Development Strategy


We work to ensure that our customers can quickly and comfortably travel great distances, and thus be mobile, meet more often, work successfully, and see the world in all its diversity.

We give our customers a choice through an extensive route network and different carriers operating within our Group, from low-cost to premium class airlines.


is to strengthen leadership in the global airline industry by seizing opportunities in the Russian and international air transportation markets.

Updated Aeroflot Group Development Strategy

In 2018, the Board of Directors of PJSC Aeroflot approved the new Aeroflot Group Development Strategy 2023 (Minutes No. 5 dated 27 September 2018) as the key goals of the previous strategy, Aeroflot Group Development Strategy 2025, had been achieved ahead of schedule.

The new Aeroflot Group Strategy aims to further strengthen its position in the global air transportation market and to improve social mobility and air transport accessibility across Russian regions.

The Strategy outlines the key growth areas for the Group, its operational and financial performance targets. In line with the Development Strategy and pursuant to the directives of the Russian Government, Aeroflot Group has developed and updates annually its Long-Term Development Programme, which covers management-related activities, goals, and KPIs.

The Group’s consolidated IFRS budget and KPIs for the budget year are developed in line with the targets of the Aeroflot Group Strategy and the Long-Term Development Programme.

Key growth areas and goals of Aeroflot Group

Carry 90–100 million passengers in 2023
  • Pobeda airline is a key growth driver leveraging its strong operational efficiency to offer the lowest fares and extensive opportunities for passengers in all income brackets. By 2023, the Group’s low-cost carrier is expected to carry 25–30 million passengers a year.

  • Aeroflot airline will continue to grow as a premium carrier making a stronger focus on the transfer market.

  • Rossiya airline will continue to expand its regional flights becoming the principal carrier offering flat fares on routes sponsored by the government.

  • Aurora airline is expected to double its local operations in the Far Eastern Federal District

International transit traffic of 10–15 million passengers in 2023

Aeroflot airline intends to leverage its competitive advantages to ramp up its international transit traffic. In particular, Aeroflot has an up to three-hour advantage over its competitors in transit time between Europe and Asia, a key air transportation market, while offering excellent customer experience at the lowest unit costs. It is already the number one carrier by transfer traffic at some routes from large European cities to Asian destinations.

Bring 200 Russian-built Superjet 100 and MC 21 aircraft online by 2026

Aeroflot Group will work with the United Aircraft Corporation to ensure that all Russian-built aircraft meet the highest international standards of aircraft operations. The Group will have to operate a total of approximately 520 aircraft to achieve its target passenger traffic.

Launch an international hub in Krasnoyarsk and three new regional bases in Sochi, Yekaterinburg, and Novosibirsk.

Increase regional traffic to 19 million passengers in 2023. Aeroflot Group will make a significant contribution to carrying out the instructions given by the Russian President to the Government to expand the network of scheduled inter-regional passenger routes, bypassing Moscow, to 50% of the total scheduled domestic flights by 2024.

Deliver a leading-edge level of digitalisation across Aeroflot Group

Aeroflot will retain its focus on the extensive integration of cutting-edge digital technology, including artificial intelligence.

Key initiatives and work streams within the long-term strategy


Develop Aeroflot Group’s route network through penetrating new markets and increasing the number of flights
Continuously upgrade the fleet
Develop Aeroflot Group’s operations base
Improve the employee performance and labour productivity
Support innovative development of Aeroflot Group


  • Develop the premium passenger segment through improving the passenger experience, flight schedule, and expanding the route network
  • Develop the low-cost passenger transportation segment
  • Promote transfer traffic, including the international transit traffic
  • Support national and regional passenger service programmes sponsored by the Government

Impact of risks on the Group’s strategy

The key potential risks that may affect the Group’s development strategy are:

  • risk of changes in the external business environment
  • risk arising from infrastructure constraints
  • macroeconomic risks.

To mitigate the key risks, the medium-term strategy of the Group provides for:

  • development of an efficient hub at Moscow Sheremetyevo airport to promote international transfer traffic
  • availability of different capacity aircraft in the fleet and a reasonable balance between fleet diversification and standardisation to maximise operational flexibility
  • growth planning and control at each of Aeroflot Group companies to maintain the Group’s effective presence in all market segments
  • monitoring the progress of infrastructure development and new facilities construction at Moscow Sheremetyevo airport
  • diversification of revenue streams by currency and geography.

Passenger traffic targets across Aeroflot Group

2023 52

2023 25-30

2023 10-15

2023 3

Key programmes supporting the Development Strategy

The Investment Programme for 2019 was approved by PJSC Aeroflot’s Board of Directors on 13 December 2018 (Minutes No. 10). It is designed to address long-term strategic objectives, improve the operations of business units, and continue the overall dynamic development of the Company’s investment activities.

The 2019 Investment Programme focuses on the established investment agenda such as property, plant and equipment, capital construction, and software, and sets new development projects designed to:

  • ensure maintenance operations: procurement of tools and equipment to perform maintenance for all types of aircraft; fitting out of hangar facilities
  • develop a training platform: purchasing and delivering an FFS А350 flight simulator; purchasing A321 and SSJ100 Door Trainers; upgrading the software for the FFS B737 flight simulator; purchasing airport visuals for the FFS SSJ100 flight simulator, etc.
  • upgrade aircraft: ongoing equipment of aircraft with WiFEC; replacement of business class seats aboard Airbus A330s; having wheelchairs aboard Boeing 777 aircraft
  • construct new facilities: continued construction of a new hangar for aircraft servicing; designing a building for the training platform; designing a facility for composite materials maintenance and repair, etc.
  • develop the IT infrastructure: maintaining the existing and developing new information systems and further business process digitisation; developing digitisation projects; purchasing communication, telephone, and computer equipment
  • ensure high-quality passenger experience; PJSC Aeroflot’s website design; procurement of uniforms for front line employees
  • provide software solutions: developing the SAP system; maintaining and developing the Company’s website, commercial, operations-related, office, and other systems
  • invest in R&D projects under the Group’s Innovative Development Programme
  • provide other types of investment in property, plant and equipment: running fire safety initiatives, purchasing workwear, ensuring seamless operation of business units

Aeroflot Group’s Innovative Development Programme 2025 was fully aligned with the regulatory guidelines of federal executive authorities and adopted by PJSC Aeroflot’s Board of Directors on 25 August 2016.

The Innovative Development Programme covers the main innovation focus areas and activities at PJSC Aeroflot and its Rossiya and Aurora subsidiaries, as well as key midand long-term innovation KPIs to 2025. For more details on Aeroflot Group’s Innovative Development Programme see the Information Technology and Innovation section.

Cost cutting management plan for 2018

An emergency team was set up in 2018 to optimise costs and improve performance.

Emergency measures developed by the team to improve operational performance helped achieve positive financial results for the year despite the strong growth of the average jet fuel prices.


  • reducing selling, general, and administrative expenses
  • streamlining the marketing budget
  • negotiating discounts and special terms with service providers, including fuel suppliers
  • postponing further investment in customer service (to avoid any undue increase in operating costs)
  • reducing management remuneration, including through releasing funds by early completion of the Long-Term Incentive Programme, etc.

Along with these initiatives, the Company focused on its income, including by optimising the day-to-day management of flight profitability and network operation, improving fares, adjusting the fuel surcharge, enhancing sales and load factor supervision and monitoring, developing additional revenue sources, and adopting operational changes.

Strategy implementation report

2009 2018 Outlook for 2025
Join the Top 20 global players by passenger traffic 68th globally by passenger traffic 19th
Join the Top 5 European players by passenger traffic 15th
in Europe
in Europe*
Carry over 70 million passengers 11.1 million
55.7 million
Carry at least 30 million domestic passengers 4.9 million
31.0 million

* Rating for 2017. Ranked 5th among European traditional carriers.
Sources: Air Transport World’s rating, Company data.


In 2018, Aeroflot airline moved its domestic flights to the new Terminal B of Sheremetyevo International Airport.

The airline began to gradually transfer the flights in May 2018 and fully completed the transfer in November, by the start of its winter 2018/2019 season. Since the start of the winter season, the terminal has been handling a daily total of about 400 domestic flights.

According to the winter 2018/2019 schedule, Terminal D handled 40 domestic round trip flights: 8 flights to the Russian Far East by Aeroflot airline (3 routes: Vladivostok, Khabarovsk, Petropavlovsk-Kamchatsky) and 32 flights operated jointly with Rossiya airline (11 routes: Sochi, Magadan, Khabarovsk, Krasnodar, Mineralnye Vody, Petropavlovsk-Kamchatsky, Orenburg, Rostov-on-Don, Simferopol, Yuzhno- Sakhalinsk, and Vladivostok).

The new passenger Terminal B at Sheremetyevo airport is located within the northern sector of the airport and has an annual throughput of 20 million passengers. The terminal is connected to the airport’s southern sector (Terminals D, E, and F) by passenger and baggage tunnels with automatic trains. Travelling between the airport’s terminals takes four minutes. This inter-terminal link enables an extremely fast and efficient connection between different terminals of the airport.


As part of reinforcing the hub at Sheremetyevo airport, scheduled flights of Rossiya airline under commercial operation of PJSC Aeroflot were transferred from Vnukovo airport to Sheremetyevo International Airport (Terminal D) as of winter 2018/2019. This initiative enhances the transfer potential of Rossiya airline flights through higher connectivity with Aeroflot’s core network, thus drastically improving flight planning flexibility for passengers and making flights more cost effective.


In February 2018, PJSC Aeroflot and Rostec Corporation signed a firm contract for 50 Russianbuilt next generation MC 21 passenger aircraft. Under the contract, Aviaсapital-Service (a leasing subsidiary of Rostec) will provide Aeroflot airline with 50 MC 21 300 aircraft on operating lease. The aircraft’s configuration for Aeroflot is designed to carry 169 passengers (16 business class and 153 economy class seats). The deal was approved by the Annual General Meeting of Shareholders on 25 June 2018.

Long-term development programme

Aeroflot Group’s Long-Term Development Programme (the LDP) was designed in accordance with Instruction of the President of the Russian Federation No. Pr-3086 dated 27 December 2013, and approved by PJSC Aeroflot’s Board of Directors on 2 December 2014 (Minutes No. 8). On 13 December 2018 (Minutes No. 10), PJSC Aeroflot’s Board of Directors gave a general approval to the main provisions of Aeroflot Group’s LDP for 2019–2023 updated to reflect the new Aeroflot Group Development Strategy 2023.

This involved a review of the Programme’s key initiatives to support its implementation.

The LDP’s key goal is to ensure the Group’s long-term sustainable development, strengthen its competitive position, create and develop a competitive edge, and improve performance and financial stability.


  • Develop the list of activities to ensure the achievement of the Group’s strategic growth targets
  • Identify areas and initiatives to improve the Group’s competitive edge and performance
  • Analyse risks to, and opportunities for, achieving the strategic targets and implementing the LDP initiatives.

The LDP details strategic areas for the Group’s development and includes a list of key initiatives and activities aimed at the strategy implementation in the medium term. The LDP complements and expands the key strategic initiatives set out in the Aeroflot Group Development Strategy 2023.


  • Develop within Aeroflot Group’s multi-brand platform
  • Expand the route network and aircraft fleet
  • Enhance the production capacity
  • Implement Aeroflot Group’s Innovative Development Programme
  • Implement the investment programme
  • Ensure an adequate talent pipeline
  • Increase labour productivity.

The 2018 progress on Aeroflot Group’s Long- Term Development Programme was audited by an external auditor, Nexia Pacioli. The auditor’s opinion was issued on 29 March 2019.

Following the independent audit, the auditor expressed an opinion that the report reflecting the progress on Aeroflot Group’s Long-Term Development Programme and achievement of the 2018 target KPIs was reliable in all material respects and was prepared in compliance with Aeroflot Group’s Long-Term Development Programme for 2018–2022 which was approved by PJSC Aeroflot’s Board of Directors on 21 December 2017 (Minutes No. 7).

The auditor confirmed the reliability, in all material respects, of the following data in the 2018 LDP progress report:

  • Actual KPI performance: 7 out of 11 KPIs were achieved in 2018
  • Progress on the initiatives and their current status: most of the initiatives had been completed
  • Spending budgets in line with their intended purpose (compensations for the carrier’s lost earnings and partial compensations for lease payments made under the Russian-built aircraft operating lease)

KPI system

The 2018 KPI list, weights, and targets for PJSC Aeroflot’s CEO, which reflect the Company’s KPI system, were approved by PJSC Aeroflot’s Board of Directors on 21 December 2017 (Minutes No. 7), and updated by PJSC Aeroflot’s Board of Directors on 26 April 2018 (Minutes No. 13) for the second quarter of 2018 and then on 31 October 2018 (Minutes No. 7) for the third quarter of 2018, in line with Aeroflot Group’s adjusted 2018 budget.

From 2015 onward, the scope of the CEO’s KPI list (with KPI weights and targets) is fully in line with the KPIs of our Long-Term Development Programme and extended to include all members of PJSC Aeroflot’s Management Board to provide incentives for the management to pursue Group-wide corporate objectives. The list now also includes individual KPIs for Deputy CEOs and other members of the Management Board, with the aim to improve the Group’s overall performance.

The KPIs for other employees of PJSC Aeroflot were approved by the CEO’s Order No. 539 dated 29 December 2017; they were updated by the CEO’s Order No. 375 dated 14 September 2018 for the second quarter of 2018 and then by the CEO’s Order No. 490 dated 17 December 2018 for the third quarter of 2018, in line with Aeroflot Group’s adjusted 2018 budget.

2018 KPI targets and actual performance by PJSC Aeroflot’s CEO
KPI* Unit 2017 2018 Reasons for variance (2018A vs 2017P)
Weight Plan Actual Performance to plan Weight Plan Actual Performance to plan
Total Shareholder Return (TSR) % 10.0 13.5 1.2 8.89 10.0 20 (18) 0.00 Negative macroeconomic impact on Aeroflot Group’s operating margins and net income during the year (due to higher fuel costs)
ROIC % 20.0 14.9 14.9 100.00 20.0 12.9 12.0 93.02 Higher fuel costs
Long-term debt/EBITDAR 5.0 0.93 0.86 107.53 5.0 0.75 0.80 93.33 Higher fuel costs
Integrated Innovation Key Performance Indicator (IIKPI) % 10.0 80% 80* 100.00 10.0 100 100** 100.00
Investment Programme Efficiency 5.0 5.22 6.88 131.80 5.0 10.91 20.11 184.33 High returns on the 2018 investment projects and lower capex
CASK cent per ASK 5.0 4.9 5.32 91.43 5.0 4.9 5.45 88.78 Higher fuel costs and exchange rate fluctuations in 2016–2018 (the target of 4.9 cent per ASK was the lowest value achieved in 2016)
Share of State-Subsidised Funding in Total Funding Secured % 5.0 0 0 100.00 5.0 0 0 100.00
Punctuality % 5.0 87.0 90.4 103.91 5.0 87.0 89.9 103.33 Aeroflot Group’s initiatives to improve punctuality of aircraft departures include: · joint initiatives of PJSC Aeroflot, its business units, and third-party companies to improve punctuality of arrivals and departures to and from base/non-base airports · air traffic management to improve flight arrival punctuality and, consequently, flight departure punctuality
PJSC Aeroflot’s Flight Safety % 15.0 99.957 99.972 103.49 15.0 99.957 99.974 103.95 Effective flight safety management, including: · implementation of initiatives based on the results of air accident and incident investigations · monitoring of key operational risks and development of up-to-date corrective measures to mitigate them to acceptable exposure · reduction in number of air accidents and incidents associated with errors and violations in flight operations · reduction in the number of close-call incidents (from 2017)
Passenger Load Factor % 10.0 80.0 82.8 103.50 10.0 82.0 82.7 100.85 Effective measures to increase utilisation of aircraft fleet
Overall Productivity mn ASK per emp. 10.0 4.235 4.431 104.62 10.0 4.489 4.551 101.38 Higher productivity levels across Aeroflot Group supported by budget-controlled increase in work loads and headcount growth optimisation
* The value shown is the minimal value achieved in 2017.
** According to Minutes No. 1 dated 27 February 2018 of a meeting of Inter-Agency Working Group on Supporting Innovative Development Priorities, the IIKPI bonus can be paid in full if the variance between the target KPI and actual performance does not exceed 10%. Note. 2017 and 2018 KPIs are calculated for Aeroflot Group, except for PJSC Aeroflot’s Flight Safety KPI.

Pursuant to the directives of the Russian Government, PJSC Aeroflot’s KPI system embraces financial, economic, and industry-specific indicators, including:

  • mandatory financial KPIs – Total Shareholder Return (TSR) and ROIC for Aeroflot Group – in line with the KPI Guidelines (Letter of the Federal Agency for State Property Management No. OD-11/22160 dated 26 May 2014)
  • Overall Productivity KPI (for Aeroflot Group) – in line with the Russian Government’s Directive No. 6362p-P13 dated 24 October 2013
  • Share of Supplies from Small and Medium- Sized Businesses, Efficient Energy Use, and Environmental Friendliness KPIs were incorporated into PJSC Aeroflot’s KPI system and KPI lists for relevant department heads – in line with the Russian Government’s Directive No. 6362p-P13 dated 24 October 2013
  • Integrated Innovation Key Performance Indicator (IIKPI) (for Aeroflot Group) – in line with Letter of the Deputy Minister of Economic Development of the Russian Federation No. 3142-OF/D06 dated 24 February 2012 and the Russian Government’s Directive No. 1472p-P13 dated 3 March 2016
  • Investment Programme Efficiency KPI (for Aeroflot Group) – in line with Directive of the Federal Agency for State Property Management No. PF-11/35029 dated 14 August 2014
  • CASK KPI (for Aeroflot Group). As per the resolution of PJSC Aeroflot’s Board of Directors dated 20 April 2017 (Minutes No. 14), the Company achieved the CASK reduction target in line with Directives of the Russian Government No. 2303p-P13 dated 16 April 2015 and No. 4750p-P13 dated 4 July 2016. Since 2017, the Company’s objective is to maintain the achieved level
  • Share of State-Subsidised Funding in Total Funding Secured KPI – in line with paragraph 2 of Instruction of the Russian Prime Minister Dmitry Medvedev No. AD P36-4617 dated 11 July 2015 on including the indicator showing investment capital raised in the private equity market.

As per the resolution of PJSC Aeroflot’s Board of Directors adopted in 2017, Aviation Accident with Fatalities (Plane Crash) was set as the disqualification indicator (cancelling the bonus) in the KPI system.

Aeroflot’s History
In 1976, Aeroflot carried over 100 million passengers in a year for the first time in the company’s history, mainly on domestic routes. In 1990, Aeroflot entered the Guinness Book of Records as the largest airline in the world – that year the number of passengers carried reached 139 million, with 142 representative offices abroad and a fleet consisting of almost 2,000 aircraft.
2019 KPI targets for the CEO of PJSC Aeroflot
KPI Weight Unit Plan
Revenue per Available Seat-Kilometre (RASK) 20% RUB per ASK 3.76
CASK* 10% cent per ASK 3.3
Integrated Innovation Key Performance Indicator (IIKPI)** 10% % 100
Investment Programme Efficiency 5% 16.32
Share of State-Subsidised Funding in Total Funding Secured 5% % 0
Punctuality 10% % 87.0
PJSC Aeroflot’s Flight Safety 20% % 99.957
Passenger Load Factor 10% % 82.4
Overall Productivity 10% mn ASK per emp. 4.739***
* Calculations exclude fuel prices.
** According to Minutes No. 1 dated 27 February 2018 of a meeting of Inter-Agency Working Group on Supporting Innovative Development Priorities, the IIKPI bonus can be paid in full if the variance between the target KPI and actual performance does not exceed 10%.
*** The target is based on the 2019 budget.
Note. KPI performance is assessed on the basis of the Regulations on Bonus Payments to the Managers and Specialists of PJSC Aeroflot. KPIs are calculated for Aeroflot Group, except for PJSC Aeroflot’s Flight Safety KPI.

In 2018, the majority of the Long-Term Development Programme KPIs for PJSC Aeroflot’s CEO were met/exceeded as a result of efficient operations. KPI performance was affected by negative macroeconomic factors and higher potential sanctions risks.

Aeroflot Group Development Strategy 2023 involves a considerable increase in operational KPIs and development of new growth areas, including the launch of a new hub and regional bases. In view of these prospects and the significant increase and volatility of fuel costs, the existing financial KPIs – TSR and ROIC – which were earlier adopted as part of Aeroflot Group’s Long-Term Development Programme and PJSC Aeroflot’s CEO incentives, will not be used in 2019.

To bring the management incentive system in line with Aeroflot Group’s short-term strategic priorities, PJSC Aeroflot’s Board of Directors approved the following 2019 KPIs for PJSC Aeroflot’s CEO (Minutes No. 12 dated 7 February 2019). The CEO’s KPI list and weights for 2019 reflect the Company’s profile and strategic priorities and have been approved by the Russian Ministry of Transport, a federal executive body that oversees PJSC Aeroflot’s activities.

Aeroflot Group’s strategic approach continues to be based on multi-brand offering, which helps maximise the coverage of all the key market segments. Each of the Group’s airlines targets a dedicated market segment, thereby minimising intra-Group competition. Rossiya’s scheduled flights were moved from Vnukovo airport to Aeroflot’s hub, Sheremetyevo airport to drive internal synergies through additional transit flows between the route networks of Aeroflot Group airlines.


Type of flights

Business model

Flight range

Aircraft fleet

Target group

Base airport

Share of international passengers in the airline’s passenger traffic

Multi-brand platform

Aeroflot airline focuses on addressing the needs of the premium passenger segment by offering bestin- class services, a high frequency route network with extensive flight geography, access to the route network of partners from the SkyTeam Alliance, an effective flight schedule, convenient connecting flights for transfer passengers, and a young aircraft fleet. Rossiya airline has three focal areas: scheduled flights from Saint Petersburg, scheduled flights from Moscow (mostly flat fares), and charter flights for tour operators. Rossiya’s business scheduled flights is governed by Aeroflot, which means that tickets are sold via a shared website and that the two airlines are code sharing, thus ensuring connectivity between their networks. Pobeda airline targets the low-cost segment. Domestic flights from Moscow to Russia’s regions, along with inter-regional flights within Russia, make up the bulk of the airline’s route network, building stronger ties between Russian regions. The airline also expands its international route network. Aurora airline focuses on local and inter-regional flights in the Far Eastern Federal District, connecting large cities in Russia’s Far East and offering flights between major cities and remote towns.
Premium product Regional and charter products in the mid-price segment Low-cost product Regional product for Far East
Scheduled flights Scheduled and charter flights Scheduled flights Scheduled flights
  • Hub model
  • High frequency of flights
  • Economy and business class
  • Best-in-class service
  • Flights from Saint Petersburg and Moscow (connectivity with Aeroflot’s network)
  • Flat fares
  • Charter flights to the most popular leisure destinations
  • Economy and business class
  • Direct flights as the bulk of passenger traffic
  • Flights between Russia’s regions
  • High passenger load factor and fleet utilisation
  • Economy class only
  • Passenger flights in the Far East
  • Local flights to remote destinations within the region
  • Economy and business class
  • Short-haul flights
  • Medium-haul flights
  • Long-haul flights
  • Short-haul flights
  • Medium-haul flights
  • Long-haul flights
  • Short-haul flights
  • Medium-haul flights
  • Short-haul flights
  • Medium-haul flights
  • Narrow-body aircraft
  • Wide-body aircraft
  • Narrow-body aircraft
  • Wide-body aircraft
Narrow-body aircraft Narrow-body aircraft, including regional turboprops
  • Business
  • Visiting friends and relatives
  • Leisure
  • Visiting friends and relatives
  • Leisure
  • Business
  • Leisure
  • Visiting friends and relatives
  • Visiting friends and relatives
  • Business
Москва (Шереметьево)
  • Moscow (Vnukovo, Sheremetyevo)
  • Saint Petersburg (Pulkovo)
  • Moscow (Vnukovo)
  • Airports in Russia’s regions
  • Vladivostok
  • Khabarovsk
  • Yuzhno-Sakhalinsk
~50% ~40% ~25% ~25% (Asia Pacific)
Add to my report
Add to my report
My report (0)
My report
Download page
Download page
Submit page
Submit page
Print page
Print page
Site Map
Site Map
Interative Analysis
Interative Analysis
Search Overlay Close