China Southern Airlines has hosted a forum in the resort
city of Sanya with senior airline management of SkyTeam as it reviewed its future
membership in the global alliance.Industry aviation leaders gathered in Sanya under the theme, “Industry Cooperation
... A Win-Win Future”. Present and addressing at the forum were Mr. Li Jian, Vice
Minister, General Administration of Civil Aviation of China (CAAC); Mr. Liu Shao
Yong, President of China Southern Air Holding Company & Chairman of China Southern
Airlines; Mr. Chen GAO Shun, Deputy Secretary General, Hainan Provincial People’s
Government; Mr. GAO Boa Hong, Vice Mayor, Sanya People’s Government; Mr. Jung He
Lee, President & COO of Korean Air; Mr. Dominique Party, Senior Vice President of
International Affairs and Alliances, Air France; Mr. Liu Zoning, President,
Guangdong Airport Management Corporation and Mr. Wang Xian ping, Senior Advisor,
China Southern Airlines.

SkyTeam is one of the three big global alliances, with current 10 member carriers in
possession of 2,018 aircraft serving 14,615 daily flights to 728 destinations in 149
countries and regions. The SkyTeam alliance enjoys the best hubs and network,
including Atlanta Airport - the world’s largest airport where Delta Air Lines is
based, Paris-Charles de Gaulle - the largest hub in Europe where Air France is
headquartered, Inch eon Airport - the Asian biggest airport where Korean Air is
based and Mexico City Airport - the largest airport in the Latin American region
where Aeroméxico is hubbed.

China Southern Airlines is the largest airline in The People’s Republic of China in
terms of fleet, routes and annual passenger traffic and is the first mainland
Chinese airline to launch its own self-created computer reservation system; sell
China’s first airline e-ticket and offer customers self-service check-in. Currently,
China Southern is expediting the building of Guangzhou and Beijing as dual airline
hubs to serve to ever expanding Chinese domestic marketplace. 

China Southern has relocated its fleet of Airbus A330 aircraft to Beijing to serve
the most extensive flights in mainland China.

China Southern Airlines signed an initial agreement for future SkyTeam membership in
late August 2004 and in June 2006; China Southern inked a GAAAA (Global Airline
Alliance Adherence Agreement) with SkyTeam, striding forward a key step towards a
global airline alliance membership.
China Southern Airlines is aiming at becoming an official member of SkyTeam by the
close of year 2007.

The Sanya forum will provide China Southern with the opportunity to communicate with
varied domestic and international airline industry leaders in its preparation for
its official membership into the SkyTeam.

Since signing the GAAAA last year, China Southern Airlines has been ramping up to
significantly improve its varied service facilities, standards and procedures to
meet membership requirements. This includes upgrades to its IT systems including
seat reservations; departure systems; Sky Pearl Club Frequent Flyer Service;
e-ticketing; bill and settlement systems; revamping its sales & marketing and
retraining its staff training under SkyTeam practices.

Mr. Yang Yuan Yuan, CAAC Minister said, “Promoting the backbone Chinese carriers in
joining global airline alliances is a main method of strengthening their
international competitiveness. The Chinese aviation industry has to be exquisite in
grasping the international trend to initiatively accommodate itself to the fierce
global competition, making efforts in stepping into a strong civil aviation
country.”

Mr. Liu Shao Yong, Chairman, China Southern Airlines added, “Joining SkyTeam with
such an extensive network is not only a positive move for China Southern Airlines
but a significant benefit to customers, offering more choices in destinations and
air fares. Passengers who select SkyTeam have a world of choices including 14,615
flights to 728 worldwide destinations. SkyTeam goes where 80% of world passengers
want to go. Meanwhile, SkyTeam offers customers numerous fare options such as
‘Around-The-World’, ‘Europe Pass’, ‘America Pass’ and ‘Asia Pass’, allowing
passengers to circle the globe via travel on any- or all - of SkyTeam members.”

Mr. Jong Hee Lee, President and COO of Korean Air, welcomed the forum on behalf of
SkyTeam and commented “As a leading airline alliance, SkyTeam is well aware of the
importance of China and its air travel market, which is why we are very proud to
soon have China Southern as a partner in our SkyTeam alliance. We have no doubt that
when China Southern’s joining process is completed, it will add new momentum to the
growth of both SkyTeam and the Chinese aviation industry.”
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