Air China grows revenue, expands network

Air China has announced its interim results for the six months ended June 30, 2007. During the period, the airline produced operating revenue (including air traffic revenue and other operating revenue) of US$3.4 million (RMB23,353 million), a 17.2% increase over the same period last year. Net profit was 6.7%, US$200 million (RMB1,569 million), as Air China continued to outperform its domestic peers.

Earnings per share nearly tripled, rising 169% from RMB0.049 in the first half of 2006 to RMB0.132. ( Air China results are reported according to International Financial Reporting Standards.)

Total passenger traffic (RPKs) in the first half rose 14.4%, to 17.6 billion domestic and 14.2 billion international RPKs. As well, Air China proceeded with its announced plan to join the worldwide Star Alliance, now meeting 21 of the 57 entry requirements, and launched new code sharing with Hong Kong’s Cathay Pacific Airways. The company also strengthened its cooperation with such airlines as Lufthansa, United Airlines, Scandinavian Airlines, Air New Zealand, Austrian Airlines, and Korea’s Asiana Airlines.

The airline continued to improve service quality, including product upgrades to first and business class cabins on long-haul aircraft, and focused development at its three main hubs of Beijing, Shanghai, and Chengdu. Marketing efforts in relation to the Beijing 2008 Olympics, for which Air China is the sole airline partner, progressed smoothly.

Speaking of the first half, Mr. Li Jiaxiang, Chairman of Air China, said, “The Company captured opportunities in the market and has achieved remarkable improvement in operating efficiency. We continue to make significant progress in transforming our organization, expanding our hub and route networks, improving customer service systems, and further enhancing the Air China brand.”