Air China Management Discussion of December Operating Data

During December 2013, Air China Limited (CA+ZH+NX) recorded year-over-year and month-over-month increase in passenger traffic, measured by Revenue Passenger Kilometers (RPK) and passenger head count.

Passenger capacity (ASK) and passenger traffic (RPK) for December rose by 11.3% and 8.9% year-over-year respectively. ASK on domestic routes increased by 9.7% year-over-year, while RPK rose by 6.3%. ASK and RPK on international routes increased by 15.8% and 15.5% year-over-year respectively, and also climbed on regional routes by 6.7% and 5.8% year-over-year respectively. The overall passenger load factor was 77.2%, a year-over-year decrease of 1.7 percentage points. The passenger load factor on domestic, international and regional routes decreased by 2.5, 0.2 and 0.6 percentage points respectively.

With respect to the cargo operation, Revenue Freighter Tonne Kilometers (RFTK) and freighter tonnage carried for December decreased on a year-over-year and month-over-month basis. Available Freighter Tonne Kilometers (AFTK) increased by 4.5% year-over-year. RFTK and freight tonnage both decreased by 3.6% year-over-year. The cargo load factor was 56.0%, a year-over-year decrease of 4.7 percentage points.

Starting from 1 December, flights from Beijing-Siam Reap (two flights per week) were launched. Flights from Wuhan-Chiang Mai (two flights per week), Beijing- Mudanjiang (seven flights per week), Harbin-Tianjin-Haikou (seven flights per week) and Hangzhou-Lijiang (one flight per day) commenced operation on 10, 12, 15 and 20 December respectively.

In December, excluding the controlling company, Air China (CA) purchased a total of 311,000 tonnes of jet fuel at a price of RMB7,220 per tonne, a year-over-year decrease of 2.0%. The average jet fuel purchase price at international airports was RMB6,279 per tonne, a year-over-year decrease of 4%. The average jet fuel purchase price for domestic flights was RMB7,465 per tonne, a year-over-year decrease of 5%.

During the month, the Group added six airplanes, including two A320s, one A330, two B737-800s, as well as one B777F. One A340 aircraft and one B747 cargo jet were retired. As at the end of December, the Company operated a fleet of 497 aircraft.