News (July, 2007)

The Airbus А319 from the S7 Airlines was the first foreign-made aircraft, that started making flights on a regular basis from the Mukhino airport in the city of Ulan-Ude. Now the flights of S7 Airlines on the Moscow – Ulan-Ude - Moscow route will be carried out on these modern and comfortable А319 aircraft in accordance with the previously announced company plan to renew their aircraft fleet.

Starting July 18, 2007 tickets for daily S7 flights to/from St. Petersburg went on sale at all airline ticket offices: flight S7-039/040 on the Moscow — St. Petersburg — Moscow route (flights will start on September 1, 2007) and flight S7-1019/1020 Sochi — St. Petersburg — Sochi (flights will start on September 17, 2007).

The flights from Moscow will be on the Airbus A319 and Boeing-737-500 airliners, and from Sochi on the Tu-154М airliners:

S7 Airlines in association with the ”Russian Standard” Bank now provides its clients in Novosibirsk, Novokuznetsk and Norilsk with an opportunity to buy airline tickets on credit. Now you can fly on credit, without paying the full airline ticket price at once. In the future, the number of cities with such an opportunity will grow considerably.

S7 Tour, part of the S7 Group of Companies, has agreed to purchase 90% of the shares in “TURENERGOSERVIS Travel Agency” CJSC (TES). The purchase of the large tour operator, specializing in trips to Egypt and Turkey, will allow an increase in the sales of tour packages toward these countries. This will double in size the gross share of S7 Tour in the Russian tour services market, and sales will reach 120,000,000 USD.

”Our strategic goal in the next 2 to 3 years is to gain the leading position in the dynamically growing tourism market,” said Svetlana Antoshkina, Chairperson of the Board of Directors for S7 Tour. “We are convinced, that the synergetic effect from simultaneous development of all principal branches in tourist industry: Air transportation, tour operation and tour agency services under single management will allow us to meet the challenges we are facing”.

The airline’s revenues (exclusive of VAT) grew by 20% - up to 451,000,000 USD in the first half of 2007. Also all the basic performance indicators of S7 Airlines, including effective airplane payload, have increased. The growth is the result of route network and flight frequency optimization, modernization of the aircraft fleet and considerable reduction in expenses for fuel.

In the first half of 2007 the number of passengers, transported in S7 Airlines flights came to 2,233,000 which is 5% higher than the rates for the similar period last year. The number of flights grew by 11%, and reached 20,100. Passenger traffic came to 5.5 billion passenger miles which is 1.1% more than the rate during the first half of 2006.