1 The Next Decade of Air China Mr. Kong Dong President, China National Aviation Holding Co. Chairman, Air China Limited Beijing 2010-05-12.

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The Next Decade of Air China

Mr. Kong DongPresident, China National Aviation Holding Co.

Chairman, Air China Limited

Beijing 2010-05-12

After eight years’ development, Air China has successfully realized structural reform and industrial consolidation, together with Shandong Airlines, Air Macau,and Shenzhen Airlines making an air carrier group.

1 Reviews on the past eight years

On Operations, Air China improved both scale and efficiency, making a solid foundation for next decade development.

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115131

151

176

207220

243

262

2002 2003 2004 2005 2006 2007 2008 2009

Fleet Expansion

51.7 52.0

67.574.4

86.8

96.8 94.399.5

2002 2003 2004 2005 2006 2007 2008 2009

Total Turnover Growth

Unit: A/CUnit: 100million ton km

64.1% 64.1% 65.7% 66.0%71.9% 74.2% 75.9% 78.6% 75.0% 76.8%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load Factor Growth

Unit: %

1 Reviews on the past eight years

On financial performances, Air China leads in the domestic aviation industry

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2.15 2.56

17.09

29.7738.81

-91.49

50.00

2003 2004 2005 2006 2007 2008 2009

137.4

115.9

73.4 68.8 68.3 66.8 63.8 61.6 58.4 56.1

CA SQ LH CX WS NH DL FR CZ QF

World Top Ten Carriers in Market Capitalization

(As of 1st Dec. 2009, Unit: 100million Dollar)

Air China’s Net Profit in 2003-2009 (Unit: 100millon RMB)

Reviews on the past eight years

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In the next decade, Air China’s strategic goal:

2 Outlook On Air China’s Next Decade

To become a Top 30-50 large industrial group with global competitiveness

To build a large world-class network carrier

To build a high-quality Beijing Hub with strong global competitiveness

In the next decade, Air China will take LH, AF-KLM, Delta as benchmark carrier, building itself to become a world-leading carrier.

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Strategy: Automative, high-efficient comprehensive int’l hubStrategy: large-scale, high quality and hub-spoke airline

2 Outlook On Air China’s Next Decade

Air China will build global network and supportive high-efficient fleet in ten years, competing with other int’l peers

AF-KLM Fleet in 2008: 574 A/C

AA Fleet in 2008: 662 A/C

Air China’s strategy in 2020

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Fleet of over 886 aircraft

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Complementary global and domestic route network

3 World Top Five in Passenger Volume

4 World Top Ten in Cargo Volume

Outlook On Air China’s Next Decade

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Document number 8

Not benchmarking in scale, Air China will become a high-quality, int’l-branding and respectful flag carrier in 2020.

Strong anti-risk capability

High value int’l brand reflection

Strong profit capability

Reaching 4-star service

A/C Utilization ratio reached 11-12 hours

High-quality staff

leading safety operation

Over 75% in passenger Load factor

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Systematic and automatic management

2Outlook On Air China’s Next Decade

Air China make all efforts to help building Beijing as a world-class comprehensive hub

Till 2020, BCIA’s scale and efficiency will reach international level

Passenger volume top 3 in the world

Cargo volume top 8 in the world

Int’l connecting passenger 50%

On-time performance ratio 90%+

successful connection 90%+

……

Outlook On Air China’s Next Decade2

A successful hub must be an example in intensive cooperation, and a collective work within many operating segments

LH Hub Example

LH in MUC T2

Delta Hub Example

Building Beijing hub cannot be achieved by Air China alone. Currently, we need BCIA to further improve in many fields so as to realize our common vision.

Further optimization of connection procedure

Systematic and automatic management of Slots

Resolution of congested airspace and air corridor

Immigration and customers’ restrictions in connections

Effectively resolution to competitions

Shortening MCT

Improved punctuality

Improved connection success

Basic for comprehensive hubs

2Outlook On Air China’s Next Decade

In the next decade, Air China will make its own contributions to build China as a strong aviation nation, living up to its missions and leading positions.

Cargo sector with int’l competitiveness

Strong IT & Service sector

Strong MRO sector

Comprehensive Service & Support sector

Optimised industrial chain

High efficient airport support system

High efficient air control system

High efficient customers and immigrations …….

More comprehensive regulations and policies

High value International Brand

Building China as a strong aviation nation is airlines’ responsibilities, including Air China

Building an excellent hub

Building a competitive industrial sectors

Upgrading whole industrial level

To provide support and pratice in industrial standard management

Thank You