Transcript of the beginning of the meeting: 

Vladimir Putin: Mr Levitin, could you please report on last year's operation of the transport industry.

Igor Levitin: Mr Putin, last year was difficult, especially at the beginning. The volume of transportation plunged by about 20%-25%. But the anti-crisis measures taken by the government had a positive effect on the industry. According to available information (the statistics data is being verified), we transported 45 million passengers last year, a decrease of 9.8%.

Vladimir Putin: This is compared to 2008? 

Igor Levitin: Yes, compared to 2008. The decrease worldwide was approximately 3.5%. However, despite the overall decrease of 9.8%, transportation in Russia's Far East grew 12%.

Vladimir Putin: Was that due to subsidies? 

Igor Levitin: Yes, and it means that the anti-crisis measure that stipulated subsidies had a positive effect. I would also like to say that despite a difficult situation in civil aviation the airlines paid as much as 45 billion roubles in taxes. This means - have a look at Graph 11 (shows the graph) - that we now have 15 companies that account for about 80% of transportation. In other words, companies are becoming larger and the industry is being consolidated. This is a global trend; the same process is taking place in other countries.

I would also like to say that we have restructured some airlines and turned them over for management to Russian Technologies, in accordance with previous decisions.

Vladimir Putin:  This is what we have agreed to do - to take the necessary steps in order to create economically self-sufficient and internationally competitive airlines that will reliably serve their passengers. Part of these assets belongs to Russian Technologies, and I have asked you to consider the forms of working with them.

Igor Levitin: The state corporation is managing three federal airlines that are being transformed into joint stock companies - Rossiya, Kavminvody and Orenburg Airlines, as well as three joint-stock companies - Vladivostokavia, Saratov Airlines and SAT Airlines (Sakhalinskie Aviatrassy).

We will corporatise federal state unitary enterprises in 2010. This is what we propose. Rossiya Airlines, the lst argest carrier and the core of these assets, is to be transformed into a joint-stock company to be registered in St Petersburg, where the city governor can facilitate the process and help to optimise the number of personnel. This is a challenging project, which we should carry out jointly [with the city authorities]. When all other federal unitary state enterprises are corporatised, these assets should be assigned to a single management company and subsequently merged with Aeroflot. We would like to coordinate this idea with you.

Vladimir Putin: I am prepared to discuss it, but first I want to be sure that this decision will not violate antimonopoly legislation. 

Igor Levitin:  We have considered several scenarios for the industry's consolidation. At present, Aeroflot accounts for some 15% of domestic flights and is mostly focused on international flights. If we decide to consolidate these airlines with Russian Technologies, they will account for some 305-35% of domestic flights.

Vladimir Putin: Does this contradict legislation? 

Igor Levitin: No, antimonopoly legislation permits this, and we could join forces with the Federal Antimonopoly Service to find a way to monitor compliance with these regulatory measures. 

Vladimir Putin: Good, it's decided then. I accept your proposal; start working to implement it.

I have one more question. At the height of the crisis, it was decided that some pilots who were licensed to fly exclusively Soviet-made planes should be dismissed, and we considered retraining them.  

Igor Levitin: It was a very difficult question, especially [during the economic downturn] in 2008-2009. You approved our proposal then and instructed us to implement it. The project involved selected pilots and flight engineers, and 450 million roubles have been allocated for its implementation in 2010 in accordance with your directive. We have selected 100 for retraining at our schools. Sixteen airlines and nine regions have confirmed their intention to take part in the programme. The money for next year has also been allocated. This will ease tensions created by changes in the fleet and adoption of modern planes, in particular the SuperJet and An-148, which have a completely different cabin. This is why we need to retrain the crews.

Vladimir Putin: How many people will be retrained at these centres? 

Igor Levitin: We plan to retrain 100 people this year and then gradually increase the number. In all, we have retraining requests for 600 people and have selected approximately 300 people. Our criteria were of the candidate's health and knowledge of a foreign language. The programme involves a number of regulatory requirements. We plan to retrain 100 people this year. 

Vladimir Putin: Good.