Business risks

Business risk is common to any company operating in a market environment and the way it is dealt with depends on the strategy and management quality of the company. Business risks traditionally include reputational risks, competition risks and strategic risks. For a service sector company, the risk of fluctuation in demand must also be taken into account, since it has substantial impact on volumes of air transport (depending on seasonality and other factors). JSC Aeroflot partly offsets fluctuations in demand by the use of flexible tariffs and introduction of loyalty programmes.

Aeroflot always observes the highest standards of business conduct, working continuously to improve flight safety, enhance service quality, increase passenger loyalty and raise overall business efficiency. The Company also strives to minimize any negative impact from its business. For these purposes the Company:

• modernizes its aircraft fleet to reduce levels of harmful atmospheric emissions and to increase fuel efficiency;
• insures its liability as an owner of hazardous facilities for any harm caused by an accident at such facility, and also civil liability of organizations that operate nuclear power facilities;
• has put in place a system for environmental management and supervision of environmental aspects of Company operations, which incorporates state-of-the-art environmental protection technologies and standards;
• has developed and launched in pilot mode a system for monitoring of СО₂ emissions, collection and analysis of data, and preparation of reports on greenhouse gas emissions and tonne-kilometers flown;
• has approved Environmental Management Guidelines in compliance with the requirements of ISO 14000, as well as Guidelines for Accounting and Control of Greenhouse Gas Emissions.

These measures will enable reduction of business risks in the long term and help to achieve Aeroflot’s goal of joining the world’s Top 20 leading airlines by passenger numbers by 2025.