mar; Nizhnevartovsk; Novosibirsk; Omsk; Perm; Petropavlovsk-Kamchatsky; Rostov; Samara; St Petersburg; Tyumen; Ufa; Vladivostok; & Volgograd.

International, Scheduled Destinations: Amman; Amsterdamm; Antalya; Athens; Baku; Bangkok; Barcelona; Beijing; Beirut; Belgrade; Berlin; Bishkek; Bratislava; Brussels; Bucharest; Budapest; Cairo; Copenhagen; Damascus; Delhi; Dubai; Dusseldorf; Frankfurt; Geneva; Hamburg; Havana; Helsinki; Hong Kong; Istanbul; Karlovy Vary; Kiev; Larnaca; Ljubljana; London; Los Angeles; Luanda; Madrid; Milan; Mumbai; Munich; New York; Nice; Oslo; Paris; Prague; Riga; Rome; Seoul; Shanghai; Simferopol; Sofia; Stockholm; Tallinn; Tashkent; Tbilisi; Tehran; Tokyo; Toronto; Ulaan Bataar; Venice; Vilnius; Warsaw; Washington; Yerevan; Zagreb; & Zurich.

Finnair (FIN) said it will sell the last two MD-11ERs it owns to Aeroflot (ARO). The airplanes will be transferred in November 2008 and July 2009. Value of the sale is at least €30 million/$40.6 million. Finnair (FIN) operates seven MD-11ERs, five of which are under leasing agreements that expire by the end of 2010, when it plans to have retired all MD-11ERs and operate a long-haul fleet of A330s and A340s.

June 2007: Aeroflot (ARO) flew 1.98 billion (RPK)s passenger traffic in May, up +12.7% from the year-ago month. Load factor was 67.5% LF.

Aeroflot (ARO) denied Italian media reports that it plans to drop out of the bidding for Alitalia (ALI), while revealing that it is working with the (EU) on maintaining (ALI)'s European traffic rights, if its consortium beats out Air One (ADH) and wins the privatization tender. "There is no hesitation to leave the bidding. There is no question of dropping out," Lev Koshliakov, an (ARO) Deputy Director General, told Thomson Financial. He said Italian bank Unicredit, which only holds a 5% stake in the consortium, could be the "nominal" owner of the traffic rights, but he would not explain further. Koshliakov said Aeroflot (ARO) wants to invest to develop Alitalia (ALI), rather than just own it. "Alitalia (ALI) and Aeroflot (ARO) are network companies, not like Air One (ADH) that is point-to-point. A combination of the networks would give synergies," he insisted. He said Aeroflot (ARO) is "confident" it will have the resources to renew (ALI)'s aging fleet, after receiving proposals from several international banks, noting that (ARO) has ordered 50 Sukhoi SuperJet 100s. Italy's Alenia Aeronautica holds 25% of Sukhoi Civil Aircraft. "This can be an interesting option and can be lucrative in terms of economics. Aeroflot (ARO) has special conditions as a launch customer," he said.

Meanwhile, RIA Novosti shed more light on Aeroflot (ARO)'s interest in Jat Airways (JAT). (ARO) signed a Memo of Understanding (MOU) with the Serbian carrier to acquire up to 75% of the airline and commit $100 million toward the purchase of short-haul and/or regional airplanes.

Aeroflot (ARO) CEO, Valery Okulov stressed again this week that (ARO) wants to win the Italian government's auction to buy Alitalia (ALI) and that he has no plans to drop out of the bidding. "Of course we want to have (ALI). But this is a very tough process," he said. He said Aeroflot (ARO) has the experience necessary to rebuild Alitalia (ALI) as a result of its own restructuring. He also said it is becoming more important for the Russian airline to invest in Europe. "More then 50% of our revenue is coming from the European market, and we are going to extend our presence there," he said, adding that (ARO) is holding off on investing in other carriers while pursuing Alitalia (ALI). "First I want to know that we have a positive (ALI) deal."

Later, three weeks after insisting it would see the process through to the end, Aeroflot (ARO) announced it would withdraw from the bidding for the Italian government's stake in Alitalia (ALI). "Aeroflot (ARO) and its advisers have not had access to critical information with respect to the commercial and operational aspects of Alitalia (ALI)'s business to confidently formulate a well supported business proposal to successfully restructure Alitalia (ALI)," the Russian carrier said in a statement. It said the "conditions for the sale" would have limited its restructuring plans for (ALI), and that despite its withdrawal, it remains committed to expanding activities in Europe "by increasing its operational activities as well as acquiring strategic assets."

Two potential buyers now remain: A consortium led by USA investment group MatlinPatterson, and AP Holding, the Italian holding company run by Air One (ADH) owner, Carlo Toto. Deadline for binding bids is July 12.

The (EC) denied a Ryanair (RYR)/Aer Lingus (ARL) merger on the grounds that two major carriers based in the same country and airport, presented an anticompetitive situation. Competition Commissioner, Neelie Kroes did not answer a question at a Brussels news conference concerning a similar problem with Air One (ADH) and (ALI), each of which operates bases at Rome Fiumicino and Milan Malpensa.

Despite the fact that its initial order lapsed last November and it signed on for 22 A350 XWBs in the interim, Aeroflot (ARO) opted to join the rush to order the 787 Dreamliner with a commitment to Boeing (TBC) for a reported 22 airplanes. The manufacturer released a statement saying it was "very pleased that Aeroflot (ARO) has selected the 787 Dreamliner for its fleet requirements" and that it "looks forward to working with Aeroflot (ARO) to finalize the order." It provided no other information and the (ARO) agreement is not part of its 787 order book, which now stands at 584 firm and 45 pending contract signings. However, widespread reports out of St Petersburg from both Russian and international news agencies pegged the order at 22 airplanes with deliveries to start in 2014. (ARO) CEO, Valery Okulov and Boeing Commercial Airplanes (TBC) President, Scott Carson were in the city to negotiate the deal and spoke to media there. Okulov said the 787 order would not affect (ARO)'s deal with Airbus (EDS). The airplanes will be 787-8s, according to "Bloomberg News," which reported from Moscow.

Reports of renewed negotiations between Boeing (TBC) and Aeroflot (ARO) surfaced in recent days and followed what was thought to be an awkward period during which Russian National Reserve Corp - - a major (ARO) shareholder - - lost its delivery slots for 22 787s, while relations between the USA and Russia appeared to strain. Those ties now have been strengthened by more than just (ARO)'s 787 order. In addition, the manufacturer announced an expanded collaboration agreement with Sukhoi, under which Boeing (TBC) will "expand its advisory role" on the Superjet 100 program. Its assistance will include flight and maintenance crew training, spare part management and supply, production of flight and maintenance manuals, and after-sale support. The companies have been working together since 2002. The arrangement is part of a promise between Boeing (TBC) and United Aircraft Corp (which includes Sukhoi, Tupolev and Ilyushin among others) to "identify opportunies to expand collaboration on commercial aviation activities." A working group will be established to study further cooperation in areas of research and development, manufacturing, design and marketing, among other areas.

Finnair (FIN) increased Helsinki - St Petersburg frequencies to 20-times-weekly, thanks to the award of three additional flights covered by a codeshare agreement with Rossiya (SDM). It also flies daily to Moscow Sheremetyevo in cooperation with Aeroflot (ARO). Finnair (FIN) CEO, Jukka Hienonen recently said that there are 13 Russian cities with more than >1 million people that Finnair (FIN) would like to serve, if it can secure permission. "Of course we can't fly to all of them, and it still isn't easy for us to get more traffic rights into Russia," he said.

Aeroflot (ARO) announced a deal with Rosneft, a Russian oil company, under which the carrier will purchase "petroleum derivatives and oil chemistry products," transport Rosneft employees and exchange infrastructural assets, technical expertise and marketing, among other elements. The parties also will cooperate on establishing storage and fueling facilities at domestic airports. Rosneft posted a +$3.5 billion profit in 2006, according to (ARO).

Separately, (ARO) said it appointed Natalya Goncharova to direct the company's "interaction with the investment community."

A320-214 (3157, VP-BRZ), RBS Aviation leased.

July 2007: Aeroflot (ARO) flew 2.19 billion (RPK)s passenger traffic in June, up +9.3% on the year-ago month. Load factor was 72.5% LF.

Moscow Domodedovo (DME) Director Sergey Rudakov said the airport landscape in the Russian capital, which features three international gateways, is on the verge of significant change. The day after Lufthansa (DLH) announced it would join six Star Alliance (SAL) partners by shifting its operations south from Sheremetyevo (SVO) to (DME), Rudakov said that (DME) is working to bring all Oneworld (ONW) airlines to the airport as well. "We believe that is possible," he said. British Airways (BAB), Royal Jordanian (RJA) and Iberia (IBE) currently operate from (DME), while Cathay Pacific Airways (CAT), Japan Airlines (JAL), and Finnair (FIN) are at (SVO).
Rudakov said (DLH)'s shift, and its new partnership with AiRUnion (ZXD)/(DOD)/(OMK)/(SMR), will make it the dominant foreign carrier in Russia and will effect "a big change in Moscow." (DLH) will be (DME)'s 28th foreign airline. He claimed there will be enough business for (SVO) and Vnukovo (VKO) as well: "In the next three years, Moscow airports can expect to generate up to +15 million new passengers." Roughly 80% of Russian passengers come from Moscow, he said, and angling for airline alliances and customers wanting to transfer easily, will be a key component of future airport competition.

Currently, (SVO) processes around 14 million passengers annually, (VKO) has 7 million, and (DME) expects +21% year-over-year passenger growth to 18 million. "By 2015, we estimate 40 million passengers. Then we could be one of the top five airports in Europe," he said.
The airport has invested $240 million of its own money in improvements over the past three years, but Rudakov said that "to keep our position, we need [third-party] investment." At the same time, he has no interest in investing in other airports. "Why should we spend money in, let's say, Vladivostok, where we can add maybe 100,000 extra passengers, when with same money we can get 2 million more guests at (DME)," he asked. Part of that investment has gone toward increased cargo handling capacity. (DME) will build a cargo village and will shortly welcome a new twice-weekly Asiana Airlines (AAR) 747F service from Seoul.

Aeroflot (ARO) said it has started using mobile automatic check-in desks at up to 10 Russian airports lacking stationary desks, allowing it to check in passengers using its Sabre program and introduce e-ticket technology at new destinations.

A321-211 (3191, VP-BRW), delivery.

August 2007: Aeroflot (ARO) transported 846,600 passengers in July, up +10.1% on the year-ago month. Load factor was 77.4% LF.

Aeroflot (ARO), Snecma Services and Russian Maintenance Repair & Overhaul (MRO) provider, BAP3-400 signed a Memo of Understanding (MOU) to look into creation of a joint venture for (CFM56) (MRO) in Russia next year, (ARO) announced. (ARO) plans to be operating 56 A320 family airplanes by 2010 and said that "intensive growth" of (CFM56) use in Russia "is happening not only in Aeroflot (ARO), but also in other air companies."

(ARO) said it issued "more than" >100,000 e-tickets in the six months since it started transitioning to the platform. It has been able to issue e-tickets inside Russia since June, but previously was able to do so abroad and thanks to interline agreements with SkyTeam (SKT) partners. It currently issues e-tickets on 40 routes and plans to be up to 60 by year end.

Aeroflot (ARO) said it is converting two MD-11 passenger airplanes into freighters, with Boeing (TBC) to handle the modifications in conjunction with (SASCO), a subsidiary of Singapore Technologies Aerospace. "By putting [the MD-11s] in the hands of the original manufacturer for conversion, we can extend the life of the airplanes and maximize their capabilities," Aeroflot (ARO) Cargo General Director, Andrey Goryashko said. Modification work is slated to start in November 2008. A converted MD-11F has a capacity of 205,400 lbs structural payload at a range of 3,486 nm/6,456 km and is capable of 630,500 lbs/286,000 kg maximum takeoff weight. The main and lower deck compartments are capable of holding as many as 36 96-by-125-inch pallets. Aeroflot (ARO) Cargo, which currently operates four DC-10F freighters, said it has committed to three additional MD-11F conversions.

Aeroflot (ARO) said it finalized an order for 22 787-8s valued at $3.6 billion following shareholder approval of the transaction. "The 787 will open new market opportunities as we further modernize our fleet and expand our international reach," General Director, Valery Okulov said. The airline announced neither an engine selection, nor a delivery schedule. Previous reports pegged deliveries as starting in 2014. Boeing (TBC) has logged orders for 706 787s from 48 customers, including 258 orders this year.

October 2007: Aeroflot (ARO)'s first-half profit plunged -25.2% year-over-year to +RUB3.2 billion/+$128.6 million, according to Russian Accounting Standards, although the airline said that "in general, revenues continue to be higher than costs," "RIA Novosti" reported. Turnover climbed +21.7% to RUB33.5 billion, against a +15.4% increase in costs to RUB31.9 billion, as (ARO) transported approximately 3.8 million passengers during the six-month period, up +17.9%.

The Russian flag carrier (ARO) announced that it is offering a -3% discount on tickets reserved or purchased through its website. E-tickets, first available in the spring, now are offered on 40 itineraries. That total will increase to 60 by year end, (ARO) said, adding that it plans to be 100% e-ticket compliant next year. The airline also said it renewed its International Operating Safety Audit (IOSA) certification until 2010.

Russian airlines have been ordered by the Transport Ministry to follow a list of customer service regulations beginning October 20 or risk fines and the eventual loss of their operating licenses, "The Moscow Times" reported. Under the new directives, airlines are forbidden from denying travel in the case of lost or stolen tickets and must provide hot meals every 4 hours and hotel rooms in the case of extended delays, among other things, the paper said.

Aeroflot (ARO) will decide within two weeks whether to submit a second bid for Alitalia (ALI), according to press reports citing (ARO) Deputy General Director Finance & Planning, Mikhail Poluboyrarinov, who said the airline may raise up to €1 billion/$1.43 billion to finance the acquisition. (ARO) was named on a shortlist of potential bidders.

Later, Alitalia (ALI) announced that Aeroflot (ARO) "has decided not to take part in the project regarding the privatization of Alitalia (ALI)." Late last month, (ARO) said it would make a decision shortly. Air One (ADH)/Intesa Sanpaolo, Lufthansa (DLH), and Air France (AFA)/(KLM) remain interested in (ALI), according to "Reuters."

Aeroflot (ARO)'s winter schedule, to be operated to March 29, will feature frequency increases on flights from Moscow Sheremetyevo to Sochi (to 21-times-weekly from 13), Irkutsk (to 21 from 14), Krasnodar (to 28 from 21), Mineralnie Vodi (to 14 from eight), Novosibirsk (to 21 from 14), Perm (to 14 from seven), Athens (to seven from four), Hannover (to seven from three), and Hong Kong (to five from three).

AerCap (DEA) Holdings announced that AerVenture, a joint venture with LoadAir and AI Fawares, will lease six new A320-200s to Aeroflot (ARO) for 10 years. The (CFM56)-powered airplanes will be delivered to the Russian carrier between July 2008 and March 2009. Aeroflot (ARO) Head of Fleet Planning & Aircraft Procurement, Sergei Koltovich said the carrier's new partnership with AerVenture "should develop into a truly long-term relationship."

Aeroflot (ARO) Cargo said it will decide by year end, whether to purchase up to 10 777F freighters, according to statements from the board cited in Russian press reports. Delivery would be scheduled for 2012 to 2015. (ARO) Cargo currently operates four DC-10s, but launched an MD-11 conversion program two months ago.

A319-112 (3281, VP-BHK), and A320-211 (3267, VP-BUM), deliveries.

November 2007: Aeroflot (ARO) transported 688,900 passengers in October, up +7.2% from the year-ago month, and reported a +5.9% rise in (RPK)s passenger traffic to 2.97 billion. Load factor was 69.6% LF.

A Russian court ruled that Boris Berezovsky, a longtime political enemy of Russian President, Vladimir Putin who has been living in exile in the UK since 2000, fraudulently embezzled RUB214 million/$8.78 million from Aeroflot (ARO) when he maintained financial control over the carrier in the 1990s. He rejected the verdict as a "farce" and the UK government said it would not extradite Berezovsky to Russia.

2 A319-111s (3298, VP-BUN; 3336, VP-BUO), (GEF) leased and A321-211 (3334, VP-BUP), delivery.

January 2008: 2007 statistics: 25.54 billion (RPK)s passenger traffic +14%; +13.8% capacity (ASK)s; +.1 load factor for 70.2% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "ARO-2007-STATS."

Finnair (FIN) Technical Services (FTS) reached an eight-year, €200 million/$291.7 million deal with Aeroflot (ARO) Cargo to provide airframe, engine and component, Maintenance Repair & Overhaul (MRO) services for its MD-11s. Aeroflot (ARO) Cargo is (FTS)'s largest customer outside the Finnair (FIN) Group. Approximately one-quarter of (FTS)'s annual turnover comes from third parties. Finnair (FIN) has sold its two owned MD-11s to (ARO) Cargo, which will operate six of the type next year.

Moscow Domodedovo (DME) announced the end to its renovation project on Runway 1, which began in 2003 and was part of a modernization project costing approximately RUB12 billion/$492.2 million. A temporary third runway was opened in May 2006 to handle traffic during the work. The new Runway 1 will handle up to 45 operations per hour.

Aeroflot (ARO) remains interested in Serbia's Jat Airways (JAT), according to (ARO) Deputy Director General, Mikhail Polyboyarino. He told reporters in Moscow that (ARO) is seeking a partner for a joint bid for Jat (JAT) and that a tender may take place as early as late March. "A valuation is currently being performed," he said, according to "Thomson Financial."

(ARO) took delivery of its 14th A320 this month, on lease from (GECAS) (GEF). It expects +10 more this year and now operates 11 A319s, 14 A320s and 10 A321s. It carried 633,800 passengers in December, up +12.2% from the year-ago month. Traffic rose +8.1% to 1.92 billion (RPK)s, and load factor was 64% LF. It also added a seventh daily Moscow Sheremetyevo - Saint Petersburg flight aboard a Tu-154M.

Aeroflot (ARO) removed its final Tu-134 from service, "RIA Novosti" reported. The final flight of the 14-strong fleet was on December 31 from Kaliningrad to Moscow. The airplane used to seat 76 passengers.

A320-214 (3373, VP-BQU), (GEF) leased.

February 2008: Aeroflot (ARO), which celebrated its 85th birthday on February 9, said it carried more than >8 million passengers last year, which represented a +12% increase over 2006. It said it is targeting 9.5 million in 2008, and that it expects to grow domestic passengers by +35.6%.

Aeroflot (ARO) said its net profit through the first nine months of 2007 nearly doubled to +$357.3 million, according to International Financial Reporting Standards, from +$186.3 million in the year-ago period. Consolidated revenue climbed +31.9% year-over-year to $2.8 billion, against a +21.9% rise in expenses to $2.28 billion. In a statement, Deputy Director General Finance & Planning, Mikhail Poluboyarinov cited "effective control of fuel costs, favorable market conditions and profitable currency exchange rates." (ARO) now operates a fleet of 83 airplanes to 93 destinations in 47 countries.

Aeroflot (ARO) Cargo launched weekly Moscow Sheremetyevo - Paris Charles de Gaulle service with a 737-300F freighter. The airplane, on lease from (GECAS) (GEF), began serving Helsinki. (ARO) Cargo will take a second 737-300F at the end of this month.

Aeroflot (ARO) Cargo, which recently announced the resignation of Director General, Andrey Goryashko, said it transported 121,879 tons in 2007, with 44,971 tons onboard freighters and the remainder as belly cargo on (ARO) passenger flights. It also said it posted a +RUB6.8 million/+$277,000 net profit in October and a +RUB12.8 million net profit in November. It operated six MD-11F freighters and two 737Fs in 2007, and plans to take delivery of six leased Il-96-400Ts beginning this year.

Sukhoi does not intend to follow the example of Airbus (EDS) with its A380 or Boeing (TBC) with its 787 and stressed that its SSJ program is proceeding according to schedule. The prototype Superjet 100 is in final assembly at Komsomolsk and rollout of the 95-seat variant is scheduled for September 26. First flight will take place by year end and first delivery to Aeroflot (ARO) is expected in November 2008. Delivery to the first Western customer, ItAli Airlines (ACL) is planned for December 2009. Sukhoi General Manager, Mikhail Pogosyan said the company will take a decision on the development of a shorter or stretched version "in a short time."

Meanwhile, Alenia Aeronautica is waiting for Russian President, Vladimir Putin to sign a decree allowing the Finmeccanica subsidiary to take a 25%-plus-one share in Sukhoi Civil Aircraft Co. Non-Russian companies are allowed to take only 25% in certain strategic industries, including aviation, and a special presidential decree is necessary for the Italian company to acquire the extra share.

At June's Paris Air Show, a general agreement was signed between Alenia Aeronautica and Sukhoi Holding for the 25.1% shareholding, paving the way for Finmeccanica to realize its longstanding ambition to be involved in a regional jet program. It currently is a 50% shareholder through Alenia Aeronautica in turboprop manufacturer ATR, with (EADS) (EDS) holding the other half. It is widely known that Finmeccanica would like to take over EADS (EDS)' shareholding in ATR.

Aeroflot (ARO) Cargo 737-300F (VP-BCN) starts service - SEE PHOTO - ARO-737-300F-FEB08.

A320-214 (3410, VP-BPX), RBS Aerospace leased.

March 2008: Aeroflot (ARO) on the occasion of its 85th birthday said it intends to double its annual passenger numbers by 2015 to approximately 16 million and acquire at least one European competitor. "Aeroflot (ARO)'s future growth will focus on the development of the route network between Europe and Asia involving strategic alliances, infrastructure improvements and an ambitious airplane acquisition program," CEO, Valery Okulov said. (ARO) said "European airline acquisitions" are "in the pipeline." It bid for Alitalia (ALI) last year and in recent weeks has expressed an interest in (CSA) Czech Airlines and Jat Airways (JAT). "We are now on course to expand rapidly into the Central European and South East Asian markets, and the majority of new passengers are likely to come from intercontinental flights via Moscow airport," Okulov added. (ARO) said that "tactical partnerships and foreign airline acquisitions are crucial to enlarge the network . . . the major focus for expansion will be on the European aviation market with anticipated acquisitions of a European air carrier." It said it plans to purchase "more than" 65 airplanes over the next eight years, lifting its fleet from the current 83 to 150 by 2015. Recently, it took delivery of a 15th A320 and second this year. It seats 140 and is leased from Royal Bank of Scotland. Nine more A320s will arrive this year.

Aeroflot (ARO) CEO, Valery Okulow confirmed (ARO)'s interest in investing in either Jat Airways (JAT) or (CSA) Czech Airlines, as both Eastern European carriers approach privatization. He was speaking to "La Tribune". Meanwhile, a source close to Austrian Airlines (ALA) Group confirmed that there recently have been talks between (ARO) and (AAG), but they ended without the Russian carrier deciding to invest. Aeroflot (ARO) derives 37% of its revenue from its European network.

Airbus (EDS) projected that Russian airlines will need more than >900 passenger airplanes, valued at $79 billion, over the next 20 years to meet demand for both replacement and fleet growth. Russian passenger traffic is expected to increase +6.2% (RPK)s annually on average over the next two decades, faster than the world average of 4.9%, Airbus (EDS) said.

Aeroflot (ARO) will launch four-times-weekly, Sochi - Novosibirsk on April 30, and twice-weekly, Moscow (airport unidentified) - Bratislava on May 27, both aboard Tu-154Ms.

Technical problems will postpone delivery of the first Sukhoi Superjet indefinitely, the Russian manufacturer announced. First deliveries originally were slated to begin by late 2008. "The airplane is currently in the final testing stages and it will make its first flight within a month," Alexei Fyodorov, CEO of United Aircraft Building Corp, told "RIA Novosti." "Our specialists are working round the clock to meet our obligations to contractors." Recently, Superjet International CEO, Alessandro Franzoni told the SpeedNews Commercial Aviation Suppliers Conference in Los Angeles that the regional jet's first flight was "imminent." To date, the 78/98-seat airplane family has garnered 73 firm orders plus 46 options, the bulk of them from Russian customers. The company hopes to market some 700 airplanes priced at $25 to $28 million. Program suppliers include Honeywell (SGC), Parker, Thales (THL), and Goodrich (BFG). The SaM 146 engine is supplied by Powerjet, a joint venture between Snecma and NPO Saturn.

AerCap Holdings (DEA), the Dutch lessor, will lease 10 new A330-200s to Aeroflot (ARO) for 9 to 10-year periods with deliveries beginning in November and extending to April 2010.

April 2008: Aeroflot (ARO) flew 2.13 billion (RPK)s passenger traffic in March, up +14.4% on the year-ago month, as passenger numbers rose +19.7% to 723,700. Load factor was 68.8% LF.

Aeroflot (ARO) signed a cooperation agreement with MIAT Mongolian Airlines (MNG) that will begin with an interline agreement and by October include codeshare flights between Moscow Sheremetyevo and Ulan Bator, a special prorate agreement, luggage check-through, and interline e-ticketing. Loyalty program linkup and cooperation on freight and promotion will come later.

May 2008: Aeroflot (ARO) carried 732,400 passengers in April, up +13.3% from the year-ago month. Passenger traffic (RPK)s rose +6.7% to 2.09 billion, and load factor was 68.3% LF.

June 2008: Aeroflot (ARO) finally has released its 2007 full-year results under (IFRS) standards, reporting a +$313.4 million profit that represented a +21.4% increase over the +$258.1 million earned in 2006. However, it is predicting a drop this year, as "fuel prices are having a colossal effect on us," according to comments from (ARO) Deputy Director, Mikhail Poluboyarinov cited by Reuters. Revenue should rise +30%, driven partly by a +8% to +10% increase in fares.

Last year, (ARO) enjoyed a +27.3% year-over-year increase in revenue to $3.81 billion, outpacing a +23.9% rise in costs to $3.23 billion. Operating profit surged +49.7% to +$578 million from +$386.2 million in 2006.

The company operated 143 airplanes at year end. It carried 8.2 million passengers, up +12.3%, and load factor rose +1.1 points to 71.2% LF.

Aeroflot (ARO) launched its Aeroflot Shuttle service between Moscow Sheremetyevo and St Petersburg, which it said is designed to offer "faster and more convenient processing." It will feature fixed gates, additional air bridges, and separate buses for business and economy passengers, who will be able to claim their bags within 15 minutes of arrival. (ARO) offers eight daily flights between the cities, and said an average of 200,000 passengers fly on the route each month.

Aeroflot (ARO) confirmed that it plans to lease an additional +19 A320 family airplanes. No other details were provided. Interfax reported that the carrier plans to add up to +65 Airbus (EDS) airplanes in the future. It already operates 36 narrowbody Airbus (EDS) airplanes. It reportedly wants to double its current level of domestic services by 2014. CEO, Valery Okulov said that (ARO) is looking for a European airline with which it can form a strategic partnership. "We are considering Austrian Airlines (AUL) . . . [but] it is too early to talk about" a definitive deal, he said.

A320-214 (3511, VP-BKY), (GEF) leased.

July 2008: Aeroflot (ARO) said it carried 852,900 passengers in June, up +13.7% year-over-year. Load factor was 74.7% LF. First-half passenger numbers climbed +16.2% to 4.4 million, with load factor at 68.5% LF.

Aeroflot (ARO) Cargo was granted a license last week from the Chinese government allowing it to transport dangerous goods into the nation. It currently operates both freighter and passenger flights to Beijing and Shanghai. It also is allowed to transport dangerous goods to the UK, Germany, France, Finland, Japan, South Korea, and Hong Kong.

The Sukhoi Superjet 100 will not be delivered to launch customer Aeroflot (ARO) until the second half of 2009, a year behind schedule, Sukhoi Civil Aircraft Company and the Russian airline revealed. A Sukhoi spokesperson confirmed the delay to "Agence France Presse." Lev Koshlyakov, Aeroflot (ARO)'s deputy head, told "Reuters" that Sukhoi had informed it via a letter not to expect any SSJ100s until the 2009 third quarter. The carrier had expected to take delivery of as many as 30 in the second half of this year. The SSJ100 made its first test flight last month, but Sukhoi does not expect certification to be completed until mid-2009. Delivery delays had been hinted at since March, but it had not been known until this week that the delay would be as long as one year. Russian media have reported that the government is considering pumping more money into the SSJ100 program.

At the Farnborough Air Show, a contract was signed from Aeroflot (ARO) for the purchase of five A321s to be powered by (CFM56-5)s.

Aeroflot (ARO) Cargo signed an exclusive engine Maintenance Repair & Overhaul (MRO) contract with Snecma Services.

Boeing (TBC) announced the multiyear lease of three MD-11BCFs to Aeroflot (ARO) Cargo, which already operates four DC-10s, through its Boeing Capital Corporation financing subsidiary. The airline has committed to acquire three more MD-11s for conversion, with redelivery scheduled for next year.

August 2008: Aeroflot (ARO) carried 919,500 passengers in July, up +8.6% from the year-ago month. Traffic (RPK)s climbed +4.6% to 2.65 billion and load factor was 77.9% LF.

Aeroflot (ARO) will not bid for Austrian Airlines (AUL). "The risks outweigh the reward," an (ARO) spokesperson told "Reuters." The (AUL) board approved the privatization of the carrier and is waiting on a decision from the government, which controls holding company (OIAG). Aeroflot (ARO) repeatedly has stated its interest in acquiring a European partner.

September 2008: Aeroflot (ARO) posted a +RUB2.25 billion/+$90.1 million first-half profit, its board of directors announced. The result represents a -29.7% drop from earnings of +RUB3.2 billion in the year-ago semester. Revenue in the six months ended June 30, rose +39.4% to RUB42.98 billion, while expenses were RUB41.11 billion. (ARO) said fuel costs were +21.3% over budget.

Aeroflot (ARO)'s board decided to open a branch in Krasnoyarsk, where it will base a Tu-154 and add up to seven airplanes in the fourth quarter. It said the decision was based on "KrasAir (ZXD)'s difficulties to continue its operations and to meet the considerable demand in this region." KrasAir (ZXD) is one of the largest constituents of the debt-ridden, five-airline AiRUnion (ZXD)/(DOD)/OMK)/(SMR) alliance, which recently suffered from operational difficulties and groundings, and last week was promised 24,000 tonnes of fuel by the Russian government through September 14, according to press reports.

(ARO) announced the implementation of a fuel efficiency and environmental program designed to save up to -1.5 million tons of fuel per year.

Aeroflot (ARO) cut ties to Aeroflot-Nord (AEN) following Sunday's fatal crash of a 737-500 operated by the regional affiliate (AEN), saying that Aeroflot-Nord (AEN) no longer will operate flights under its code, nor be allowed to use its name. "A decision has been taken to completely sever cooperation with Aeroflot-Nord (AEN)," (ARO) CEO, Valery Okulov said at a Moscow news conference. "We have paid too big a price for providing our logo to the company." Aeroflot (ARO) owns a 51% stake in (AEN) and described the carrier as a "subsidiary," prior to the crash, which killed all 88 passengers and crew. It is unclear whether it will retain its stake, but Okulov said (ARO) will operate flights previously delegated to (AEN) with its own mainline airplanes going forward.

The decision came as Russian authorities began to investigate the crash, sorting through debris scattered over 10,000 sq m. The 737-500 en route from Moscow Sheremetyevo was approaching Perm for a landing, when it lost radio contact at 3,600 ft and crashed just hundreds of meters from a residential area on the city's outskirts. No ground injuries were reported. Alexander Bastrykin, head of a federal committee investigating the accident, said the crash "was apparently connected to technical failure and a fire in the right engine (later denied)" but did not provide evidence to support the claim. Investigators said the cockpit voice (CVR) and flight data recorders (FDR) had been recovered, but sustained "serious damage" and are in "poor condition," adding that "additional work using special equipment" would be required before any information could be extracted.

Meanwhile, the air traffic controller (ATC) who was in contact with the doomed airplane prior to the crash, told Russia's Channel One TV that the flight deck crew behaved erratically. "The pilot (FC) . . . wasn't obeying my instructions," Irek Bikbov said. "I informed the pilot (FC) that he had reached a point where he should go down. He confirmed he was going down, but kept climbing." He said the airplane also turned left, when he instructed it to turn right, and that the pilots (FC) insisted everything was fine, when he asked them what was wrong.

Russian Transportation Minister Igor Levitin traveled to Perm to inspect the accident site, and defended the country's aviation safety standards during a news conference. He said the 737-500, which first flew in 1992, had no known problems prior to Sunday's flight. He ruled out terrorism as a possible cause, explaining that tests conducted on airplane fragments offered "no proof" of explosives.

Aeroflot (ARO) is the top airline at Moscow (SVO) Airport, which in January through July 2008, handled 2.9 million domestic passengers and 5.7 million international passengers, for a total 8.6 million. This gave the airport a ranking of No 2, with the others (in millions) being: 1. Moscow (DME) 11.9; 3. Moscow (VKO) 4.6; 4. St Petersburg 4.0; 5. Yekaterinburg 1.4; 6. Novosibirsk 1.1; 7. Kaliningrad 1.0; 8. Sochi 0.9; 8. Krasnodar 0.9; 10.0 Samara 0.8.

According to an analysis by "Travelport," air travel between Russia and China has grown about +35% in the past year, driven principally by demand from China (where exports to Russia are soaring). Growth, on the other hand, is considerably slower and in some cases nonexistent on routes from Russia to more mature Asian markets like
Japan, Korea, and Thailand.

Russian Prime Minister, Putin meets with aviation leaders to discuss lowering airplane import tax.

October 2008: In 2007, Aeroflot (ARO)'s earned a net profit of +$313 million. 2007 (ARO) passengers were +17%. During 2007, (ARO) boosted its domestic operations by opening new bases in Sochi, a southern resort city on the Black Sea, and in Magadan, in Russia's Far East. (ARO) also increased its cooperation with Rossiya Airlines (SDM) on the busy Moscow - St Petersburg route. (ARO) first-half 2008 profit calculated under (IFRS), dropped -55% year-over-year to +$72.2 million, according to an (ARO) statement cited by press reports from Moscow. Last month, it said profit under Russian accounting standards fell -29.7% to +RUB2.25 billion/+$85.9 million on a +39.4% rise in revenue. Deputy Director General, Finance & Planning, Mikhail Poluboyarinov said full-year earnings may plunge nearly -67% to $80 to $85 million, according to "RIA Novosti." "We forecast that [traffic] will shrink. It can't do anything but shrink as corporate clients cut back the number of business trips," he told "Reuters," adding that a specific demand forecast will be possible next month. First-half revenue under (IFRS) climbed +28.4% year-over-year to $2.14 billion, while costs surged +42% to $2 billion.

(ARO) placed its 20th A320 into service last week. The airplane is on lease from the Royal Bank of Scotland.

Aeroflot (ARO) informed Russia's Ministry of Transport that it wishes to bid for the state's 25.5% stake in rival S7 Airlines (SBR). (ARO) CEO, Valery Okulov wrote in a letter to Transportation Minister, Igor Levitin, "For the consolidation of domestic flights, we are working out the possibility of obtaining the S7 airline (SBR)," Russian media reported. An S7 (SBR) spokesperson told reporters that the carrier had received no notification from Aeroflot (ARO). "I am absolutely confident that, given the current situation, it is necessary for large airlines to maximally coordinate their actions in order to ensure safe, stable and smooth air travel," Okulov wrote, according to The Moscow Times. The Russian and Moscow city governments announced this week their intention to create a 10-carrier alliance to replace the failed AiRUnion. S7 (SBR) is not a part of that alliance (see story below).

(ARO) unveiled a winter schedule comprising flights to 94 destinations in 47 countries. It said that in order to save fuel, it will replace Tu-154s with A320 family airplanes on eight international and two domestic routes from Moscow Sheremetyevo (SVO). It also announced a codeshare deal with SkyTeam (STM) partner China Southern Airlines (GUN) covering (GUN)'s thrice-weekly, Urumqi - (SVO).

1st of 10 A330-243s (963, VP-BLX), delivery.

November 2008: The Russian Federal Antimonopoly Service (FAS) will attempt to block Aeroflot (ARO)'s effort to acquire the state's 25.5% stake in S7 Airlines (SBR), (FAS) head, Igor Artemyev said on Vesti television. "We have concerns about transferring the blocking stake in the private company to (ARO). A monopoly could form in this situation . . . We will try to block this deal," Artemyev said, according to "Reuters." The Ministry of Transport said this week that it supported (ARO)'s bid.

Russia's Sukhoi Civil Aircraft Company is pressing ahead with the type certification schedule for its Superjet 100 ahead of launching serial production next year. On November 5, a specially chartered An-124-10 flight operated by Volga-Dnepr Airlines (VDA) transported fuselage, wings and empennage to the Siberian Chaplygin aviation research center in Novosibirsk for assembly of a second prototype for full-scale static tests. The other ground-test airplane is under trials at the Central Aerohydrodynamics Institute (TsAGI) at Zhukovsky outside Moscow. The first operable prototype has chalked up more than 100 hours of flying since May 19. Two more airplanes are slated fly in December and January.

The static test program at the Chaplygin center is designed to validate the airframe's service life capability of 70,000 hours as claimed by Sukhoi. This is double that of the short-/medium-range Tu-134 the Superjet is expected to replace. "Following the reassembly, the airframe will be subjected to fatigue and functional checks providing for its airworthiness during 140,000 hours," Chaplygin Director, Vladimir Barsuk said. "We have already tested about 170 key elements successfully and don't expect gross abnormalities in its operability as a whole." At the same time, (TsAGI), while continuing airframe structural trials, has begun testing the passenger cabin structure for safety by simulating internal pressurization at different altitudes.

The Snecma/(NPO) Saturn engine joint venture is poised to launch a series of on-wing trials of the PowerJet SaM146 in France, once they are completed in Russia. Program Co-director, Yuri Basyuk said the engine's perfomance measured under various operating modes and involving up to 2,000 parameters, has remained within forecast levels.
Sukhoi is bent on gaining Russian certification for the Superjet by mid-2009 and starting delivery to launch customer Aeroflot (ARO) toward the end of next year. It says (KhAAPO) is gearing up for mass production with logistics and material supples being arranged. Yet there are serious doubts about the schedule's viability. Citing a lack of funds, Sukhoi and (NPO) Saturn last month jointly appealed for an injection of an extra $150 million from the state to expedite the Superjet's certification.

A320-214 (3699, VP-BME), delivery.

December 2008: Aeroflot (ARO) transported 692,100 passengers in November, up +10.3% from the year-ago month. Load factor was 68% LF.

Russia's treasury is set to provide RUB30 billion/$1.08 billion in soft loans to the air transport industry to help it through the current credit squeeze. Last month, the government established a state-backed dedicated relief facility to finance the working capital needs of a few major airlines. According to sources, the five carriers that transport more than >1 million passengers per year, with at least half on scheduled flights, are eligible to receive funds. The recipients identified to date by First Deputy Prime Minister Igor Shuvalov are Aeroflot (ARO), newly formed Rosavia ((AXX)/(SDM)/(ZXD)), and Transaero (TRX), a private operator of Russia's largest long-haul fleet. KD avia Director Business Development Mikhail Baskov said that his airline also is on the list given its role in serving the Kaliningrad exclave. "We firmly count on receiving up to RUB4 billion at an affordable interest rate," he said.

Rosavia, the successor to the defunct KrasAir (ZXD)-led AiRUnion alliance, has applied for RUB5 billion to carry it through its formation and allow it to maintain operability and meet growth rate targets in 2009.

The government made a decision in principle to subsidize carriers that provide domestic air services to remote regions, with particular recipients still to be selected. At the same time, civil aviation agency, Rosaviatsiya plans to tighten supervision over airlines' financial and operational performance. "We'll request them to report results before each summer and winter season," Deputy Chief, Vladimir Chertok said. "If results worsen grossly, we'll consider suspending or annulling air licenses."

Russian investor Alexander Lebedev intends to sell half his 30% stake in Aeroflot (ARO) through his National Reserve Corp (NRC) and go after the Russian government's 25% share of S7 Airlines (SBR), (NRC) Deputy General Director, Leonid Dushatin told "Reuters." (NRC) will sell the shares at approximately RUB72.1/($2.58) each, the news service reported, and "part of the money will go toward buying the government's stake in (SBR)," Dushatin said, adding that (NRC) has received government approval for the move, and already has reached a deal to purchase more (SBR) shares from majority owners Vladislav and Natalia Filev.

Rolls-Royce (RR) said its (Trent 700) successfully powered the first scheduled flight of an (ARO) A330-200 from Moscow Sheremetyevo to St Petersburg. The flight marks the Trent's service entry in Russia, and "demonstrates the growing presence of (RR) in the Russian market," (RR) VP Customer Business, Nick Devall said. In June 2007, (RR) won a $600 million deal with (ARO) to provide the (Trent 700) to power 10 leased A330-200s and A330-300s and support the engines under a long-term "TotalCare" service agreement.

A330-243 (973, VP-BLV "V. Vysotsky"), delivery.

January 2009: Aeroflot (ARO) said it plans to post a profit of +RUB9.3 billion/+$316 million this year, which would be "higher than the expected level of 2008," as (ARO) moves forward with a plan and budget "taking into account the anti-crisis-management program aimed at increasing the efficiency of the operational and commercial activity." (ARO), which has suffered along with its competitors during the recent downturn in the Russian commercial aviation industry and has been the subject of speculation regarding its or an investor's interest in S7 Airlines (SBR), was some -$72.2 million in the black through the first half of 2008.

(ARO)'s board announced that it expected 2009 revenue to increase +19% over 2008, while expenses rise +16%. The carrier intends to add 24 new airplanes to its fleet this year, including six A330s, allowing it to save -100,000 tons of fuel compared to older airplanes being replaced and to increase flight hours by +3.5%. Passenger boardings are expected to reach 9.5 million.

Malev Hungarian Airlines (HGA) will be taken over by Russia's state-owned Vneshekonombank owing to the "previous owner's weak management and the global financial crisis," Russian First Deputy Prime Minister, Viktor Zubkov said at a Budapest news conference. Aeroflot (ARO) will be (HGA)'s "strategic partner." (HGA)'s owner, the AirBridge consortium comprising Russian investor Boris Abramovich (of the defunct AiRUnion alliance) and two Hungarians, failed to fulfill certain obligations over the past two years, executives said, leading Hungarian Finance Minister Janos Veres to tell reporters, "The steps taken since the privatization have not been adequate to ensure the future of the airline." (HGA) has a €30 million/$38.9 million loan from Vneshekonombank. A shareholders meeting was scheduled following the recent recall of Abramovich as (HGA) Chairman. It was unclear how (HGA) will ensure that a European Union (EU) investor will hold a majority stake.

(ARO) said that expected opening of the new Terminal 3 at Moscow Sheremetyevo, which (ARO) will share with its SkyTeam (STM) partners, will attract "additional transit passengers." The new facility and new airplanes will necessitate a +5.6% year-over-year increase in employees, although it said that the number of "administrative and management personnel is to be reduced."

(ARO) has put its first A330-243 (963, VP-BLX) into service on routes between Moscow and St Petersburg, ahead of deploying them on Asian routes this month, with destinations including Tokyo and Shanghai.

February 2009: Aeroflot (ARO) said "preliminary analysis" of its 2008 financial performance indicated a 26.2% year-over-year growth in revenue based on Russian accounting standards. "This gives ground for us to expect a positive financial result for 2008, close to the 2007 level," (ARO) said. It reported a $313.4 million profit under (IFRS) in 2007. (ARO) transported 9.3 million passengers in 2008, up approximately +13.4%, but load factor fell -0.3 point to 70.9% LF.

(ARO) launched twice-weekly, Moscow Sheremetyevo - Eilat Ovda flights aboard an A320. (ARO) also suspended flights to Magadan from Krasnoyarsk and Novosibirsk pending certification of Airbus (EDS) airplanes for operation at the airport. The route currently is served with a Tu-154.

(ARO) said "preliminary analysis" of its 2008 financial performance indicated a +26.2% year-over-year growth in revenue based on Russian accounting standards. "This gives ground for us to expect a positive financial result for 2008, close to the 2007 level," (ARO) said. It reported a +$313.4 million profit under (IFRS) in 2007. It transported 9.3 million passengers in 2008, up approximately +13.4%, but load factor fell -0.3 point to 70.9% LF.

The airline launched twice-weekly, Moscow Sheremetyevo - Eilat Ovda flights aboard an A320. It also suspended flights to Magadan from Krasnoyarsk and Novosibirsk pending certification of Airbus (EDS) airplanes for operation at the airport. The route currently is served with a Tu-154.

(ARO) and Malev Hungarian Airlines (HGA) will code share on each other's Budapest - Moscow Sheremetyevo services beginning March 29 and will offer a combined six daily flights.

(ARO) confirmed its interest in purchasing a stake in (CSA) Czech Airlines following the Czech government's February 5 tender launch. It intends to sell 91.5% of the national carrier in a two-round tender. (ARO) acknowledged that it cannot own more than >49% of (CSA) owing to European regulations but said, "We aim to have a partner who would be a Czech resident." CEO, Valery Okulov said (ARO) is "talking to prospective partners and will be able to declare its choice shortly." (ARO) said it will maintain (CSA)'s status as the country's flag carrier, which would "get an ability to operate on a much wider scale" in partnership with (ARO). "The synergy is certainly there. We started our cooperation long before any global alliances appeared. We have even more in common now that both belong to SkyTeam (STM)," Okulov said.

Russia's Federal Anti-monopoly Service (FAS) is intent on abolishing overflight fees charged to foreign airlines, which traditionally benefit Aeroflot (ARO). (FAS) Director, Igor Artemyev told reporters that his agency has prepared a relevant draft decree to be submitted for government approval shortly. Since the late 1970s, foreign operators have been paying pro-rate charges for transiting airspace over Siberia on routes between Europe or North America and Asia. Under this practice, Aeroflot (ARO) receives substantial additional revenue, which industry experts estimate at $200 to $400 million per year. "We don't mean to harm Aeroflot (ARO) in any way, but that system of imposing feudal royalties is an absurdity and should be eliminated," Artemyev said.

Discussing the matter with Russian counterparts in 2005, European aviation authorities claimed that payments for rights to fly on trans-siberian routes cost (EU)-based carriers more than >€250 million annually. Founders of newly formed aviation holding, Rosavia also are lobbying against overflight charges, citing the advantage gained by Aeroflot (ARO), which Rosavia is designed to rival. The Transport Ministry, however, is opposed to scrapping the charges in the short term. Minister, Igor Levitin told reporters that the fees should remain in place at least until after 2014, when Russia will host the Winter Olympics in Sochi.

Russia's Interstate Aviation Committee (IAC) released its final report on last September's Aeroflot Nord (AEN) 737-500 accident near Perm that killed all 88 on board, finding that the pilot (FC) who "lost spatial orientation" had been drinking. (IAC) Deputy Chairman, Alexei Morozov told reporters that an examination "detected the presence of ethyl alcohol in the flight crew (FC) commander's body before his death" and that the captain's "regime of work and rest in the period preceding this aviation accident was a factor behind his overall tiredness and ran counter to the established standards." Investigators concluded that the pilot (FC) misread an attitude indicator and that the airplane, with autopilot and autothrottle turned off, banked to its left before hitting the ground. Morozov stressed that "the direct cause of the accident was the loss of orientation in space" and that it remains the "prerogative of prosecutors" to determine whether a flight crew (FC) member was intoxicated. The controller working the doomed flight told Russian television last year that the pilot (FC) "wasn't obeying my instructions," and officials quickly backed off initial claims that there were problems with the engines. Aeroflot (ARO) cut ties to Aeroflot Nord (AEN) after the accident and said it would not permit the carrier to code share or operate under the Aeroflot (ARO) name, although it owned a 51% stake in the airline and had described it as a "subsidiary" prior to the crash.

(ARO) suffered an embarrassing incident in December when passengers aboard a 767 set to depart Moscow Sheremetyevo for New York (JFK) demanded that the flight crew (FC) be replaced after the captain (FC) delivered a slurred welcome-aboard announcement, causing passengers to suspect he was intoxicated. (ARO) initially suggested that the pilot (FC) may have suffered a stroke but then retreated from those statements, admitting "that his physical condition was not good."

(ARO) took delivery of its 27th A320. It is the 49th A320 family airplane in (ARO)'s fleet. It will take delivery of an additional 15 this year.

1 A319-112 (3794, VQ-BBA), BOC (SIL) leased, 3 A320-214s (3778, VQ-BAX "G. Nevelskoy"), AerVenture leased, & (3786, VQ-BAY; 3789, VQ-BAZ "V. Obruchev), (GEF) leased.

March 2009: Aeroflot (ARO) transported 635,900 passengers in January, up +0.3% from the year-ago month. Traffic climbed +2.6% to 1.97 billion (RPK)s and load factor slipped -1.4 points to 62.5% LF.

SkyTeam (STM) partners (AFA)/(KLM) and (ARO) were among the four groups filing official yet nonbinding expressions of interest in fellow alliance member (CSA) Czech Airlines, the Czech Finance Ministry announced. The Czech government is selling its 91.5% stake in the airline. Other interested parties are charter carrier Travel Service (TSF)/Unimex Group and Odien, a private investor. (AFA)/( KLM) said the Czechs do not expect any binding offers before June, giving the bidders time to perform due diligence. It said (CSA)'s "network is highly complementary to that of (AFA)/(KLM)" and that it would "enable the group to strengthen its position in Central and Eastern Europe." In a statement, (ARO) confirmed its intention to "maintain (CSA)'s status as a national Czech airline" and said that because it is not a citizen of an (EU)-member nation and cannot own more than >49% of (CSA), it intends to partner with a Czech entity during the tender's second stage. "(CSA) is the largest and most stable airline in Central Europe in economic and market terms. By joining and mutually expanding their route networks, (AAO) and (CSA) will be able to become more profitable," (ARO) CEO, Valery Okulov said. (ARO)'s bid occurred amid the controversy surrounding Okulov's future with the company. Reports surfaced earlier this month that Russian Transport Minister, Igor Levitin wished to replace Okulov and assign him to a ministry position. A board member representing 30% shareholder National Reserve Corporation said removing Okulov would be "madness" and "like putting out a fire with kerosene" in comments reported by "Reuters."

(ARO) officially dismissed CEO, Valery Okulov and replaced him with Vitaly Savelyev, a VP at Russian conglomerate Sistema, who reportedly has no previous aviation experience. The "Moscow Times" reported that (ARO) minority investor, Alexander Lebedev (through his National Reserve Corporation) withdrew his support of Okulov, paving the way for his ouster. Okulov held the post for nearly 12 years and accepted a position overseeing civil aviation in the Russian Transport Ministry, according to a statement cited by "Reuters."

(ARO) said its summer schedule features flights to 47 countries (49 in 2008) and 94 destinations (down from 96). Four-times-weekly flights from Moscow Sheremetyevo to Vilnius begin May 15 and thrice-weekly service to Guangzhou starts June 3. Dubai service will double to twice-daily. Flights to Jeddah, Mumbai and Toronto will be suspended. (ARO) will operate 82 airplanes during the schedule.

(ARO) will take delivery of its first Sukhoi Superjet 100 in December, 13 months behind the original schedule and one month later than the most recently promised date, Sukhoi Civil Aircraft's, Viktor Subbotin told "RIA Novosti." (ARO) reportedly said it will fill the gap with short-term leases on alternative airplanes. Subbotin also told reporters that Sukhoi expects to receive more Superjet orders at this year's Paris and MAKS air shows, claiming that some preliminary agreements already have been signed.

2 A320-214s (3823, VQ-BBB "Yu Gagarin;" 3838, VQ-BBD), (GEF) leased, and A320-214 (3835, VQ-BBC), AerVenture leased.

April 2009: Aeroflot (ARO) transported 604,600 passengers in March, a -16.5% fall from the year-ago month. Load factor was down -8.1 points to 60.7% LF.

(ARO) Cargo launched a weekly, Saint Petersburg - Frankfurt Hahn flight aboard an MD-11F freighter.

(ARO) said that new CEO, Vitaly Savelyev, named to replace the ousted Valery Okulov, has taken over and said an efficiency program implemented last summer will be worth $161 million in reduced costs this year and more than >-$400 million by the end of 2010. In addition, it announced establishment of a separate, Moscow-based charter division that will operate mostly Il-96s. "It was noted that over >43% of passenger traffic in Russia is made by charter," (ARO) said, leading it to decide to "substantially enhance its charter traffic, at the same time retaining its regular flights network developing the network carrier strategy." (ARO) said Savelyev and management will be working on a five-year business plan designed "to ensure (ARO)'s continuous competitiveness and growth," including unidentified cost-efficiency programs.

The Czech government selected Air France (AFA)/(KLM) and the Unimex/Travel Service consortium to proceed to the second round of bidding for a 91.5% stake in CSA Czech Airlines. (ARO) and Odien, a private investor firm, were rejected. (AFA)/(KLM) issued a statement confirming its selection. Czech Prime Minister, Mirek Topolanek and Finance Minister, Miroslav Kalousek told reporters that (AFA)/(KLM) and Unimex/TS will be asked to submit their bids by the end of June and that the government would not disclose why they were chosen ahead of (ARO) and Odien.

(ARO) said the Czech government's decision to pass on its bid for (CSA) Czech Airlines "objectively corresponds with the interests of (ARO)'s management" because (ARO) "detected considerable risks in the bid, which would have entailed serious financial obligations at a time of a global financial crisis." (ARO) said it came to that conclusion "following a thorough examination of (CSA)'s financial and operational situation." (ARO) also confirmed that "recent statements by Czech politicians" had "associated" the airline with "a security threat to the Czech Republic" and with a "lack of high standards of flight safety." (ARO) said it acknowledged the government's "legitimate right to select its preferred business partners" but that it "would be inappropriate if the Czech government were to have based their decision on politically biased assessments"

Blue Wings (BLW) signed a deal with Abu Dhabi's Elite Aviation to operate two A320s, which the carrier hopes will help it reacquire its operating license (AOC) that was suspended by Germany's (LBA) on April 1. (BLW) owner, Alexander Lebedev told reporters that he has offered a 49% stake in the airline to Aeroflot (ARO) (in which he holds 30%) for €1/$1.30. (ARO) said it would consider the offer, according to "Reuters." "The acquisition will allow (ARO) entry to the European market without any expenditure," Lebedev said. "Having lost on its (BLW) investment, NRK [Lebedev's investment vehicle] will win as an (ARO) shareholder."

(ARO) took delivery of its 29th A320. The airplane is on lease from (GECAS) (GEF). (ARO) currently operates 52 A320 family airplanes and expects to take three more A320s this year.

The first two Sukhoi Superjet 100s have been flown to the MM Gromov Flight Research Institute outside Moscow for flight certification testing. "The stability and control testing show good results," Sukhoi Civil Aircraft President, Viktor Subbotin said. "The overall test program, including static tests at the Central Aerohydrodynamics Institute, eliminated redesign risks."

May 2009: Aeroflot (ARO) remains interested in expanding its footprint in Europe, yet "it is a great myth that (ARO) is shopping around for airlines," Deputy Director General Corporate Communications, Lev Koshliakov noted during a presentation at the recent North Hub Riga conference organized by airBaltic (BAU). (ARO) got involved in at least two European airline dossiers not by choice but by heritage, he said. "We were forcefully drawn in the Malev (HGA) file because a Russian bank owns all its debt and contacted us. We are not going to buy them and are acting as a consultant." (ARO) also has been contacted by Blue Wings (BLW), whose German Air Operators Certificate (AOC) was revoked last month. "Its owner, Alexander Lebedev, offered (ARO) a block of stock," Koshliakov confirmed. The (ARO) board will discuss the proposal. "Certainly when things are offered very inexpensively it asks for careful consideration," he commented. (BLW)' controlling shareholder Lebedev, who holds a 49% stake in (BLW), made a €10 million/$13.3 million deposit with Germany's regulatory authority (LBA) as part of an effort to resume operations this week, he told reporters. He has withdrawn his threat to shut down (BLW) and has offered to sell his stake to (ARO), in which he holds 30%, for a symbolic €1. He said the suspension has cost (BLW) an estimated €20 million. (BLW) operates 10 A320s and has 20 more on order.

(ARO) also took the initiative to look at several Western airlines, Koshliakov revealed. "We look into all opportunities that fit in our strategy [to grow]. Europe is our most profitable market, so we are certainly interested in having a reliable partner to increase our network and operations," he explained. (ARO) looked at several privatization projects, including Jat Airways (JAT), Alitalia (ALI), Austrian Airlines (AUL), and (CSA) Czech Airlines. "It was very frustrating how we were pushed out of the second round of the (CSA) tender," Koshliakov conceded. Arguments made by Czech politicians that (ARO) forms "a security threat to the Czech Republic" and that "Russian airlines are unsafe" are politically motivated, he claimed.
"We are not unhappy with the fact that we were not retained," he added. "We believed there were considerable risks in the bid, which would have entailed serious financial obligations at a time of a global financial crisis, but this does not take from the fact that (ARO) is still seen as something sensational in Europe. There still is a certain prejudice associated with Russia."

He concluded, "We tested the waters. We now know much more about the (EU) legislation and regulatory formalities, how it all works for an outsider coming into a market."

Later, Aeroflot (ARO) declined Alexander Lebedev's offer to purchase his 49% stake in Blue Wings (BLW) for €1/$1.35), Blue Wings (BLW) Chairman, Jorn Hellwig told "Der Spiegel." Lebedev now is considering negotiating with S7 Airlines (SBR) and Rosavia, as well as Arabian investors, in his search for more capital. Discussions with Air Berlin (BER) or the German government also may occur, Hellwig said.

(ARO) Cargo said it successfully migrated to a new reservation and accounting system, CargoSpot, that will give it full control over sales and revenue management by integrating all internal business processes into one system.

A source close to the Sukhoi Superjet program questioned a "RIA Novosti" report that Russia's United Aircraft Corporation (UAC) plans to reduce its Superjet 100 production to 74 airplanes from the 230 it planned to build by 2012. It still plans to deliver the first (SSJ) this year to launch customer Aeroflot (ARO). The source said that he had received no official word regarding any (SSJ) production cut, but the Moscow-based news agency said (UAC) planned to build only 196 commercial airplanes in 2009 - 2012, rather than the 405 approved for production two years ago. (UAC) plans to deliver 22 airplanes this year. It also manufactures the An-148, Tu-204/-214 and Il-96.

June 2009: Aeroflot (ARO) said its "prompt steps to balance income and expenditures" during the first quarter, along with favorable exchange rates, helped it post a +RUB713.1 million/+$22.7 million net profit. It flew 5.39 billion (RPK)s traffic in the quarter, down -3.8% year-over-year, on a -10.9% drop in passenger numbers. (ARO) said its April and May performance "revealed an upward drift in carriage."

Aeroflot (ARO) investor, Alexander Lebedev told "RIA Novosti" that (ARO) faces significant challenges as a result of the financial crisis and has launched insolvency proceedings for Aeroflot (ARO) Cargo and is evaluating elimination of Aeroflot Don (DAU) and Aeroflot Nord (AEN). "After the order of six MD-11Fs and three 737 freighters, (ARO) Cargo made a loss of -$140 million," Lebedev said, adding that (ARO) plans to dissolve the cargo subsidiary and reintegrate it into the mainline. Freight fell -35.1% in the first quarter. (DAU) and (AEN) are expected to present restructuring plans and face elimination. (ARO) plans layoffs throughout the company.

Lufthansa Technik (DLH) (LTK) expanded its component support services agreement with Aeroflot (ARO) to "the complete Aeroflot Group," adding Aeroflot Nord (AEN) to a contract already covering mainline and Aeroflot Don (DAU) airplanes. Under the new five-year-contract, (LTK) will provide its Total Component Support package to 45 737 Classics and A320s.

(SITA) announced a three-year deal with (ARO) to implement its airport management system at Moscow Sheremetyevo. The system already is in use in Terminals 1 and 2 and will be implemented in T3 when it opens later this year. The deal includes the provision of (SITA)'s AirportResource Manager and AirportHandling Manager.

A319-112 (3942, VQ-BCO), BOC (SIL) leased, 2 A320-214s (3923, VQ-BCM; 3954, VQ-BCN); and A330-243 (1014, VQ-BBE), AerCap (DEA) leased.

July 2009: Aeroflot (ARO) carried 758,100 passengers in June, a -11.1% decline year-over-year. Load factor fell -3.8 points to 70.7% LF. Through the half-year, (ARO)'s passenger numbers fell -12.1% to 3.9 million, with load factor at 63.5% LF.

(ARO) will defer delivery of two A320-200s from the 2010 first quarter to the first quarters of 2011 and 2012 and the delivery of three A321-200s from the 2010 third quarter to the first and third quarters of 2012, it said in a statement cited by "Agence France Presse." "Given the current situation on the international air transport market, the board agreed to change the delivery schedule," (ARO) said.

August 2009: Aeroflot (ARO) will introduce the Sukhoi Superjet 100 into service on December 28, 2009, replacing A319s on routes from Moscow to Chelyabinsk and Astrakhan - - SEE ATTACHED "FLIGHT INTERNATIONAL" ARTICLE ON THE SUKHOI SUPERJET 100 - - "ARO-SUKHOI SUPERJET 100-AUG09."

(ARO) and Vnesheconombank subsidiary, (VEB)-Leasing signed an agreement under which (ARO) will have the option to return its first 10 Superjet 100s after 12 years, with delivery financing arranged through loans by the bank to (VEB). (ARO) has 30 SSJs on order.

A319-112 (3998, VQ-BCP), BOC Aviation (SIL) leased.

September 2009: Aeroflot Airlines (ARO) increased its twice-daily, Moscow Sheremetyevo - Kaliningrad service to five-times-daily.

(ARO) CEO, Vitaly Savelyev said that (ARO) expects to conclude 2009 in the black but that it plans to cut -2,000 jobs over the next six months and is evaluating a reduction of a further -4,000. "The trend is still going toward a decline," he said at an investment conference, according to "Reuters." (ARO) employs some 15,500. Savelyev also said (ARO)'s interest in pursuing tie-ups with European carriers may be a thing of the past. "No one wants (ARO) there. The European legislation will not allow us there," he was quoted as saying.

(ARO) said it completed the (IATA) (ITA) Safety Audit for Ground Operations, claiming it is the first Russian and third European carrier to do so.

(ARO) took delivery of its fifth A330-243 (1045, VQ-BBF) on lease from AerCap (DEA). The (Trent 772)-powered airplane seats 34 in business class (C) and 207 in economy (Y). (ARO) currently operates the type to Beijing, Havana, Vladivostok, and London Heathrow and said it will fly the new airplane on both international and domestic routes. It said it plans to take delivery of five A330-300s and one more A330-200 before year end.

A330-243 (1047, VQ-BBG), Aercap (DEA) leased.

October 2009: Aeroflot (ARO) said it earned a +RUB3.5 billion/+$119.2 million first-half profit according to Russian accounting standards, representing a +55.6% increase over the +RUB2.25 billion earned on the same basis in the first six months of 2008. Passenger revenue fell -12.1% year-over-year but market share rose +1.5 points to 26.2%.

The new high-speed “falcon” train will cut the Moscow - St Petersburg journey to less than four hours.

(ARO) took delivery of its sixth A330-243 (1058, VQ-BCQ) on lease from AerCap (DEA). The airplane is powered by (Trent 772)s and is painted in SkyTeam (STM) livery. Four more are expected through April.

November 2009: Aeroflot (ARO) reported a +RUB5.98 billion/+$204.5 million profit in the first nine months of 2009, up +8% year-over-year according to Russian accounting standards, on a -9% drop in revenue. It carried 6.5 million passengers in the first nine months of 2009, down -8.9% year-over-year, while (RPK)s dropped -8% to 19.21 billion. Load factor was 69% LF. The (ARO) board approved the lease of six A321s.

Sukhoi Civil Aircraft said it will miss the delivery date of the first Superjet 100 that was scheduled for the end of 2009. The airplane is headed to launch customer Aeroflot (ARO), but Sukhoi said that it will "not be able to supply its new regional plane, Superjet 100, to customers before the end of 2009." No new date was announced. The "Moscow Times" cited industry sources who said that a certification delay was the cause of the latest delay. (ARO) had expected delivery in December and planned to take one per month for a total of 30. An official with Sukhoi's parent company, United Aircraft Corporation (UAE), warned in August that the first jets might not be delivered until 2010.

4 A321-211s (4058, VQ-BEA; 4074, VQ-BED; 4099, VQ-BEE; 4103, VQ-BEF), deliveries and A330-343X (1065, VQ-BCU), AerCap (DEA) leased.

December 2009: Aeroflot (ARO) and Alitalia (ALI) signed a Memo of Understanding (MOU) "to further develop new routes and frequencies between Italy and Russia as well as implement a wide ranging reciprocal code share to domestic and beyond destinations," (ALI) announced. The carriers also will cooperate more closely on network planning, reservations, sales and marketing, passenger service, charter and cargo operations and technology. (ALI) and (ARO) already code share on flights to/from Moscow Sheremetyevo and four Italian destinations.

(ARO) launched the following A320 services: from Vladivostok to Yuzhno-Sakhalinsk (UUS) (thrice-weekly), Petropavlovsk-Kamchatsky (PKC) (twice-weekly) and Khabarovsk (KHV)(twice-weekly) and from (KHV) to (UUS) (thrice-weekly) and (PKC) (twice-weekly).

Moscow Domodedovo airport (DME) announced that "in accordance to (ICAO) Standards and Recommended Practices," it now is capable of operating simultaneous departures from its parallel runways spaced 2 km apart. (DME) said this will "ensure future increased capacity" up to 90 movements per hour. (DME) is Russia's largest airport in terms of passenger traffic, with a 45% share of passenger volume. It is served by 80 airlines.

Aeroflot Cargo is to be reintegrated into parent carrier Aeroflot Russian Airlines (ARO). It has recently returned its leased 737-300F freighters and is currently operating three MD-11Fs.

(ARO) has deferred deliveries of 2 A320-22s and 3 A321-200s from 2010 to 2011 and 2012. (ARO) will phase out its Il-96-300s in 2010 and replace them with MD-11 passenger airplanes it will lease.

A320-214 (4133, VQ-BEH), BOC Aviation (SIL) leased, 1 A321-211 (4116, VQ-BEG), and A330-343s (1072, VQ-BCV), deliveries.

January 2010: In 2009, Aeroflot (ARO) carried 8.756 million passengers, while the second largest carrier, Transaero (TRX), carried 5.026 million. Cumulative traffic of Aeroflot (ARO), its daughter companies NordAvia and DonAvia, and would-be merged airlines would have given (ARO) 17.745 million passengers, or 39.4% of all passengers carried by the Russian air transport industry.

A merged Aeroflot (ARO) to include Rossiya, Kavminvodyavia (KMV), Orenburg Airlines (Orenair), Saratov Airlines (SarAvia), Sakhalin Airways (SAT) and Vladivostok Airlines (Vladavia) could cover all Russian territory from the Northwest to the Far East with three hubs (Pulkovo in St Petersburg - also home for GTK Rossiya), Sheremetyevo in Moscow (Aeroflot (ARO) base) and Vladivostok (base airport for VladAvia).

Aeroflot (ARO) will suspend its Moscow Sheremetyevo - Norilsk and - Bratislava service on January 20 and will stop its Moscow Sheremetyevo - Cairo flights as of January 30.

Sukhoi Superjet SSJ 100's first delivery now is expected in mid-2010, confirming reports that the setback from the year-end 2009 timetable resulted from problems related to the (SaM146) engines developed and produced by Powerjet, a joint venture between Snecma and (NPO) Saturn. The source cited the "likely, but badly communicated, delays that traditionally accompany a new airplane type (look at the 787). The (SSJ) involves a new mainframe, a new engine and new [international] partnerships" that create additional complications.

United Aviation Corporation (UAC) Director General, Alexei Fyodorov told reporters in Russia that "Sukhoi is in talks with the buyers about new time frames for delivery of these planes. The engine-makers have shifted the timetable of certification. Well, it turned out they were not ready," "Reuters" reported. He added: "I think the problems were indeed technical. A new engine is being developed." (UAC) holds a 75%-minus-one-share stake in Sukhoi Civil Aircraft. The remainder is held by Finmeccanica subsidiary Alenia Aeronautica. A Snecma spokesperson refused to comment on the reasons for the delay or whether technical issues or a longer-than-expected certification process for the (SaM146) is the cause. The firm order portfolio for the SSJ stands at 122. Aeroflot (ARO) was scheduled to take the first airplane.

(ARO) announced the retirement of its last Tu-154. The airplane flew for the final time on December 31 from Yekaterinburg to Moscow Sheremetyevo, according to "RIA Novosti," and will be replaced with an A320. (ARO) once operated 23 TU-154s. (ARO) has given up plans for a fast retirement of its Il-96-300 fleet for now.

(ARO) is on the verge of striking a deal with investor Alexander Lebedev to purchase his 25.8% stake in (ARO), putting (ARO) under full control of the Russian government, which already holds 51%. According to reports from Moscow, (ARO) will pay around $400 million for Lebedev's shares. He told "The Guardian" that a deal was reached and that he agreed to purchase Russian-made airplanes for his Moscow Vnukovo-based, Red Wings (RWZ) and to sell his 26% share in lessor Ilyushin Finance to the government for $175 million. A Lebedev spokesperson confirmed the (ARO) deal and price to other news outlets.

The Bank of Russia has acquired a 11.79% stake in Aeroflot (ARO) from the National Reserve Corporation.

(ARO) took delivery of its 33rd A320-214 (4160, VQ-BEJ) and A330-343 (1077, VQ-BEK), deliveries. (ARO) expects to take another A330-300 in April.

February 2010: Aeroflot (ARO) flew 2.43 billion (RPK)s traffic in January, a +23.2% increase year-over-year. Load factor rose +8.4 points to 70.9% LF.

The Russian government announced plans to merge a series of smaller airlines, including St Petersburg-based Rossiya (SDM), into Aeroflot (ARO). Russian Transport Minister, Igor Levitin said the consolidation would lift (ARO)'s domestic market share to 30% to 35% from 15% to 20%, according to "RIA Novosti." Other carriers involved are Kavminvodyavia (KMV), Orenburg Airlines (ORB), Vladivostokavia (VLK), Saratov Airlines, and Sakhalin Airlines (SKH), according to "ITAR TASS." They originally were to be combined in a new state-owned carrier called Rosavia, plans for which now have been shelved.

Rossiya (SDM), Kavminvodyavia (KMV) and Orenburg Airlines (ORB), three of the six airlines scheduled to be combined with Aeroflot (ARO) under a Russian government plan announced this month, will be transitioned from state-owned enterprises into joint stock companies prior to the merger, "The Moscow Times" reported. The other three, Vladivostokavia (VLK), Saratov Airlines and Sakhalin Airlines (SKH), already are joint stock companies. Transport Minister, Igor Levitin said the stake sales will occur this year. He said the move is "compatible with the anti-monopoly regulations."

Shannon Aerospace (SLD) announced the completion of six-year maintenance checks on three Aeroflot (ARO) A320 family airplanes.

March 2010: Air France (AFA) and Aeroflot (ARO) signed a new cooperation agreement allowing code share flights beyond their respective hubs at Paris Charles de Gaulle (CDG) and Moscow Sheremetyevo (SVO). The agreement entered into effect March 28. (AFA) will add its code to and sell (ARO) flights from (SVO) to Khabarovsk, Novosibirsk, Krasnoyarsk, Irkutsk, Yekaterinburg et Nizhnevartovsk, while (ARO) will add its code to (AFA) flights from (CDG) to Strasbourg, Lyon, Marseille, and Lisbon. Currently, the SkyTeam (STM) alliance pair sells eight daily code share flights between (CDG) and (SVO).

The Russian government set aside RUB2.5 billion/$84.3 million to subsidize 11 airlines to carry passengers to/from the country's far east from April 1 to October 31, an official told "ITAR-TASS." Aeroflot (ARO), Transaero Airlines (TRX) and S7 Airlines (SBR) are among the group.

SuperJet International, the Sukhoi/Alenia Aeronautica joint venture, received certification to provide maintenance on Aeroflot (ARO) A320s at its Venice facility.

April 2010: A330-243 (1103, VQ-BEL), AerCap (DEA) leased.

June 2010: Aeroflot (ARO) plans to operate to Male in the Maldives and to Denpasar in Bali, Indonesia, this winter. (ARO) is continuing to transfer more international flights to its new Moscow Sheremetyevo airport terminal D. (ARO) will restart Moscow - Tel Aviv operations.

July 2010: Aeroflot (ARO) signed a firm contract with Airbus (EDS) for the purchase of 11 A330-300 airplanes. The newly ordered A330-300s will feature a spacious two class cabin layout seating around 300 passengers. (ARO) is planning to operate the airplanes on its extended network of long-haul destinations.

August 2010: Aeroflot (ARO)) is now taking over control over the airlines previously owned by Rostekhnologii that were supposed to be merged under the "Rosavia" brand. The Rosavia merger project has now been cancelled, but Rostekhnologii has ordered 50 737NG airplanes (and 15 options) regardless, that will then be leased to (ARO) and its new subsidiaries. (ARO) is planning to continue to operate the airlines under separate certificates and brands for now, similar to its subsidiaries, Donavia (DAU) and Nordavia (AEN) and has not yet published any final plan on what role the new subsidiaries will play, although it has indicated some of them might be turned into low-cost or charter carriers. The airlines included in the deal are (KMV) - Kavkazskie Mineralnye Vody, Orenair (ORB), Rossiya (SDM), Saravia, SAT Airlines (SKH), and Vladivostok Air (VLK) that are all under full or majority control of Rostekhnologii. Earlier this year, (ARO) also acquired the remaining 49% in Nordavia (AEN) held by Aviainvest and it now also controls 100% of the Northern Russian regional carrier. (ARO) and Rossiya (SDM) have already entered into a code share agreement on a wide range of domestic routes. Meanwhile, Alexander Lebedev has sold his 25.8% stake in Aeroflot (ARO) back to Aeroflot Finance for 400 million USD. (ARO) has announced an order for additional 11 A330-300s in July with the airplanes scheduled to be delivered between 2011 and 2013. It has also announced plans for an order of either 22 A350s or 787s. Several new routes have been announced:
Moscow Sheremetyevo - Denpasar: weekly seasonal A330-200 service starting on December 21;
Moscow Sheremetyevo - Gelendzik: daily A319-100 service has started on May 29;
Moscow Sheremetyevo - Hurghada - Luanda: bi-weekly A320-200 service starting on November 2 (replacing bi-weekly non-stop 767-300ER service);
Moscow Sheremetyevo - Kazan: daily A319-100 service starting on September 1;
Moscow Sheremetyevo - Male: 2x weekly seasonal A330-200 service starting on November 3;
Moscow Sheremetyevo - Phuket: weekly seasonal A330-300 service starting on December 19;
Moscow Sheremetyevo - Punta Cana: weekly seasonal A330-200 service starting on November 3;
Moscow Sheremetyevo - Tel Aviv Ben Gurion: 5x weekly A319-100/A320-200 service has resumed on August 1;

Aeroflot (ARO) has given up a short-lived experiment of basing an A320-200 in the Russian Far East and has already suspended its routes between Vladivostok and Khabarovsk and from the two cities to Petropavlovsk-Kamchatskiy and Yuzhno-Sakhalinsk again in April after five months. It has also given up its Moscow Sheremetyevo - Bratislava (only resumed in April 2010) and St Petersburg - Kaliningrad routes on May 12. (ARO) has also entered into a code share agreement with Skyteam (STM) alliance partner, Kenya Airways (KEN) allowing the two carriers to sell connections between Moscow Sheremetyevo and Nairobi Jomo Kenyatta International via Dubai.

(ARO) has launched another new joint venture with Aeroflot-Plus minority shareholder, Jetalliance (JAF). The two carriers have based two Cessna Citation business jets in Moscow Sheremetyevo and both own 49% in a new subsidiary called "Jetalliance East," based at Moscow Sheremetyevo.

A330-343E (1247, VQ-BQY "M Shilohov"), ex-(F-WWYQ), delivery.

September 2010: Russian Technologies signed a firm order for 50 737NGs valued at $3.7 billion at list prices plus 35 options. The state-owned company plans to lease the airplanes to Aeroflot (ARO).
Boeing (TBC) said the 737NGs will be delivered starting in 2013 with (ARO) receiving the 35th airplane in the order in 2016. A company spokesperson said the order is the same as the 50 Boeing airplanes USA President, Barack Obama announced Russia had agreed to purchase during Russian Presiden,t Dmitry Medvedev's June visit to Washington.

Boeing Commercial Airplanes President & CEO, Jim Albaugh and Russian Technologies Director General, Sergei Chemezov signed the order agreement in Sochi. Chemezov said the airplanes "will help the Russian airline industry and Russian airlines to [be] more competitive on the global market."

SuperJet International CEO, Alessandro Franzoni said that Sukhoi Civil Aircraft Company's Superjet 100 is on track to receive a Type Certificate in November from the Russian aviation authorities, with deliveries to launch customers Aeroflot (ARO) and Armavia (ARZ) occurring in December.

“The [test] airplanes are flying very intensely now, and the chance is very high that we will obtain the Russian certification in November,” Franzoni said at European Regions Airline Association’s Annual General Meeting (AGM) in Barcelona. “The delivery process can start as soon as we get this. For sure, the acceptance process [by (ARO) and (ARZ)] will start in December." (ARO) holds firm orders for 30 SSJ-100 plus 20 options, and (ARZ) has two on firm order with two options.

October 2010: Four European states are facing legal action from the European Commission (EC) over their bilateral air service agreements with Russia, partly because they include controversial provisions for Siberian overflights. The (EC) says the bilaterals with the four states - Germany, France, Austria and Finland - include specific provisions on paying Russian flag-carrier, Aeroflot (ARO) for the right to overfly Siberian territory. This enforced payment to (ARO) for Siberian overflights has long been a source of controversy. The (EC) estimates that European Union (EU) carriers paid $420 million in charges, mostly to Aeroflot (ARO), in 2008.

Boeing (TBC) said that Russian state corporation Rostechnology finalized a previously announced order for 50 737NGs with purchase rights for an additional 35 valued at $3.7 billion. The order, signed two months ago is for 15 737-700s, 25 737-800s and 10 737-900ERs.

Rostechnology intends to lease the airplanes to Russian airlines. Its 737s will be delivered with the "Boeing Sky" Interior. In addition to the new design, (TBC) also announced a performance improvement package offering a -2% reduction in fuel consumption through various airframe and engine improvements.

November 2010: Aeroflot (ARO) signed a marketing deal with the USA National Basketball Association (NBA) New Jersey Nets, a team now owned by a Russian billionaire. The NJ Nets (or based on their recent on-court performance - - the "Nyets") will be moving to Brooklyn, one of New York City's five boroughs, in 2012.

December 2010: Moscow Domodedovo Airport (DME)'s operator, Eastline Group, has outlined a plan for further infrastructure improvements to expand its throughput capacity. Airport director, Vyacheslav Nekrasov says Eastline has earmarked Rb97 billion/$3.2 billion for building a new passenger terminal with a dedicated pier and parking garage by 2015. "The completed vision of the facility is designed to process up to 36 million passengers a year," he says, expecting (DME)'s throughput to grow +20% to 22.4 million this year.

Construction work is to be funded from Eastline's internal resources and through co-financing arrangements with the interested parties. The airport development program also envisages building an underground rail station, to switch from an above-ground station, and a third runway. Eastline is discussing options to finance these projects with the high-speed rail operator Aeroexpress and Russian transportation ministry respectively. "In each case, the initial drafting and cost evaluation have been done," says Nekrasov. "We hope both projects will be completed prior to the new terminal."

Aeroflot (ARO) and Boeing (TBC) have agreed on contractual terms for an order of eight 777-200ERs and an equal number of 777-300ERs. Deliveries are due between 2012 and 2017. Meanwhile, (ARO) is in talks with (TBC) about receiving two of the 22 787s on order ahead of schedule, in time to satisfy demand for the Sochi Winter Olympic Games in 2014.

The 777 order signals (ARO)’s continued desire to field a more competitive long-haul fleet. Currently, (ARO) operates a fleet of 11 767-300ERs, 11 A330-200s, and six Ilyushin Il-96-300s, as well as 67 A319/320/321 narrow bodies. (ARO) also has committed to buying 11 A330-300s, with deliveries to start next year, and 22 A350XWBs.

Sukhoi will miss its goal of beginning customer deliveries of the Superjet 100 regional jet this year. After several rounds of delay, Sukhoi was pressing hard to meet the 2010 in-service goal, but now is having to satisfy itself with obtaining a partial Russian certification, which is still planned by year-end. Approval of some technical issues also is being deferred, with Basic Area
Navigation performance and Category III landing capabilities not due to be finalized until next year, Sukhoi officials acknowledge. Armavia (ARZ) will receive its Superjet (95007) first. The airplane is currently involved in certification work and due to be handed over in February. Aeroflot (ARO)’s first aircraft, (95008), is currently in the paint shop and then will undergo final delivery preparations. The airplane is due to be delivered in March, along with a second one. The airline has already included the Superjet 100 in its summer flight schedule. Prior to the formal delivery, each airline will use its first airplane to train pilots (FC) on the Superjet 100. That work is to start as soon as Russian authorities grant the type certificate. The work is important since a fully capable simulator is not yet ready. The European Aviation Safety Agency is slated to grant its type certificate by July, although that remains contingent on the willingness of authorities to issue the document with only Category II landing capabilities for later expansion.

On December 29, 2010, the Tu-204SM performed its first test flight. The airplane took off from Ulyanovsk-Vostochny airport at 13.25, Moscow time, and was airborne for about an hour. Test pilot Victor Minashkin was the captain of the airplane. The first flight test program was successfully completed. The airplane landed exactly on schedule.

The representative of a new generation of Russian passenger airplanes was manufactured at the Ulyanovsk aviation plant. The Tu-204SM was designed by (JSC) Tupolev. The airliner is equipped with (PS-90A2) engines. Its non-refuelling flight duration is up to nine hours. Flight range is about 4,000 km. The airplane can take 174 passengers in a two-class layout. The airplane is equipped with new navigation and radio communication equipment, as well as new hardware. The enhanced airplane is controlled by two pilots (FC) instead of three crew (FC) members required to navigate the basic version.

The Tu-204SM is a modification of Tu-204 airplane. It conforms to the present international flight safety requirements.

January 2011: Aeroflot (ARO) carried 11 million passengers last year, up a robust +29% from 2009’s depressed levels.

Russian airplane certification authority (IAC AR) approved type certification for the Sukhoi Superjet 100, clearing the way for first delivery of the long-delayed airplane, which rolled out in September 2007 and made its first flight nearly three years ago. The program was formally launched by Sukhoi in 2004 as the Russian Regional Jet (RRJ). "The type certificate confirms the compliance of the airplane with the (IAC) certification norms and airworthiness directives thus opening the way to start commercial operation," the Sukhoi Civil Aircraft Company stated, noting that it was also granted a design organization approval certificate from (IAC AR).

Launch customer Aeroflot (ARO) holds firm orders for 30 SSJ-100s plus 15 options, while Armavia (ARZ), which has two on firm order with two options, was expected to take the first delivery.

March 2011: Aeroflot (ARO) divested its debt-laden, Nordavia (AEN) subsidiary to a mining company, the world's biggest nickel and palladium producer Norilsk Nickel (which owns another airline called Nordstar (JSC) (also known as "Taimyr Airlines") for a few million dollars ($7 million) just to get it off its hands. (AEN) flies from Moscow (SVO), Murmansk, and Arkhangelsk. (AEN) had previously been valued at $207 million, except $200 was the company's debt.

(ARO) placed an order for six (GE90)-powered 777-300ERs and two 777-200ERs. "These 777 airplanes will strengthen our network strategy, particularly the international growth opportunities we expect from our joint businesses with SkyTeam (STM) alliance partners when servicing the 2014 Sochi Olympic Games and the 2018 FIFA World Cup," (ARO) General Director, Vitaly Saveliev said.

The official signing of the order corresponded with USA Vice President, Joe Biden's visit to Moscow to meet with Russian President, Dmitry Medvedev.

Boeing (TBC) noted that Russia's (VSMPO), a subsidiary of Rostechnologii State Corporation, manufactures large titanium forgings for the 777’s landing gears, wings and pylon. It said seven of SkyTeam (STM) alliance's 12 members have ordered a combined 141 777s.

April 2011: KfW IPEX-Bank GmbH was mandated by BOC Aviation (SIL) as arranger and sole lender for a seven-year commercial debt financing of three new Aeroflot (ARO)-operated A320-200s. The transaction closed in March and airplane deliveries are scheduled for April and May this year.

May 2011: Aeroflot (ARO) will take delivery of its first Sukhoi Superjet SSJ100 this month and plans to put it into service June 16, according to Superjet International Deputy Senior VP Commercial, Svetlana Issaeva.

In all, (ARO) will receive 10 SSJ100s this year. She noted that the first SSJ100 (SN95007) delivered to Armavia (ARZ) last month has been operated on 54 flight cycles for a total of 105 flight hours. It has had 98% dispatch reliability, Issaeva said. She declined to release fuel burn statistics but said such figures will be revealed soon.

The SSJ100's Entry Into Service (EIS) will allow Superjet International to market the airplane to airlines around the world, she asserted. "With the airplane in operation, it will be much easier for us to introduce it to a wide range of customers because the airplane will speak for itself." She acknowledged that "it will take time" to convince Western airlines to purchase the SSJ100.

Meanwhile, an announcement about the next SSJ product could come as soon as June. "We are working internally in order to be able to introduce to the market the next generation of the family and I think by June we'll be able to do it," Issaeva said. "We've considered several options" in terms of size.

SSJ100 production rate is slated to reach 17 this year, 33 in 2012 and 60 by 2014.

June 2011: Russia's government has reiterated its intention to sell a state stake in Aeroflot (ARO) following its enlargement and re-organisation.

Vice Premier & Finance Minister, Alexei Kudrin said the 51% state-owned airline had been put on the extended list of strategically important enterprises scheduled for privatization.

"Over the next three to five years, the state should cease to be a controlling shareholder in such companies. In the transportation sector, this will, first of all, concern Aeroflot (ARO)," said Kudrin.

"The aim is to improve corporate governance, encourage private investment in developing key industries and raise up to $30 billion from selling state assets." In line with the decision to lessen state control over (ARO), Transport Minister, Igor Levitin has quit as its governing board chairman.

The value of a 51% government stake in (ARO) is currently estimated at Rb38 billion/$1.3 billion.

Industry analysts expect it to rise if the management successfully incorporates six provincial carriers, previously owned by the state, and achieves synergies from the enlarged Aeroflot (ARO)'s operation by 2014.

Aeroflot Russian Airlines (ARO) has selected the Thales (THL) TopSeries in-flight entertainment (IFE) for its fleet of 16 777-300s. The system will be configured for 402 passengers and will be line-fit into the new airplanes with first delivery scheduled for January 2013, according to (THL).

The new 777 airplanes will have audio and video on-demand entertainment at every seat. In business class (C), in-seat screen sizes are 15.4 inches. Other features include in-seat power, (USB) and iPort, which enable passengers to interface their portable devices (and also iPhone, iPod, iPad) to the system, allowing them to enjoy their own content through the in-seat screen. In addition, passengers will have the Thales (THL) Touch Passenger Media Unit, a handheld media device that brings to the passenger endless Android applications common to the consumer world. In premium economy (PY) and economy (Y), in-seat screens are 10.6 and 8.6 inches, respectively.

(ARO) completed the first passenger flight of new Russian regional jet Sukhoi Superjet 100 (SSJ100) from Moscow to St Petersburg. This flight marked the beginning of commercial operation of the new SSJ100 by (ARO).

The SSJ100 received the name of the famous Soviet pilot, Mikhail Vodopyanov. The SSJ100 took to the air from Moscow’s Sheremetyevo International Airport (Terminal D) at 9.10 am and landed at St Petersburg’s Pulkovo International Airport at 10.40 am. Its first passengers were: the Deputy Chairman of the Russian Federation, Sergei Ivanov; the Minister of Economic Development of the Russian Federation, Elvira Nabiullina; the Deputy Minister of Transport, Valery Okulov, who arrived to St Petersburg to participate in the XV St Petersburg International Economic Forum. There is no doubt, that the General Director of “Aeroflot,” Vitaly Saveliev and the President of United Aircraft Corporation (UAC) and General Director of Sukhoi Holding (SSJ), Mikhail Pogosyan arrived to the north capital on board the SSJ100.

Sukhoi Superjet 100 (95008) was delivered to (ARO) under contract with the VEB-Leasing on financial lease (leasing). The delivered airplane is designed to carry 87 passengers in a comfortable two-class layout (12C – business class and 75Y – in economy class). Maximum flying distance is 2300 km.

(ARO) has ordered 30 SSJ100 airplanes in total. In the future, (ARO) plans to purchase ten more.

Sukhoi Superjet 100 (RRJ-95) is a 100 seat regional jet. The operating range for the basic version is 3.048 km and 4.578 km for the long range version. In February 2011, the SSJ100 obtained the Type Certificate by the Russian Certification Authority (IAC AR). The (EASA) certification is expected to follow in 2011.

“SSJ100 regional jets will contribute to the implementation of one of the key areas of our strategy to build a global network airlines, said General Director of (ARO), Vitaly Saveliev. It is to strengthen leadership (ARO) in domestic market of air transportation. The SSJ100 will perform flights to St Petersburg, Kazan, Nizhny Novgorod, Ufa, and Samara. And over time, it will be put on the foreign destinations.”

“The first passenger flight of SSJ100 as part of the (ARO) fleet is an important milestone. We’ll provide overall support to the customer at the primary stage of entering into operation and grant quality after-sales support. Our airplane has already received a high evaluation from (ARO)’s pilots (FC) and now it is the turn of the passengers. I believe that the SSJ100 will be an excellent tool for the development of the regional route network,“ said the President of United Aircraft Corporation (UAC) and General Director of Sukhoi Holding (SSJ), Mikhail Pogosyan, commenting on the delivery of the first SSJ100.

GE Capital Aviation Services Limited (GECAS) (GEF) announced delivery of two new A320s to Aeroflot Russian Airlines (ARO). (ARO) operates a fleet of nearly 100 airplanes to more than >100 destinations.

On the second day of the Paris Air Show, Aeroflot (ARO) ordered eight 777-300ERs worth $2.3 billion at list prices.

August 2011: Aeroflot Russian Airlines (ARO) put its second Sukhoi Superjet SSJ100 (95010) airplane into operation, (VEB) Leasing leased.

September 2011: A320-214 (4835, VQ-BKU "A Nikolaev"), (BOC) leased, ex-(D-AXAN).

November 2011: In an effort to increase airspace capacity, the Russian Ministry of Transport has introduced Reduced Vertical Separation Minima (RVSM) - - SEE ATTACHED - - "ARO-2011-11 - RVSM INTRO."

Aeroflot Russian Airlines (ARO) put its third Sukhoi Superjet 100 airplane (SSJ100) in operation. The airliner, named after the famous (ARO) pilot (FC) Ivan Orlovets, performed its first scheduled flight SU713/714 on route Moscow – Nizhny Novgorod – Moscow.

Russian state corporation Rostechnology has completed the asset transfer of five regional carriers to Aeroflot (ARO), in a previously announced deal worth RUB2.5 billion/$81 million.

(ARO)’s sister company, Aeroflot-Finance, received 52.156% of Vladivostok Avia (VLK), 51% of Saravia Airlines, 75% minus one share of Rossiya Airlines (SDM), 100% of Yuzhno-Sakhalinsk-based SAT Airlines (SKH) and 100% of OrenAir (ORB). Rostechnology received 3.55% of Aeroflot (ARO) shares.

In 2010, the Russian government decided (ARO) would get six airlines belonging to Rostechnology. The sixth carrier, Mineralnye vody-based KMV (KMV), ceased operations this summer and became a part of Donavia (DAU), which is also an (ARO) sister company. (ARO) has announced plans to re-brand at least some of the airlines and to replace their remaining old generation Russian airplanes by A320 family or SSJ 100 airplanes.

According to an (ARO) statement, the group plans to take 45.5% of the market by 2025. Transport Clearing House VP, Marina Bukalova said the company has nearly reached this target. During the first nine months of 2010, (ARO) and its two sister companies (Donavia (DAU) and Nordavia (AEN)) had 30% of the market share. During the first nine months of 2011, (ARO) (with (DAU), (VLK), Saravia, (SDM), (SKH) and (ORB), excluding (AEN)) had a 40% of the market.

During the same period in 2011, the S7 Group (S7 Airlines (SBR) and Globus (WEG)) had a 13% share, Transaero (TRX) 12%, UTair Group (UTair (TYU) and UTair-Express), 10%. All together, the four biggest airline groups have a 75% share. Bukalova said the continuing monopolization and declining competition will have a negative effect on the market.

December 2011: Russia and Ukraine will remove restrictions for the number of carriers and number of flights on the Moscow (DME) - Odessa (ODS) route, effective with the 2012 summer schedule. Currently, only two designated carriers (Transaero (TRX) and AeroSvit (UKA)) are allowed to fly between these cities. Aeroflot (ARO) is a (UKA) marketing partner on this route.

The new rules will weaken (TRX)’s position on the (DME) - (ODS) route as more carriers are allowed to fly to (ODS), the third biggest city in Ukraine. There is a high demand for (ODS) service but the limited number of carriers keeps fares high.

The restrictions imposed by bilateral agreements between Russia and other countries have been widely criticized by most Russian carriers, which claim free access of international routes is restricted, as (ARO) and (TRX) dominate most routes.

(TRX) Deputy CEO, Dmitry Stolyarov said (TRX) welcomes further liberalization on international routes but it is not clear why Russian authorities began with the (DME) - (ODS) route instead of, for example, (DME) - Paris, where only SkyTeam (STM) Alliance members (ARO) and AirFrance (AFA) are allowed to fly.

(TRX) tried to get approval for charter flights from (DME) to Rome and Milan Malpensa but Russian aviation authorities withdrew permission.

Aeroflot (ARO) launched Sukhoi Superjet 100 (SSJ100) international services on December 4 when the airplane (RA 89002) flew between Moscow (SVO) and Oslo (OSL). By the end of the year, the airplane is expected to fly from (SVO) to Budapest (BUD).

“The fact that the SSJ100 started to serve international routes of Aeroflot (ARO) reflects the confidence of the airline in the reliability of our airplane. We believe that the SSJ100 airplane will efficiently serve both international and domestic routes of (ARO) and will do our best to make sure that the growing fleet of SSJ100 meets the expectations of the airline,” Sukhoi Civil Aircraft President, Vladimir Prisyazhnyuk said.

(ARO) operates three SSJ100s, which serve (SVO) routes to St Petersburg, Nizhny Novgorod, Yekaterinburg, Ufa, Astrakhan, Chelyabinsk, Kazan, Anapa, Perm, and Minsk. (ARO) was the SSJ100’s first Russian customer and took first delivery in May.

Armenian Armavia (ARZ) was the launch customer for the SSJ100 in April.

Later in the month, (ARO) took delivery of the fourth Sukhoi Superjet 100 (95012) in Komsomolsk-on-Amur. The SSJ100 received the name after the famous Aeroflot (ARO) pilot, Khariton Tskhovrebov and the tail number (RA-89004).

January 2012: Aeroflot (ARO) has given up its close cooperation with former subsidiary Nordavia (AEN) at the end of October and now operates all of its services from Moscow Sheremetyevo to Anapa, Astrakhan, Ekaterinburg, Novosibirsk, Samara, Surgut, Ufa, and Volgograd with its own (ARO) airplanes. Aeroflot (ARO) however, still code shares on Nordavia (AEN)’s own routes from Moscow Sheremetyevo to Arkhangelsk, Murmansk, Naryan-Mar, Norilsk and Syktyvkar.

(ARO) also introduced its own new routes:
Moscow Sheremetyevo - Alicante: daily A320-200 service starting on June 1;
Moscow Sheremetyevo - Ashgabat: 5x weekly A319-100 service starting on February 1;
Moscow Sheremetyevo - Bologna Marconi: daily A320-200 service starting on June 1;
Moscow Sheremetyevo - Dnepropetrovsk: daily SSJ 100-95 service starting on March 25;
Moscow Sheremetyevo - Donetsk: daily SSJ 100-95 service starting on March 25;
Moscow Sheremetyevo - Guangzhou: 3x weekly B767-300ER service starting on March 25;
Moscow Sheremetyevo - Krakow: 4x weekly SSJ 100-95 service starting on March 25;
Moscow Sheremetyevo - Nizhnekamsk: daily SSJ 100-95 service starting on March 25;
Moscow Sheremetyevo - Odessa: daily SSJ 100-95 service starting on June 1;
Moscow Sheremetyevo - Orenburg: daily SSJ 100-95 service starting on March 26;
Moscow Sheremetyevo - Samarkand: 6x weekly A320-200 service starting on February 1;
Moscow Sheremetyevo - Stuttgart: daily A319-100 service starting on April 27;
Moscow Sheremetyevo - Tomsk: daily A320-200 service starting on June 2.

Russian aviation authorities have postponed implementing new regulations requiring all Russian airplanes with a maximum takeoff weight of more than >5,700 kilos to be equipped with a Traffic Collision Avoidance System (TCAS) and an Enhanced Ground Proximity Warning System (EGPWS). The new rules, which were to take effect January 1, were delayed because Russian Prime Minister, Vladimir Putin said during his December trip to the Russian Far East that carriers were not prepared for it.

Airline experts say that regional carriers will suffer the most from the new regulations because the cost of the new equipment, including installation, is estimated to be RUR 6 - 10 million/$192,000 - $320,000) per airplane. It is not profitable to install it on old Tupolev Tu-134s and Antonov An-24s, the base of most Russian regional airlines’ fleet. Some carriers have announced plans to significantly reduce their Soviet-built fleets.

At the end of 2011, authorities changed the minimum requirements to receive an Air Operator’s Certificate (AOC) from 10 to eight airplanes with more than >55 seats, although there is still a possibility the minimum will increase to 20 airplanes. Local authorities believe this measure should improve aviation safety.

Aeroflot (ARO) has signed a memorandum of understanding (MOU) with Russian state corporation Rostechnology to lease 50 Boeing (TBC) 737 NGs, the two companies announced. The airplanes, which were ordered in 2010, will be leased to (ARO) by Aviation Capital Services, a leasing subsidiary of Rostechnology. Delivery is expected from September 2013 through 2017.

(ARO) said it will receive 737-800 and 737-900 modifications, although details were not released. Earlier it was forecasted that the 737s might modernize (ARO) regional subsidiaries’ fleet but after the (MOU) announcement, an (ARO) representative said part of the airplane order will be operated solely by (ARO).

Over the past several years, the carrier has grown its narrow body fleet with A320 family airplanes, which now numbers more than >70.

In 2008, Rostechnology decided to create a new airline, Rosavia, combining several regional Russian carriers (Vladivostok Avia (VLK), Saravia Airlines, Rossiya Airlines (SDM), SAT Airlines (SKH) and OrenAir (ORB) and KMV (KMV).

A year later, the corporation announced the tender for narrow bodies for the new carrier but the airline project failed before Rostechnology signed the deal. It was decided to sell the regional carriers to (ARO). (KMV) ceased operations in the summer and Saravia was sold at the end of 2011.

Among the other subsidiaries, the largest 737 fleet is operated by (ORB), which now has five 737 Classics and 14 737-800s. (SKH)’s fleet includes three 737 Classics. St Petersburg-based (SDM) also operates five 737-500s but (SDM) has already announced it will take these airplanes out of service in the near future. (ARO) subsidiary, Donavia, which was launched before the deal with Rostechnology, will receive 10 737s.

(ARO) had earlier announced plans to acquire 30 A320neos and is currently awaiting board approval. It also is the likely recipient of 35 MS-21-300s and 15 MS-21-200s now firmly ordered by Rostekhnologii, with deliveries scheduled between 2017 and 2022.

On completion of Technical acceptance procedure, JSC “Sukhoi Civil Aircraft“ (SCAC) and Aeroflot (ARO) signed the Act of Delivery & Acceptance for the fifth deliverable Sukhoi Superjet SSJ100 (MSN 95015) at Komsomolsk-on-the Amur. The airplane received the name after the famous Aeroflot’s pilot (FC) "Dmitry Barilov" and the tail number (RA-89007).

The document, signed by the parties, states that the jet airplane is technically sound and fully meets the performance criteria. The Act of Delivery & Acceptance also confirms that the SSJ100 is transferred to (ARO) with a full set of required operational and maintenance documentation and flight kit. The airplane is ready to start commercial operation on (ARO) domestic and international route network.

The airplane is planned to fly from Komsomolsk-on-the Amur to Moscow on January 27, 2012.

February 2012: Aeroflot (ARO) reported 14.2 million passengers carried, up +25.6% in 2011 over the year-ago period. International traffic increased +21.9% to 8.7 million passengers and domestic traffic rose +32% to 5.5 million. (RPK)s increased +20.8% to 42 billion, producing a load factor of 77.5% LF, up +0.3% point.

February 2012: The Russian and Italian aviation authorities have agreed to amend their bilateral agreement, adding one more designated carrier from Russia and Italy on the Moscow - Rome (FCO) and Moscow - Milan (MXP) routes. Until now, only two carriers, Russian Aeroflot (ARO) and Alitalia (ALI, could fly between these destinations.

According to industry experts, authorities have agreed to add 21 frequencies a week from each country on both routes. The final document has not yet been signed but final approval is expected soon.

Russian Transaero Airline (TRX) tried last year to launch charter flights from Moscow Domodedovo (DME) to (FCO) and (MXP) for the New Year’s holiday but Russian aviation authorities withdrew permission and (TRX) had to operate the flights to the closest cities to (FCO) and (MXP). (TRX) has brought legal action against the authorities.

Aeroflot (ARO) and Skyteam (STM) Alliance partner, Delta Air Lines (DAL) finally started code sharing last December after receiving approval some years ago. The code share, which was in response to growing competition on Russian - USA routes, connects (ARO) flights from Moscow Sheremetyevo (SVO) to New York (JFK), and (SVO) - Washington Dulles (IAD) and (SVO) - Los Angeles (LAX).

(DAL) sells connecting service on (ARO) flights to Russian destinations including Kaliningrad, Krasnodar, Samara, St Petersburg, Novosibirsk and Ekaterinburg. (ARO) sells connecting service on (DAL) flights on USA routes including Atlanta, Orlando, Miami, Las Vegas, (LAX), San Francisco, Denver, Boston, Washington National, and Chicago.

Perry Cantarutti, (DAL) Senior VP Europe, Middle East, Africa, & India, said in 2011 (DAL) carried around 90,000 passengers on its Russia - USA routes. Load factor was a little over >80% LF for the year. (DAL) operates daily flights between (SVO) and (JFK).
According to Cantarutti, by the end of January around 3,000 passengers used code share opportunities.

Russian airlines carried 64.1 million passengers in 2011, a +12.6% increase over 2010. International passengers rose +13.2% to 31.4 million; domestic passengers increased +12% to 32.7 million.

Aeroflot (SU) carried the most passengers, at 14.2 million, up +25.6%. Transaero Airlines (TRX) carried 8.5 million passengers, up +27.2% year-over-year. UTair (TYU) reported 5.8 million passengers carried, up +31.3%. S7 (SBR) Group, which includes Sibir (SBR) and Globus (GLP), carried 6.6 million passengers in 2011, up +11.4%. Rossiya Airlines (SDM), which will soon be part of the (ARO) group, carried 3.5 million passengers. The overall share of the market’s five biggest airlines increased from 53.1% to 57.9%.

Despite stable growth and positive passenger numbers in the Russian market, experts say the overall airline economy in Russia deteriorated in 2011. Load factor decreased one point to 77.2% LF. Load factor on international routes fell -0.7 point to 81.1% LF.

The number of Russian carriers decreased from nearly 160 to 126. In 2011, Russian aviation authorities withdrew 37 air operators’ certificates (AOC), including Avianova (ANV) and Sky Express (SEX).

Aeroflot (ARO) and Russian state corporation Rostechnology will form a Maintenance Repair & Overhaul (MRO) joint venture (JV) and will release details of the business plan at the end of May.

Industry experts say the (JV) could include a foreign (MRO) provider, such as Lufthansa Technik (DLH) (LTK).

The (MRO) (JV) will concentrate on (ARO)’s fleet, which comprises 113 airplanes and includes A320 family airplanes, A330s, Sukhoi Superjet SSJ100s and 767s; it plans to add 787s, 777, 737NGs, A350s and Irkut MS-21s to the fleet. The (MRO) (JV) plans to expand to the Eastern Europe markets.

Last year, the (S7) (SBR) Group created an (MRO) subsidiary, comprising (S7) Engineering and Domodedovo Technic Company at Moscow Domodedovo (DME) and Sibir Technics at Novosibirsk Tolmachevo (OVB). The providers perform "C" checks on A320s and 737 Classic and NG services

(ARO) operates a fleet of more than >100 airplanes, including 10 767s, 14 A330s, 18 A321s, 43 A320s, 15 A319s, six Il-96-300s, five Sukhoi Superjet SSJ100s and three MD-11Fs.

6th SSJ100 (95013, RA-89005), delivery at Komsomolsk-on-the Amur (KXK). The airplane, painted in SkyTeam Alliance (STM) livery, flew from (KXK) to Moscow on March 5.

March 2012: Russia’s Ministry of Transport is aiming to liberalize the country's international airline market by establishing a new system for choosing which carriers will operate on international routes.

According to Russian authorities, carriers will now have to possess an (IATA) Operational Safety Audit (IOSA) certificate, incur no tax debt and demonstrate a high level of flight regularity.

Transaero Airlines (TRX) last year accused the Ministry of Transport of restricting competition and supporting a monopoly. (TRX) said the regulator withdrew permission for (TRX) to operate charter flights from Moscow to Rome, Milan and Venice in the winter season. (TRX) claimed the ministry withdrew permission under pressure from Aeroflot (ARO), which is a designated carrier on Russia-to-Italy routes.

The ministry wants to establish a commission to adopt the new criteria, which will be measured using a points system. For example, a carrier will receive the most points if it eliminates safety defects. In addition, a carrier will have an advantage if it operates new Russian-built airplanes (such as the Sukhoi Superjet SSJ100, Antonov An-148 or the Tupolev Tu-204.

UTair (TYU)), Russia’s third largest airline, sent a letter to the Russian Association of Air Transport Operators stating the new points system and criteria will not create a transparent environment for competition. (TYU) said that authorities will violate antitrust laws if advantages are given to operators of new Russian airplanes.

April 2012: Russian and Belarusian aviation authorities will renegotiate amendments to their bilateral agreement after Belarusian authorities insisted the document that was signed several days ago was not coordinated properly.

After previous negotiations, the Russian Ministry of Transport had said the rules and number of frequencies previously approved were to remain in effect through May 10 when the two sides would make changes.

However, Belarus authorities insist on an equal number of frequencies for both sides on Moscow - Minsk (MSQ) route and sent a demand for Russian authorities to stop one out of five daily Moscow - (MSQ) flights from April 13. Russian authorities would not agree to this demand and threatened to stop Belarusian flights from (MSQ) to Russian regions.

Belavia Belarusian Airlines (BLV) Deputy (CEO), Igor Cherginets told "RIA Novosti" that if Russia forbids (BLV) to operate regional flights, Belarusian authorities will insist on two daily frequencies for Moscow - (MSQ) route for airlines of the both countries.

A (BLV) spokesman said that Aeroflot’s (ARO) number of frequencies should be cut as the largest Russian carrier is lobbying to ban (BLV) operations to Russian regions.

Last month, the dispute on the number of frequencies on the Moscow - (MSQ) route nearly stopped flights between the countries. (BLV) operates four flights a day between the cities while (ARO) had permission for three flights per day, and UTair (TYU) for one flight. Several months ago, S7 Airlines (SBR) received rights for one flight per day, starting from March 26.

Later, Russia and Belarus agreed to five daily frequencies for each country’s carriers on the Moscow - Minsk (MSQ) route, effective April 27. The two countries will set the new rules for the winter season schedule in September.

Deputy Minister of Transport of Russia, Valery Okulov said Russia and Belarus aviation authorities will consider cabotage for the carriers, although no details were given.

7th SSJ100 (95016 RA-89008 "GEORGY BENKUNSKY") delivery. The SSJ100s serve routes from Moscow to 14 Russian cities as well as to Minsk, Donetsk, Budapest, Bucharest, Copenhagen, Oslo and Stockholm. Aeroflot (ARO) operations confirm that the SSJ100s perfectly match their requirements in terms of high frequency departures on regional routes.

May 2012: Aeroflot (ARO) has reported a 2011 profit of +$491 million, up +94% from a +$253 million profit in the year-ago period. Revenue rose +25% to $5.3 billion and traffic revenue increased +21% to $4.5 billion. Operating costs rose from $2.9 billion to $4 billion year-over-year.

(ARO) said the results, in accordance with International Financial Reporting Standards, were due to the growing number of passengers. It also sold shares in several subsidiaries, including Moscow Insurance Company, Nordavia Airline (AEN) and Sheremetyevo Refueling Complex, among others.

“The aggregate gain on disposal related to mentioned transactions recognized income is $424 million,” (ARO) said in a consolidated financial statement.

In 2011, (ARO) carried 14.2 million passengers, up +25.6% compared to the year-ago period. (ARO)’s fleet exceeds 100 airplanes and includes 15 A319s, 43 A320s, 18 A321s, 14 A330s, nine 767s, six Ilyushin Il-96-300s and eight Sukhoi SSJ100s.

Aeroflot (ARO) started new services from Moscow Sheremetyevo to Stuttgart and Krakow.

The Russian Federal Air Transport Agency, Rosaviatsia announced it will spend RUB219.4 million/$7.2 million to subsidize five carriers that service Kaliningrad (KGD) – Moscow and (KGD) – St Petersburg routes. The program runs through September 15.

Aviation authorities signed contracts with five carriers that take part in the program (Aeroflot (ARO), Rossiya Airline (SDM), S7 Airlines (SBR), UTAir (TYU) and Ak Bars Aero.

Last year, the government spent RUB138 million to subsidize these routes.

Kaliningrad is a Russian exclave situated on the west of the country and does not border the main territory. It is surrounded by Poland and Lithuania.

Russia and Republic of Korea have agreed to remove restrictions on flights between Korean cities and Vladivostok International Airport (VVO). In a memorandum of understanding, the two countries said they would not limit the number of designated airlines and frequency entitlements of both sides.

(VVO) in the Russian Far East will gain "open skies" status in June. Industry experts say the new rules will attract new carriers and more passengers, enabling (VVO) to get a return on its investment. In 2011, the airport handled 1.46 million passengers and this year it expects to handle 1.85 million passengers.

The two sides also discussed the exchange of fifth freedom rights for Russian airlines on Republic of Korea and North America routes and increasing overfly rights on trans-Siberian routes, but deferred a decision until the next round of negotiations.

The eighth Sukhoi Superjet SSJ100 airplane of Aeroflot Russian Airlines (ARO) successfully completed its first scheduled flight SU1196/1197 on route Moscow — Kazan — Moscow. The SSJ100 is named after the famous Aeroflot (ARO) pilot (FC) "Evgeny Barabash."

The SSJ100 (95014, RA-89006) was delivered to (ARO) under contract with the VEB-Leasing JSC on financial lease (leasing). The SSJ100 is designed to carry 87 passengers in a comfortable two-class layout (12C — business class and 75Y — in economy class). (ARO) has ordered 30 SSJ100 airplanes in total.

(ARO) currently operates eight SSJ100 airplanes serving routes from Moscow to 14 Russian cities as well as to 10 destinations in Europe and the (CIS). (ARO) operations confirm that the airplane perfectly match requirements in terms of high frequency departures on regional routes.

June 2012: Russia and the Scandinavian countries of Norway, Denmark and Sweden are developing a new bilateral agreement to replace the document signed in 1956.

Russian authorities want approval to operate scheduled flights from Russia to Oslo, Bergen, Tromso, Haugesund, Fagernes, Kirkenes, Trondheim, Stavanger in Norway, Copenhagen, Billund and one more point in Denmark; as well as Stockholm, Goteborg, Malmo, Lulea and Ostersund in Sweden.

Norwegian carriers have asked for routes from Norway to Moscow, St Petersburg, Murmansk, Arkhangelsk and four additional points.

Danish airlines are seeking service from Denmark to Moscow, St Petersburg and Kaliningrad. Swedish carriers are looking to fly from Sweden to Moscow, St Petersburg and three additional points.

The next negotiation on the new agreement will take place at year end or early 2013.

Russian and Scandinavian aviation authorities have confirmed the agreement will include multiple designations of carriers between the countries but with limitations of one carrier per city pair for passenger service. There will be no restrictions on cargo services.

Russian authorities have refused to discuss implementing the agreed-upon principles concerning Siberian overflight with their Scandinavian partners. In 2006, the European Union (EU) and Russian Federation agreed to phase out costly Siberian overflight fees by 2013.

Deputy Minister of Transport, Valery Okulov said Russia will review the agreement this year because of the implementation of the European Union’s Emissions Trading Scheme (EU ETS).

The Russian Ministry of Transport has amended its Air Code, allowing carriers to introduce non-refundable tickets. Currently, Russian airlines have to pay 8% in refunds to passengers who cancel their flights 24 hrs before the flight. In 2010, the refunds amounted to RUB22.7 billion/$700,000.

Russian authorities said foreign carriers operating scheduled flights to Russia sell nonrefundable tickets, which allows them to offer sales with lower prices, giving an unfair advantage over Russian carriers on international routes.

The Ministry said the nonrefundable rates will increase population mobility, which is 9.3 times lower than in the USA and 2.9 times lower than in Russia in 1990.

July 2012: Aeroflot (ARO) will create a regional carrier in the Russian Far East, combining its sister companies, Vladivostok Avia (VLK) and SAT Airlines (SKH), according to an "Interfax" news agency report quoting (ARO) (CEO), Vitaly Saveliev. According to Saveliev, the new airline will be a co-ownership with the regional governments; (ARO) will be the majority shareholder.

The new company could take from a year to a year-and-a-half to create. Saveliev said the airline will acquire 10 to 15 new airplanes but did not specify the type.

(ARO) regional carriers can acquire 737NGs leased from Russian state corporation Rostechnology. (VLK) operates A330s, A320s, Tupolev Tu-204-300s and Yak-40s. (SKH)’s fleet comprises Antonov An-12s, An-24s, 737-200/500s, and Bombardier DHC-8-200s and DHC-8-300s.

Last year, Rostechnology completed the asset transfer of five regional carriers, including (SKH) and (VLK) to (ARO).

Saveliev also said (ARO) is considering the purchase of Krasnodar-based, Kuban Airlines (KIL), which operates mostly in southern Russia, but the deal is still uncertain.

Aeroflot (ARO) has announced plans to suspend its remaining twice weekly service between Moscow Sheremetyevo International (SVO) and Damascus (DAM) airports from August 6. It was the last European carrier still serving Syria. Besides national carrier Syrianair (SYR), Air Algérie (ALG), Air Arabia (ABZ), EgyptAir (EGP), Emirates (EAD), Etihad Airways (EHD), flydubai (FDB), Iran Air (IRN), Jazeera Airways (JZI), Kish Air (KSH), Kuwait Airways (KUW) and Sudan Airways (SUD) still have limited scheduled operations from and to Syrian airports.

2 A330-343Es (1323, VQ-BPI; 1328, VQ-BPJ), ex-(F-WWTJ & F-WWTO), deliveries.

September 2012: The Aeroflot (ARO) Group reported a first-half net profit of +$7.1 million, down -98% from a +$376.8 million profit in the year-ago period.

Operating revenue rose +54% to $3.6 billion, while operating costs rose +64.4% to $3.5 billion. Traffic revenue increased +64% to $3.2 billion.

The Aeroflot Group includes Aeroflot Airlines (ARO) and four regional carriers (Rossiya (SDM), SAT Airlines (SKH), OrenAir (ORB) and Vladivostok Avia (VLK)) that merged last year. Russian state corporation Rostechnology had originally transferred five carriers to (ARO), but after the deal, it sold Saratov-based Saravia Airlines.

The group said the results were due to the consolidation of the all members’ financial results. (ARO) representatives added that the integration is not complete. (ARO) has reported it will create a special structure to monitor and coordinate the financial and operational performance of all group participants.

(ARO) expanded its network to Italy on 1 September, following the entry of competitor Transaero (TRX) in the scheduled market to Italy. (ARO)'s fourth Italian destination after Milan Malpensa, Rome Fiumicino and Venice is Bologna (BLQ) in the northeast of the country. The new route is operated daily with 140-seat A320s out of (ARO)’s Moscow Sheremetyevo (SVO) hub. The Russian capital was last served from Bologna by Meridiana fly (ALS)/(EUY), which dropped its low-frequency route to Moscow Domodedovo in January this year.

(ARO) appears to have shelved plans for subsidiary carrier, Rossiya (SDM) to double its Antonov An-148 fleet, following a hike in the twinjet type's catalogue price. Following the delivery of six domestically built An-148s, (SDM) had been in talks to specify technical terms, with the aim of firming up an order for a further six.

The final decision depended on endorsement from the enlarged Aeroflot (ARO) Group, into which Rossiya (SDM) was integrated in 2010. But Aeroflot (ARO) Director General, Valery Saveliev indicates that the management cannot avoid taking steep pricing into account. "From the operating standpoint, they have proven to be sound airplanes," he said. "The price (SDM) originally paid was perfectly adequate in terms of value for money. We would have considered acquiring a further six An-148s, had their price not risen sharply. Therefore, we've put a stop to that plan."

(SDM) Director, Sergey Belov says airframer (VASO) has retroactively raised prices for the An-148s already in service with (SDM). But United Aircraft argues that (VASO) has to cope with high production costs. Vice President, Alexander Tulyakov said: "There are large overheads, with heating costs alone weighing in a lot."

A321-231 (5271, VP-BDC), ex-(D-AZAD) and A330-343E (1345, VQ-BPK "I. Kulibin"), ex-(F-WWCI) deliveries.

October 2012: Russia’s aviation authorities will allow local carriers to employ foreign pilots (FC), as it deals with a rising shortage of qualified pilots (FC) in a fast-growing airline market.

Speaking at the "Wings of Russia" forum, Deputy Minister of Transport, Valery Okulov said the changes, which will be written as air code and migration legislation, will be published on the Ministry of Transport website soon. Authorities did not specify when it will implement the changes.

Until now, only Russian citizens can be pilots (FC) with local carriers, according to Russia’s air code. Okulov said the government will invest Rub250 million/$8 million in pilot (FC) training.

Aeroflot (ARO) commenced operations on six new international routes from its hub at Moscow Sheremetyevo (SVO), including services to Turkmenistan’s second-largest airport, Ashgabat (ASB), and to Samarkand (SKD), Uzbekistan’s second-largest city. (ARO) also added Miami, Florida (MIA) as its fourth USA destination from the Moscow airport, and returned to the Estonian capital, Tallinn (TLL), which it last served 12 years ago. Indirect competition on the Miami route comes from Transaero (TRX)’s two weekly flights from Moscow Domodedovo to the Florida city.

Italy and Russian aviation authorities have appointed Italy’s Meridiana Fly (ALS)/(EUY) as a second designated carrier on the Milan - Moscow route. Alitalia (ALI) has been the only Italian airline operating the Milan - Moscow route. (ALI) performs daily flights between these destinations but starting on October 29, it will add four more weekly flights.

Earlier this year, the two governments agreed to change their bilateral agreement and add one more designated carrier from the each side on the Rome - Moscow and Milan - Moscow routes, on which only Aeroflot (ARO) and (ALI) were allowed to fly.

Russian authorities already have designated Transaero Airline (TRX) as the second Russian carrier.

A330-300 delivery, (ARO)'s 100th Airbus (EDS) airplane.

November 2012: Aeroflot (ARO) will create a low-cost carrier (LCC) if state authorities make changes in the air code allowing carriers to sell nonrefundable tickets, (ARO) (CEO), Vitaly Saveliev said. Currently, Russia’s air code requires every Russian airline to refund the ticket price to the passenger if he/she refuses to fly and informs the carrier in advance.

(ARO) said it would create an (LCC) several years ago, establishing the new carrier on the basis of Saravia ((IATA) Code: (6W)) regional airline, which (ARO) acquired from Russian state corporation Rostechnology. However, (ARO) sold Saravia at the end of 2011.

Last month, the Russian government announced it is considering allowing non-Russian (LCC)s to operate on domestic routes, a measure that would lower rates on domestic destinations, making flights more affordable.

Russian airlines carried 57 million passengers during the first nine months of the year, up +15.2% over the year-ago period, Russian Federal Air Transport Agency/Rosaviatsia said.

International traffic rose +22.2% to 29.9 million passengers and domestic traffic increased +8.3% to 27 million. Load factor was 79.4% LF, up +1.6 points year-over-year. The total market share of Russia’s five biggest airlines increased to 62.4% from 56.4%.

Russia’s biggest airline, Aeroflot (ARO), carried 13.3 million passengers, up +26.1% over the year-ago period. Transaero Airlines (TRX) carried 8.07 million passengers, up +23.1%. UTair (TYU) carried 5.9 million passengers, up +43.1%. Sibir (SBR), which is working under the S7 Airlines (SBR) brand, said it transported 4.8 million passengers, up +24.3%. St Petersburg-based, Rossiya (SDM) reported carrying 3.36 million passengers, up +23.9%.

(TRX) launched weekly 737 services from Moscow Vnukovo to Astana (TSE) and Almaty (ALA) on Nov. 2. (TRX) also operates daily, Moscow Domodedovo (DME) - (TSE) and (DME) - (ALA) 737 and 767 services.

Russia’s Federal Antimonopoly Service (FAS) has blocked an agreement between Aeroflot (ARO) and Moscow Sheremetyevo airport (SVO) to release airport terminals D, E and F for (ARO), its sister companies and SkyTeam (STM) Alliance partners. The document was signed last month. The (FAS) said several terms and conditions of the agreement limit competition in the airline market and put some carriers at a disadvantage.

In addition to (ARO) and its partners, several foreign and Russian airlines operate at D, E, F terminals, including (SAS) Scandinavian Airlines, Finnair (FIN), AirBaltic (BAU), Air Astana (AKZ), (LOT) Polish Airlines, and Transaero (TRX). At the time, most of them did not comment on the agreement as they were unaware of the conditions. Experts say the other (SVO) terminals will be unsuitable for them, forcing them to change airports.

Aeroflot (ARO) is ready to decline its monopoly on 34 international destinations, (ARO) (CEO), Vitaly Saveliev said during a meeting with Russian President, Vladimir Putin.

“The domestic market has been already liberalized and none of the carriers has exclusive rights. But several Russian carriers, including (ARO), have exclusive rights on the international destinations. If other airlines will be appointed on our routes we will support it, but we think we need to get more frequencies on these destinations,” Saveliev said.

(ARO) is designated on the largest number of international routes starting in Moscow. The international aviation relations are regulated by bilateral agreements between Russia and other countries. (ARO) inherited most of the rights from Soviet Aeroflot.

Currently, (ARO) is the only Russian airline allowed to operate regular flights from Moscow to destinations including Prague (PRG), Stockholm, Brussels, Budapest, Belgrade, Oslo, Amsterdam, and Copenhagen.

Transaero (TRX) is the second airline that won rights for international routes in the Russian market.

This year, Russia liberalized bilateral agreements with Italy and France. Next year, one more carrier from the Russian and Czech side will be added on the Moscow - Prague (PRG) route.

Aeroflot (ARO), which recently added six new routes from its Moscow Sheremetevo (SVO) base, continued to expand its network from the Russian airport with services to Tenerife South (TFS) in the Spanish Canary Islands, which commenced on 30 October. The 5,300 km routing across Europe is offered with twice-weekly frequencies and will be operated using Ilyushin Il-96-300 airplanes with capacity for 282 passengers. There is no direct competition on the route, although Transaero (TRX) and VIM Airlines (MOV) compete indirectly serving Tenerife South from Moscow Domodedovo, each with weekly flights.

December 2012: While Aeroflot (ARO) alone made a +$114 million net profit over the first half of 2012 (a -65% fall on the previous year's figure) this was effectively wiped out at group level by the accumulated losses of its subsidiary airlines. Vladivostok Avia (VLK), Rossiya (SDM) and Orenair (ORB) generated combined net losses of -$108 million over the first six months of this year, says Aeroflot (ARO).

Rossiya (SDM) suffered the heaviest operating losses, -$56 million, while Vladivostok Avia (VLK)'s reached -$34 million.

Aeroflot (ARO) will increase daily Moscow Sheremetyevo - Donetsk SSJ100 service to 2X-daily, on January 7, using an A319.

January 2013: Aeroflot (ARO) must postpone 777-300ER operations as it has not yet received type certification from the Interstate Aviation Committee. (ARO) (which has 16 of the type on order) received its first 777-300ER on January 30 in Seattle, Washington, USA. It had planned a flight to Moscow on January 31; its first commercial service from Moscow to Bangkok was scheduled for February 1.

(ARO), which said it followed all necessary procedures to receive the type certification, plans to exact a penalty on the Interstate Aviation Committee.

Aeroflot (ARO), which did not specify a new date of its first commercial flight, said until the 777 type certificate is granted, Bangkok flights will be operated by A330 and 767 airplanes.

(ARO) ordered eight 777-300ERs in March and eight in June 2011. The 777s feature a three-class cabin layout and include a premium-economy class. The airplanes will be equipped with on board Wi-Fi.

(ARO) will equip 26 long-haul airplanes with Wi-Fi Internet access by year end. The service will be available in the first quarter on 12 A330s and three 777s to be delivered soon. During the year, it plans to implement Internet on one more 777 and seven A330s. (ARO) will add six more Wi-Fi-equipped 777s in 2014, three in 2015 and three in 2016.

(ARO) has partnered with OnAir to develop its in-flight connectivity program. (ARO)’s Wi-Fi Internet access system has been tested and is available on five A330s.

(ARO), which launched its Internet program in 2010, was the first Russian airline to provide onboard mobile connection and Internet access. “Our aim is to make Wi-Fi access available on all our long-haul airplanes,” (ARO) (CEO), Vitaly Saveliev said.

Russia’s Transaero (TRX) also launched onboard Internet last year.

February 2013: Aeroflot (ARO) and Russia’s Federal Anti-monopoly Service (FAS) have reached an interim agreement in the dispute over (ARO)’s deal with Moscow Sheremetyevo airport. In addition, the (FAS) said it has fined Sheremetyevo airport RUB100,000/$3,289 for “concluding an anti-competitive agreement.”

Last year, Aeroflot (ARO) and the Sheremetyevo airport agreed to release airport terminals D, E and F for (ARO), its sister companies and SkyTeam (STM) Alliance partners. However, the (FAS) later blocked the deal, saying that several terms and conditions would limit competition and put some carriers at a disadvantage.

Recently, the (FAS) gave Aeroflot (ARO) and Sheremetyevo airport two months to correct the agreement. Later, authorities said they had received the documents from the airport, but it would take time to check proposed solutions. Neither the airport nor (ARO) disclosed a possible decision on the new version of the agreement.

Two airlines that would be affected by the agreement are Transaero (TRX), which operates from three Moscow airports including Sheremetyevo, and NordWind Airline (NWD), a charter carrier controlled by Pegas Touristik travel company.

Additionally, several foreign carriers operate at D, E, F terminals, including (SAS) Scandinavian Airlines, Finnair (FIN), AirBaltic (BAU), Air Astana (AKZ), and (LOT) Polish Airlines.

Industry experts said the airlines would have to leave the airport as the B and C terminal infrastructure would not be adequate for most of them. Terminal A is devoted to business aviation.

Russia’s aviation authorities have announced they will permit 200 foreign Captains (FC) and instructors to work for local airlines over the next five years.

Russia’s Ministry of Transport has prepared amendments for its air code that will allow Russian airlines to hire foreign pilots (FC). Those changes are being discussed by other Ministries and Government Departments that would be involved or affected by the change, Mikhail Gubanov, a representative of Federal Air Transport Agency, Rosaviatsia told an aviation conference in Moscow.

Gubanov said attracting Captains and instructors from other countries was necessary because of a pilot (FC) shortage in Russia. The possibility for a change in law was first raised last year.

Russian aviation authorities have given Aeroflot (ARO) permission to operate its Boeing 777-300ER. Last month, (ARO) had to postpone the 777-300ERs first flight due to the missing type certification. The first flight (from Moscow to Bangkok) was immediately rescheduled for February 4.

Aeroflot (ARO) (which has 16 of the type on order) received its first 777-300ER (41679, VP-BGB "M. KyTy30B/M. Kutuzov" 2013-02 - - SEE PHOTO - - "ARO-777-300ER - 2013-02") January 30 in Seattle, Washington. It had planned a flight to Moscow on January 31; its first commercial service from Moscow to Bangkok was scheduled for February 1.

Four Sukhoi Superjet SSJ100s, grounded temporarily due to technical reasons, will resume operations before the end of the month. All four airplanes are in the Aeroflot (ARO) fleet. Sukhoi Civil Aircraft Company (SCAC) reported two SSJ100s would enter service by the end of this week and said service bulletins have been issued to address technical issues that were discovered after the airplanes entered service.

According to (SCAC), erroneous leakage detection system engagement, a slat extension fault and landing gear-up fault were detected and solutions implemented.

Airworthiness certificates for three Sukhoi SSJ-100s operated by Aeroflot (ARO) have been renewed, Sukhoi Civil Aircraft Company (SCAC) (SSJ) said. The airplanes, which were grounded temporarily due to technical reasons, will be put back in service.

Russia’s aviation authorities had grounded four SSJ100s; the last airplane renewed its airworthiness certificate a few days later.

Aeroflot (ARO) has launched a Maintenance Repair & Overhaul (MRO) joint venture (JV) with Russian state corporation Rostech and European based SR Technics (SWS).

SR Technics (SWS) will invest $100 million in the Russian business through 2020. The partners will launch two companies, one for Airplane Maintenance & Repair, and the second one will focus on Components. All partners will have equal shares. SR Technics (SWS) will control the new provider and will be responsible for results.

The second joint venture (JV) will create a component storage and a component repair facility. SR Technics (SWS) will get 50%, plus two shares in the company; Aeroflot (ARO) and Rostech will have 25% minus one share each. Both companies will work not only in Russia but also in the countries in the east of Europe.

(ARO) said that the new (JV)s will allow it to reduce (MRO) costs by -$800 million over the next five years. After the (MRO) joint ventures (JV)s are launched, Aeroflot Technical Department will focus on the operational maintenance of (ARO)`s fleet at Sheremetyevo airport. The Aeroflot (ARO) fleet consists of 129 airplanes including A320 family, A330s and Sukhoi Superjet 100s. In January, it took the delivery of its first 777-300ER. (ARO) has 16 of the type on order.

March 2013: Aeroflot (ARO) recently signed a five-year agreement with Lufthansa Systems (LHS) to deploy the NetLine/Hub Information Technology (IT) solution at its Moscow Sheremetyevo hub.

(LHS) said the Netline/Hub solution enables airlines to track hub processes in real time and communicate operational situations to workers on the ground. (ARO) operates a fleet of 130 airplanes, and is looking to reduce “delay costs” at its Moscow hub. “Using this solution at our Moscow Sheremetyevo hub will make our processes run more smoothly and increase the satisfaction of our passengers,” said Kirill Bogdanov, Deputy General of Information Technology at (ARO).

(ARO) will take delivery of its first 737-800 in September. Aviacapital-Service is financing the deal. The 158-seat airplane is configured for 20C business and 138Y economy seats.

The second and third airplanes will be delivered to (ARO) in November and December, respectively. Currently, (ARO)’s medium-haul fleet includes only A320s family airplanes.

In January 2012, (ARO)t signed a memorandum of understanding (MOU) with Russian state corporation, Rostech to lease 50 737 NGs (737-800 and 737-900 modifications). The 737-900 configuration has not yet been decided.

Separately, Aeroflot (ARO) announced it has taken delivery of its second of 16 777-300ERs. The 777-300ER will be used on service to Phuket in March; New York, Hong Kong, Petropavlovsk-Kamchatski in Russia’s Far East in April; and Seoul in May.

April 2013: Aeroflot (ARO) reported 2012 net income of +$166 million, down -66% from the year-ago period. (ARO) said the profit drop was due to 2011 share sales in several subsidiaries, including Moscow Insurance Company, Nordavia Airline (AEN) and Sheremetyevo Refueling Complex, among others. Also, in 2012, (ARO) included data from its subsidiaries; (ARO) said not all subsidiaries are profitable, but it did not specify which were loss-making.

Several carriers in different Russian regions joined (ARO) at the end of 2011, including Saint Petersburg-based, Rossiya Airlines (SDM), OrenAir (ORB), Vladivostok Avia (VLK) and SAT Airlines (SKH) in Russia’s Far East.

Aeroflot’s 2012 revenue rose +51% year-over-year to $8.13 billion. Revenue from the core business increased +59% to $7.1 billion due to passenger growth. In 2012, (ARO) carried 17.7 million passengers, up +24.6% from 2011.

(ARO) increased its offering to Greece this month, as it added a third route to the southern European country from its Moscow Sheremetyevo (SVO) base on 26 April. The new service to Thessaloniki (SKG) is initially offered with thrice-weekly frequencies, but an additional weekly flight will be added, effective 18 May. (ARO) uses its A320s to operate the 2,000 km route. (ARO) also offers flights to two other Greek destinations from the Moscow airport, serving Heraklion with ten times weekly, and Athens with daily services.

Russia and Finland authorities have agreed to designate second carriers on the Moscow - Helsinki route. The first designated airline from each side has “14 frequencies per week” and the second designated airline from each side “will have seven frequencies per week,” effective from the (IATA) winter season 2013 - 2014, according to a statement by Russia’s Federal Air Transport Agency, Rosaviatsia.

Currently, only Aeroflot (ARO) and Finnair (FIN) are allowed to operate flights between these cities. (FIN) operates nine flights per week, seven of which are under a code share agreement with (ARO). (ARO) performs 14 flights per week, seven of which are a code share.

Over the last year, Russia has liberalized bilateral agreements with Italy and France, adding more carriers on routes connecting Moscow with Rome, Milan, Paris, and Nice. Russia’s Transaero Airlines (TRX) won the rights to fly from Moscow to Rome, Milan and Paris, while Rossiya Airlines (SDM), a member of the Aeroflot (ARO) group, launched flights from Moscow to Nice. French Aigle Azur (AZU) was allowed to launch flights from Paris and Nice to Moscow; it has already launched the Paris route and will launch the Nice flight later this year. Italian Blue Panorama (BPA) started Rome - Moscow flights at the beginning of April, while Meridiana Fly (ALS)/(EUY) was designated at Milan - Moscow.

May 2013: Aeroflot (ARO) will transfer some flights from Moscow Sheremetyevo to Vnukovo airport in the winter schedule 2013 - 2014 due to infrastructure limitations at Sheremetyevo Airport.

Details of the transfer were not immediately disclosed, but an (ARO) spokesperson said they will be announced after May 15. (ARO) is expected to mainly move its leisure destinations routes that are not connected with other flights.

Sheremetyevo Terminal D, constructed by (ARO), can handle up to 12 million passengers per year, which falls short of (ARO)’s 17.7 million passengers carried in 2012.

Last year, (ARO) signed an agreement with Sheremetyevo to release airport terminals D, E and F for the carrier, its sister companies and SkyTeam (STM) Alliance partners. The three terminals have a total capacity of around 30 million passengers per year. (ARO) had planned to occupy the terminals in 2014, but Russia’s Federal Antimonopoly Service (FAS) blocked the initiative. (ARO) and authorities have not yet reached a final agreement on Sheremetyevo.

Last year, Transaero (TRX) some of its flights from Domodedovo to Vnukovo due to capacity issues.

(ARO) serves 53 countries, 128 destinations, and 133 routes.

June 2013: Aeroflot (ARO) has taken delivery of its first Sukhoi Superjet SSJ100 in full specification. (ARO) has 30 of the type on order in standard specification, which is a single-class cabin with 98Y seats. (ARO), however, changed its order to include full specification that includes an upgraded flight management system (FMS) and weather radar with a wind direction detection function.

The full SSJ100 also features additional video control cameras, separate lighting controls for business (C) and economy (Y) classes. An additional working flight attendant (CA) position at the back near the galley is added. The full version also offers three lavatories with diaper changing boards, and has upgraded galleys from three to four, one of which is equipped with two ovens.

July 2013: Aeroflot (ARO) ceased operations of its three MD-11Fs in mid-July. One airplane has already been returned to Boeing Capital Leasing. Two other airplanes are being prepared for return. The carrier has not issued an official statement, but (ARO) has excluded the MD-11s from schedule, saying it was no longer economic to operate specialist cargo airplanes.

(ARO) is renewing its fleet with 777s that were ordered in 2011 with more cargo space in the airplane belly.

Last year, Aeroflot (ARO) carried 193,948 tonnes of cargo, up +20.8% year-over-year. It is the second largest Russian cargo carrier after AirBridgeCargo (ABC).

Teledyne Controls has confirmed that its new advanced (WGL) Comm+ wireless technology has been chosen by Aeroflot (ARO) for its Boeing next generation 737NG fleet. First delivery will be in September, to add to the solutions already in place for (ARO)’s A320 and A330 airplanes, along with its fleet of 777s.

August 2013: Moscow Sheremetyevo Airport has announced a tender for investors to take part in the reconstruction of its northern terminals. Deadline for applications is August 26. The airport plans to create a new complex to accommodate up to 40 million passengers per year. The renovation should start with Terminal B and will increase capacity to 10 million passengers per year after the first phase.

The airport also plans to build a tunnel between the northern and southern terminals, which are now separated by runways. Earlier this year, Sheremetyevo (CEO), Mikhail Vasilenko said the cost of the new projects will total as much as $370 million. Vasilenko said the lack of connections between the terminals has compromised the airport’s ability to handle connecting flights.

Sheremetyevo’s northern part includes terminals A, B and C. Terminal A is new for business aviation. Terminal B is former Sheremetyevo 1, the oldest terminal that needs the most significant renovation. Russia’s low-cost carrier (LCC) Avianova (ANV) operated from Terminal B and was its biggest partner. After (ANV) left the market in 2011, the terminal lost all its smaller partners. Terminal C was built at the beginning of the decade, and is mainly used for charter airlines and some scheduled services.

Sheremetyevo, the second biggest airport in Moscow after Domodedovo, handled 13.4 million passengers during the first six months of 2013.

September 2013: Aeroflot (ARO) has created a subsidiary named Taiga Airline, which was created by merging two Russian Far Eastern airlines, Vladivostok Avia (VLK) and (SAT) Airlines (SKH). The corporate structure and flight network have been approved. (ARO) (CEO), Vitaly Saveliev said the new carrier will be a co-ownership with regional governments, but Aeroflot (ARO) will be the majority shareholder.

At the end of August, (ARO) signed an agreement with Sakhalin regional authorities to purchase 49% of the new carrier. It received 100% of (SAT) Airlines (SKH) from Russian state Corporation Rostechnology at the end of 2011. Earlier this year, Aeroflot (ARO) said it would need government subsidies to create a regional carrier in the Far East.

Vladivostok Avia (VLK) will become a branch of the new carrier. In March, (ARO) transferred its 52.2% share in (VLK) to (SAT) Airlines (SKH). Vladivostok Knevichi Airport will remain a base for (VLK)’s A320 family airplanes. It will stop flying Tupolev Tu-204s currently in service. Fleet development plans have not been disclosed.

In the first half, (VLK) carried 546,238 passengers, up +1.2% from the year-ago period. (SAT) Airlines (SKH) carried 118,612 passengers in the first half, up +0.5% year-over-year.

Moscow Domodedovo Airport has announced that Dmitry Kamenshchik is its beneficial owner, with 100% shares in the companies that own and manage the airport.

The Russian government has submitted a bill to its lower legislative house, State Duma, that would allow foreigners to stay in the country without a visa for 72 hours if they transfer by air carrier. The document was developed by the Ministry of Culture.

The official government website says the bill’s main purpose is “to reduce visa barriers that prevent income tourism development.” The new law is expected to increase the number of transfer passengers at Moscow airports by +20% to +30%.

Moscow Sheremetyevo Airport handles 20% to 25% of transfer passengers per year, but that includes people traveling in Russia, between Russia and other countries, and between third countries. In 2012, the airport handled 26.19 million passengers, up +16.1% from the year-ago period.

Experts say the new measure is necessary for Sheremetyevo-based Aeroflot (ARO), Russia’s largest carrier. Aeroflot (ARO) has been trying to attract passengers flying between Europe and Asia, but strict visa measures still do not allow them to leave the airport without a visa, which can be inconvenient in case of flight delays.

Moscow Sheremetyevo Airport has said four companies have applied for the tender to finance the reconstruction of its northern terminals. According to (CEO), Mikhail Vasilenko, the companies include (VTB) Capital Company, Oleg Deripaska’s Transstroy Corporation, Arkady Rotenberg’s (TPS) Avia Group and Airport Koltsovo.

Sheremetyevo, which announced the tender in the middle of August, had planned to reveal the results on September 17 but has postponed the deadline to September 25. The airport plans to create a new complex to accommodate up to 40 million passengers per year. The renovation should start with Terminal B and will increase capacity to 10 million passengers per year after the first phase.

The airport also plans to build a tunnel between the northern and southern terminals, which are now separated by runways. The cost of the new projects will total as much as $370 million.

Sheremetyevo, the second biggest airport in Moscow after Domodedovo, handled 13.4 million passengers during the first six months of 2013.

The Russian government is considering Ramenskoye Airfield and Yermolino Airport as possible airports for low-cost carriers (LCC) in the Kaluga region, the "Kommersant" newspaper has reported. The new locations are necessary as Moscow’s three existing airports (Domodedovo, Sheremetyevo and Vnukovo) will not be able to handle expected high levels of passenger growth.

In addition, Aeroflot (ARO) and UTair (TYU) have disclosed their plans to launch a Low Cost Carrier (LCC) subsidiary, which will increase the number of passengers in Moscow. "Kommersant" said Aeroflot (ARO) plans to base its (LCC) at Domodedovo airport, while UTair (TYU) has chosen Yermolino.

According to UTair (TYU) (CEO), Andrey Martirosov, even if capacity reduces at Moscow’s existing airports, they will reach their peak capacity in a couple of years. During the first seven months of 2013, passenger numbers have grown +14.9% to 56.361 million. Martirosov added that with minimum investments, Yermolino could handle six to 10 million passengers per year.

Using Ramenskoye as a civil airport has been discussed for a couple of years. It is located 40 km southeast of Moscow, near Zhukovsky. It is currently used as a major airplane testing facility and as a base for Ministry of Emergency Situations. The airfield is a part of Gromov Flight Research Institute and hosts the (MAKS) Air Show every two years. The main problem facing officials is how to combine the flight-testing aerodrome, which is used for military airplanes, with a civil airport.

Moscow’s fourth airport, Bykovo, situated not far from Ramenskoye, handled regional flights during the (USSR) period. During 1970s and ‘80s, it operated 525 - 550 flights per day. However, the government does not consider it a new airport for Moscow, even though it is situated not far from the city. In 2010, it stopped operations and was turned into a car parking facility for car sales companies.

The Russian government has extended the appointment of Aeroflot (ARO) (CEO), Vitaly Saveliev for another five years, according to a spokesperson for Prime Minister, Dmitry Medvedev. Saveliev was appointed (CEO) on April, 10, 2009 for five years; he succeeded Valery Okulov, who led (ARO) since the end of the 1990s. Saveliev’s term expires in April 2014.

Under Saveliev’s leadership, Aeroflot (ARO) launched Sukhoi Superjet 100 (SSJ100) operations, ordered 16 777s and took delivery of the first of the type. In addition, (ARO) received an asset transfer of five regional carriers from Rostec Corporation, expanding the Aeroflot Group.

Earlier this month, (ARO) created a Far East subsidiary named Taiga Airlines. Saveliev reportedly told the Prime Minister that the new (LCC) will be a tough product:— “the seats will be like in a suburban trains,” he said, adding that tickets will be sold only via the Internet. The "(ITAR)-(TASS) News Agency" quoted Saveliev as saying the average rates will be -40% lower than other carriers. Taiga Airlines will compete with the railroad service.

Aeroflot (ARO) has selected SR Technics (SWS) to install an Airbus (EDS) in-flight entertainment (IFE) and connectivity system on three of its A330-200s. Under the agreement, installation of (EDS)'s AirLine Network Architecture (ALNA VA) will be carried out alongside scheduled "C"-checks.

(ALNA V2) is a line-fit system that allows passengers to use their own wireless communication devices such as smartphones and laptops on board. The work is to be completed by year-end, with all modification and maintenance activities being completed at SR Technics (SWS)’ headquarters in Zurich, Switzerland.

Boeing (TBC) delivered the first Next-Generation 737-8MO (41195, VP-BRF) to Aviation Capital Services, a subsidiary of the State Corporation Russian Technologies (Rostec). Aviation Capital Services has leased the airplane to Aeroflot (ARO).

(ARO) currently serves 56 countries, 136 destinations and 171 routes.

October 2013: Aeroflot (ARO) has reported a first-half net income of +$1.5 million, down -79% from +$7.1 million in the year-ago period, according to International financial reporting standards.

(ARO) reported a nine-month net income of +RUB19.297 billion/+$601 million for the period ended September 30, up +40% compared to the year-ago period. Revenue rose to RUB155 billion, up +17.9% from RUB131.5 billion in the year-ago period. The figures are according to Russian Accounting Standards (RAS).

The company said that revenue grew because of rising demand. (ARO) added 15 airplanes from September 30, 2012 to September 30, 2013, including new 777s.

On October 24, (ARO) announced it would delay delivery of its 22 A350 XWBs to between 2018 and 2023. Deliveries were originally scheduled from between 2018 and 2020.

(ARO) also publishes financial results according International Financial Reporting Standards.

(ARO) is Russia’s largest carrier. During the first nine months, it carried 15.7 million passengers, up +18.4% compared to the year-ago period. Load factor reached 79.7% LF.

Aeroflot (ARO) has registered a new low-cost carrier (LCC) subsidiary called "Dobrolet" (DBL) which will launch flights in 2014. It is named after the original name of Aeroflot (ARO), adopted when the flag-carrier was formed 90 years ago. Dobrolet (DBL) will be based in Moscow and initially use eight Boeing 737-800s in a single-class configuration. (ARO) said the first flights of the budget operation are foreseen to take place in spring 2014, serving popular destinations in the European region of Russia.

Dobrolet (DBL) will commence operations in the second quarter of 2014 and will initially fly from its main hub in Moscow to Saint Petersburg and eight other cities within Russia. The new airline will operate one-class 737-800NGs in a navy and sky-blue livery that includes Dobrolet spelled out in Russian. (ARO) said that the Dobrolet (DBL)’s fares will be -40% less expensive compared to current ticket prices in the market. The airline also said that Dobrolet’s airplanes will have more seats in the cabin thanks to a reduction in the pitch between rows. In addition, seats will not recline and there will be no in-flight entertainment systems on board.

While Dobrolet (DBL) will not have a business-class (C) cabin, it will offer “comfort” seats as well as priority boarding and in-flight meals at extra cost.

(ARO) said that it will cut the cost of transport by up to -40% compared with legacy carriers by configuring the 737s with higher capacity, reducing the seat pitch, and offering direct ticket sales. It will also charge ancillary fees for checked baggage, priority boarding and catering.

(ARO) will wholly own (DBL) and said it will invest some $100 million in the operation over the first two years. Dobrolet (DBL)'s fleet will expand by eight airplanes annually, it added. It has named Vladimir Gorbunov as the head of the carrier.

However, Aeroflot (ARO) (CEO), Vitaly Saveliev warns that low-cost operations in Russia will not be feasible unless legislation is adopted to enable the charging of ancillary fees and hiring of foreign pilots (FC). "We look forward to the adoption of appropriate legislative measures before the end of this year," he said.

Aeroflot (ARO) will provide a RUB430 million/$13.5 million loan for its Far East subsidiary, Aurora Airline (AAZ) for initial investments. It will have to repay the loan in 2017. According to Aurora Airline (AAZ)’s business plan, it must also increase its passenger numbers in the near future.

In September, (ARO) announced the new Far East subsidiary, originally named Taiga Airline, which was created by merging Vladivostok Avia (VLK) and (SAT) Airlines (SKH). At the end of August, Aeroflot (ARO), which signed an agreement with Sakhalin regional authorities to purchase 49% of the new carrier, changed the name to Aurora Airline (AAZ).

Moscow Sheremetyevo Airport has chosen Arkady Rotenberg’s (TPS) Avia Group to finance the reconstruction of its northern terminals.

According to the (TPS) Avia Group, the company and airport will create the joint ventures (JV)s to fulfill the project’s northern part of the airport. These include constructing a new terminal for 15 million passengers to replace Terminal B, a new cargo terminal handling 500,000 tons per year, a third fuel complex and a tunnel connecting the southern and northern parts of the airport. Currently, the two parts are disconnected and it is possible to reach northern terminals only by car or bus from the southern part.

Sheremetyevo (CEO), Mikhail Vasilenko estimated the cost of the new projects to be as much as $370 million, but the airport did not disclose finance details.

Reconstruction of the northern terminals is one of the airport’s main strategic projects. It is expected the northern part will be able to handle 40 million passengers by 2030.

Initially, Vasilenko said four companies (including (VTB) Capital Company, Oleg Deripaska’s Transstroy Corporation, Arkady Rotenberg’s (TPS) Avia Group, and Airport Koltsovo) had applied for the tender, but the airport received proposals from only the (TPS) Avia Group and Airport Koltsovo.

Aeroflot (ARO) is looking at adding two 737-800s from BBAM Aircraft Management (BBB), another two units from Avolon Aerospace, one aircraft from AWAS (AWW), and three 737-800s from (SMBC) Aviation Capital.

The carrier is also looking to extend the lease agreement on four A320s with (GECAS) (GEF).

Aeroflot (ARO) will delay delivery of its 22 Airbus A350 XWBs to between 2018 and 2023. Deliveries were originally scheduled from between 2018 and 2020. The decision was approved at a company shareholders meeting. Industry experts say there are two possible reasons for the delay: One is that (ARO) has converted part of its A350-800 order into A350-900s. (ARO) said it will now get eight A350-800s and 14 A350-900s, though earlier the order was split into 18 A350-800s and four A350-900s. The second possible reason is (ARO)’s order for 16 Boeing 777s, which experts believe could cause overcapacity in the wide body segment of the Russian market. Deliveries started at the beginning of the year.

(ARO) ordered 22 A350 XWBs in 2007. Deliveries, which were originally scheduled from 2015, were later postponed to 2018. According to Aeroflot (ARO), the deal is now valued at $3.13 billion excluding customs duties.

(ARO) fleet includes 22 Airbus A330s, 23 A321s, 51 A320s and 15 A319s; four Boeing 777s, five 767s and one 737; six Ilyushin Il-96s; and 10 Sukhoi Superjet SSJ100s.

November 2013: Russian and Czech aviation authorities will designate second carriers to begin services on the Moscow - Prague route during the (IATA) summer season 2014. According to a memorandum of understanding (MoU) signed in September 2012, the new airline will have rights to operate seven flights per week. Currently, only Russia’s Aeroflot (ARO) and (CSA) Czech Airlines (both SkyTeam (STM) Alliance members) can operate flights between the cities. In November 2012, (ARO) (CEO), Vitaly Saveliev said (ARO) was ready to decline its monopoly on 34 international destinations.

Last year, Russian authorities have agreed to liberalize bilateral agreements with several countries including France, Finland, and the Ukraine.

Russian tycoon, Alexander Lebedev has sold 4.5% of his shares in Aeroflot (ARO). The businessman confirmed the deal to the "(ITAR)-(TASS) News Agency." “I have been oppressed in this company for 10 years, I was not allowed to carry through adequate decisions,” Lebedev told (ITAR)-(TASS).

Lebedev did not disclose the value of the deal, but (RIA) Novosti said the share is estimated to be RUB3 billion/$93.5 million. The deal took place at the Moscow Exchange; the buyers were not announced. Over the last year, Lebedev has decreased his Aeroflot (ARO) share from 12.5% to 4.5%.

In April, Lebedev sold 100% of his shares in Red Wings Airlines (RWZ) for a symbolic RUB1 to the (GHP) Group and businessman Sergey Kuznetsov. Plans to turn the airline into a low-cost carrier (LCC) have not yet happened.

Aeroflot (ARO) will launch its new Far East subsidiary, Aurora Airline (AAZ) this month. (ARO) holds a 51% stake and the Sakhalin regional government owns 49% of the new subsidiary. (AAZ) has received its first Airbus A319 in the new livery and will fly from Moscow to the Far East this month. By year end, Aurora (AAZ) will have four A319s; two additional A319s/320s will arrive at the beginning of 2014. All of the airplanes are from Aeroflot (ARO)’s fleet. By 2018, the Far East subsidiary expects its fleet to grow to 40 airplanes. It will also include some regional airplanes such as the Bombardier DHC-8-Q300, DHC-8-Q400 and DHC-6 Twin Otter. - - SEE ATTACHED - - "ARO-2013-11-AURORA FLEET." (AAZ) plans to increase its destinations from 30 to 128 and will operate flights from main cities including Khabarovsk, Vladivostok, Yuzhno-Sakhalinsk, and Magadan.

Aeroflot (ARO) needs regional government support to develop regional routes in this part of the country. (CEO), Vitaly Saveliev said he is ready to cooperate with other regional governments in the Far East.

In September, the airline announced the new Far East subsidiary, originally named Taiga Airline, which was created by merging SAT Airlines (SKH) and Vladivostok Avia (VLK), which will reportedly cease operations at the beginning of 2014.

(ARO) has taken delivery of its second 737-800, leased from Ireland’s Avia Capital Leasing, which is a partner of Russia’s Aviacapital Service. The first 737-800 was delivered at the end of September. (ARO)’s 158-seat 737-800 features a two-class cabin layout, comprising 20C business-class and 138Y economy-class seats.

December 2013: The Aeroflot Group has reported a nine-month net income of +$542.2 million, up +84.1% year-over-year. Revenue rose +16.8% to $7.03 billion. Traffic revenue for the period grew +17.8% to $6.26 billion. Non-fuel operating costs increased +10.1% to $4.3 billion. Fuel costs rose +11.4% to $1.88 billion over the year-ago period. The results are according to International Financial Reporting Standards (IFRS).

The group passenger traffic grew +14.7% to 24 million, while (RPK)s rose +16.2% to 65.3 billion. (ARO) capacity rose +18.3%, while (ARO) group capacity was up +15.8% compared to 9 Million in 2012.

According to the Russian Accounting Standards (RAS), Aeroflot (ARO)’s net income rose +40%. After publishing (RAS) results, the company said that revenue grew because of rising demand. After publishing (IFRS) results, (ARO) (CEO), Vitaly Saveliev added that revenue growth was due to operation optimization of its subsidiaries.

The Aeroflot Group enjoyed strong growth in traffic, revenues and profits over the first three quarters of 2013, succeeding both in growing (RASK) and lowering (CASK) and bringing the prospect of improving its Fiscal Year (FY) 2013 operating margin, after two years of falling profitability. It has led the consolidation of the Russian airline sector, integrating and reshaping newly acquired subsidiaries, and now appears to be reaping the benefits of this government-backed process.

The next phase in the group’s progress will be the planned launch in northern spring 2014 of its low cost carrier (LCC) subsidiary, Dobrolet (DBL). (LCC)s have not previously been a feature of the Russian market, but this is changing on international routes. easyJet (EZY) is now well established from London and Manchester to Moscow; Wizz Air (WZZ) flies from Budapest to Moscow; and Ryanair (RYR) has obtained permission to fly from Dublin to Moscow and St Petersburg from March 2014.

Legislation, allowing elements of the (LCC) business model in the domestic market is expected to be passed by the end of this year, and Aeroflot (ARO) is investing USD 100 million in Dobrolet (DBL) to take advantage of this. SEE ATTACHED - - "ARO-2013-12 - DOBROLET START."

"Dobrolet" (DBL) is the original name used by Aeroflot (ARO) following its formation in 1923. (DBL) will use a fleet of 8 Boeing 737-800s configured in a single 170Y class layout. (ARO) (CEO), Vitaly Savelyev said "We hope for the removal of restrictive Russian import duties on commercial airplanes so that we can increase the capacity to 189Y. (DBL) claims its fares will be up to -40% cheaper than existing legacy carriers, with the savings being achieved through the use of higher airplane capacity via reduced seat pitch, eliminating the use of agents for ticket sales and additional charges for extra leg-room seating, checked baggage and in-flight meals.

Its route network will initially span eight destinations in western Russia (St Petersburg, Kaliningrad, Samara, Yekaterinburg, Krasnodar, Ufa, Noviy Urengoy, and Makhachkala) though the no-frills airline plans to expand this to 19, then 26, in 2015 and 2016, respectively. Dobrolet (DBL) also intends to increase its fleet to 40 airplanes within five years, by which time it hopes to be carrying 10 million passengers annually. However, Vitaly Savelyev cautioned that budget airlines will only succeed if the Russian Government relaxes its legislation to allow the charging of ancillary fees and hiring of foreign pilots (FC).

(ARO) added +15 airplanes from September 30, 2012 to September 30, 2013, including new Boeing 777s. The group includes Aeroflot Airline (ARO), Donavia (DAU), OrenAir (ORB), Rossiya Airlines (SDM), and Aurora Airline (URR), which was created from Vladivostok Avia (VLK) and (SAT) Airlines (SKH).

Aeroflot (ARO) began 4x-weekly, Moscow - Chita Airbus A320/Boeing 737-800 service.

(ARO) plans to move flights operated by its subsidiary, Rossiya ((IATA) Code: FV, based at St Petersburg) (SDM) to wet-leases with effect from March 30, 2014. All of Rossiya (SDM)'s routes from St Petersburg (including numerous domestic Russian routes as well as routes to Western Europe, the Mediterranean, Eastern Europe, the (CIS), and Israel) are to be operated under Aeroflot (ARO)'s SU flight numbers from the beginning of the (IATA) summer timetable. The majority of all flights operated by subsidiaries Donavia ((IATA) Code: D9, based at Rostov) (DAU) and Aurora ((IATA) Code: HZ, based at Yuzhno-Sakhalinsk) (URR) already operate using SU flight numbers.

Russian and Cyprus aviation authorities have agreed to designate second carriers (in addition to Aeroflot) on several routes between the countries.

On December 16th, 2013, the third Sukhoi Superjet SSJ100 in full specification for Aeroflot Russian Airlines (ARO) operated a ferry flight from the Delivery Center of (CJSC) “Sukhoi Civil Aircraft” (Zhukovsky, Russia) to (ARO)'s base airport “Sheremetyevo.” The airplane was named after the (USSR) honored pilot (FC), a veteran of Aeroflot (ARO) — Pyotr Khmelnitsky.

The Sukhoi Superjet SSJ100 with tail number (RA89017) is ready to run commercial flights on domestic and international routes. (ARO) operates the SSJ100 airplane on routes to cities in Russia, Germany, Sweden, Czech Republic, Denmark, Finland, Norway, Croatia, Hungary, Romania, Lithuania, Latvia, Estonia, Ukraine, and Belarus.

To date, (ARO) is the largest operator of Sukhoi Superjet SSJ100S. Starting from the Entry into Service (EIS) with (ARO), the SSJ100 has performed more than >16,000 commercial flights with a total of more than >24,000 flight hours. As of December 2013, 22 SSJ100s had been delivered to Russian and foreign customers.

Aeroflot (ARO) will lease six 777-300ERs from (GECAS) (GEF) during the course of 2014. Russian aviation portal (ATO) said the deal will be voted on by (ARO)'s shareholders during their (AGM) on January 21, 2014. (ARO) currently operates four 777-300ERs on flights from Moscow Sheremetyevo to Adler/Sochi, Bangkok Suvarnabhumi, Beijing Capital, Geneva, Guangzhou, Hong Kong Chep Lap Kok, Khabarovsk, Krasnoyarsk, New York (JFK), Petropavlovsk-Kamchatsky, Phuket, Shanghai Pudong, and Vladivostok.

Aeroflot (ARO) currently operates 138 airplanes to 56 countries, 159 destinations, on 237 routes and 353 destinations.

737-8LJ (41197, VP-BRR "A. Solzhenitsyn"), Russian Technologies leased, 2 A321s (5881, VP-BTL "E. Vakhtangov;" 5913, VP-BTR "S. Diaghilev"), ex-(D-AVZV & D-AZAC), and SSJ100-95B (95039, RA-89022)
delivery.

January 2014: Rossiya Airlines (SDM) will transfer all flights to Aeroflot (ARO) commercial management from the 2014 (IATA) summer season. All Rossiya (SDM) flights will be operated under Aeroflot (ARO)’s (SU) code after March 30, when the airline stops using its (FV) code. (SDM) said the unified booking platform will simplify the booking process and cut costs. Also, (SDM) will receive additional profit from selling tickets for all (ARO) subsidiaries, but will lose financial independence.

In November 2011, (ARO) received 75%, minus one share, of Rossiya Airlines (SDM) from Rostekhnologii (Rostec), a state corporation controlled by the Russian Federation, together with shares of four other regional carriers. Aeroflot (ARO) turned under its management OrenAir (ORB), sold Saravia Airlines, and created Aurora Airlines (AAZ) from Vladivostok Avia (VLK) and SAT Airlines (SKH) in the Far East.

Moscow airports handled more than >71 million passengers in 2013. Domodedovo, Sheremetyevo and Vnukovo airports reached a market share of 60% to 70%. Domodedovo remains the biggest airport in the country (in 2013 it handled 30.76 million passengers, up +9.2% on the year-ago period).

Last year, two of the biggest low-cost carriers (London-based easyJet (EZY) and Turkish Pegasus Airlines (PGS) launched flights to Domodedovo airport.

Sheremetyevo, which was Moscow’s main airport during the 1990s, handled 29.3 million passengers, up +11.7% year-over-year. Sheremetyevo-based Aeroflot (ARO), the airport’s key partner, has not yet announced its year-end results, but during the first 11 months of 2013 it carried 19.3 million passengers, up +18.5%.

Vnukovo handled 11.18 million passengers, up +15.2% compared to 2012. It is the fourth airport in Russia’s rating after Saint Petersburg Pulkovo, which had 12.85 million passengers. The number of passengers at Vnukovo has grown because of the development of its two main partners, UTair (TYU) and Transaero (TRX). According to a Vnukovo statement, the two carriers reached 70% of the airport’s total share. Transaero (TRX) began to transfer its flights from Domodedovo to Vnukovo airport in 2012. Budapest-based Wizz Air (WZZ) also launched flights to Vnukovo in 2013.

Aeroflot (ARO) (CEO), Vitaly Savelyev said (ARO) will not make a final decision on its soon-to-be-delivered 787 Dreamliners until later this year. (ARO) ordered 22 787s in 2007 but deliveries have been pushed back two years to 2016 - - SEE ATTACHED - - "ARO-2014-01 - 787 ORDER STATUS."

Aeroflot (ARO) has suggested it could acquire Bombardier (BMB) DHC-8-Q400s for new subsidiary, Aurora Airlines (AAZ). However, such a deal is only likely if (BMB) pursues a joint venture (JV) with Rostekhnologii (Rostec) and establishes a final assembly line fot the 70 - 78 seat turboprop in Russia.

February 2014: The Russian government has approved a bill to allow local airlines to sell non-refundable tickets, which will enable local carriers to be more competitive on the international market. It is expected the document will be considered by the State Duma later this fall.

According to Russian Air Code, currently, the airline is obliged to give back the full ticket cost to passengers who cancel their reservations 24 hours before the flight.

Aeroflot (ARO) (CEO), Vitaly Saveliev has said the non-refundable tickets are necessary to launch low-cost carriers (LCCs) in the country. Last year, Aeroflot (ARO) registered a new (LCC) subsidiary called Dobrolet (DBL), which plans to start flights later this year. The new (LCC) is 100% owned by (ARO), which will invest $100 million in (DBL) over the next two years.

Russia’s UTair (TYU) will launch a (LCC) from its base at Yermolino airport in the Kaluga region. Transaero (TRX) has announced a low-cost discount class on existing domestic flights.

Aeroflot (ARO) has taken delivery of its sixth full-specification Sukhoi Superjet 100 (SSJ100). The SSJ100 was delivered to (ARO) directly from the manufacturer. The new SSJ100 has been transferred to (ARO) under a financial lease from (VEB) Leasing. The airplane can accommodate 87 passengers in a two-class configuration (12C seats in business and 75Y in economy).

Aeroflot (ARO) has taken delivery of its first Airbus A320 airplane equipped with sharklets (SEE PHOTO - - (ARO-A320 WITH SHARKLETS-2014-02"), becoming the first airline in Russia to use the new fuel-saving wing tip devices. The airplane is powered by (CFM56) engines, features a two-class cabin, and seats 158 passengers with eight in business (C) class and 150Y in economy.

Russian airlines have not ordered sharklet-equipped A320s specifically, but instead are making modifications to earlier orders. It is possible the next sharklet-equipped airplane will be delivered to UTair (TYU) or S7 (SBR) Airlines.

Russia’s Interstate Aviation Committee granted Certificate Approval for sharklets in January. Aeroflot(ARO) became the first Airbus operator in Russia; it began flying A310s in 1992. In 2003 and 2008, the first A320s and A330s were delivered to (ARO), respectively.

Aeroflot (ARO) has taken delivery of its sixth Boeing 777-300ER out of an order for 16 of the type. The 550-seat airplane is configured in a three-class arrangement, with business-, economy- and comfort-class sections. On (ARO)’s winter timetable, the new 777-300ER will fly to Sochi, Khabarovsk, Krasnoyarsk, Vladivostok, Hong Kong, Bangkok, and Phuket.

Aeroflot (ARO)’s current fleet includes 90 airplanes, which include A320 family and 22 A330 airplanes.

March 2014: The Aeroflot Group has reported a 2013 full-year net income of +RUB7.334 billion/+$203.3 million, up +41.9% compared to a year ago. The results are published according to International Financial Reporting Standards.

Revenue rose +15% to RUB290.95 billion. The results were driven primarily by a +18% increase in passenger revenue. Revenue from cargo services fell -13.5% because of Aeroflot (ARO)’s decision to ground its cargo fleet.

Fuel costs rose +11.2% year-over-year to RUB79.1 billion because of (ARO)’s growing fleet and adding new destinations. At the beginning of 2013, (ARO) took delivery of its first new Boeing 777; (ARO) now has six 777s.

Operating costs, excluding airplane fuel, grew +9.9% to RUB133.3 billion. Staff costs increased +17.4% to RUB45.34 billion.

The Aeroflot Group includes Moscow-based Aeroflot Airlines (ARO), Rostov on Don-based Donavia (DAU), and the carriers Aeroflot (ARO) acquired from the Rostec Corporation (Rossiya Airlines (SDM), OrenAir (ORB), Aurora Airlines (AAZ) and Yuzhno-Sakhalinsk-based (SAT) Airlines (SKH)).

In 2013, (ARO) registered new low-cost carrier (LCC) subsidiary, Dobrolet (DBL), with plans to launch flights in 2014.

Aeroflot (ARO) expanded its domestic network with the addition of a new route from Moscow Sheremetyevo (SVO) to Rostov-on-Don (ROV) on March 1st. The 985 km sector will be operated daily, utilizing (ARO)’s A319s. The link to the administration center of the Rostov Oblast is already operated by (ARO)’s subsidiary, Donavia (DAU), with 48 weekly flights. There is no direct competition on this airport pair, but S7 Airlines (SBR) (24), Ural Airlines (URL) (14) and Transaero Airlines (TRX) (11) provide indirect competition by flying between Rostov-on-Don and Moscow Domodedovo.

Aeroflot (ARO) has introduced a new daily service from its Moscow Sheremetyevo (SVO) base to Karagandy (KGF) in Kazakhstan. The 2,470 km route was launched on Monday March 10th, and will be flown by (ARO)’s A319s. No other airline operates this airport pair but Transaero Airlines (TRX) offers thrice-weekly flights from Moscow Domodedovo to Karagandy using 737-400s. Surprisingly maybe, this appears to be the only link operated by (ARO) between Moscow and any airport in Kazakhstan.

Russia’s and Tunisia’s aviation authorities have agreed to sign a new air service agreement, but it will not change the current situation regarding flights from Moscow and Saint Petersburg.

Both countries agreed to keep in force frequency entitlement of seven flights per week for Saint Petersburg per specified route for each side and 10 flights per week for Moscow per specified route for each side, according to the document published by Russia’s Federal Air Transport Agency, Rosaviatsia.

Industry observers say negotiations between two countries were motivated by Tunisian carriers’ desire to add more flights to their biggest markets – Moscow and Saint Petersburg. But Russian authorities did not agree with that because Russian airlines do not want to expand the number of frequencies on Tunis destinations.

The authorities also agreed to establish up to three scheduled flights per week for each side, in total to/from four cities in Russia: Rostov on Don, Kazan, Krasnodar, Sochi. Two cities were added as possible destinations in Tunisia: Tabarka and Tozeur. Two more points will be specified later.

Charter services between the two countries will be allowed on request by designated carriers within frameworks of national air regulations. “Charter services should not jeopardize scheduled services on the agreed routes,” the document stated.

April 2014: Russia’s State Duma has passed air code amendments allowing carriers to hire non-Russian pilots (FC) and sell nonrefundable tickets. The amendments on foreign pilots (FC) will become effective in 90 days; the changes to nonrefundable ticket sales become effective in 60 days.

Russian airlines will be allowed to contract foreign pilots (FC) for five years, but the government will determine the number of people allowed to work for the carriers. Previously, it was said there would be a limit of 200 captains (FC) and instructors, although local airlines pointed out it was not enough.

The changes are necessary as the Russian market has experienced double-digit growth for the last several years, but the local training system cannot supply enough pilots (FC).

Nonrefundable tickets are necessary to launch the country’s low-cost carriers (LCCs).

Last year, Aeroflot (ARO) registered a new (LCC) subsidiary called Dobrolet (DBL), which plans to start flights later this year. The new (LCC) is 100% owned by Aeroflot (ARO), which will invest $100 million in (DBL) over the next two years.

Russia’s UTair (TYU) will launch an (LCC) from its base at Yermolino Airport in the Kaluga region. Transaero (TRX) has started a low-cost discount class on existing domestic flights.

Moscow’s Sheremetyevo International Airport transfered flights to Simferopol, Crimea, to the Federal zone of Terminal D, starting April 25, where passengers registered on the counters of domestic airlines. The airport said the decision was made in accordance with Russia’s border service.

Among local carriers, only Aeroflot (ARO) operates an average of 4x-daily to Simferopol from Sheremetyevo’s Terminal D. Other carriers (such as S7 Airlines (SBR), (VIM)-Avia (MOV), Ural Airlines (URL), Transaero (TRX) and UTair (TYU)) operate flights to Crimea from Moscow Domodedovo or Vnukovo airports.

Russian airlines are continuing flights to Simferopol, despite tensions between the countries, which include disputes on air navigation service rights. Recently, (ICAO) confirmed Ukraine’s exclusive right to provide air navigation services in international airspace over the Black Sea within the Simferopol flight information region.

Aeroflot (ARO) grounded its aging fleet of six Ilyushin Il-96 airplanes at the end of March. (ARO), which started grounding the type at the end of 2013, has replaced them with Boeing 777-200s. (ARO), which ordered 16 777s in 2011, currently operates seven of the type.

Russian newswire "TASS" recorded the last flight as being operated by one of (ARO)'s last of three remaining airframes, (74393201005, RA-96008). Aeroflot (ARO) had warned in its last quarter results that the retirement of the Ilyushins would be accelerated citing their poor economics.

(ARO) took delivery of the first Il-96 in 1993. It purchased six airplanes and planned to order more in exchange of customs decrease for Western-built airplanes, although the second deal did not take place.

Cubana de Aviacion (CUB) remains the only operator of the Il-96 passenger version.

(ARO)’s current operating fleet comprises seven 777s, four 767s, four 737s, 22 Airbus A330s, 26 A321s, 60 A320s, 10 A319s and 10 Sukhoi Superjet SSJ100s.

Aeroflot (ARO) took delivery of a new Airbus A320 from the manufacturer’s factory in Toulouse. The sharklet-equipped airplane has been named in honor of the Soviet cosmonaut, Vladimir Komarov.

May 2014: Aeroflot (ARO) has reported first-quarter net-income of +RUB3.03 billion/+$84.5 million, up +5.1% compared to the year-ago period.

The results, which were published according to Russian Accounting Standards (RAS), were due to passenger growth in the first three months. According to Federal Air Transport Agency, Rosaviatsia, Aeroflot (ARO) carried 4.98 million passengers from January - March, up +15.2% year-over-year.

(ARO) also said the results were due to “changes in the exchange rate of the rouble against foreign currencies in light of Aeroflot (ARO)’s significant volume of traffic on international routes.”

Revenue rose +14.4% to RUB46.1 billion.

(ARO) said the first-quarter cost of sales was RUB42.6 billion, up +24.2% year-on-year, “primarily due to the increased traffic volume as well as costs associated servicing the company’s expanded fleet, which increased by +29 airplanes between the first-quarter 2013 and the first-quarter 2014, and due to fluctuations in the rouble exchange rate to foreign currencies.”

First-quarter administrative and commercial expenses fell -0.8% to RUB6.38 billion.

Transaero Airlines ((IATA) Code: UN, based at Moscow Domodedovo) (TRX) and Aeroflot (((IATA) Code: SU, based at Moscow Sheremetyevo) (ARO) have been banned by the Ukrainian Civil Aviation Authority from serving Kharkov and Donetsk until further notice. On May 5, Kiev indefinitely extended a previous temporary moratorium which expired on May 5.

Collectively, the two airlines continue to serve Dnepropetrovsk, Kiev Borispol, Kiev Zhulyany, and Odessa in the Ukraine.

In the wake of growing unrest in the east of the country, Russian news agency "(RIA) Novosti" said Ukraine last month banned Russian males aged 16 - 60 from entering the country, excepting those traveling with women or children, or those who have documents confirming an invitation from close relatives or serious illness or death in the family.

Estonian Air (ENA) and Aeroflot (ARO) expanded their cooperation on Tallinn - Moscow service. (ENA) increases flights June 26 - August 29 from 7x-weekly to 9x.

Aeroflot (ARO)’s new low-cost (LCC) subsidiary, Dobrolet Airline (DBL) - - SEE PHOTO - - "ARO-737-800-DOBROLET-2014-05" has received its air operator’s certificate (AOC) and plans to launch operations in June, according to (ARO) (CEO), Vitaly Saveliev.

Dobrolet (DBL) has two Boeing 737-800s. (ARO) also plans to transfer one Sukhoi Superjet 100 (SSJ100) to (DBL). By the end of the year, (DBL) plans to increase its fleet to eight airplanes.

(DBL) will launch flights from Moscow to Saint Petersburg, Samara, Ufa, Perm, and Yekaterinburg. The new (LCC) (DBL) was registered at the end of 2013. (DBL) unveiled the livery of its first Boeing 737-800 in April.

Aeroflot (ARO) has taken delivery of its fifth Boeing 737-800, which can accommodate 158 passengers in a dual-class configuration of 20C seats in business and 138Y in economy.

(ARO) has taken delivery of a new Airbus A320 with sharklets. (ARO)’s fleet includes 100 A319/320/321 family airplanes with an average age of 4.7 years.

(ARO) has taken delivery of its ninth Sukhoi Superjet 100 (SSJ100). The new SSJ100 has been transferred to Aeroflot (ARO) under a financial lease from (VEB) Leasing. The SSJ100 can accommodate 87 passengers in a dual-class configuration (12C seats in business and 75Y in economy), and has a range of 2,400 km.

June 2014: Aeroflot (ARO)’s new low cost carrier (LCC) subsidiary, Dobrolet Airline (DBL) launched Moscow - Simferopol service on June 10th. From June 14, (DBL) expects to operate 3x-daily flights between the cities. (DBL) reportedly sold 4,000 tickets in 45 minutes on May 26, reached a passenger load factor of 100% LF on its first flight.

The airline currently operates flights from Moscow Sheremetyevo Airport, but will later move to Ramenskoye Airport.

Aeroflot (ARO) has named its former First Deputy (CEO), Andrey Kalmykov to head (LCC) subsidiary, Dobrolet (FBL) from June 3, according to "Kommersant." Vladimir Gorbunov, who has been leading the company, will become Kalmykov’s deputy. Gorbunov, formerly head of Avianova, was invited to Dobrolet (DBL) last year.

Aeroflot (ARO) (CEO), Vitaly Savelyev said Dobrolet (DBL) will this year offer services to eight domestic cities within the range of 2,000 km from Moscow. (DBL) plans to expand this over the following two years to 26 destinations.

Savelyev does not rule out that it could also launch cross-border flights (tentatively to Kiev, Istanbul and Yerevan) in 2016. He expects Dobrolet (DBL)'s fares to be up to -20% lower than economy (Y) fares charged by Aeroflot (ARO).

In April, Russian authorities announced the airspace over Crimea within the Simferopol flight information region (FIR) is controlled by Russia’s state air traffic management corporation. (ICAO) confirmed Ukraine’s exclusive right to provide air navigation services in international airspace over the Black Sea within the Simferopol (FIR). But despite (ICAO)’s statement, the region is controlled by Russia’s air traffic management corporation.

August 2014: Aeroflot (ARO) reported first-half net income of +RUB3.39 billion/+$95.6 million, down -36.2% year-over-year. The first-half period ended June 30 and the results were published according to Russian Accounting Standards (RAS).

First-half revenue rose +14.8% to RUB105.7 billion. Cost of sales increased +17.7% year-on-year to RUB92.39 billion.

(ARO) said the results were due to increased traffic volume, higher costs associated with fleet expansion and higher foreign currency exchange rates.

Commercial expenses rose +24.5% to RUB14.4 billion, which Aeroflot (ARO) attributed to the “seasonality of traffic volumes versus fixed costs related to maintaining the fleet and ground equipment.”

During the first half, (ARO) carried 10.96 million passengers, up +14.9% compared with the year-ago period. It added 23 airplanes since the end of the first-half 2013.

(ARO) and its group members (Rossiya Airlines (SDM), Aurora (AAZ), Donavia (DAU), and Dobrolet (DBL)) are the only carriers in Russia that publish results according to (RAS).

Aeroflot (ARO)’s new low-cost (LCC) subsidiary, Dobrolet (DBL) suspended flights on August 4 due to sanctions by the European Union (EU). (DBL) began operations on June 10 with Moscow - Simferopol services. “The lease contract and agreements on Dobrolet Airlines’ (DBL) Technical Maintenance, Insurance and Air Navigation information exchanges have been annulled,” Russia’s "Interfax" news agency reported, quoting (DBL). “On conditions of unprecedented pressure coming from European counteragents, (DBL) is compelled to suspend flights and ticket sales,” it said.

(DBL)’s fleet comprised two Boeing 737-800s and one Sukhoi Superjet 100 (SSJ100). Before the end of the year, (DBL) had planned to increase its fleet to up to eight airplanes.

The sanctions were introduced as Dobrolet, (DBL) a state-owned subsidiary, launched flights to Crimea. On August 1, (DBL) launched Moscow - Volgograd flights; before the end of August it was scheduled to begin flights to Samara and Ufa.

Dobrolet (DBL) had sold nearly 65,500 tickets; passengers will be carried by Aeroflot (ARO) subsidiary, Orenair (ORB). Aeroflot (ARO) continues to operate flights to Simferopol.

Carriers that operate flights to Crimea include Moscow-based VIM Avia (MOV), Vnukovo-based Red Wings (RWZ) and Domodedovo-based Transaero Airlines (TRO). In July, (TRO) launched services to Simferopol with a 522-seat Boeing 747.

Ukraine’s State Aviation Administration is requiring Russian airlines, Aeroflot (ARO) and Transaero (TRX), to get permission for each flight over Ukraine. Both carriers pass over the country’s territory, while flying from Russia to Bulgaria, Israel, Turkey, Egypt, and Greece.

Ukrainian authorities said the new rules (which became effective August 14) are necessary because the two carriers “disregard the international rules flying to Crimea.” Both airlines continue to operate flights to Simferopol Airport.

(ARO) estimates it will cost $20 million per year to bypass Ukraine, Interfax reported, quoting (ARO) (CFO), Shamil Kurmashov.

Both carriers previously announced they had changed their international routes to detour flights around Ukraine, after the July 17 Malaysian Airlines (MAS) Boeing 777 MH17 crash, which is widely believed to be a shootdown.

(ARO) has canceled all its flights to Kharkiv and Donetsk, through October 25, and to Odessa and Dnepropetrovsk, until August 31.

Russian aviation authorities have forbidden Ukrainian carriers to fly over Russia, after (ARO)’s new low-cost carrier (LCC) Dobrolet (DBL) had to cease operations, due to sanctions imposed by the European Union (EU).

September 2014: Aeroflot (ARO) has registered a new low-cost carrier (LCC) subsidiary called Byudzhetny Perevozchik, which directly translates as “Budget Carrier,” after European sanctions forced it to close its Dobrolet (DBL) start-up. With the carrier's launch set for autumn this year, initial flights will likely cover Ufa, St Petersburg, Samara Kurumoch, Perm, Volgograd, Adler/Sochi, Tyumen, and Surgut.

Russia’s Federal Air Transport Agency, Rosaviatsia, has distributed the allocations of foreign pilots (FC) that Russian airlines can hire following the passage of air code amendments by the State Duma in April, allowing carriers to hire non-Russian pilots (FC).

In the next 12 months, Aeroflot (ARO) will be able to contract 80 pilots (FC); Transaero (TRX), 67; AirBridgeCargo (ABC), 16; UTair (TYU), 10; Metrojet and VIM-Avia Airlines (MOV), 7 each; Yakutia Airlines (SYL), 5; Saratov Airlines (SOV), 3; Avia Management Group, which operates Dexter Air Taxi, 1.

Aeroflot (ARO) recruited its 80 pilots (FC) mostly from western Europe.

Russia’s aviation authorities, which is hoping to solve its pilot (FC) deficit problems, now allows 200 foreign captains and instructors to work for local airlines over the next five years. Airlines can contract captains with at least 3,000 flight hours and no fewer than 500 hours on the airplane type.

Before 2014, local airlines were only allowed to hire pilots (FC) who were Russian citizens.

Moscow Domodedovo Airport has concluded a contract to build the second segment of its passenger terminal, which will nearly double terminal space by December 2016 in a RUB27 billion/$723.5 million expansion project.

The airport complex area will be broadened by 235,000 sq m and—taking into account the ongoing project aimed at expanding the first segment of the passenger terminal (will increase to 500,000 sq m).

The new segment of the passenger terminal will include about 100 check-in counters and more than >40 self-service check-in kiosks. The facility will add airplane parking stands and boarding bridges to accommodate very large airplanes, including the Airbus A380.

A new segment of the airport complex is designed to serve international passengers with a two-level technology, which allows departing and arriving passengers to enter and leave the terminal on different levels.

Separately, Russia’s Federal Air Transport Agency, Rosaviatsia, has approved plans for the reconstruction of Domodedovo’s second runway, which will be built at a distance of 287.5 m from the existing runway. After that, the old one will be closed for reconstruction to allow airport operations without any restrictions.

Domodedovo is Russia’s second largest hub; in 2013, it handled 30.76 million passengers.

Russia may restrict flights of Western carriers over its territory, if new financial and energy sanctions are imposed, Russian Prime Minister, Dmitry Medvedev told the "Vedomosti" newspaper.

Discussions began on changing trans-Siberian routes for European airlines in early August, when Aeroflot (ARO) subsidiary, Dobrolet (DBL) had to cease operations after just two months, because of the sanctions.

European carriers have said airlines could see increases in flight times, fuel consumption and cabin crew wages (which would give a competitive advantage to airlines from other regions, such as Asian carriers) if the airspace suspensions happen. Finnair (FIN) said it could be negatively affected, because its strategic business flights to 15 destinations in Asia are primarily over Russian territory.

However, Russian industry experts say the ban would also have a negative effect on Russian carriers.

October 2014: News Item A-1: Aeroflot (ARO) relaunched daily, Airbus A320 Moscow - Tbilisi, Georgia service from October 26, after Russia’s Federal Air Transport Agency, Rosaviatsia, announced September 15 that scheduled flights could resume between the countries.

Other airlines (including (VIM)-Avia (MOV), (S7) Airlines (SBR), Transaero (TRX), Ural Airlines (URL), UTair (TYU), and Red Wings (RWZ)) have also received permission to re-establish scheduled flights between Russia and Georgia, but have not announced flights yet.

The carriers were forced to cease flights to Georgia in 2008, because of the conflict between the countries. Later, some airlines, including Russia’s (S7) Airlines (SBR) and Georgian Airways (GEI), resumed Moscow - Tbilisi charter flights only. The limitation on Russia - Georgia destinations forced the carriers in the neighboring countries (such as Latvia, Belarus and Ukraine) to establish new connections to attract the transfer passengers with flights via Riga, Kiev, and Minsk.

News Item A-2: Aeroflot (ARO) has begun to transfer the assets of its defunct low-cost carrier (LCC) start-up Dobrolet (DBL) to a new subsidiary, Byudzhetny Perevozchik, the "Interfax" agency reported, quoting (ARO) (CEO), Vitaly Saveliev.

Byudzhetny Perevozchik, which directly translates as “Budget Carrier,” will be (ARO)’s second attempt to launch an (LCC). On August 4th, (DBL) was forced to suspend flights after just two months, due to sanctions imposed by the European Union (EU).

(ARO) owns 100% of the new company, which it is aiming to launch this winter. (ARO) will transfer two Boeing 737s, previously operated by Dobrolet (DBL), to the new carrier. The 737s were moved to Aeroflot (ARO) subsidiary, Orenair (ORB) after (DBL) ceased operations. Saveliev said the group is not planning to transfer the "Dobrolet" brand to the new subsidiary. The new airline brand has not yet been decided.

(DBA) flew from Moscow to Simferopol in Crimea, which is at the heart of the Russian - Ukrainian conflict. (DBA) added a second route between Moscow and Volgograd before it stopped services. Orenair (ORB) replaced Dobrolet (DBL) on Moscow - Simferopol services on September 16.

Byudzhetny Perevozchik will fly from Moscow Sheremetyevo Airport’s Terminal B for the 2014 - 2015 winter schedule. However, by February 28, the carrier will move to either Vnukovo or Domodedovo airport, as Sheremetyevo begins a terminal renovation program. Ramenskoye airport is supposed to be a base airport for the (LCC), but it will not be ready before March 1, 2015.

The new (LCC) replaces Dobrolet (DBL), which started flights June 10, but suspended operations August 4 due to sanctions imposed by the European Union (EU).

Byudzhetny Perevozchik has launched a website and disclosed its route network. The carrier still has no branding. According to its website, the (LCC) plans to fly from Moscow to Surgut, Perm, Yekaterinburg, Ufa, Samara, Kazan, Volgograd, Belgorod, and Tyumen.

It will fly from Moscow Sheremetyevo Airport’s Terminal B for the (IATA) 2014 - 2015 winter schedule; however, it has not yet received its air operator’s certificate (AOC). By February 28, the (LCC) will have to move to either Vnukovo or Domodedovo airport as Sheremetyevo begins a terminal renovation program.

The budget carrier plans to use a Boeing 737-800 in a single-class layout; its first flight date has not yet been announced.

According to (ARO) (CEO), Vitaly Saveliev, (ARO) has begun to transfer the assets of the defunct carrier (DBL) to Byudzhetny Perevozchik.

Saveliev said the group does not plan to transfer the "Dobrolet" brand to the new airline, but the airplane livery appears to be similar to Dobrolet (DBL), according to the website.

At the end of the month, the Aeroflot Group named its new low-cost carrier (LCC) “Pobeda,” which translates to “victory” in Russian. Pobeda is expected to operate its first flight from Moscow Vnukovo Airport to Volgograd on November 17. Ticket sales begin on November 1. Pobeda plans to fly from Moscow to Surgut, Perm, Yekaterinburg, Samara, Kazan, Volgograd, Belgorod, and Tyumen.

News Item A-3: Sheremetyevo Airport plans to finish the first phase of the new terminal, which will replace Terminal B (formerly called Sheremetyevo 1) in 2017. It will be able to handle 15 million passengers per year, but later, its capacity will increase to 30 million passengers.

News Item A-4: Aeroflot (ARO) has added fresh links to two more capital cities from its main hub at Moscow Sheremetyevo (SVO), namely to Chisinau (KIV) in Moldova and Tbilisi (TBS) in Georgia. Both routes started on October 26th and both are operated daily by the SkyTeam (STM) Alliance carrier’s 140-seat A320s. Additionally, both city pairs also face no direct competition, and they are also technically both service resumptions, with flights to Chisinau beginning again after a 20-year hiatus.

Aeroflot (ARO) closes its Moscow - Toronto service on October 26, due to low demand, (CEO), Vitaly Saveliev said. In September, Transaero (TRX) also ceased operations on the route.

“The Moscow - Toronto flights do not generate enough income, which is why we decided to close it,” Saveliev was quoted as saying by the "(TASS)" agency. “We had an idea to get the transfer passengers from India to Canada; we have tried the destination twice, but we did not succeed.” Aeroflot (ARO) operated 2x-weekly, Moscow - Toronto service, while Transaero (TRX) had one weekly flight.

November 2014: News Item A-1: Aeroflot (ARO) will equip its cabin crew ((FC) - (CA)) with iPad Minis equipped as crew tablets, which will be used to replace paper documents. Earlier this year, Rossiya Airlines (SDM) became the first carrier in Russia to distribute Apple iPads equipped as electronic flight bags (EFB) for pilots (FC), who are able to use them during all phases of flight (including takeoff and landings). Transaero Airlines (TRO) also launched (EFB) Class 2, enabling the use of electronic documents on portable devices during all phases of flight.

News Item A-2: Aeroflot (ARO)’s new low-cost carrier (LCC) Pobeda (PBD) has received its air operator’s certificate (AOC) and launched ticket sales. The new subsidiary plans to start flights November 17 from Moscow Vnukovo Airport.

The (LCC) plans to fly from Moscow to Surgut, Perm, Yekaterinburg, Samara, Kazan, Volgograd, Belgorod and Tyumen.

Aeroflot (ARO) announced the launch of the new (LCC) after its previous subsidiary, Dobrolet (DBL), ceased operations over the summer due to European Union (EU) sanctions. In October, the new (LCC) applied for an (AOC) and announced its route network.

Some carriers in the market have criticized (ARO) for launching the (LCC), when market growth in Russia has slowed. However, according to Russia’s Federal Air Transport Agency, Rosaviatsia, during the first 10 months of 2014, airlines carried 80.62 million passengers, up +11.4% year-over-year. In October, growth reached +7.9%, which is lower than in previous years, but higher than in some other world regions.

News Item A-3: Russia’s Federal Air Transport Agency, Rosaviatsia, said the government has spent RUB3.5 billion/$74 million for regional routes and Kaliningrad routes subsidy programs so far this year.

According to statistics for the first 10 months of 2014, 18 Russian airlines carried 460,000 passengers and operated 10,000 flights. The program includes 94 regional routes.

The government planned to spend up to RUB3.58 billion during the year.

Another subsidy program (flights between Kaliningrad and the country’s main territory) ran from May 15 through October 15, 2014. According to the Rosaviatsia, six airlines carried 220,000 passengers from Kaliningrad, up +14% year-over-year. The government, which had planned to spend RUB468.4 million on the program, used the entire amount.

December 2014: News Item A-1: The Aeroflot Group reported a nine-month net loss of -RUB3.56 billion/-$72.2 million as of September 30, reversed from a net profit of +$545.2 million in the year-ago period. The results are published according to International Financial Reporting Standards.

Revenue rose +6.5% to RUB236.7 billion. (ARO) carried 17.8 million passengers in the nine-month period, up +13.4% year-over-year.

(ARO) said that its adjusted net profit reached +RUB12.9 billion. Profit adjusted for net foreign exchange loss related to revaluation of finance lease liabilities, provisions for impairment of accounts receivable, pre-term return of airplanes, and for other non-recurring items.

(ARO) deputy (CEO) Finance, Network & Revenue Management, Shamil Kurmashov said: “In the third-quarter, Russian airlines faced serious challenges, in particular a sharp decline in the rouble exchange rate versus key foreign currencies, as well as continued weakening of consumer demand and a downturn in the tourism industry. All these factors, as well as non-recurring events, impacted our financial performance. After adjustments for foreign exchanges losses, however, the Group remained profitable both in the third quarter and in nine months 2014.”

News Item A-2: Aeroflot (ARO)’s new low-cost carrier (LCC), Pobeda, operated its first flight on December 1 from Moscow Vnukovo to Volgograd. In December, Pobeda plans to start flights from Vnukovo to Yekaterinburg, Samara, Perm, Belgorod, Tyumen, and Surgut.

According to Vnukovo Airport, Pobeda’s fleet will reach four Boeing 737-800s before year-end. The 189-passenger 737-800s are configured in a one-class layout.

(ARO) announced the launch of the new (LCC) after its previous subsidiary, Dobrolet (DBL), ceased operations over the summer, due to European Union (EU) sanctions. In October, the new (LCC) applied for an air operator’s certificate (AOC) and announced its route network. In November, Pobeda received its (AOC) and launched ticket sales.

News Item A-3: Ukraine’s State Aviation Administration has banned several Russian and Ukrainian airlines on the Moscow - Dnepropetrovsk route from December 1 for safety reasons. The affected airlines are Russia’s Aeroflot (ARO), Transaero (TRX), UTair (TYU) and UTair-Ukraine (UTN) and Dniproavia (UDN).

Aeroflot (ARO) had planned to re-launch Moscow - Dnepropetrovsk service from December 1. (ARO) was supposed to start daily service to Dnepropetrovsk, as well as 2x-daily service to Kharkiv. However, Aeroflot (ARO) had to change plans for both routes due to the latest ban. The Russian flag carrier has also been prohibited from re-launching the Kharkiv route.

Aeroflot (ARO) ceased several Ukrainian routes after Malaysia Airlines (MAS) MH17, a Boeing 777-200ER, was shot down over Ukraine by a surface-to-air missile July 17, while on a scheduled flight from Amsterdam to Kuala Lumpur. All 298 on board were killed. (ARO) also ceased flights to Donetsk and Odessa.

According to Interfax-Ukraine, Ukrainian authorities do not have information on a possible ban for Aeroflot (ARO)’s Moscow - Odessa flights. Flights to Donetsk are currently impossible, as the airport in the city was totally destroyed.

January 2015: News Item A-1: Boeing (TBC) has begun discussions with Russian airlines about potential changes in their fleet development due to the downturn in the country's economy, "Bloomberg" reported, quoting Boeing VP Global Sales, John Wojick. He said scheduled deliveries for 2015 will be fulfilled, as it’s too late for (TBC) to adjust the schedules.

Transaero (TRX) has two 747-8 deliveries planned for this year. Last year, (TRX) canceled its order for four 787-8s and moved the 747-8 delivery from 2016 to 2015.

According to Wojick, Russia accounts for less than <10% of Boeing (TBC)’s total commercial airplane sales.

At the beginning of December, Aeroflot (ARO) (CEO), Vitaly Saveliev told the "TASS" news agency that Russia’s biggest carriers must develop a joint fleet reduction plan, because the “planes fly half-empty.” However, Saveliev did not disclose (ARO)’s plans to postpone deliveries.

Transaero (TRX) and UTair (TYU) responded by saying they will optimize their fleets independently, without coordination with other carriers.

Also in December, UTair (TYU) announced a -40% fleet cut. It plans to ground six Boeing 737-800s, leaving nine of the type in its fleet. It will stop using two 767s and the entire fleet of 15 Bombardier CRJs. (TYU) also does not intend to use six leased Sukhoi Superjet SSJ100s. (TYU) plans to ground all 12 Airbus A321s. (TYU) will also stop operating 11 757s, as part of these airplane types are transferring to UTair (TYU)’s charter subdivision. (TYU) will continue to operate 34 Boeing airplanes (most of which are 737-500s) and 15 ATRs.

News Item A-2: SkyTeam (STM) Alliance member Aeroflot (ARO) has signed an agreement with Sukhoi Civil Aircraft Company (SSJ) for another 20 Sukhoi Superjet SSJ100s, which will be operated by the Russian carrier’s regional subsidiaries.

This latest agreement increases (ARO)’s commitment from 30 to 50 SSJ100s, scheduled for delivery by 2017. “(ARO) will receive the additional SSJ100s in full specification, able to accommodate 87 passengers in a spacious dual-class configuration (12C seats in business and 75Y in economy) and with a flight range of 2,400 km,” (ARO) said.

The airplane will be deployed on short-haul domestic routes operated by the Aeroflot (ARO) Group subsidiaries. “As the Russian domestic market continues to expand rapidly (Aeroflot Group’s domestic traffic increased +23.6% year-on-year in November 2014) the new airplanes are expected to make a significant contribution to the group’s future growth,” (ARO) said.

(ARO) currently operates a fleet of 150 Airbus (EDS), Boeing (TBC) and Sukhoi (SSJ) airplanes. In 2013, it carried 20.9 million passengers, or 31.4 million, including subsidiaries.

February 2015: News Item A-1: Russia’s international traffic was down -15.3% in January, while the number of domestic passengers grew +18.2%.

According to Russia’s Federal Air Transport Agency, Rosaviatsia, all airlines carried 5.8 million passengers in January, up +0.2% year-over-year. The decrease in international traffic is due to the change of currency exchange rates, which are expected to continue falling during the year.

Russia’s charter carrier, Nordwind (NWD) carried 132,211 passengers, down -48% year-over-year.

UTair (TYU), Russia's fourth biggest airline, carried 395,818 passengers, down -29.3%. (TYU) faced difficulties at the end of the year; its subsidiary UTair Finance entered into technical default on bonds last November.

Transaero (TRX) carried 786,568, down -3.8% year-over-year. S7 Airlines (SBR) is down -2.6% to 538,216 passengers, but Globus Airline (GLP), a second member of the S7 (SBR) Group, carried 178,998 passengers, up +39.7% year-over-year.

Aeroflot (ARO), Russia's biggest airline, carried 1.8 million passengers, up +14.1% over a year ago. A member of the Aeroflot (ARO) Group, Saint Petersburg-based Rossiya (SDM), grew +27.2% to 379,310 passengers.

News Item A-2: FL Technics has begun cooperation with Aeroflot (ARO) as (ARO)’s approved supplier of spare parts in both scheduled and airplanes on ground (AOG) situations. The company will provide worldwide supply of (AOG), critical and routine spare parts and materials throughout 2015 for (ARO)’s Airbus A320s and Boeing 737NGs through warehouses in the UK, Lithuania, Poland, the Russian Federation, Malaysia, and the USA.

March 2015: News Item A-1: The Aeroflot Group reported a full-year net loss of -RUB17.1 billion/-$274.6 million as of December 31, 2014, reversed from a net profit of +RUB7.33 billion in the year-ago period. The results are reported in accordance with International Financial Reporting Standards (IFRS). “In the second half of 2014, Russian air carriers faced serious external challenges, the major ones being a significant depreciation of the ruble and the resulting fall in consumer demand and downturn in the international travel market, which affected the annual financial results of the Group,” (ARO) deputy (CEO), Shamil Kurmashov said.

Revenue rose +9.9% year-over-year to RUB319.8 billion. Scheduled flights revenue increased +10% to RUB253.6 billion, while charter flights revenue decreased -12.5% to RUB15.02 billion, due to a decline in international traffic.

In 2014, the Aeroflot Group carried 17.1 million passengers on international routes, down -1.7% from 2013. The number of passengers on domestic routes rose +26% to 17.64 million. The total number of passengers increased +10.7% 34.7 million.

“In particular, in December the Group’s passenger traffic was up by +16% on the back of a +35.5% increase in passengers on domestic flights. Passenger traffic dynamics was the main driver of revenue growth that amounted to 9.9% in 2014,” Kurmashov said.

Operating costs increased +13.8% to RUB308.5 billion. Airplane fuel increased +10.2% year-over-year to RUB87.2 billion. “This increase is driven by the dynamics of oil and jet kerosene prices and weakening of the ruble, as well as an increase in the Group’s traffic volume, fleet expansion and addition of new routes. Airplane servicing and passenger services costs amounted to RUB61 billion, up +15.6% from 2013. This increase is primarily due to the change in the ruble’s exchange rate against foreign currencies (+7.7%), expanded scale of operations and traffic volume (+ 3%), and the change in service rates (+4.9%),” the group said.

The Aeroflot Group includes the biggest Russian carrier (ARO) as well as several subsidiaries including Donavia (DAU), OrenAir (ORB), Rossiya (SDM), Pobeda (PBD), and Aurora (AAZ).

News Item A-2: The Russian government will invest RUB350/$5.7 billion in the country’s airport infrastructure from 2015 - 2020. Russia’s Ministry of Transport, Maxim Sokolov said the investment will enable the reconstruction and construction of new runways at 147 airports (nearly half the airports in the country).

In 2014, five airports at Lipetsk, Vladikavkaz, Makhachkala, Nikolayevsk on Amur and Palana were totally reconstructed or built, according to a statement by Russia’s Federal Air Transport Agency, Rosaviatsia.

Taxiways and platforms were renewed at four airports in Abakan, Voronezh, Petropavlovsk-Kamchatsky, and Samara. In addition, a new airport at Iturup Island in the Russian Far East was built and opened in 2014. Construction began on the new Yuzhny International Airport at Rostov-on-Don in 2014. Airfield reconstruction at Petropavlovsk-Kamchatsky and Krasnodar will be finished and new runways will be launched at Volgograd and Samara in 2015.

According to Russian legislation, the airports can be operated by private companies but the airfields belong to the government, which invests in their renovations. Private companies can invest in the terminal infrastructure.

Sokolov said more than >50 Russian airports increased their traffic more than >20%, while the Russian airline market was up +10.2%.

News Item A-3: Fourteen Russian airlines have used government subsidies to lease regional airplanes since 2012.

April 2015: News Item A-1: Russian airlines carried 16.9 million passengers in the first quarter, down -2.3% year-over-year, according to Russia’s Federal Air Transport Agency, Rosaviatsia.

International traffic was down -15.6%, while domestic traffic grew +11.4% year-over-year. The decrease in international traffic is due to the change of currency exchange rates. In January - February, international traffic was down -14.5%.

In January - March, Aeroflot (ARO) carried 5.5 million passengers, up +9.8% year-over-year. Saint Petersburg-based Rossiya (SDM), an Aeroflot Group member, carried 1.035 million passengers, up +21.9% from the year-ago quarter.

Transaero (TRX) carried 2.2 million passengers, down -6% year-over-year. (S7) Airlines (SBR)’s passengers carried are also down -6% to 1.56 million. Globus Airline (GLP), a second member of the (S7) Group, carried 481,251 passengers, up +24% year-over-year. Despite the number of passenger decrease of three out of five of Russia’s biggest carriers, the total market share of the top five airlines has increased from 66.1% to 66.9%, which is due to the closure of several small airlines.

Over the past several months, Russian authorities have suspended or canceled the air operator’s certificates (AOCs) of eight carriers.

Financially troubled UTair (TYU) carried 1.03 million passengers for the three-month period, down -36.1% year-over-year. To stabilize its financial situation, (TYU) has cut its fleet and network.

Traffic for Russia’s charter carriers is also down for the three-month period. Nordwind (NWD) carried 311,016 passengers, down -59.6% year-over-year. IFly traffic was down -58.5% to 72,865. However, Royal Flight cargo charter airline increased its traffic four times year-over-year to 87,196.

News Item A-2: Moscow’s Vnukovo International Airport has reported handling 3.2 million passengers in the first quarter, up +23% year-over-year, despite the traffic decrease of its main carriers. The airport cited the growth of Aeroflot Group carriers and Transaero Airline (TRX) for the results.

UTair Airline (TYU), Vnukovo’s main partner, has reported a significant decrease in passenger numbers.

Aeroflot (ARO) subsidiary Pobeda (PBD), which launched flights from Vnukovo in December 2014, reported carrying 189,028 passengers in the first two months of 2015, according to Russia’s Federal Air Transport Agency, Rosaviatsia. Aeroflot (ARO) subsidiaries, Rossiya Airlines (SDM), Donavia and OrenAir also operate flights to Vnukovo. (SDM) showed a +20% passenger growth at the beginning of the year.

Transaero (TRX) now operates from two Moscow airports (Vnukovo and Domodedovo). (TRX) has transferred or launched several international flights to Vnukovo, such as London, Paris, and Prague.

Moscow Domodedovo handled 5.7 million passengers in the first quarter, down -10% from 6.33 million year-over-year.

News Item A-3: Russia has allowed Sheremetyevo International Airport to sell shares for Vladivostok International, according to a government statement. “Non-core assets sale will allow Sheremetyevo to improve its corporate structure and efficiency,” the statement said. The Russian government owns 83% shares of Sheremetyevo.

In August 2014, Sheremetyevo published a proposal to acquire 52% of Vladivostok shares as well as 100% of shares for Vladivostok’s new Terminal A, which opened in 2012.

In February, a consortium led by Singapore’s Changi Airports International (CAI) won the tender. The consortium also includes Basic Element and the Russian Direct Investment Fund (RDIF). Each member will hold an equal share in the consortium. The transaction was scheduled to close after receiving regulatory approvals.

In 2008, the shares were transferred to Sheremetyevo by presidential decree. The Moscow airport became a principal investor in the Vladivostok reconstruction program, which was necessary to prepare the airport for Asia-Pacific Economic Cooperation (APEC) leaders meeting in September 2012. After the proposal was made, Sheremetyevo extended the deadline for the Vladivostok deal twice, due to numerous requests from buyers to clarify tender documentation.

News Item A-4: See video - "777-300 Business Class HKG TO Moscow"

May 2015: News Item A-1: First-quarter losses by Russian airlines have increased RUB1 billion/$19.4 million, according to the Russian Association of Air Transport Operators (AEVT), which estimated 2014 full-year losses to be -RUB30 billion due to currency rates and passenger traffic decreases. Losses are growing due to changes in the market structure and rising fuel prices, which increased +10% to +20% in April.

First-quarter international traffic was down -15.6%, while domestic traffic grew +11.4% year-over-year. Most domestic routes are still unprofitable for carriers, while international destinations are making money. Structure changes led to the additional losses, the association said.

The (AEVT) expects the trend to continue in the second quarter following the government’s decision to reduce the value-added tax (VAT) from 18% to 10% for airlines on domestic flights beginning July 1. The (AEVT) is considering asking the government to reduce the (VAT) to 0% for airlines operating domestic flights.

Russian airlines carried 23.4 million passengers in January - April 2015, down -2% year-over-year, according to Russia’s Federal Air Transport Agency, Rosaviatsia. Domestic traffic grew +10.8%, while international traffic was down -14.8% year-over-year.

This trend began at the end of 2014 due to the dramatic changes in currency exchange rates. In January - February, international traffic was down -14.5%; in the first quarter, it was down -15.6%. In April, the number of international passengers decreased -12.5% year-over-year.

For the January - April period, Aeroflot (ARO) carried 7.5 million passengers, up +8.3% year-over-year. Saint Petersburg-based Rossiya (SDM), an Aeroflot Group member, carried 1.46 million passengers, up +21.9% from the year-ago quarter. (SDM) has become the fourth biggest in Russia, deposing the former third UTair (TYU) to the fifth position. UTair (TYU) carried 1.4 million passengers, down -34.1%. Transaero (TRX) carried 3.03 million passengers, down -4.2% year-over-year. (S7) Airlines (SBR)’s passengers carried are down -5.7% to 2.14 million.

News Item A-2: Russia’s Aeroflot (ARO) Group has corrected its strategy through 2020. In that year, the group is expecting to carry 64.7 million passengers, (ARO) said. In 2014, (ARO) forecasted flying 67.6 million passengers in 2020. The plans on fleet growth were also corrected from 383 to 367 airplanes. Even with these changes, the group plans to reach a market share of 43.1%, including both international and domestic airlines.

Aeroflot (ARO) enlarged its group in 2011, when Russian state corporation Rostec completed the asset transfer of five regional carriers to the carrier. Later (ARO) created from two airlines in the Russian Far East, Aurora Airline (AAZ) and created a low-cost carrier (LCC) Pobeda (PBD).

In 2014 (ARO) itself carried 23.6 million passengers, up +13% year-over-year. The number of passengers carried grew for all but one Aeroflot Group member in 2014. Saint Petersburg-based Rossiya Airline (SDM) carried 5.19 million passengers, up +13.1%. Donavia (DAU) carried 1.7 million passengers, showing +28.3% growth. Aurora Airline (AAZ) tripled the number of passengers it carried to 1.05 million. Only OrenAir (ORB), specializing mostly in charter services, carried 3.03 million passengers, down -3.4% year-over-year.

News Item A-3: Moscow Domodedovo Airport has extended its border control zone by opening a new 6,000-square meter, 22-meter high atrium, which allows the airport to handle arriving and departing passengers at different levels.

The new atrium will also enable the airport to add +24 more passport control channels, from 56 to 80. “The finishing of the next stage of Domodedovo terminal expansion will allow us to optimize the international flights passenger traffic allocation. The Federal Agency for the Development of the State Border Facilities, "Rosgranitsa," together with the airport, plans to continue to implement necessary measures and to finish the checkpoint re-equipment at Domodedovo airport,” the Head of Rosgranitsa Konstantin Busygin said.

According to Rosgranitsa, the authority (in partnership with private investors) is working on the arrangement and development of border checkpoints at 11 airports in Russia.

Last September, Domodedovo concluded a contract to build the second segment of its passenger terminal, which will nearly double terminal space by December 2016. The airport will continue expansion even though its traffic has decreased due to the economic downturn and the move of its biggest partner (Transaero Airlines (TRX)) to Vnukovo Airport.

News Item A-4: The new Kaluga International Airport, located 160 km from Moscow, is set to open May 27.

News Item A-5: Aeroflot (ARO) received a Boeing 737-8LJ (41207, VQ-BWA "V DAHL") from airplane lessor Avolon (AZV), which will be operated by its Pobeda (PBD) subsidiary. This is Avolon (AZV)’s sixth airplane on lease to Aeroflot (ARO).

June 2015: News Item A-1: Aeroflot (ARO) low-cost carrier (LCC) subsidiary, Pobeda Airline (PBD) (which began operations December 1, 2014) carried its one millionth passenger at the beginning of June.

(PBD) operates flights to 34 destinations in Russia with a fleet of 11 Boeing 737-800s. (PBD) was launched at the second half of 2014 after (ARO)’s first (LCC) Dobrolet (DBL) (was forced to cease operations due to (EU) sanctions). Pobeda (PBD) made the top 10 list of Russia’s biggest airlines, according to passengers carried in the first quarter.

“(PBD) is growing at an extraordinary rate, as is its home airport, Vnukovo, which is continuing to see rapid increases in passenger volumes. In January - May 2015, passenger numbers rose by +27.9% to 5.668 million. We are pleased to see continued growth on domestic routes, led by the Aeroflot Group, which accounts for 27.8% of total passenger volumes at Vnukovo,” Vnukovo Board Chairman, Vitaly Vantsev said. Pobeda (PBD) is replacing UTair Airline (TYU) as Vnukovo’s main carrier after UTair (TYU)’s passenger numbers decreased significantly during the last several months.

In 2014, Aeroflot (ARO) carried 23.6 million passengers (34.7 million passengers as Aeroflot Group including subsidiaries). During the first four months of 2015, (ARO) carried 7.5 million passengers; collectively with its subsidiaries, the figure reached 10.9 million passengers, while all Russian airlines (including the Aeroflot Group) carried 23.5 million passengers.

News Item A-2: Aeroflot (ARO) (CEO), Vitaly Saveliev was elected to the (IATA) Board of Governors for the third time, running through 2018.

July 2015: News Item A-1: Russia’s Ministry of Transport has announced proposed changes to the Air Code that would allow local airlines to overbook flights.

Proposed wording changes include: “The contract of air transportation could be changed by the airline in case of flight cancellation or its combination with another flight to the same destination, as well as aircraft type change, route change or carrier’s inability to provide the passenger a seat at the aircraft.” That could be done “in case of safety or security reasons, at the request of state agencies in accordance with their competence and because of airline decision.”

If the carrier cannot provide transportation mentioned in the ticket, it is obliged to offer the alternative option and provide compensation, established by state aviation rules. The existing Air Code does not allow an airline to sell more tickets than passenger seats in the aircraft operating the flight, although carriers have unofficially used overbooking.

The draft changes are published for public discussion.

News Item A-2: The Russian government has reduced value-added tax (VAT) from 18% to 10%, from July 1, for Russian airlines operating domestic flights. The bill was approved by the government earlier this year to help to stabilize the carriers after they reported significant losses at the end of 2014.

First-quarter 2015 losses by Russian airlines increased RUB1 billion/$19.4 million, according to the Russian Association of Air Transport Operators (AEVT), which estimated 2014 full-year losses to be -RUB30 billion due to currency rates and passenger traffic decreases. Losses are growing due to changes in the market structure and rising fuel prices, which increased +10% to +20% in April.

(AEVT) is certain the -18% to -10% decrease is not enough. In the middle of June, the association appealed to the government to set (VAT) to zero, adding that “domestic flights are remaining low profitable and the part of the domestic flights continues to dominate over international flights.”

The Ministry of Transport did not agree with the initiative.

In 2014, the Russian government pledged to support the struggling Transaero Airlines (TRX). UTair Airlines (TYU) and Ural Airlines (URL) are also seeking government guarantees.

News Item A-3: Russian airlines want to keep existing bilateral agreements with Cyprus as a new round of talks is set to begin on air service development between the countries.

On the eve of the meeting, Russia’s Association of Air Transport Operators (AEVT) (together with Aeroflot (ARO), Transaero (TRX), (S7) Airlines (SBR), Yakutia (SYL), UTair (TYU), and Ural Airlines (URL)) discussed a possible service development between the countries with Russia’s Ministry of Transport representatives.

At the forefront of the talks is the absence of Cyprus-designated carrier Cyprus Airways (CYP), which ceased operations at the beginning of the year. Russian carriers have suggested to Cyprus authorities that a non-Cyprus European airline be permitted to operate flights between Cyprus and Russia, even though most agreements stipulate that only the specific country’s airline can operate flights between that country and Russia. The airlines have pointed out the number of passengers has been decreasing, not only in Cyprus, but also on most international routes.

(AVET) said that carriers have agreed to make no major changes in the Russia - Cyprus bilateral agreement and asked the Ministry of Transport not to vary the document.

In May, Cyprus authorities confirmed Cobalt Air had applied for an air operator’s certificate (AOC) in May to set up operations from Cyprus, intending to use the island as its base.

News Item A-4: Aeroflot (ARO) took delivery of its 10th Boeing 737-800. The airplane is configured in a two-class composition with 20C seats in business class and 138Y seats in economy class.

August 2015: News Item A-1: Russia’s Yuzhno-Sakhalinsk airport will begin construction on a new terminal in 2016, which can handle 500 domestic and 200 international passengers per hour. The airport is located in Russia’s Far East.

The new terminal will cost a maximum of RUB2 billion/$31.3 million excluding value-added tax (VAT), according to the Sakhalin region administration. The previous administration estimated terminal construction to be RUB5 billion.

Design specifications still must be developed and approved by the public. Specifications to be discussed should include earthquake-resistant requirements due to instability in the region, Sakhalin Governor, Oleg Kozhemyako said.

Yuzhno-Sakhalinsk airport (which handled 373,678 passengers, down -3% year-over-year in the first half of 2015) is the biggest of seven airports in the Far East region. It is a base airport for Aeroflot (ARO)’s subsidiary, Aurora Airline (AAZ).

News Item A-2: Aeroflot ((IATA) Code: (SU), based at Moscow Sheremetyevo) (ARO) is planning to equip two of its subsidiaries with an undisclosed number of SSJ100-95s, (CEO) Vitaly Savelyev has told Russia's "TASS" newswire.

“I don't think it will happen this year, but we have plans for next year," he said. "We are considering two subsidiaries – Rossiya ((IATA) Code: FV, based at St Petersburg) (SDM) and Donavia ((IATA) Code: D9, based at Rostov) (DON).”

Earlier this year, state-backed (ARO) signed a Letter of Intent (LOI) with Sukhoi Civil Aircraft (Moscow Zhukovsky) to acquire a further twenty SuperJets with deliveries to occur by 2016. Once firmed, the order will boost (ARO)'s SuperJet order book to fifty airframes.

In a bid to ease a foreign currency crunch and to stimulate local industry, the Russian government has committed itself to weaning Russia off its dependence on Western-manufactured airplanes.

In March, Moscow announced it would inject RUB100 billion/USD1.9 billion into Sukhoi (SSJ)'s parent firm, the United Aircraft Corporation (UAC), to help spur the production of the SuperJet while moving to recapitalize the State Transport Leasing Company (GTLK) to the tune of RUB30 billion/USD469 million.

In June, (GTLK) announced it had secured placements for thirty-two Superjets (fifteen with Yamal Airlines ((IATA) Code: YC, based at Salekhard) (LLM), fifteen with Kazakhstan's Scat ((IATA) Code: DV, based at Shimkent) (VSV) and two with an undisclosed operator) it had bought using the funds which were extended to it in the form of tied-loans.

News Item A-3: Russian airlines carried more than >125,000 passengers on Kaliningrad - Moscow and Kaliningrad - Saint Petersburg routes within the framework of Kaliningrad subsidy program for the first four months. According to Russia’s Federal Air Transport Agency, Rosaviatsia, since April 15, 2015, RUB269 million/$4.09 million was spent for subsidies, 64% of its budget of RUB420 million.

The program started will continue through October 15, 2015. Six airlines take part in the subsidy program: Aeroflot (ARO), Transaero (TRX), Ural Airlines (URL), UTair (TYU), S7 Airlines (SBR), and Red Wings Airlines (RWZ).

It is expected that 190,000 passengers will be carried within its framework, down 14% from the year-ago period; 150,000 will be carried on Kaliningrad - Moscow, and 40,000 on Kaliningrad - Saint Petersburg.

Russian authorities launched the Kaliningrad subsidy program in 2011. Kaliningrad is a Russian exclave situated west of the country and does not border the main territory. It is surrounded by Poland and Lithuania.

September 2015: News Item A-1: "Aeroflot (ARO) to Acquire Transaero Airlines (TRX)" by (ATW) Linda Blachly, September 1, 2015.

Russia’s largest airline, Aeroflot (ARO), will acquire Transaero Airlines (TRX), according to a (TRX) statement.

The announcement that Russia’s (majority) state-owned carrier Aeroflot (ARO) was going to take over the country’s second biggest carrier, Transaero Airlines (TRX), will have a significant impact on competition in the Russian market. Based on latest passenger figures from the Russian Federal Air Transport Agency (Rosaviatsia), the two carriers accounted for 43% of passenger movements on Russian carriers in the first seven months of 2015. Add in the figures for Rossiya Airlines (SDM), ORENAIR (ORB), Pobeda (PBD), Donavia (DAU), and Aurora (AAZ), all of which are either fully-owned or majority-owned by Aeroflot (ARO), and the market share climbs to over >57%. See chart - "TRX-2015-09 - Top 15 Russian Airlines.jpg."

A government commission backed the acquisition in a meeting led by First Deputy Prime Minister, Igor Shuvalov, (TRX) said.

“In the interests of the development of commercial aviation and creating one of the largest in the world group of airlines, the commission has approved the acquisition of Transaero Airlines (TRX) by the Aeroflot Group. The shareholders of (TRX) believe this measure will serve the interests of passengers, personnel and partners of the airline.”

In May, Transaero (TRX) reported a 2014 net loss of -RUB14.5 billion/-$255 million. The Aeroflot (ARO) Group reported a 2015 first-half net loss of -RUB3.54 billion, narrowed from a net loss of -RUB1.91 billion in the year-ago period.

Later on September 2, Aeroflot (ARO), which revealed plans to buy Transaero Airlines (TRX) September 1, said it will acquire 75% plus one share of (TRX) for RUB1/1.53 US cents, (TASS) news agency reported, quoting Russia’s Deputy Prime Minister, Igor Shuvalov.

If the transaction is approved by (ARO)’s board of directors, the Aeroflot Group will have half the Russian airline market.

The deal follows (TRX)’s increasing debt burden. In the 2015 first half, its loans and similar liabilities reached RUB67.5 billion/$1.2 billion.

At the end of December 2014, Russian Prime Minister, Dmitry Medvedev signed a government resolution guaranteeing a three-year RUB9 billion loan to be provided by the (VTB) Bank, which is 60.9% owned by the Russian government. In return, (TRX) agreed to freeze domestic fares in 2015, and reduce fares by -5% to -7% on domestic routes served exclusively by (TRX).

On January 30, 2015, (TRX) received a three-year RUB9 billion loan from the (VTB) Bank, backed by the Russian government. According to the (VTB) Bank, the loan was planned to be used to finance (TRX)’s operations.

News Item A-2: The Aeroflot Group, which just announced it would acquire Transaero Airlines (TRX), reported 2015 first-half net loss of -RUB3.54 billion/-$60 million, narrowed from a net loss of -RUB1.91 billion in the year-ago period. The results are published according to International Financial Reporting Standards (IFRS).

Revenue rose +25.8% to RUB176.467 billion and operating profit was +RUB5.87 billion, reversed from an operating loss of -RUB1.384 billion in the year-ago half.

Traffic rose +14% to 17.9 million passengers. Domestic passenger numbers grew +33.4% to 10.3 million, while international passenger numbers decreased -4.9% to 7.6 million. Load factor remained flat at 75.7% LF. The load factor on international routes grew +1.2 points to 75.8% LF; on domestic routes it decreased -2.1 points to 75.5% LF.

“In the first half of 2015, the Aeroflot Group strengthened its position as the leader in the Russian air transportation market with +14.0% year-on-year growth in passenger traffic and a +5.8% point increase in market share,” Aeroflot (ARO) Deputy (CEO), Shamil Kurmashov said. “This was driven by strong operational performance at (ARO) and the successful roll-out of Russia’s first low-cost carrier (LCC), Pobeda (PBD), which has quickly become one the top airlines in the country. The Group also benefited from changes in the competitive landscape, taking market share from foreign carriers that decreased frequencies on a number of routes, as well as less efficient Russian peers,” he said. “The Group focused on fleet optimization, cost-cutting, boosting efficiency of business processes and financial management, and maintaining a robust financial position,” Kurmashov added.

(ARO) is the biggest member of the group that also includes OrenAir (ORB), Donavia (DAU), Rossiya Airlines (SDM), Far East subsidiary, Aurora Airline (AAZ), and low-cost carrier (LCC) Pobeda (PBD).

News Item A-3: News Item A-4: Transaero Airlines (TRX) reported a 2015 first-half net loss of -RUB3.2 billion/-$57.6 million, narrowed from a RUB10.4 billion net loss in a year-ago period. First-half revenue grew +5.1% to RUB50.7 billion.

Passengers carried in the first half remained flat year-over-year—5.8 million. (RPK)s decreased -11% to 19.3 billion.

Transaero (TRX) reported its first-half capital is negative—RUB52.6 billion—compared to a positive capital of RUB4.8 billion in the 2014 first half. Loan sums and financial lease liabilities have grown +59.6% to RUB149.9 billion from RUB93.9 billion in the year-ago half. Operational lease liabilities have increased +84.9% from RUB24.5 billion to RUB45.3 billion.

On September 3, Aeroflot (ARO) agreed to be involved in the restructuring of Transaero (TRX), due to its debt burden. The board decision came three days after it agreed to acquire 75% plus one share of (TRX) for RUB1/1.53 US cents.

News Itemn A-4: Russian airlines carried 52.5 million passengers in the 2015 first half, the same number compared to the year-ago period. In July, passenger numbers grew +2.8%, continuing a trend of May and June.

First-half International traffic was down -13.8% year-over-year (YOY) to 23.257 million, according to Russia’s Federal Air Transport Agency, Rosaviatsia. Domestic traffic grew +14.6% to 29.21 million. Passenger load factor decreased -0.5 points to 79.2% LF.

Also in January - July, Aeroflot (ARO) carried 14.6 million passengers, up +9.8% (YOY). Saint Petersburg-based Rossiya (SDM), an Aeroflot Group member, carried 2.88 million passengers, up +2.5% from the year-ago period. Transaero (TRX) carried 7.5 million, up +2.7% (YOY). Ural Airlines (URL) carried 2.94 million, up +4% (YOY). UTair (TYU) carried 3.1 million, down -38.9% (YOY). (S7) Airlines (SBR) carried 4.5 million, up +0.5% (YOY), while Globus Airline (GLP), a member of (S7) Group, carried 1.35 million passengers, up +18.6%.

News Item A-5: Transaero Airlines (TRX) (CEO), Olga Pleshakova has resigned and has become Chairman of the (TRX) board. Dmitry Yerzakovich was initially appointed as the new (CEO). However, the latter lasted for under a week, before in turn being replaced by Aeroflot (ARO) executive, Dmitry Saprykin.

Former Board Chairman, Alexander Pleshakov remains as a board member & Managing Director. (TRX) said the management appointments were decided at (TRX)’s board meeting on August 31, and are not related to the acquisition by Aeroflot (ARO) announced September 1. On September 2, it was disclosed that (ARO) was ready to buy 75% plus one share in Transaero (TRX).

(TRX) did not disclose reasons for the deal, but the decision was made because of its increasing debt burden. In the first half of 2015, (TRX)’s loans and similar liabilities reached RUB67.5 billion/$1.2 billion, although according to the "Kommersant" newspaper, the total debt could be as high as RUB260 billion.

On September 2, Pleshakov released a statement saying neither (TRX) management nor shareholders initiated the deal. According to Pleshakov, they had suggested different scenarios for (TRX)’s bail out.

News Item A-6: Aeroflot (ARO) has agreed to be involved in the restructuring of Transaero Airlines (TRX), (ARO) said. The board decision comes three days after it agreed to acquire 75% plus one share of (TRX) for RUB1/1.53 US cents.

In making the decision, (ARO) said it “took into account the factor of high social tension in the airline market.” The board requested Aeroflot (ARO) management to immediately develop necessary steps to insure operational control of (TRX) and to provide (ARO) with corporate control during the restructuring.

Aeroflot (ARO) also agreed to include Sberbank as a financial consultant for the process. Sberbank is one of Transaero (TRX)’s biggest creditors. (TRX)’s overall debt to Sberbank has reached RUB250 billion, Interfax agency reported quoting Sberbank President, Herman Gref. Gref added that the exact volume still has to be agreed between the parties. This amount includes payments and principle under lease agreements with Sberbank Leasing, a subsidiary of Sberbank. Gref blamed Transaero (TRX) management for (TRX)’s problems.

News Item A-7: "Unfriendly Skies: Ukraine to Close Airspace to Russian Airlines" By WCARN.com Christopher Miller, Mashable, September 25, 2015.

The skies over Eastern Europe just became a little less friendly.

Ukraine announced it will close its airspace to Russian airlines starting October 25 (the latest move in its conflict with Russia over Russia's annexation of Crimea and support for separatists in the east of Ukraine). The ban will have a significant impact on major Russian airlines, including the national carrier, Aeroflot (ARO), and (Transaero) (TRX).

"In accordance with a decision by the Security Council, the government of Ukraine is adopting a decision to ban flights by Russian companies, primarily (ARO) and (TRX), to Ukraine," Prime Minister Arseniy Yatsenyuk told the Ukrainian government cabinet, according to a statement posted on the Cabinet's Ministry site. "Airlines with the Russian tricolor have no reason to be in Ukrainian airports."

Moreover, the government moved to ban Russian planes transporting soldiers or military cargo from flying through Ukrainian airspace, and blocked government agencies from using software made by Russia's Kaspersky Labs.

The Russian response came almost immediately, with the government saying it would retaliate in kind. "If these intentions are realized in actual documents from Ukraine's aviation authorities, by closing the airspace to Russian companies, then the Russian authorities will be compelled to take countermeasures," said Russian Transportation Minister, Maxim Sokolov. "Ukrainian citizens will suffer first and foremost."

"But I emphasize, that under the situation that has taken shape, the Russian side is being forced to do this by the Ukrainian side," he added.

The Kremlin claimed Ukraine does not have the right to impose such a ban. "As far as we know, Yatsenyuk does not have the right to suspend air traffic. He does not have such a prerogative," said Russian President, Vladimir Putin's Press Secretary, Dmitry Peskov. "Under international agreements, and international law, only the country's aviation authorities can do this. Using these channels is also envisioned in the international law."

"For now, I can say one thing: that the severing of air links between Russia and Ukraine would be another act of folly," Peskov added.

Russia's (ARO) and (TRX) fly multiple flights to and from Kiev to Moscow every day. (ARO) said that it was yet to receive a formal notification of the ban from Ukraine. "Only when and if Aeroflot (ARO) receives official notification from the aviation authorities of Ukraine that flights have been canceled, will (ARO) inform passengers and explain the rules on ticket reimbursement."

Ukraine has also imposed sanctions on hundreds of Russian companies, goods and individuals, for reasons of national security, according to the government. Russia has done the same.

While a renewed ceasefire has significantly lessened the fighting in Ukraine's war-racked eastern Donetsk and Luhansk regions, a settlement to the bloody conflict that has killed nearly 8,000 people since April 2014, is still a long ways off.

Russian President, Vladimir Putin and Ukrainian President, Petro Poroshenko will meet with the French and German leaders in Paris on October 2 to discuss a political settlement. While the Russian and Ukrainian leaders will both speak at the UN General Assembly next week, officials in Kiev told "Mashable" there was "no possibility" the two would meet in New York.

News Item A-8: Aeroflot (ARO) will initiate and fully subscribe to a capital increase in Orenair (ORB) subsidiary as part of the group’s multi-brand renewal strategy. (ORB) provides flights to leisure destinations.

In November 2011, (ARO) received 100% shares of (ORB) from Rostekhnologii (Rostec), a state corporation controlled by the Russian Federation, together with shares of four other regional carriers like Rossiya Airlines (SDM), Saratov Airlines (Saravia) (SOV), (SAT) Airlines (SKH) and Vladivostok Avia (VLK). (ORB) created Aurora Airlines (AAZ) from the last two companies and sold Saratov Airlines (SOV).

News Item A-9: "Russia issues New Foreign Pilot Allocations" by (ATW) Polina Montag-Grimes, September 16, 2015.

Russia’s Federal Air Transport Agency, Rosaviatsia, has distributed new allocations of foreign pilots (FC) that Russian airlines can hire. Over the next 12 months, Aeroflot (ARO) will be able to contract 50 pilots (FC); AirBridgeCargo (ABC), 16; Nordwind (NWD), 5; Chukotavia, 1; (SKOL) Airline, 5.

Russian legislators made air code amendments allowing carriers to hire non-Russian pilots (FC) in April 2014 in an effort to address pilot (FC) shortages. As of September 2014, airlines have been allowed to hire 200 foreign pilots (FC) over five years. Airlines can contract captains with at least 3,000 flight hours and no fewer than 500 hours on the aircraft type.

Due to the fairly recent downward and stagnation trend in the Russian airline market, the pilot (FC) shortage problem has become less relevant for the carriers. According to Rosaviatsia, the quota for 123 foreign pilots (FC) in 2015 is not distributed.

Before 2014, Russian airlines were allowed to hire only pilots (FC) who were Russian citizens.

News Item A-10: A fire at Moscow Domodedovo Airport has delayed more than >100 flights on September 3. The fire broke out at 7:20 am local time at the airport general contractor’s stock. According to an airport statement, the fire area was 15 square meters, but the smoke seeped into the main terminal via the ventilation system. Domodedovo resumed operations at 9:20 am local time.

By 4 pm local time, 116 delayed flights had departed from the airport, with an average flight delay of two hours, Domodedovo reported. It added that all other operations, including check-in and luggage sorting were operating normally.

October 2015: News Item A-1: "Aeroflot drops plans to acquire Transaero; bankruptcy imminent" by (ATW) 2015 Polina Montag-Girmes, October 1, 2015.

Aeroflot (ARO)’s plans to acquire Transaero Airlines (TRX) have fallen through and the Russian government will allow (TRX) to enter bankruptcy, placing (TRX)’s future in serious doubt.

The Russian government has ruled out rescuing (TRX). The government decided Transaero (TRX)’s debt burden was too high for a bailout to be viable.

On September 1, it was announced Aeroflot (ARO) would acquire struggling (TRX). (ARO), Russia’s largest airline, was ready to buy 75% plus one share of (TRX) for RUB1/1.53 US cents. But (ARO), which is 51%-owned by the Russian government, backed out of the deal when (TRX)’s shareholders, which are led by Alexander and Olga Pleshakova, failed to consolidate 75% plus one share of the airline’s ownership by September 28 in order to facilitate the Aeroflot (ARO) acquisition.

The September 28 deadline had been agreed to with (ARO), which refused to give (TRX)’s shareholders more time.

Also, Russian media reported that (TRX)’s main creditors could not come up with a solution for the airline’s debt problem. (TRX)’s overall debt reached RUB250 billion, the Interfax agency reported, quoting Sberbank, President Herman Gref, Sberbank as one of (TRX)’s biggest creditors.

Aeroflot (ARO) has guaranteed it would fulfill obligations to (TRX) passengers who otherwise would be stranded if (TRX) ceases operating. “The passengers will be carried or will be able to get a refund,” (ARO) (CEO), Vitaly Savelyev said October 1.

News Item A-2: "Aeroflot Sues Transaero Airlines" by (ATW) Polina Montag-Girmes, October 14, 2015.

Aeroflot (ARO) has sued Transaero Airlines (TRX) for RUB5 billion/$79.3 million in the Moscow City Arbitration Court, which did not disclose details.

The Aeroflot Group stated it will hire half of (TRX)’s 12,000 staff and is ready to offer jobs to 700 pilots (FC); 2,800 flight attendants (CA); 1,000 members of Engineering and Technical personnel; 1,200 employees of Ground Handling division; and 300 Administrators and Managers.

On October 1, Aeroflot (ARO) dropped plans to acquire 75% plus one share of Transaero (TRX). The Russian government has ruled out rescuing (TRX) after it said (TRX)’s debt burden, which is estimated at RUB250 billion, was too high for a bailout to be viable. (ARO) became responsible for carrying Transaero (TRX) passengers, along with other carriers such as S7 Airlines (SBR).

News Item A-3: "Transaero (AOC) Canceled; (S7) Co-owner Buys 51% of Shares" by (ATW) Polina Montag-Girmes, October 21, 2015.

Transaero Airlines (TRX)´s air operator´s certificate (AOC) was to be canceled from October 26, Russia’s Federal Air Transport Agency, Rosaviatsia, reported. According to the statement, “(TRX) is unable to service and repay its debt, as well as fund its operations. That does not meet certification requirements of Federal Aviation Regulations (FAR).” The decision was made by the authorities after (TRX)’s unscheduled audit took place on October 6 - 20.

Aeroflot (ARO) had planned to acquire Transaero (TRX), but later dropped plans, saying (TRX) shareholders failed to consolidate 75% plus one share. It was supposed to save (TRX), the second biggest airline, which has suffered a growing debt burden. According to Russia`s Sberbank President, Herman Gref, Transaero (TRX)`s overall debt to creditors reached RUB250 billion/$4 billion.

The day before authorities announced the (TRX) (AOC) decision, Russia´s "(RBC) Daily" reported Vladislav Filev, (S7) Group co-owner, bought 51% of (TRX) shares. New shareholders will try to escape the (TRX) bankruptcy, the "(RBC) Daily" reported, quoting Filev. Sberbank has already filed a bankruptcy claim against (TRX). The claim was registered in Saint Petersburg City Arbitration Court on October 19.

After news of the (S7) deal, shares of Transaero (TRX) at the Moscow Exchange grew from RUB6.8 to RUB17.51 per share by 5:30 pm Moscow time.

News Item A-4: "Aeroflot Receives 56 International Routes from Transaero" by (ATW) Polina Montag-Girmes, October 26, 2015.

Russian authorities have canceled 141 of the defunct Transaero Airlines (TRX)’s international route designations and have transferred 56 of them to Aeroflot (ARO) and subsidiary Rossiya Airlines (SDM). The designations, which took effect October 22, are approved for one year and may be extended.

(TRX) ceased operations on October 26 after its air operator’s certificate (AOC) was canceled by Russia’s Federal Air Transport Agency, Rosaviatsia. (S7) (SBR) Group co-owner Vladislav Filev has purchased 51% of Transaero (TRX)'s shares.

(ARO) received designations for several routes between Russia and Kazakhstan (including on routes from Moscow to Astana, Almaty, Aktau, Atyrau, Kokshetau, and Shymkent).

Due to the strict bilateral agreement between Russia and Kazakhstan, Aeroflot (ARO) has not been able to gain a market share in that region.

(ARO) also received designations for European routes that have been liberalized during the last several years and ones where (TRX) was the second Russian-designated carrier, such as routes including Moscow to Rome, Milan and Paris; Saint Petersburg to Rome and Milan; and Moscow to New York. It has also received other designations for popular routes such as from Moscow to London, Vienna, Tel Aviv, Istanbul, Dubai, and Salzburg.

Aeroflot (ARO) will lease 14 former Transaero (TRX) airplanes from Sberbank Leasing.

The Aeroflot Group is also planning to employ 6,060 people out of Transaero (TRX)’s staff. It said 2,765 employees will be able to get a job at Aeroflot (ARO), while the others will be offered jobs at Aeroflot (ARO) subsidiaries, Rossiya Airlines (SDM), Donavia (DAU), Aurora (AAZ), OrenAir (ORB) and Pobeda (PBD).

News Item A-5: Aeroflot (ARO) will launch daily, Sukhoi Superjet SSJ100 Moscow - Saratov service from December 1, which will encroach on regional Saratov Airlines (SOV)’s dominance on the route.

Previously, Saratov Airport could only handle Yakovlev Yak-40s, Yak-42s, Embraer EMB-195s, DHC-8-400s and several other aircraft types in the same weight class, due to its proximity to the city and the aerodrome infrastructure condition. However, in September the airport was granted permission to handle the SSJ100, opening up the route for larger competitors such as Aeroflot (ARO).

Saratov Airlines (SOV) operates a fleet of Yak-42s and EMB-195s.

According to Saratov Airport, Saratov Airlines (SOV) will operate up to 4x-daily, Saratov - Moscow services during the (IATA) 2015 - 2016 winter season. Komiaviatrans regional airline performs 3x-weekly Embraer-145LR Moscow - Saratov service.

Aeroflot (ARO) received 51% shares of Saratov Airlines (SOV) (previously known as Saravia) in 2011 from Rostec, together with the shares of other regional carriers, but later sold its shares in the Saratov-based carrier to local businessmen.

In 2012, new airport construction began in Saratov that will increase the number of carriers flying to the city in the Volga region.

News Item A-6: Aeroflot (ARO) will combine three of its regional subsidiaries: (Rossiya Airlines (SDV), Donavia (DAU), and Orenair (ORB)) into one company under the Rossiya Airlines (SDV) brand. After the consolidation, the subsidiary will concentrate on regional markets, according to an Aeroflot (ARO) statement.

(ARO) plans to develop the premium segment, while its Pobeda (PBD) subsidiary will remain in the low-cost carrier (LCC) segment. Russia’s Far East based Aurora Airline (AAZ) will be a separate regional subsidiary developing the network in the east of the country.

On September 18, (ARO) said it would initiate and fully subscribe to a capital increase in Orenair (ORB) subsidiary as part of the group’s multi-brand renewal strategy.

In November 2011, (ARO) received 100% shares of (ORB) from Rostekhnologii (Rostec), a state corporation controlled by the Russian Federation, together with shares of four other regional carriers like Rossiya Airlines (SDM), Saratov Airlines (Saravia) (SOV), (SAT) Airlines (SKH), and Vladivostok Avia (VLK). The carrier created Aurora Airlines (AAZ) from the last two companies and sold Saratov Airlines (SOV).

News Item A-7: "Ukraine Extends Ban to All Russian Airlines on October 25" by (ATW) Polina Montag-Girme, October 15, 2015.

The Ukrainian State Aviation Administration announced a total ban of all Russian airlines from flying into Ukraine as of October 25, in a back-and-forth political move.

On September 28, Ukraine announced it would ban Russian airlines from flying into Ukraine from October 25. The list included nearly 20 Russian airlines, among them were the biggest carriers such as Aeroflot (ARO) and S7 Airlines (SBR). The only big airline not included on the Ukrainian list was UTair (TYU), which would have been able to increase its flights to Kiev.

On September 29, Rosaviatsia, in turn, said it will ban Ukrainian airlines from flying into Russia on October 25. Ukrainian authorities said the latest measure was because Russia’s Federal Air Transport Agency, Rosaviatsia, “failed to provide a response explaining the reasons for flight limitations for Ukrainian carriers into Russia.”

Belarus’ Minsk-based Belavia (BLV), as well as Latvian Riga-based airBaltic (BAU), will benefit from the situation as they are able to offer transfer flights through their bases between Moscow and Kiev.

News Item A-8: Russian civil servants must choose Russian carriers when traveling on business, according to a decree signed by President Vladimir Putin on September 30. The mandate is one of several recent moves by the government to support the Russian airline industry as passenger numbers stagnate.

The decree amends business travel rules for civil servants that states government officials must choose Russian airlines or carriers of the Eurasian Economic Union for duty journeys, except when only foreign carriers serve a necessary route or if fares are sold out for a particular date. The document was prepared by Ministry of Labor in May.

From January - July 2015, Russian airlines carried 52.5 million passengers, the same number compared to the year-ago period. In July, passenger numbers grew +2.8%, continuing a trend of May and June.

November 2015: News Item A-1: (S7) (SBR) Group co-owner, Vladislav Filev (who bought 51% of Transaero (TRX) shares right before authorities pulled its air operator’s certificate (AOC)) has pulled out of the deal.

The official reason given is that (TRX) owners failed to consolidate 51% of shares that are free and discharged. But (TRX) Co-Founder, Alexander Pleshakov accused Filev of the deal collapse. He insisted Filev knew that part of the shares was pledged, when the agreement was signed October 20.

Pleshakov added that he heard about a meeting of Filev and Aeroflot (ARO) management took place on November 2, after which he was informed about the deal failure. Pleshakov said the agreement with Filev is still effective and Filev’s statement is in violation.

(ARO) had previously planned to acquire (TRX) to save Russia’s second biggest airline, which had a growing debt burden. However, Aeroflot (ARO) later dropped its plans, saying (TRX) shareholders failed to consolidate 75% plus one share. According to Russia’s Sberbank President, Herman Gref, (TRX)’s overall debt to creditors had reached RUB250 billion/$4 billion.

News Item A-2: Aeroflot (ARO) subsidiary, Aurora Airline (AAZ) has achieved (IATA) Operational Safety Audit (IOSA) certification following an assessment of its operational management and control systems.

(AAZ) (CEO), Konstantin Sukhorebrik said, “(IOSA) certification is a mandatory standard for airlines operating in the world market. Aurora (AAZ) is a part of the Aeroflot Group, which has very high safety standards. Passing the audit successfully, we have confirmed our competence, experience and work quality.”

Aurora Airline (AAZ) was created by merging Vladivostok Avia (VLK) and (SAT) Airlines (SKH); for a short period it was known as Taiga Airline. (AAZ) operates domestic and international flights. It plans to double its number of passengers and fleet in the next three years.

News Item A-3: Russian aviation authorities have banned EgyptAir (EGP) from flying into Russia. (EGP),the Egyptian flag carrier, which operated 3x-weekly, Cairo - Moscow scheduled services, was forced to cancel flights from November 14.

The airline confirmed that the Minister of Civil Aviation of Egypt, Hossam Kamal had received notification from Domodedovo Moscow Airport on the ban. Russia’s Minister of Transport, Maxim Sokolov said the decision is connected with the Metrojet (KLV) Airbus A321 crash on October 31, "TASS" reported, quoting the Minister. The A321 crashed in Egypt’s Sinai Peninsula shortly after takeoff from Sham el-Sheikh airport, en route to St Petersburg, killing all 224 onboard in what is widely believed to be caused by a bomb explosion.

Russia’s Aeroflot (ARO) will cease Moscow Sheremetyevo - Cairo scheduled service, effective November 18, while its subsidiary OrenAir (ORB) will operate several flights from Moscow Domodedovo to Sharm el Sheikh and Hurghada through December 1. After that, the Aeroflot Group will cease all Egypt flights.

News Item A-4: Aeroflot (ARO) subsidiary, Rossiya Airlines (SDM) has appointed Aeroflot Deputy (CEO), Dmitry Saprykin as its new (CEO). The decision was announced at a board meeting headed by Vadim Zingman, also a former (ARO) Deputy (CEO), who moved to Rossiya (SDM) earlier this year.

Saprykin will coordinate a united regional (ARO) subsidiary that will be molded from Rossiya (SDM), OrenAir (ORB) and Donavia (DAU), (ARO) said.

In September and October, Saprykin headed Transaero Airlines (TRX), which Aeroflot (ARO) planned to buy, but ultimately pulled out of the deal.

In November 2011, (ARO) received 75% (minus one share) of Rossiya Airlines (SDM) from Rostec (a state corporation controlled by the Russian Federation) together with shares of four other regional carriers.

In March 2014, Rossiya (SDM) transferred its flights under Aeroflot’s (ARO)'s (SU) code.

737-8LJ (41213, VQ-BWE "M Shchepkin"), Avia Capital leased, and SSJ-100-95B (95091 RA-89062 "P Nesterov"), ex-97011.

December 2015: News Item A-1: Russian airlines carried 479,000 passengers between the Russian Far East and other parts of the country under a six-month government subsidy program, down 2.24% year-over-year.

The program ran from April 1 through October 31, 2015 and applied to destinations in the extreme eastern parts of Russia.

Eleven airlines (Aeroflot (ARO), Transaero (TRX), Yakutia (SYL), Alrosa, UTair (TYU), (VIM) Avia (MOV), Ural Airlines (URL), OrenAir (ORB), S7 Airlines (SBR), Ikar and NordStar (JSC)) were part of the program, flying 53 routes between 29 cities in eight federal counties of the country. The program’s budget reached RUB3.37 billion/$52.4 million.

Aeroflot (ARO) and Transaero (TRX) carried the biggest number of passengers (154,000 and 136,000, respectively). The most popular route was Moscow - Vladivostok, with 54,000 passengers carried. The Moscow - Khabarovsk route took second place with 53,000 passengers carried.

Russian authorities first began a Far East subsidy program in 2009.

Three Russian airlines (Orenburg International Airport (ORB), Avia Management Group (which operates Dexter Air Taxi) and YuVT-Aero) carried 93,000 passengers during the first 11 months of 2015 through the regional routes subsidy program in the Volga region.

According to Russia’s Federal Air Transport Agency, carriers operated flights on 31 routes. Kazan - Perm has become the most popular route of the program.

This year, federal government subsidies for flight development in the Volga region will reach RUB620 million. The program was launched in 2013.

News Item A-2: "Russia’s International Traffic dropped -28.4% in November" by (ATW) Polina Montag-Girmes.

International traffic for Russian airlines was down -28.4% in November year-over-year (YOY) to 2.2 million passengers, according to Russia’s Federal Air Transport Agency, Rosaviatsia.

The total number of passengers carried in November reached 5.7 million, down -11.8% (YOY). The sharp drop is attributed to the closure of Egyptian destinations, following the Metrojet (KLV) Airbus A321 crash on October 31, and charters to Turkey due to increased tensions between the two countries after the downing of a Russian fighter jet over Syria by Turkey.

In the January - November period, all Russian airlines carried 86.5 million passengers, down -0.4% (YOY). International traffic was down -14.9% to 37.6 million, while domestic routes grew +14.5% to 48.9 million.

Aeroflot (ARO) carried 24 million passengers in the 11-month period, up +10.7%. (S7) (SBR) carried 7.6 million, up +2.6 %. While Globus (GLP), a part of the (S7) Group, carried 2.2 million, up +15.2%. UTair (TYU), that announced its debt portfolio refinancing, carried 5.2 million, down -35.7%. Ural airlines (URL) carried 5.1 million, up +6.3%. (URL) remained fifth place in the ratings, while Rossiya Airline (SDM) stayed at the sixth place with 4.5 million passengers carried, down -6.7% (YOY).

News Item A-3: The Arbitration Court of Saint Petersburg and Leningrad region has put Transaero Airline (TRX) under external supervision, in a decision published on the court’s website December 16. Russia’s Sberbank filed a bankruptcy motion against Transaero (TRX) on October 19, after Aeroflot (ARO)’s plans to acquire (TRX) fell through.

(TRX)’s overall debt reached RUB250 billion/$3.72 billion, Interfax agency reported September 4, quoting Sberbank President, Herman Gref. Sberbank is one of (TRX)’s biggest creditors. Russia’s Federal Air Transport Agency, Rosaviatsia, suspended (TRX)’s ticket sales from October 1, 2015. (TRX)’s air operator’s certificate (AOC) was canceled October 26.

Aeroflot (ARO) carried (TRX) passengers through December 15. Since the beginning of September, (ARO) said it has carried 1.9 million Transaero (TRX) passengers.

January 2016: News Item A-1: Aircraft leased by Transaero Airline (TRX) were not maintained properly in a disregard of lease agreements, Sberbank President, Herman Gref told Russia´s TV "Rossiya 24" at the end of December 2015.

“As long as we work with that case, we discover new surprises. We have discovered unreliable financials and that airplanes were not maintained properly. Most of the airplanes were not in working order, while the debts to Maintenance Repair & Overhaul (MRO) providers are significant and we discover new debts. We do not have any contacts with the owners. I would recommend the owners to contact creditors and to be more loyal to us,” Gref said.

Sberbank was one of the main Transaero (TRX)´s creditors, while its subsidiary, Sberbank Leasing was one of (TRX)’s lessors.

The bank filed a bankruptcy claim against (TRX) on October 19, after Aeroflot (ARO)’s plans to acquire Transaero (TRX) fell through. Its air operator’s certificate (AOC) was canceled from October 26, 2015. The Arbitration Court of Saint Petersburg and Leningrad region put (TRX) under external supervision, in a decision published on the court’s website on December 16.

At the end of October 2015, it was announced (ARO) would lease 14 former (TRX) airplanes from Sberbank Leasing. The deal included 10 Boeing 737-800s planned for delivery in 2016 and four 747s.

News Item A-2: Aeroflot (ARO), which is combining three of its regional subsidiaries (Rossiya Airlines (SDM), Donavia (DAU), and Orenair (ORB)) into one company under the Rossiya Airlines (SDM) brand, said the fleet of the renewed carrier will reach 74 aircraft and will carry up to 10 million passengers per year.

After the merger, which is expected to be finalized in 2016, the subsidiary will concentrate on regional markets.

According to Aeroflot (ARO), the new Rossiya (SDM) will employ 1,500 of 2,060 OrenAir (ORB)’s staff. Details about Donavia (DAU) have not been disclosed.

(ARO) also plans to develop the premium segment, while its Pobeda (PBD) subsidiary will remain in the low-cost carrier (LCC) segment. Russia’s Far East based Aurora Airline (AAZ) will be a separate regional subsidiary developing the network in the eastern part of the country.

News Item A-3: "Russia’s International Traffic Drops -15.8% in 2015"
by (ATW) Polina Montag-Girmes, January 27, 2016.

International traffic for Russian airlines was down -15.8% in 2015 to 39.5 million year-over-year (YOY), according to Russia’s Federal Air Transport Agency, Rosaviatsia.

Domestic traffic was up +13.6% to 52.6 million. The total number of passengers carried reached 92.1 million, down -1.2% (YOY). In December, international traffic was down -30.7%, due to the closure of Egyptian destinations, Turkey’s charter flight ban, and the Transaero (TRX) collapse. In November, traffic dropped -28.4%.

In 2015, Aeroflot (ARO) carried 26.1 million passengers, up +10.6%. The Aeroflot Group (which also includes Rossiya Airline (SDM), OrenAir (ORB), Donavia (DAU), Aurora (AAZ) and Pobeda Airline (PBD)) carried 39.4 million in 2015, up +13.4% (YOY).

S7 Airlines (SBR) carried 10.6 million passengers in 2015, up +5.6%, 8.2 million passengers were carried by the Sibir branch and 2.4 million by Globus (GLP).

UTair (TYU), which announced a debt portfolio refinancing, carried 5.5 million passengers, down -25.3% (YOY). Transaero (TRX), which ceased its operations in October, carried 11.2 million in 2015. Ural Airlines (URL) carried 5.4 million, up +5.5% (YOY).

News Item A-4: "Moscow Airports' International Traffic Down -10.4% in 2015" by (ATW) Polina Montag-Girmes, January 27, 2016.

Moscow’s three airports: (Sheremetyevo, Domodedovo and Vnukovo) handled 37.9 million passengers in 2015, down -10.4% year-over-year (YOY), according to statistics released by Russia’s Federal Air Transport Agency, Rosaviatsia.

Domodedovo handled 30.5 million international and domestic passengers, down -7.7% (YOY), which was the biggest loss. Sheremetyevo handled 31.3 million passengers, up +0.1% (YOY), and Vnukovo handled 15.8 million passengers, up +24.2%.

In December 2015, Vnukovo’s traffic fell -24.7% (YOY) to 735,144 and Domodedovo’s traffic dropped -9%, to 1.9 million. However, traffic at Sheremetyevo was up +4.1% to 2.3 million passengers.

December’s decrease at Vnukovo and Domodedovo could be due to the Transaero (TRX) collapse in October 2015 and the Turkey and Egyptian charters ban.

The downward trend in Russia’s international traffic started at the end of 2014 and continued through 2015. It forced several international carriers, such as Lufthansa (DLH), Cathay Pacific (CAT) and airberlin (BER) to cut operations at Russian destinations.

See video on Aeroflot (ARO) 777-300 flight in Malaysia:

February 2016: News Item A-1: Russia’s Aeroflot (ARO) received RUB1.49 billion/$20.5 million in government subsidies in 2015, according to (ARO)’s financial results published in accordance with Russian Accounting Standards.

News Item A-2: Russia and Cyprus have agreed to remove “all the limitations on the number of designated airlines of both sides on agreed routes” between the countries. The liberalization was established in a memorandum of understanding (MOU) signed by Russia and Cyprus aeronautical authorities on March 16, 2012, but became effective in January 2015, after a letter exchange between the administrations.

Cyprus authorities also asked Russia to allow non-Cyprus but European Union (EU) carriers to operate flights on the routes. “We take this opportunity to urge you to consider on an exceptional basis the designation of European carriers, which are established in Cyprus, by the Republic of Cyprus, to operate routes between Russia and Cyprus. This is especially important as at this time, almost a year after the termination of the flight program of Cyprus Airways (CYP), there is no national or other Cypriot carrier which could operate these routes. We believe that this arrangement will provide a better equilibrium between our two countries,” Civil Aviation official, Antonis Lemesianos said in the letter.

Bilateral agreements between Russia and most other countries stipulate that flights can only be operated by airlines that are owned and managed by residents of the two countries. The non-residential ownership was the main obstacle for Budapest-based Wizz Air (WZZ) to get the designation for the Budapest - Moscow route after Malev (HGA) ceased operations and gave Aeroflot (ARO) a monopoly on the destination for a while.

In July 2015, Russian airlines asked aviation authorities not to make changes of this kind in the Russia - Cyprus agreement.

News Item A-3: "Aircraft Deliveries in Russia Slow Significantly in 2015" by (ATW) Polina Montag-Girm, February 2, 2016.

Russian carriers took delivery of fewer than 60 aircraft in 2015, less than half of the approximately 123 aircraft delivered per year during 2008-2014, according to Russia’s State Scientific Research Institute of Civil Aviation.

According to the organization, 22.1% of airplanes delivered in 2013 - 2015 were Boeing 737-800s; 15.4% were Airbus A320s; 12.9% were A321s and 7.1% were A319s. Sukhoi Superjet 100 (SSJ100) deliveries made up 14.2% of total aircraft deliveries from 2013 - 2015.

During the 2013 - 2015 time period, deliveries of Russian-assembled aircraft have not exceeded 20 aircraft per year.

Russian airlines’ passenger fleet includes 547 wide bodies and narrow bodies, of which 82 are Russian-built. Regional aircraft includes 206, comprising 125 Soviet-era aircraft, five Antonov An-148s and 76 Western-built aircraft.

According to the study, Russian airlines will need up to 1,800 - 2,200 aircraft through 2034 to replace older aircraft and meet demand. Of that number, 390 - 540 are wide bodies, 1,050 - 2,070 are narrow bodies, and 370 - 410 are regional aircraft.

The institute said if the downward trend is short-lived, Russia’s passenger turnover could grow +2.2 to 2.9 times over 2014, when it reached 241.4 billion (RPK)s.

News Item A-4: "Incident: Aeroflot A320 Near Moscow on February 8, 2016, Hydraulic Failure" by Simon Hradecky, The Aviation Herald, February 8, 2016.

An Aeroflot Airbus A320-200 (registration VP-BWF) performing flight SU-1184 (scheduled departure February 7) from Moscow Sheremtyevo to Volgograd (Russia), was enroute at FL350 about 170 nm south of Moscow, when the crew decided to return to Moscow Sheremetyevo reporting a hydraulic failure. The crew advised they needed to be towed off the runway. The aircraft landed safely on Sheremetyevo's runway 25R about 40 minutes after turning around.

A replacement A320-200 (registration VQ-BKS) departed about 2 hours after landing and reached Volgograd with a delay of 3 hours.

News Item A-5: The Aeroflot Group said it will carry 61.5 million passengers in 2021, down from a previous guidance released in May 2015 when it forecasted it would fly 64.7 million passengers in 2020. In 2014, Aeroflot (ARO) predicted it would carry 67.6 million passengers in 2020.

At the beginning of 2016, (ARO) announced it would combine three of its regional subsidiaries (Rossiya Airlines (SDM), OrenAir (ORB), and Donavia (DAU)) into one company under the Rossiya Airlines (SDM) brand, which has a fleet of more than >70 aircraft.

The group had expected the combined subsidiary would become the second largest airline in Russia.

In January 2016, (ARO) carried 2 million passengers, up +10.7% year-over-year (YOY), but the combined subsidiaries have decreased capacity. Saint Petersburg-based Rossiya Airlines (SDM) carried 275,411 passengers in January, down -27.4% (YOY); OrenAir (ORB) carried 192,617, down -3.5% (YOY); while Donavia (DAU) carried 75,693, down -33.7%.

According to an (ARO) statement, group traffic increased +11.6% to 2.97 million passengers. That also includes the results of low-cost subsidiary Pobeda Airline (PBD), which reported a fourfold increase in traffic in January to 330,956 (YOY). Its Aurora (AAZ) subsidiary carried 85,070, up 16.5% (YOY).

International traffic for the group grew +2.7% to 1.24 million, while domestic traffic increased +19.1% to 1.72 million. The significant increase of domestic traffic was also due to the Pobeda (PBD) development, Aeroflot (ARO) added.

Altogether, Russian airlines carried 5.54 million passengers, down -6.1% (YOY). The Aeroflot Group has a market share of more than >50%.

March 2016: News Item A-1: The Aeroflot Group reported a net loss of -RUB6.49 billion/-$89 million for 2015, narrowed -62% from a -RUB17.1 billion net loss in 2014.

Full-year revenue rose +29.8% to RUB415.2 billion. Total operating costs in 2015 increased +20.3% to RUB371 billion. Operating lease expenses were RUB44.4 billion, up +86.4% year-over-year (YOY). Aircraft maintenance expenses grew +66.7% to RUB32 billion for the year and aircraft fuel costs increased +25% to RUB276.7 billion.

“The challenging macroeconomic situation had a significant impact on group financial results throughout the year,” (ARO) Deputy (CEO), Finance & Network & Revenue Management, Shamil Kurmashov said. “In response to the worsening external backdrop, we took a number of steps to optimize the fleet and cut costs, enabling us to limit the growth of operating costs despite significant exchange rate pressure over the course of 2015.”

The Aeroflot Group includes the airline by the same name, as well as low cost carrier (LCC) subsidiary, Pobeda Airline (PBD) and carriers in several Russian regions (Saint Petersburg-based, Rossiya Airlines (SDM), Orenburg-based OrenAir (ORB), Rostov on Don-based Donavia (DAU), and Russia’s Far East-based Aurora (AAZ). This year, the group plans to combine three airlines ((SDM), (DAU) and OrenAir (ORB)) into one.

In 2015, Aeroflot (ARO) carried 26.1 million passengers, up +10.6%. The Aeroflot Group carried RUB39.4 million in 2015, up +13.4% (YOY).

News Item A-2: Russian airlines carried 5.1 million passengers in February, up +0.2% year-over-year (YOY), slowly reversing a downward trend, according to Russia’s Federal Air Transport Agency, Rosaviatsia.

Cargo volumes grew +0.1% (YOY) in February to 73,445 tonnes. During the first two months of 2016, airlines carried 10.7 million passengers and 151,542 tonnes of cargo. In 2015, the total number of passengers carried decreased -1.2%, to 92.1 million.

Rosaviatsia predicts traffic figures will continue to settle down this year because of additional investments into airport infrastructure and domestic route subsidies. It plans to finish runway renovation at Volgograd, Samara, Krasnodar, and Petropavlovsk-Kamchatsky airports this year. Nizhny Novgorod International Airport will open a new passenger terminal this year.

News Item A-3: "Hard Hit Russian Aviation Sector Can be Helped, (IATA) Said" by (ATW) Alan Dron, March 4, 2016.

(IATA) has proposed a series of measures to the Russian government to strengthen the nation’s aviation sector.

Russian airlines are being affected by an economic downturn caused by a combination of low oil prices (a pillar of the country’s economy) and sanctions triggered by the country’s involvement in the war in Ukraine. The rouble has also almost halved in value against some major foreign currencies, leading to a sharp drop in the number of Russians traveling abroad, particularly on holiday. Together, these factors have seen a shrinking in passenger numbers.

Speaking at the first (IATA) Aviation Day Russia, (IATA) (DG) & (CEO), Tony Tyler said there was no simple solution for the country’s aviation woes, but suggested that the adoption of several global standards would help buttress the sector.

“A healthy aviation sector is vital for Russia: - connecting the communities across the country’s vast land mass and providing vital trade and cultural links globally,” Tyler said.

“These are difficult times for Russian aviation and there is no silver bullet solution to invigorating the sector. However, a partnership agenda that extends the positive impact that global standards are having in safety and distribution, will strengthen the foundations of the sector for success.”

(IATA) was proposing several measures to the Russian government, he said. To remove costs from airlines, it should recognize the benefits of lowering and eventually removing a tax on the price of tickets for domestic flights. It should also ensure that airport charges and infrastructure developments were agreed by airlines and airport operators, with a focus on cost-efficiency and were aligned with the global principles agreed with governments through (ICAO).

(IATA) also urged Russia to adopt several international agreements, such as the Montreal Convention 1999 to provide global standard risk coverage for passengers and shippers and to facilitate e-cargo implementation, as well at the 2014 Montreal Protocol to close jurisdictional gaps when unruly passengers were unloaded in third countries after causing in-flight problems, particularly in international airspace.

Also on the security front, (IATA) & Airports Council International are seeking Russian involvement in the Smart Security Initiative to reduce frustration for passengers passing through airport security procedures, through a combination of adopting international best practices and new technologies.

(IATA) also urged the Russian government to support a global agreement through (ICAO) for a Market Based Measures system to manage the aviation sector’s carbon footprint, which is expected to grow as increasing numbers of people, particularly from the developing world, become airline passengers as wealth levels rise.

“(IATA) is a long-time partner of Russian aviation and this has created significant value,” Tyler said. “The (IATA) operational Safety Audit (IOSA) aligns some 400 airlines (including our 11 Russian members and five other Russian airlines) with the global benchmark for operational safety. And the Billing & Settlement Plan has helped to link the country’s consumers to the world with global best standards for ticket distribution.

“By working in partnership with all stakeholders (including the government) I am confident that we can create even more value with connectivity as a catalyst for economic and social development,” Tyler said.

News Item A-4: "Russia to Spend $44.4 million for Far East Subsidy Program in 2016" by (ATW) Polina Montag-Girmes, March 8, 2016.

Russian authorities have set a budget of RUB3.25 billion/$44.4 million for nine carriers to take part in a government-subsidized program on flights between Russia’s Far East and other parts of the country.

The nine Russian carriers taking part in the program are Aeroflot (ARO), Alrosa, Yakutia (SYL), Ikar, NordStar (JSC), S7 Airlines (SBR), Ural Airlines (URL), (VIM) Avia (MOV), and UTair (TYU).

According to a government statement, the 2016 subsidy program comprises 71 destinations, which include 13 cities in the Far East region. This year’s program will again run from April 1 through October 31. The participating airlines are expected to carry around 480,000 passengers during that timeframe.

In 2015, the program spent RUB3.37 billion for 11 airlines to carry 479,000 passengers. Aeroflot Group member OrenAir (ORB) did not apply for participation this year, while Transaero (TRX) ceased operations in 2015.

Russian authorities launched the Far East subsidy program in 2009.

News Item A-5: "Aeroflot Wins $16.4 million in New Contract Cargo Business" by (ATW) Polina Montag-Girmes, March 10, 2016.

Aeroflot has gained RUB1.2 billion/$16.4 million in revenue for contracted cargo space in the bellies of its passenger aircraft for its 2016 summer schedule, which started on March 1.

According to Aeroflot (ARO), the number of companies contracting cargo space on its aircraft has risen from 29 to 44. It pointed to the growth of freight forwarding operations in the Russian Far East as part of the reason for the rise. The additional contracts include guarantees for (ARO) to carry 15,600 tonnes of cargo between Moscow and Russia’s Far East regions, as well as between the cities of the Far East region.

(ARO) offered contract belly cargo space on several new routes for its summer schedule, including destinations in Kazakhstan such as Almaty, Astana, and Karaganda. Aeroflot (ARO) has replaced the bankrupt Transaero (TRX), which was the main carrier from Russia to Kazakhstan. Aeroflot (ARO) also offers contract cargo space in the aircraft bellies of its subsidiary Rossiya Airlines (SDM), which operates flights from Moscow Vnukovo Airport.

(ARO) previously operated three MD-11F freighters, but the cargo fleet was grounded in 2013, and now all of the airline’s cargo is carried in passenger aircraft bellies.

News Item A-6: Russia’s Interstate Aviation Committee (IAC) has reported that airlines in member states had 56 accidents, including 27 crashes, which killed 116 people in 2015, according to (IAC)’s Safety Performance Report.

The statistics include general aviation, helicopter performance and technical flights. The (IAC) defines an accident as an event where an aircraft was damaged without fatalities, while a crash is defined as an accident resulting in fatalities.

The report does not include the Metrojet (KLV) Airbus A321 crash over Sinai, as Russia stated that an explosive device was responsible for the downing of the aircraft on October 31, 2015.

Three accidents were the result of an aircraft’s takeoff weight exceeding 10 tonnes:

* On January 3, 2015, a (KAPO) Avia Antonov 26 on a technical flight ran off the runway during takeoff from Sokol Airport in Magadan. The pilots (FC) and second crew were not hurt.

* On November 22, a Boeing 737 of Kyrgyz Avia Traffic Company overshot the runway while landing at Osh Airport in Kyrgyzstan. Ten out of 160 people on board were hurt.

* On November 4, an Antonov An 12, operated by Tadjikistan-based Asia Airways, crashed after taking off in Juba, South Sudan, killing 35 out of 37 people on board. The investigation has not yet been completed.

In the report, the (IAC) pointed out the common problems of civil aviation of country members, such as insufficient pilot (FC) training, absence of distinct criteria for pilot (FC)-instructors, and insufficient knowledge of the English language.

The (IAC) includes 11 member states: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

News Item A-7: Russian and Spanish aviation authorities have agreed to increase the number of designated carriers for Moscow - Barcelona service from three to five for each side.

Rosaviatsia said it has increased the number of frequencies from 42 to 57 per week for each side. The additional frequencies will be allocated to newly designated carriers.

In addition, the number of frequencies for Moscow - Malaga service has been increased from 14 to 21 per week.

The new rules were agreed upon despite a downturn in Russian international traffic.

Rosaviatsia said both respective parties have agreed to increase the number of air carriers performing flights between the territories of both countries “except for the following routes: Madrid - Moscow (three carriers for each side) and Barcelona - Moscow (five carriers for each side.” It was agreed the airlines could use any type of aircraft on the flights.

News Item A-8: The Russian government will invest RUB13 billion/$192 million in Domodedovo International Airport’s airfield infrastructure.

News Item A-9: Russian authorities have established the Aviation Register of the Russian Federation, which will be responsible for aircraft design, components, engines and propeller certification. The setup document was published by Russia’s Federal Air Transport Agency, Rosaviatsia, on March 21.

The transfer of certification powers from Moscow-based Interstate Aviation Committee (IAC) to other authorities was announced in December 2015. (IAC) has been responsible for certification and incidents investigation since its launch by several former (USSR) countries in 1991. Now it will be responsible only for investigation.

Since the beginning, the committee has been headed by Tatiana Anodina, mother of Transaero (TRX) Founder, Alexander Pleshakov.

The reason for certification powers transfer has not been officially explained, but it could be connected with (IAC)’s decision to recall the Boeing 737 type certificate in Russia on November 5, 2015.

April 2016: News Item A-1: "Rossiya Airlines Takes First 747-400 in New Livery"

The Aeroflot Group’s consolidated regional subsidiary, Rossiya Airlines (SDM) has taken delivery of its first Boeing 747-400 in a new livery.

The 747-446 (26362, EI-XLE) was previously operated by Transaero (TRX). Rossiya (SDM)’s entire fleet will be painted when new airplanes are delivered or regular maintenance is performed on the fleet.

The Aeroflot Group has combined its three regional subsidiaries: Saint Petersburg-based Rossiya Airlines (SDM), Orenburg-based OrenAir (ORB) and Rostov-on-Don-based Donavia (DAU). The carriers launched a combined network and charter flights from the (IATA) 2016 summer season.

The new Rossiya Airlines (SDM) fleet will include more than >70 aircraft, which will include former Transaero (TRX) airplanes that Aeroflot (ARO) agreed to lease from Sberbank Leasing in October 2015, including four 747s.

Aeroflot (ARO) low-cost carrier (LCC) subsidiary, Pobeda Airlines (PBD) and Russia’s Far East-based, Aurora Airlines (AAZ), will remain self-contained.

May 2016: Aeroflot (ARO) plans to carry 30 million passengers in 2016, (ARO) (CEO), Vitaly Savelyev told Russia’s TV Rossiya 24. The whole Aeroflot Group is expected to handle 40 million passengers.

The Aeroflot Group includes low-cost Pobeda Airline, which more than doubled traffic in the first quarter to 950,794 passengers. Saint Petersburg-based Rossiya Airlines (SDM), Rostov-on-Don-based Donavia (DAU), and Orenburg-based Orenair (ORB) are now combining into one airline operating under the Rossiya Airlines brand.

In the first quarter, Orenair (ORB) carried 491,346 passengers, up +8.1% year-over-year (YOY). Rossiya (SDM) carried 862,617 passengers, down -21.2%. Donavia (DAU) carried 209,116 passengers, down 35.8%. Aurora Airline (AAZ), which serves Russia’s Far East, carried 276,827 passengers, up +21.5% (YOY).

In 2015, Aeroflot (ARO) carried 26.1 million passengers, up +10.6% (YOY). The group’s traffic reached 39.4 million passengers, up +13.4%.

June 2017: News Item A-1: Russia’s Federal Air Transport Agency, Rosaviatsia, has canceled the air operator’s certificate (AOC) of Aeroflot Group subsidiary Orenair (ORB) from May 26. The decision was made at the request of the Orenburg-based airline, authorities said in a June 1 statement.

Aeroflot (ARO) announced in October 2015 it would combine three of its regional subsidiaries: — Rossiya Airlines (SDM), Donavia (DAU), and Orenair (ORB), into one company under the Rossiya Airlines (SDM) brand.

From March 27, the 3 carriers launched a combined network that includes 81 destinations from Moscow Vnukovo, Saint Petersburg, and Rostov-on-Don.

News Item A-2: Russia OKs Moscow Sheremetyevo development.

The Moscow Region Urban Council has approved the Northern Terminal Complex development project for Moscow Sheremetyevo International Airport (SVO), which is scheduled to be completed by 2018.

July 2016: News Item A-1: China Southern Airlines (GUN), the largest airline in China, announced an expansion of their code share cooperation with Aeroflot (ARO). Both (GUN) and (ARO) are members of the SkyTeam (STM) Alliance.

Starting this month, Aeroflot (ARO) will place its SU code on China Southern Airlines (GUN) flights between Guangzhou and Moscow, as well as its Guangzhou - Wuhan - Moscow service.

(GUN) and (ARO) code share cooperation originated in 2007 and with this new arrangement in place, both SkyTeam (STM) affiliated airlines will provide more convenient travel services to passengers traveling between China and Russia.

According to the Russia Tourism Administration, from the first quarter of 2014, China became the biggest outbound tourism market to Russia.

In 2015, approximately 67,000 Chinese passengers traveled to Russia, an increase of +67% compared with the previous year. Considering this huge market growth potential, (GUN) launched several scheduled flights between China and Russia, including Guangzhou to Moscow and Urumqi to St Petersburg.

News Item A-2: The Aeroflot Group carried 15.8 million passengers from January to May, up +11.5% year-over-year (YOY).

The Aeroflot Group includes Aeroflot Airline (ARO), the low-cost carrier (LCC) subsidiary, Pobeda Airline (PBD), Far East subsidiary Aurora Airline (AAZ), as well as Rossiya Airline (SDM), Orenburg-based OrenAir (ORB) and Rostov-on-Don-based Donavia (DAU).

Moscow-based, Aeroflot Airline (ARO) carried 10.9 million out of the total traffic, up +13.6% (YOY). Group (RPK)s grew +13.2% to 35.3 billion and load factor reached 77.4% LF, up +3 points (YOY).

Aeroflot Airlines (ARO)’s load factor was up +2 points to 77.7% LF during the period.

In May, the Group carried 3.5 million passengers, up +8.8% year-over-year (YOY), while (ARO) carried 2.4 million, up +12.4%. Domestic traffic for the Group grew +8.5% in May compared to the year-ago period, while international traffic increased +9.2%.

Aeroflot (ARO) said it experienced increases in international traffic despite a flight ban to Ukraine, Egypt and a charter flight ban to Turkey.

August 2016: Aeroflot (ARO) low-cost carrier (LCC) subsidiary, Pobeda Airlines (PBD) plans to double its network at Saint Petersburg’s Pulkovo International Airport for the 2016/2017 winter schedule.

(PBD) has announced it will begin 2x-weekly Volgograd and Vladikavkaz Boeing 737-800 service from November 1, and weekly Saint Petersburg - Nalchik service from November 3.

Pobeda (PBD) currently operates 4x-weekly Saint Petersburg - Makhachkala 737-800 service, daily Saint Petersburg - Yekaterinburg service, and 2x-weekly Saint Petersburg - Kirov service.

Since launching flights from Saint Petersburg on October 23, 2015, (PBD) has operated more than >1,000 flights and carried up to 170,000 passengers from Pulkovo.

Pobeda (PBD) was launched in December 2014, operates domestic and international flights. (PBD)’s fleet includes 12 Boeing 737-800s and carried 1.99 million passengers in (1H) 2016, up +80.7% year-over-year.

September 2016: The Aeroflot Group carried 28.7 million passengers in January - August 2016, up +8.9% year-over-year (YOY). Moscow Sheremetyevo-based Aeroflot Russian Airlines (ARO) carried 19 million passengers, up +10.2% (YOY).

Aeroflot Group international passenger numbers grew +9% (YOY) to 11.9 million; domestic passengers increased +8.8% (YOY) to 16.8 million passengers.

(ARO) international passengers were up +7.5% (YOY) to 9.7 million; domestic passengers increased +13.1% (YOY) to 9.3 million.

Aeroflot Group traffic as measured in (RPK)s increased +12.2% (YOY) to 73.3 billion (RPK)s. (ARO) traffic was up +10.6% (YOY) to 54.4 billion (RPK)S. Aeroflot Group’s group passenger load factor increased +2.9% points (YOY) to 81.9% LF; for (ARO), the passenger load factor was up +1.7 points (YOY) to 81.6% LF.

"International traffic growth was supported by a decline in competition as several foreign carriers reduced flight frequencies to Russia,” (ARO) said.

In addition to (ARO), the Aeroflot Group includes Saint Petersburg-based Rossiya Airlines (SDM), low cost carrier (LCC) Pobeda Airlines (PBD) and Far East subsidiary, Aurora Airlines (AAZ).

The Group fleet reached a total of 280 aircraft as of August 31. 5 737-800s, 5 747s, 5 777-300ERs, 6 Sukhoi SSJ100s, 1 Airbus A319, 5 Dash 8-Q400s, 6 A320s and 7 A321s have been added to the Group fleet through August 31. 5 A319s, 5 A321s, 3 A320s, 3 737-500s, 1 737-800 and 1 767 have been phased out of the Aeroflot Group fleet year-to-date, the Group said.

October 2016: Aeroflot (ARO) low-cost carrier (LCC) subsidiary Pobeda Airlines (PBD) has opened an Operations Control Center at Moscow Vnukovo International Airport, which will allow flights to maintain a 30-minute turnaround time.

Visual observations enable Flight Operations to decrease delays caused by ground handling services, improving punctuality by +10% ro +15%. Pobeda (PBD) operates up to daily 70 flights, carrying 12,000 passengers from its main base in Vnukovo as well as from other airports in Russia.

The Aeroflot (ARO) subsidiary, which was launched in December 2014, operates domestic and international flights. Pobeda (PBD)'s fleet includes 12 Boeing 737-800s. In January - August, (PBD) carried 2.8 million passengers, up +58.2% year-over-year.

November 2016: News Item A-1: Russian aviation authorities have offered the 6 airlines participating in the Kaliningrad subsidy program a chance to further develop the Kaliningrad network and sell more subsidized tickets via their websites, using fewer agencies.

In 2016, 6 carriers: Aeroflot (ARO), Sibir (which operates under the (S7) Airlines (SBR) brand), UTair (TYU), Ural Airlines (URL), Red Wings (RWZ) and Nordavia (AEN)) operated routes from Kaliningrad to Moscow and Saint Petersburg within the program framework. Russia launched the Kaliningrad subsidy program in 2011, which runs from May 15 through October 15 each year.

According to Russia’s Federal Air Transport Agency, Rosaviatsia, in 2015, airlines carried 170,000 passengers, down -17% from 205,000 in 2014.

Kaliningrad is a Russian exclave situated west of the country and does not border the main territory. It is surrounded by Poland and Lithuania.

News Item A-2: Russia’s Aeroflot Group has reported a net profit of +RUB43.8 billion/+$693.5 million for the 1st 9 months of 2016 to September 30, up significantly from +RUB1.8 billion in the year-ago period. Revenue grew +23.2% year-over-year (YOY) to RUB 381.3 billion for the period.

The results are published according to International Financial reporting Standards (IFRS). “Our (IFRS) results for the 1st 9 months of the year show a significant improvement year-on-year, driven primarily by growth of the business, net positive [foreign currency] effects and tight control of operating costs,” Aeroflot (ARO) Deputy (CEO) Shamil Kurmashov said. “Profitability further improved as a result of operating leverage, with a +3.1% increase in the passenger load factor, to 82.4% LF. The group thus received extra revenue without increasing fixed costs,” Kurmashov added.

Traffic for the 9-month period rose +9.2% (YOY) to 32.8 million passengers. Operating costs grew +15.3% (YOY) to RUB314.4 billion. Operating lease expenses increased +37.7% to RUB43.2 billion.

Aeroflot Group includes the airline of the same name as well as Saint Petersburg-based Rossiya Airline (SDM), low-cost carrier (LCC) subsidiary Pobeda Airlines (PBD) and Far East-based Aurora Airline (AAZ).

January 2017: News Item A-1: Russia’s Aeroflot Group carried 43.4 million passengers in 2016, up +10.3% compared to 39.4 million passengers in 2015. Moscow Sheremetyevo Airport-based Aeroflot Airlines (ARO) carried 29 million passengers, up +11% compared to 26.1 million in 2015.

In addition to (ARO), the Aeroflot Group includes Saint Petersburg-based Rossiya Airlines (SDM), Moscow-based low-cost carrier (LCC) Pobeda Airlines (PBD) and Russian Far East subsidiary Aurora Airlines (AAZ), based in Yuzhno-Sakhalinsk.

* Aeroflot Group operations in 2016:

The Aeroflot Group tallied 18.3 million international passengers in 2016, up +14.1% year-over-year (YOY). The (ARO) Group carried 25.2 million domestic passengers during the year, a +7.6% increase (YOY).

Overall passenger traffic for the Aeroflot Group increased +14.8% (YOY) to 112.1 billion RPKs, with international traffic up 19.8% (YOY) to 63.4 billion (RPK)s and domestic traffic rising +8.9% to 48.7 billion (RPK)s.

The Group said growth in its international segment “was driven by the stable macroeconomic situation, increased flight frequencies and the launch of flights to new international destinations, as well as the development of Rossiya (SDM)’s charter program and of Pobeda (PBD)’s international route network.”

Total capacity at the Aeroflot Group grew +10.3% in 2016 to 137.6 billion (ASK)s. While domestic capacity for the Group increased +3.7% (YOY) to 58.3 billion (ASK)s, international capacity was up +15.8% (YOY) to 79.3 billion (ASK)s.

The Group reported an 81.5% LF passenger load factor (PLF) for the year, up +3.2 points (YOY). The Group’s international (PLF) was 80% LF, up +2.7 points from 2015; its domestic (PLF) was 83.5% LF, up +4.1 points from 2015.

The Aeroflot Group’s fleet totaled 289 aircraft as of December 31, 2016, up +12% (31 aircraft) from 2015. Additions to the Group’s fleet over the year included 9 Boeing 737-800s, 7 747s, 7 777-300ERs, 6 Sukhoi SSJ100s, 1 Airbus A319, 5 Dash 8-Q400s, 9 A320s and 12 A321s.

5 A319s, 6 A321s, 4 A320s, 3 737-500s, 2 737-800s, 1 767, 2 777-200s and 2 Antonov An-148s were phased out over the year, the Group said.

In November 2016, (ARO) canceled an order for 22 Boeing 787s, transferring purchase rights to Avia Capital Service, a leasing subsidiary of Russian government-owned industrial conglomerate Rostec, under an agreement among Aeroflot (ARO), Boeing (TBC) and the lessor.

Earlier this month, (ARO) announced the cancellation of an order for 8 A350-800s, originally placed in 2007. (ARO) still has 14 A350-900s on Airbus (EDS)’ order books, Airbus said on January 11.

* Aeroflot Airlines (ARO) operations in 2016:

(ARO) carried 14.9 million international passengers in 2016, up +10.6%; domestic passenger numbers were up +11.4% (YOY) to 14.1 million.

Overall passenger traffic at (ARO) grew +11.6% to 82.7 billion (RPK)s. International traffic increased +14% (YOY) to 53.3 billion (RPK)s and domestic traffic grew +7.4% (YOY) to 29.4 billion (RPK)s.

Capacity at Aeroflot Airlines (ARO) increased +8.9% for the year to 101.8 billion (RPK)s. International capacity grew +11.9% to 67.4 billion (ASK)s, while domestic capacity was 34.4 billion (ASK)s, up +3.3% (YOY).

The overall passenger load factor for the airline was 81.3% LF for 2016, up +2 points from 2015. (ARO)’s international (PLF) was 79.2% LF, up +1.5 points; domestic (PLF) was 85.4% LF, up +3.2 points from 2015.

Aeroflot Airlines (ARO) increased its fleet by +22 aircraft in 2016, a +13.2% (YOY) rise. New aircraft entering the fleet in 2016 included 6 737-800s, 2 777-300ERs, 6 SSJ100s, 12 A321s and 9 A320s. The airline phased out 5 A319s, 2 A320s, and 6 A321s over the year.

Earlier this month, (ARO) filed bankruptcy documents for its former operating subsidiaries Orenburg-based Orenair (ORB) and Rostov-on-Don-based Donavia (DON). The 2 former subsidiaries are being folded into Rossiya Airlines (SDM).

News Item A-2: INCDT: An Aeroflot Airbus A321 suffered a landing gear collapse after skidding off the runway on landing at Kaliningrad Khrabrovo International Airport on January 3 at 10:30 pm local time, Russia’s "TASS" news agency reported.

See photo: - "ARO-2017-01 - A321 INCDT.jpg."

News Item A-3: Russia’s Aeroflot Airline (ARO) has filed for bankruptcy of its Orenburg-based Orenair (ORB) and Rostov-on-Don-based Donavia (DON) subsidiaries, according to documents filed in Orenburg and the Rostov region’s commercial courts this month. A trial date for OrenAir (ORB) has been set for February 9, according to the commercial court database.

In August 2016, (ARO) recovered a RUB884 million/$13 million overdue loan it had granted to (DON) last year.

At the end of May 2016, Russia’s Federal Air Transport Agency, Rosaviatsia, canceled the air operator’s certificate (AOC) for (ORB).

In November 2011, (ARO) received shares of 5 Russian regional carriers (including Orenair (ORB), Donavia (DON) and Saint Petersburg-based Rossiya Airlines (SDM)) from Russian state corporation Rostec. In October 2015, (ARO) announced it would combine the 3 subsidiaries under the brand Rossiya Airlines (SDM).

A321-211 (6726, VP-BEE) delivery.

February 2017: A320-214 (3823, VQ-BBB), to Minerainye Vody for checks, then to Ostrava for mods and paint into Aer Lingus (ARL) colors.

March 2017: Russian airlines carried 12.7 million passengers in January - February, up +19.3% year-over-year (YOY). International traffic grew +30% (YOY) to 4.9 million; domestic traffic was up +13.7% to 7.9 million. Cargo and post traffic grew +21.4% (YOY) to 150,500 tonnes.

Aeroflot (ARO) carried 4.5 million passengers in January - February, up +13.1% (YOY).

The total market share of Russia’s 5 biggest airlines grew to 70.1% from 67.7% in the year-ago period.

777-300ER (41693, VP-BPG "A Babadzhanyan"), ex-(N55061) delivery.

May 2017: News Item A-1: INCDT: An Aeroflot (ARO) Boeing 777, en route from Moscow Sheremetyevo to Bangkok, encountered turbulence 40 minutes before landing at Bangkok International Airport May 1, injuring >20 out of 313 passengers.

According (ARO), the 777 “passed through a zone of sudden strong short-term turbulence.” (ARO) went on to say the incident was caused by clear-air turbulence. “Such turbulence occurs without any clouds, in clear skies with good visibility, and weather radar is unable to alert of its approach.”

According to (ARO), there are around 750 cases of clear-air turbulence recorded in civil aviation every year.

News Item A-2: Russia’s airlines have sold >310,000 out of 447,000 subsidized tickets in the Far East subsidy program, with a value of RUB2.15 billion/$37.6 million).

From April 1 to May 1, 10 airlines carried 44,200 passengers within the program. The most in-demand destinations were routes connecting Moscow with Vladivostok, Petropavlovsk-Kamchatsky, Yuzhno-Sakhalinsk, Khabarovsk, Yakutsk and Magadan, according to a May 15 statement by Russia’s Federal Air Transport Agency, Rosaviatsia.

The government has set a budget of RUB2.9 billion for 10 carriers, comprising Aeroflot Airline (ARO), Alrosa, Ikar, (S7) Airlines (SBR), (VIM) Airlines (MOV), NordStar (JSC), Nordwind (NWD), Ural Airlines (URL), UTair Aviation (TYU) and Yakutia (SYL).

The 2017 subsidy program comprises 50 destinations that connect the Far East and other parts of the country, plus 9 destinations in Far East inland. It runs from April 1 - October 31, 2017.

2 A321-211 (7645, VP-BFF "E. Ryazanov;" 7678, VP-BFQ "A. Alexandrov"), ex-(D-AVYG; D-AVYX) Aerospace Trading Holding leased.

June 2017: Russian airlines carried +46.9% more international passengers year-over-year (YOY) in May, reaching 3.7 million passengers for the month.

Domestic traffic increased +14.6% (YOY) to 5 million passengers in May. For the January - May period, Russian airlines carried 35.8 million passengers, up +22.1% (YOY). International traffic increased +36% (YOY) to 14 million passengers, while domestic traffic grew +14.6% to 21.8 million passengers. Load factor increased 3 percentage points from 76.6% in the 1st 5 months of 2016 to 79.6% for January - May 2017.

Individual airlines reported the following January - May passenger figures:

* Aeroflot Airline (ARO) carried 12.3 million, up +13.1% (YOY).

* St Petersburg-based Aeroflot subsidiary, Rossiya Airlines (SDM) carried 3.69 million, up +78%.

* Sibir Airlines (SBR), also known as (S7), carried 3.5 million, up +3.3% YOY. Globus (GLP), which operates under the (S7) Airlines brand, carried 1.7 million, up +51.8% (YOY).

* UTair Aviation (TYU) carried 2.6 million, up +22.4%.

* Ural Airlines (URL) carried 2.5 million, up +29%.

737-800 (44432, VP-BNQ), Sberbank leased, A320-214 (7653, VP-BFH "K Malevich"), ex-(F-WWBN), and A321-211 (7667, VP-BFK "F Volkov"), ex-(D-AVYP), both Aerospace Trading Holding leased.

July 2017: A321-211 (7749, VP-BFX "I Shishkin"), ex-(D-AVXI) sold to AviaAM Leasing on delivery and leased back.

August 2017: News Item A-1: Aeroflot Group’s international traffic increased +27.2% from January - July.

During the 7-month period, the group carried 28.3 million passengers, up +17.3% year-over-year (YOY). International traffic increased +27.2% to 12.7 million for the period, while domestic traffic grew +10.3% (YOY) to 15.6 million.

From January - July, load factor reached 82.3% LF, up +1.7 points (YOY) and capacity grew +24.2%.

For July, international traffic grew +29.8% to 2.4 million. Total group traffic reached 5.3 million, up +20.3% year-over-year (YOY). Group load factor grew +0.7 point (YOY) to 90.9% LF for the month.

Aeroflot Group includes Moscow Sheremetyevo-based Aeroflot Airlines (ARO), Rossiya Airlines (SDM), Aurora Airline (AAZ) and Moscow Vnukovo-based low cost carrier (LCC) Pobeda (PBD).

Since the beginning of the year, the group added 8 aircraft and its fleet size reached 297. Aeroflot Airlines (ARO), which operates 198 aircraft out of group’s total figure, operates Airbus A320s, A330s, Boeing 737s, 777s and Sukhoi Superjet SSJ100s.

Saint Petersburg-based Rossiya (SDM) has 747-400s, as well as A319s, A320s, 737s and 777s. Russia’s Far East-based Aurora (AAZ) operates A319s, Bombardier Q400s, DHC 8-300/200s and DHC 6-400 Twin Otters. Pobeda (PBD) has 12 737-800s.

News Item A-2: A Russian court has declared Aeroflot Airline (ARO) subsidiary Donavia (DON) insolvent following a bankruptcy filing in January, when (ARO) filed on behalf of its 2 subsidiaries: Orenburg-based Orenair (ORB) and Rostov-on-Don-based Donavia (DON).

Orenair (ORB) was declared bankrupt in February 2017.

In November 2011, Aeroflot (ARO) received shares of 5 Russian regional carriers (including Orenair (ORB), Donavia (DON) and Saint Petersburg-based Rossiya Airlines (SDM)) from Russian state corporation Rostec. In October 2015, (ARO) announced it would combine the assets of 3 subsidiaries under the brand Rossiya Airlines (SDM). In May 2016, Donavia (DON)’s air operator’s certificate was canceled after the assets were combined.

In August 2016, (ARO) recovered a RUB884 million/$13 million overdue loan it had granted to Donavia (DON) last year.

News Item A-3: AviaAM Leasing, a Warsaw Stock Exchange listed aircraft leasing company, announced that its joint venture with the Henan Civil Aviation Development and Investment Company (HNCA) - AviaAM Financial Leasing China has delivered the 6th Airbus A320 family aircraft.

On August 15th, Airbus A321-211SL (7801) was handed over to the largest Russian air carrier Aeroflot (ARO). Under the operating lease contract, (ARO) the Russian flag carrier will operate the aircraft with 16C business and 167Y economy seat configuration aircraft for the next 12 years.

The brand-new aircraft was delivered as a part of a previously signed Memorandum of Understanding between AviaAM Financial Leasing China and Aeroflot (ARO) Russian Airlines. It is the 2nd Airbus A321 type aircraft of the project covering the sale and lease back of total 8 ex-factory Airbus A320/A321 aircraft. The 6th Airbus was handed to the new owner at Hamburg International Airport, Germany.

"The project with Aeroflot (ARO) is progressively moving forward. Under the contract, we have already delivered 6 aircraft to our trusted client. 2 more Airbus aircraft as a part of the project are expected to be delivered within the next months," shared Tadas Goberis, Chairman of the Board & (CEO) of AviaAM Leasing.

Currently, Aeroflot (ARO) operates a fleet consisting of almost 300 aircraft. The newly acquired aircraft will complement (ARO)'s activities on >130 international routes across 50 countries. AviaAM Leasing, a Warsaw Stock Exchange listed aircraft leasing company, is ranked amongst world's TOP50 leasing enterprises according to AirFinance Journal.

News Item A-4: Russian airlines carried 58.3 million passengers from January - July 2017, up +21% year-over-year (YOY). International traffic increased +37.7% to 23.5 million; domestic traffic grew +11.8% (YOY) to 34.8 million passengers. Load factor was up +2.4 points (YOY) to 82.5% LF. Cargo and post traffic grew +20.9% (YOY) to 626,470 tonnes. Individual airlines report the following traffic figures for the 7-month period: Aeroflot Airline (ARO) carried 18.5 million, up +14.3% (YOY).

September 2017: News Item A-1: Russia and Kazakhstan have agreed to increase the number of frequencies on several routes between the 2 countries.

Russia’s Federal Air Transport Agency, Rosaviatsia, announced the number of frequencies on the Moscow - Astana route will grow from 9x- to 12x-weekly from the (IATA) summer season 2018. The St Petersburg - Astana route will increase from 7x- to 10x-weekly from the (IATA) summer season 2018 (growing to 14x-weekly from the (IATA) summer 2019 season). Both sides will be able to designate a 2nd carrier, which is not affiliated with the airline already performing the flights on the route. St Petersburg - Almaty services will also increase.

In August, Russia, Armenia, Belarus, Kazakhstan, and the Kyrgyz Republic (represented by the Eurasian Economic Union (EAEU)) approved a roadmap liberalizing air transport between the union member countries from January 1, 2018.

News Item A-2: "Russian Court Tells Aeroflot It Cannot Tell Stewardesses What Size Clothing to Wear" by Dmitry Madorsky and Andrew Osborn, Reuters, September 07, 2017.

A court on September 6 ruled that Russian airline Aeroflot (ARO) cannot tell staff what size clothing to wear after a stewardess complained she had been taken off international routes because she did not fit into the regulation-size uniform. The stewardess, Yevgenia Magurina, said she had been transferred to lower paying domestic flights because she exceeded what she said was (ARO)'s maximum uniform size of 48.

On Septembere 6, Magurina partially won her appeal in a Moscow court against an earlier court decision which had gone against her.

The court ordered Aeroflot to pay Magurina the amount she deemed her salary had been docked as a result of the regulation (around 17,000 rubles (US$296.53)) and to pay her compensation for moral suffering of 5,000 roubles, TASS reported.

The court however did not rule that (ARO)'s actions were discriminatory.

Magurina said after the decision she was satisfied with what she called "a victory" even though the court had not found (ARO) guilty of discrimination.

"Thank God we have solved this issue inside our country. We were ready to go further and of course it would have been a shame for Russia to expose such things outside of the Russian Federation," she told reporters.

After the ruling, Aeroflot (ARO) said it was satisfied that the court did not rule it was discriminating against employees, TASS news agency reported, and would look at amending its staff regulations once it had fully studied the court's decision.

News Item A-3: Russia’s United Aircraft Corporation (UAC) has reported a (1H) 2017 net loss of -RUB6.6 billion/-$111.7 million, narrowed from a net loss of -RUB7.3 billion in (1H) 2016.

1st-half revenue grew +51% to RUB179.7 billion and operating profit was +RUB6.5 billion, reversed from an operating loss of -RUB5.4 billion in the 1st half of last year.

(UAC) manufactures both military and civil aircraft. The company stated the civil segment share in total revenue was only 20%. (UAC) wants to increase the civil aviation share of total revenue to 45% through 2035. To date, (UAC) has failed to reach its stated goals.

According to (UAC) auditors, (RSM) Rus, information related to military aircraft manufacturing is confidential for reasons of national security and thus not open to normal auditing standards.

News Item A-4: A day after Boeing (TBC) (CEO) Dennis Muilenburg revealed a new order for 6 777-300ERs that helps bridge the delivery gap between the current 777s and the forthcoming 777X, (TBC) disclosed the buyer: Russian flagship airline Aerflot (ARO).

The purchase was approved August 31 by Aeroflot (ARO)'s board. (ARO) said the 777s will be delivered between the 2nd quarter of 2018 and the 1st quarter of 2021.

(ARO) said it plans to use the 777-3MOERs for long-haul flights between Europe and Asia and to remote regions in Russia.

October 2017: News Item A-1: AviaAM Leasing delivered 2 Airbus A320s to Aeroflot (ARO), and will deliver another 5 aircraft to (ARO) by the end of the year.

News Item A-2: "More Russian Carriers Take Over (VIM) Airlines’ Far East Routes" by (ATW) Polina Montag-Girmes montag.girmes@gmail.com October 20, 2017.

Russia’s Ikar Airline, which operates under "Pegas Fly" brand, will take over (VIM) Airlines (MOV)’s service to Anadyr in Russia’s Far East as (VIM) ceases scheduled services following financial turbulence, the Chukotka region government said in a statement on October 20. Deputy Governor Leonid Nikolaev said Krasnoyarsk-based Ikar confirmed it will launch Moscow Sheremetyevo to Anadyr Boeing 767 services from March 2018; ticket sales will start in November.

Currently, UTair Aviation (TYU) is the only carrier to provide service on the route. (TYU) will carry passengers with tickets for (VIM) Airlines flights through October 28 if free seats are available.

In addition, the Russian government issued a statement saying an agreement had been reached with Far East Yakutia Airlines (SYL) to increase frequencies on Anadyr to Magadan and Pevek to Moscow services from weekly to 2x-weekly.

Also, the Chukotka government is negotiating with Aeroflot (ARO) subsidiary Aurora Airline (AAZ) and (S7) Airlines (SBR) to develop the route network to neighboring regions, including Anadyr to Petropavlovsk to Kamchatsky and Anadyr to Yakutsk to Novosibirsk services.

Chukotka is in a remote region of Russia, wedged between the Pacific and the Arctic oceans; half of its territory is beyond the Arctic Circle. Because of the region’s location, the government considers transport development to be very important.

News Item A-3: Aeroflot (ARO) low-cost carrier (LCC) subsidiary Pobeda Airlines (PBD) has taken delivery of the 1st of 8 Boeing 737-800s leased by Singapore-based lessor (BOC) Aviation (SIL).

Before the end of the year, (PBD) will take delivery of 3 more of the type. In 2018 it will add 8 more 737-800s; in 2019, it will take 6 more from other lessors.

The new aircraft is the 1st in the fleet that equipped with Split Scimitar Winglet, which Pobeda said will decrease fuel consumption by 1.6%.

(PBD) began operations in December 2014; in June 2017 (PBD) carried its 10 millionth passenger. Between January and May 2017, (PBD) carried 1.7 million passengers, up 6% year-over-year. In 2016, the (LCC) carried 4.3 million passengers, up +38.7% over 2015.

December 2017: News Item A-1: The national carriers of Russia and Japan have signed a strategic cooperation agreement that they say will bring significant customer benefits and increase travel options between the 2 nations.

The Memo of Understanding (MOU) between Aeroflot (ARO) and Japan Airlines (JAL) will see them pursuing a variety of commercial opportunities. The 2 airlines noted there has been a steady increase in demand for flights between their 2 nations since they eased their visa requirements in January 2017.

An initial step to meet this demand will be a code share on international services between the 2 countries, as well as on domestic services in both nations. The code share’s 1st stage is scheduled to be implemented after fiscal year 2018.

Additionally, (JAL) and (ARO) will seek to develop their partnership in areas including frequent flyer programs and airport relocation. Ultimately, they will consider a joint business in the future. “As the only airline in Japan operating to Russia for >50 years, the launch of a forward-looking partnership with (ARO) demonstrates our strong commitment to this very important market,” (JAL) Executive VP Tadashi Fujita said. “As we jointly started the Tokyo to Moscow flight 50 years ago, this strategic cooperation of mutual benefits will offer both airlines’ customers more options and flexibility,” he added.

“[The] Japanese market is a long-standing and important 1 for (ARO),” (ARO)’s Deputy (CEO) Strategy & Alliances Giorgio Callegari said. “We believe that by expanding our partnership with (JAL) for both direct and transit traffic, we will be able to further develop this market by providing more opportunities for our passengers.”

(JAL) operates 4x-weekly flights to Moscow Domodedovo from Tokyo Narita using Boeing 787-8s. This rose to 7x-weekly during the peak July to October 2017 summer season.

(ARO), meanwhile, operates daily nonstop flights from Moscow Sheremetyevo to Tokyo Narita with Airbus A330-300s.

News Item A-2: Russian airlines carried 89.9 million passengers in January to October 2017, up +19.3% year-over-year (YOY).

International traffic grew +34.8% to 36.8 million; domestic traffic was up +10.5% to 53.1 million. Load factor increased +1.9 points (YOY) to 83.8% LF. Cargo and post traffic grew +18.3% (YOY) to 921,059 tonnes.

Individual airlines report the following (1H) traffic figures:

* Aeroflot Airlines (ARO) carried 27.7 million, up +13.9% (YOY).

* St Petersburg-based (ARO) subsidiary Rossiya Airlines (SDM) carried 9.9 million, up +44.4%..

* (S7) Airlines (SBR) carried 8.5 million, up 2.6%. Globus (GLP), which also works under (S7) Airlines brand, carried 3.7 million, up +21.7%.

* Ural Airlines (URL) carried 6.9 million, up +24% (YOY).

* Utair Aviation (TYU) carried 6.1 million, up +9%.

The total market share of Russia’s 5 biggest airlines declined to 65.7% from 67.1% in the 10-month period.

News Item A-3: Aeroflot Group’s passenger traffic is expected to grow +11.8% year-over-year (YOY) in 2018, the group announced December 6. In the 1st 9 months of 2017, passenger traffic for the group grew 16.8% (YOY) to 38.3 million; international traffic reached 17.2 million, up +26.4% (YOY); and domestic traffic increased +10% (YOY) to 21.1 million. Aeroflot (ARO)'s fleet is expected to grow to 361 aircraft. At the end of December 2016, the fleet comprised 292 aircraft.

Fleet:
(definitions)

Click below for photos:
ARO-737-300F - 2008-02
ARO-737-400
ARO-737-800 - 2014-08
ARO-737-800 - 2016-02.jpg
ARO-737-800 - DOBROLET-2014-05
ARO-767-300ER
ARO-767-38AER
ARO-767-38AER-I
ARO-767-AUG08
ARO-777-200ER
ARO-777-2Q8ER
ARO-777-300ER - 2013-02
ARO-777-300ER - 2013-12
ARO-777-300ER-2011-03
ARO-A319-111
ARO-A320 - 2014-09
ARO-A320-200 - 2015-08.jpg
ARO-A320-214
ARO-A320-214 - 2012-09
ARO-A320-WITH SHARKLETS
ARO-A321
ARO-A321-211
ARO-A330-200-JAN09
ARO-A330-300 STM 2009-12
ARO-A330-343-2010
ARO-DC-10-40F
ARO-IL-62
ARO-IL-96
ARO-IL-96-300
ARO-SSJ100 - 2012-01
ARO-SSJ100 - 2012-04
ARO-SSJ100 - 2012-07
ARO-SSJ100 SKYTEAM-2013-08
ARO-SSJ100-2011-01
ARO-SSJ100-2011-06-1ST
ARO-TU-154M
ARO-TU-204SM-2010-12

December 2017:

0 737-300F (CFM56-3) (VP-BCN - SEE PHOTO, 2008-02), (GEF) LSD. RTND. FREIGHTER.

0 737-4MO (CFM56-3C1) (3018-29201; /98 VP-BAH; 3025-29202, /98 VP-BAI; 3049-29203, /98 VP-BAJ; 3051-29204, /98 VP-BAL; 3056-29205, /98 VP-BAM; 3058-29206, /98 VP-BAN; 3078-29207, /98 VP-BAO; 3081-29208, /98 VP-BAP; 3087-29209, /98 VP-BAQ; 3091-29210, /99 VP-BAR). 3018-29201 RTND (GEH) 2003-09. ALL 10 LST (GIA) 2003-11. 20C, 111Y.

0 737-500 (CFM56-3C1) 3 PHASED OUT IN 2016.

25 ORDERS 737-7MO (CFM56-7B22), RUSSIAN TECHNOLOGIES LSD. 149 PAX WITH WINGLETS:

1 737-800 (CFM56-7B) (44432, VP-BNQ), SBERBANK LEASED 2017-06.

1 737-8LJ (CFM56-7B) (41197, VP-BRR "A. SOLZHENITSYN"), RUSSIAN TECHNOLOGIES LSD 2013-12. 20C, 138Y.

1 737-8LJ (CFM56-7B) (41207, VQ-BWA "V. DAHL"), AVOLON (AZV) LSD 2015-05, OPS BY POBEDA (PBD). 20C, 138Y.

1 737-8LJ (CFM56-7B) (41213, VQ-BWE "M SHCHEPKIN"), AVIA CAPITAL LSD 2015-05. 20C, 138Y.

10 +19 ORDERS 737-8MO (CFM56-7B) (41195, VP-BRF, 2013-09), RUSSIAN TECHNOLOGIES LSD. 20C, 138Y.

5 747-400.

1 747-446 (CF6-80C2B1F) (26362, /98 EI-XLW), EX-(TRX)/(JAL), OPS BY SUBSIDIARY ROSSIYA (SDM). 11F, 56C, 285Y.

4 757-23N (RB211-535E4) (692-27598, RA-; 888-30232, RA-; 895-30233, RA-; 931-30735, RA-), EX-(AAT) 2005-04. TO BE LST (MOV) 2006-03. 216Y.

2 767-3T7ER (CF6-80C2B6F) (366-25076, /91 VP-BWU "I.BUNIN;; 370-25117, /91 VP-BWV "A.KUPRIN"), BF (EVA) 2005-06. (CSL) LSD. 30C, 188Y.

2 ORDERS 767-3Y0ER (PW4060), (GEH) LSD, (AFA) MAINT.

2 767-306ER (CF6-80C2B6F) (609-27959, /96 VP-BWW "S.ESENIN;" 625-27960, /96 VP-BWX "A.BLOK" - - SEE PHOTO - - "ARO-767-2008-08"), EX-(KLM), (ILF) LSD. 30C, 188Y.

0 767-341ER (771-30342, VP-BWQ), (GEF) LSD 2004-09. RTND.

4 767-36NER (CF6-80C2B7F FADEC) (761-30107, /99 VP-BAV "L.TOLSTOJ;" 767-30109, /99 VP-BAX "F.DOSTOEWSKY;" 775-30110, /99 VP-BAY "I.TURGENV;" 776-30111, /99 VP-BAZ "N.NEKRASOV"), (AFA) MAINT, (GEF) LSD, 30C, 188Y.

2 +3 ORDERS 767-38AER (CF6-80C2) (741-29617, VP-BWT; 792-29618, /00 VP-BDI "A.PUSHKIN" EX-(ATZ) 2003-08), (GEF) LSD.

1 777-2Q8 IGW (GE90-90B-B4) (135-27607, /98 VP-BAS; 164-27608, /98 VP-BAU), (ILF) 7 YR LSD. 27607 RTND, LST (VIE) 2005-05. 12F, 43C, 240Y.

8 ORDERS 777-200ER:

2 ORDERS 777-200ER (GE90):

24 +5 ORDERS (2018-04) 777-3MOER (GE90-115BL2) (1068-41679, /13 VP-BGB "M. KYTY30B/M. KUTUZOV" 2013-02 - - SEE PHOTO - - "ARO-777-300ER - 2013-02;" 41687, /14 VQ-BQB "A KUPRIN" 2014-02; 41688, /14 VQ-BQC "I BUNIN" 2014-02; 41691, VQ-BUC "A. OSTROVSKY" 2015-05; 41693, VP-BPG "A BABADZHANYAN" 2017-03), 30C (2-2-2), 48PY (2-4-2), 324Y (3-4-3).

2 777-36NER (GE90-115B):

26 ORDERS 787-8 DREAMLINER:

0 DC-10-30F (CF6-50C2) (289-46999, /79), EX-(SIA) & (BNG), (MDF) LSD, (AFA) MAINT, RTND 2001-08.

O DC-10-30 (CF6-50C2), (TBC) LSD, (DLH) MAINT, RTND.

0 DC-10-40F (JT9D-59A) (306-47823, /79 VP-BDE; 349-47855, /81 VP-BDF; 224-46661, /76 VP-BDG), EX-(JAL), 10/40 LSD 2002-08, CONV TO F BY (ARP), TO REPLACE IL-76F'S. 47823; & 47855; ST (DET) 2009-08. FREIGHTER.

0 DC-10-40F (JT9D-59A) (262-46966, /78 VP-BDH), EX-(CHA), AIR LEASE THREE LSD 2004-01. RTND. FREIGHTER.

3 +3 ORDERS MD-11BCF (CF6-80C2D1F) (520-48502, /92 VP-BDP; 528-48503, /93 VP-BDR; 529-48512, N512SU, 2008-12; 548-48504, /93 VP-BDQ), BF (FIN), FOR CONV TO F FOR (ARO) CARGO OPS. FREIGHTER.

3 A310-304 (CF6-80C2A2) (475, /88 VP-BAG), 2 EX-(SAK), MAINT BY (DLH), EX-(PAA)/(DAL). 472 RTND (GEF) 2003-09. 475 RTND, LST (SBR) 2005-01. 12F, 35C, 138Y.

3 A310-308 (CF6-80C2A8) (592, /92 F-OGQQ "YCHAIKOVSKI;" 593, /92 F-OGQR "RACHMANINOV;" 622, /92 F-OGQT "MOUSSORGSKI;" 646, /92 F-OGQU "SKRIABIN"), LSD 1992-08. 646 RTND 2004-09. 12F, 35C, 138Y.

0 A310-324LR (PW4156A) (660; 687; 689), EX-(DAL), (AFIS) LSD THRU 2006. 689 RTND (AFIS) 2003-11. 660

17 A319-111 (CFM56-5B5) (2052, /03 VP-BWA; 2069, /03 VP-BDM; 2072, /03 VP-BDN; 2091, /03 VP-BDO; 2093, /03 VP-BWG; 2179, /04 VP-BWJ; 2222, /04 VP-BWK; 2243, /04 VP-BWLK; 3281, /07 VP-BUK; 3298, /07 VP-BUN; 3336, /07 VP-BUO; 3794, /09 VQ-BBP; 3838, /09 VQ-BBD; 3942, /09 VQ-BCO; 3998, /09 VQ-BCP), 5 PHASED OUT BY 2016. 20C, 96Y.

7 A320-200 (CFM56-5B4) ("VLADIMIR KOMAROV"), WITH SHARKLETS 2014-04. 20C, 120Y.

50 A320-214 (CFM56-5B4) (2106, /03 VD-BDK; 3823, VQ-BBB; 4835,/11 VQ-BKU), 20C, 120Y.

2 A320-214 (CFM56-5B4) (5536, /13 VP-BJA, 2013-04; 5578, /13 VP-BLP, 2013-04; 7653, VP-BFH "K Malevich," 2017-06), 180Y.

1 A320-214 (CFM56-5B4) (5967, VQ-BRV), EX-(F-WWIS), (SMBC) AVIATION LSD 2014-02.

1 A320-214 (CFM56-5B4) (5974, VQ-BRW), EX-(F-WWBE), (AWAS) (AWW) LSD 2014-02.

2 A320-214 (CFM56-5B4) (5970, VQ-BPV; 5982, VQ-BPW), EX-(F-WWBC & F-WWBF) (ICBC) AVIATION LSD 2014-02.

27 A321-211 (CFM56-5B3) (5271, /12 VP-BDC; 5881, VP-BTL "E. VAKHTANGOV" 2013-12; 5913, VP-BTR "S. DIAGHILEV" 2013-12; 6726, VP-BEE, 2017-01; 7645, VP-BFF "E. RYAZANOV;" 7667, VP-BFK "F VOLKOV" 2017-06; 7678, VP-BFQ "A. ALEXANDROV;" 7749, VP-BFX "I. SHISHKIN" 2017-07), EX-(D-AVYG; D-AVYX) AEROSPACE TRADING HOLDING LEASED 2017-05, 5 PHASED OUT 2016. 28C, 142Y.

1 A321-211SL (7801, 12 YEAR LEASED 2017-08), 16C, 167Y.

5 A330-243 (TRENT 772B-60) (963, /08 VP-BLX; 973, /08 VP-BLY; 1014, /09 VQ-BBE; 1045, /09 VQ-BBF; 1047, /09 VP-BBG), 34C, 207Y.

17 A330-343 (TRENT 772B-60) (1058, /09 VQ-BCQ; 1270, /11 VQ-BQZ; 1345, /12 VQ-BPK "I. KULIBIN;"), EX-(F-WWCI). 34C, 268Y.

8 ORDERS (2018-02) A350-800:

14 ORDERS (2018-02) A350-900:

5 BOMBARDIER DASH 8-Q400.

6 +6 ORDERS ILYUSHIN IL-96-300 (PS-90AN) (74393201002, /91 RA-96005 "V.CHKALOV;" 74393201004, /93 RA-96007 "A. MAYOROV;" 74393201005, /93 RA-96008 "IA. MOISEYEV;" 74393201007, /95 RA-96010 "N. KARPEYEV;" 74393201008, /94 RA-96011 "V. KOKKINSKI;: 74393202012 /97 RA-96015 "M. GROMOV"), 3 STORED AS OF 2015-09. 12C, 270Y.

31 +13 ORDERS SUKHOI SSJ 100-95B (SAM146 1S) (95008, /11 RA-89001 "M.VODOPYANOV;" 95010, /11 RA-89002 "D.EZERSKY;" 95011, /11 RA-89003 "I.ORLOVTSEV;" 95012, /11 RA-89004 "K.TSKHOVREBOV;" 95013, /12 RA-89005 "KOMSOMOLSK-ON-AMURE;" 95014, 12 RA-89006; 95015, /12 RA-89007; 95016, /12 RA-89008; 95017, /12 RA-89009; 95018, /12 RA-89010; 95022, /12; 95035, /13 RA-89017 "PYOTR KHMELNITSKIY;" 95036, /13; 95039, /13 RA-89022 "I ORLOVETS" 2013-12; 95041, /14 RA-89023 "P MKIKHAYLOV;" 95043, /14 RA-89032 "D EZERSKY;" 95091, RA-89062, 2015-11), 12C, 75Y.

Management:
(definitions)

Click below for photos:
ARO-1-VITALY SAVELIEV-2014-06
ARO-2-Giorgio Callegari - 2016-10.jpg

VITALY SAVELIEV, CHIEF EXECUTIVE OFFICER (CEO) & DIRECTOR GENERAL OF AEROFLOT (ARO) (2009-03).

GIORGIO CALLEGARI, DEPUTY DIRECTOR GENERAL STRATEGY & ALLIANCES.

SHAMIL KURMASHOV, DEPUTY (CEO) AEROFLOT (ARO).

VICTOR IVANOV, PRESIDENT.

DMITRY SAPRYKIN, (CEO) ROSSIYA AIRLINES (SDM) (2015-11).
Aeroflot (ARO) subsidiary, Rossiya Airlines has appointed Aeroflot Deputy (CEO), Dmitry Saprykin as its new (CEO). The decision was announced at a board meeting headed by Vadim Zingman, also a former (ARO) Deputy (CEO), who moved to Rossiya (SDM) earlier this year.

Dmitry will coordinate a united regional (ARO) subsidiary, that will be molded from Rossiya (SDM), OrenAir (ORB) and Donavia (DAU), (ARO) said.

In September and October, Saprykin headed Transaero Airlines (TRX), which Aeroflot (ARO) planned to buy, but ultimately pulled out of the deal.

In November 2011, (ARO) received 75% (minus one share) of Rossiya Airlines (SDM) from Rostec (a state corporation controlled by the Russian Federation) together with shares of four other regional carriers.

In March 2014, Rossiya (SDM) transferred its flights under Aeroflot’s (ARO)'s (SU) code.

ANDREY KALMYKOV, (CEO) DOBROLET AIRLINES (DBL) (2014-06).

VLADIMIR GORBUNOV, DEPUTY (CEO) DOBROLET AIRLINES (DBL).

SHAMIL KURMASHOV, CHIEF FINANCIAL OFFICER (CFO).

VLADIMIR ANTANOV, FIRST DEPUTY GENERAL DIRECTOR PRODUCTION.

MIKHAIL POLUBOYARINOV, DEPUTY GENERAL DIRECTOR FINANCE & PLANNING/CHIEF FINANCIAL OFFICER (CFO).

KIRILL BOGDANOV, DEPUTY GENERAL INFORMATION TECHNOLOGY (IT).

LEV KOSHLYAKOV, DEPUTY GENERAL DIRECTOR.

VLADIMIR SMIRNOV, DEPUTY GENERAL DIRECTOR GROUND SUPPORT.

IGOR DESYATNICHENKO, DEPUTY GENERAL DIRECTOR CARGO NETWORK PLANNING.

STANISLAV TULSKIJ, DEPUTY GENERAL DIRECTOR FLIGHT OPERATIONS.

SERGEI KIRYUSHIN, DEPUTY GENERAL DIRECTOR INFORMATION TECHNOLOGY (IT).

VLADIMIR GERASIMOV, DEPUTY GENERAL DIRECTOR MAINTENANCE & LOGISTICS.

OLEG OSOBENKOV, DEPUTY GENERAL DIRECTOR PERSONNEL.

SERGEI KHARITONOV, DEPUTY GENERAL DIRECTOR STRATEGIC & CORPORATE.

ALEXANDER KOLDUNOV, DEPUTY DIRECTOR GENERAL CHIEF FLIGHT SAFETY.

VLADIMIR BARILOV, CHIEF PILOT 737/767/777 DIRECTOR (SVOOZSU)
(vbarilov@aeroflot.ru).

MIKHAIL AMPILOGOV, 737 CHIEF PILOT (2002-12).

STANISLAV TULSKY, 767/777 CHIEF PILOT (SVOOZSU).

VASILY BOBROV, MAINTENANCE CENTER DIRECTOR (SVOEMSU) (vbobrov@aeroflot.ru) (2001-08).

YURI BELYKH, TECHNICAL DIRECTOR, EX-(TRX),
(alexander.makhonin@mtu-net.ru) (2001-11).

EUGENI DOBRY, DEPUTY TECHNICAL DIRECTOR (2001-08).

ALEXANDER KOLDUNOV, DEPUTY DIRECTOR GENERAL CHIEF FLIGHT SAFETY.

SERGEI BELOV, DIRECTOR ST PETERSBURG BRANCH (2006-03).

VLADIMIR SVIRIDOV, CONTRACTS HEAD (SVOEBSU) (2000-02).

ANATOLY RYBALCHENKO, CHIEF NEW AIRPLANES (2000-12).

VLADIMIR KENARSKY, DIRECTOR INFORMATION TECHNOLOGY (IT) & COMMUNICATIONS.

NIKOLAI BOSYKH, MAINTENANCE CENTER DIRECTOR.
(nbosykh@aeroflot.ru).

YOURI EVDOKIMOV, MAINTENANCE BASE DIRECTOR (SVOEMSU) (FOREIGN AIRPLANES) (1998-07).

ALEXEY SIDOROV, COMMERCIAL DIRECTOR.

ANTON BELOFASTOVE, 737/777 FLEET MANAGER.

I YATSENKO, HEAD OF QUALITY ASSURANCE (QA) DEPT (1996-09).

IGOR KALENTAROV, ENGINEERING MANAGER - (FMAD) (1996-09).

SERGEI SCHETCHIKOV, PRODUCTION MANAGER - (FMAD) (1997-11).

IGOR SUDAROV, QUALITY ASSURANCE (QA) MANAGER (1996-09).

NIKOLAY GOREV, MANAGER QUALITY CONTROL (QC).

VLADIMIR SELEZNEV, CHIEF INSPECTOR.

ANDREY TOMONCHKINE, CHIEF 737-400 MAINTENANCE DEPARTMENT (1997-08).

DIMITRY MIRGORODSKY, MANAGER (ETOPS) (CHIEF SPECIALIST (2000-11)

MIKE KAHN, MANAGER AIRCRAFT MAINTENANCE (DAL).

CURTIS JOHNSTON, (ETOPS) MAINTENANCE (DAL).

 
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