1

March 2020

2

Part 1 Performance Highlights

Part 2 Business Overview

Part 3 Financial Review

Part 4 Outlook

Under IFRS

Part 1 Performance Highlights

3

Performance Highlights – Operational Metrics

4

ATK(100 million)

RTK(100 million)

Overall Load Factor(%)

ASK(100 million)

RPK(100 million)

Passenger Load Factor (%)

• 369.18• 4.32%

• 253.64• 3.50%

• 68.70• -0.54pts

• 2,877.88• 5.19%

• 2,331.76• 5.74%

• 81.02• 0.42pts

Note: The operating data of the previous period would no longer contain Air China Cargo’s freight data of all freighters and shall be adjusted to a comparable basis.

Performance Highlights – Financial Metrics

5

Revenue Operating Expenses Profit After Tax

Net Assets※ Gearing Ratio※ Yield per RPK(RMB)

• 1,361.81• -0.43%

• 1,255.98• -0.74%

• 0.53• -2.22%

• 65.56%• -0.77pts

RMB100 million

• 1,013.29• 7.33%

• 72.64• -11.58%

※ The group implemented IFRS 16 leases from 1 January 2019, and the variation of net assets andgearing ratio represents the comparison between the data at the end of the reporting period and the data atthe beginning of the year.

Domestic Routes 2019 YoY Change

Air passenger revenue (RMB100 million) 506.48 1.64%

ASK (100 million) 974.33 2.48%

RPK (100 million) 801.68 2.55%

Passenger load factor (%) 82.28 0.05pts

Yield per RPK (RMB) 0.63 -0.88%

International Routes 2019 YoY Change

Air passenger revenue (RMB100 million) 335.86 4.65%

ASK (100 million) 1,001.48 4.12%

RPK (100 million) 794.15 6.26%

Passenger load factor (%) 79.30 1.60pts

Yield per RPK (RMB) 0.42 -1.52%

Regional Routes(Hong Kong, Macau and Taiwan)

2019 YoY Change

Air passenger revenue (RMB100 million) 24.83 -5.33%

ASK (100 million) 46.09 -4.76%

RPK (100 million) 36.40 -9.09%

Passenger load factor (%) 78.99 -3.76pts

Yield per RPK (RMB) 0.68 4.13%

6

Air China

Total 2019 YoY Change

Air passenger revenue (RMB100 million) 867.18 2.56%

ASK (100 million) 2,021.89 3.11%

RPK (100 million) 1,632.23 4.02%

Passenger load factor (%) 80.73 0.71pts

Yield per RPK (RMB) 0.53 -1.40%

Shenzhen Airlines

2019 YoY Change

ASK (100 million) 706.58 7.77%

RPK (100 million) 578.77 7.47%

ATK (100 million) 76.56 8.88%

RTK (100 million) 57.88 7.79%

Passenger load factor (%) 81.91% -0.23pts

Overall Load Factor (%) 75.60% -0.77pts

Passenger yield (RMB) 0.52 -5.01%

As at 31 December 2019, the fleet ofShenzhen Ai r l ines ( inc lud ingK u n m i n g A i r l i n e s h a d 2 1 8aircrafts, with an average age of 6.40years.

Revenue from operations wasRMB31.879 billion, up by 2.44%year-on-year.

Net profit attributable to shareholdersof the Company was RMB1.157billion, up by 26.45% year-on-year.

7

Part 2 Business Overview

8

Safe and sustainable operation

9

The Group aimed at ensuring sustainableand safe development by firmly establishthe concept of safe development andholding the bottom line of safety. Itdevoted greater efforts in the developmentof systems and mechanisms in order toreinforce the foundation of its safedevelopment.

The Group continued to optimize theoperation of the entire fleet in order toeliminate the impact of insufficientcapacity, and continued to align itsinvestments closely with marketdemand, thereby improving its resourceutilization efficiency.

Continuous improvement of service quality

10

Perfecting standards for

the service system

Improving the quality of

hardware regardingservices

Upgradingsoftware

service and products

Forming teams of

professional services

Provided whole process trainings for the service team

• Focused on flight punctuality management• Commenced the renovation of old lounges and

construction of new lounges• Comprehensively improved the quality of catering

and in-flight entertainment

• Adhered to global benchmarking• Issued whole process product and

service standards

• Established a “self-service area” at the Beijing hub for the domestic routes

• Comprehensively promoted "Paperless" convenient travel services

• Enriched the functions of Air China App

Adhered to the building of a world-class hub

11

Market leader at the Beijing hubWe actively promoted the renovation project for Terminal 3 and other construction projects including thefourth runway and the landside integrated transportation hub at Beijing Capital International Airport.Meticulous arrangements have been made for the first flight and commencement of operation at DaxingAirport, ensuring safe and smooth operation of the two airports in Beijing. We continued to extend the breadthand frequency of the route network of Beijing Hub. The commercial value of the hub increased steadily.

Balanced and complementary route networkWe deepened the global network, continued to build Beijing Capital International Airport into a world-classhub, constructed the Chengdu international hub, and focused on the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area. After years of operations, we have formed a broad and balancednetwork integrating domestic and international routes and covering the most developed and densely populatedareas in China. After years of development, the Group enjoys an absolute leading advantage in routes fromChina to Europe and North America.

12

Solid expansion of the route network

Through cooperation with members of Star

Alliance, the Company has expanded our service

coverage to 1,317 destinations in 195 countries.

As at 31 December 2019, the Group operated a total of

770 passenger routes, including 606 domestic routes, 137

international routes and 27 regional routes. The

Company’s passenger routes reached 43 countries and

regions and 187 cities, including 119 domestic cities, 65

international cities and three regions.

Maintained the leading advantage in costs

13

Production organisation: The Company continuously promotedthe "Fleet Operation Optimisation Project" and adoptedmeasures like computer-aided refined control of oil consumptionto save jet fuel costs. Besides, it optimised the fleet maintenancework plan to raise the overall availability of the fleet.

Marketing and purchase management: The Companyconstantly raised the proportion of direct selling, cut the agencyfee rate, promoted the whole-procedure management of machinesupplies, and reduced the consumption not arising fromproduction.

Operation security: The Company vigorously pushed theapplication of new energy, continuously optimised resourceallocation, and declined costs and consumption.

Capital management and control: The Company proactivelyprevent and mitigate financial risks, strengthened capitalefficiency, expanded financing channels, optimised the debtstructure, and reduced capital costs.

A passenger base that is most valuable

RMB100 million

14

The % of revenue from frequent fliers increased by 1.5 pts

2018 2019

Revenue from frequent fliers increased by 5.2% YoY

378398

0

100

200

300

400

2018 2019

Revenue from premium classes increased by 2.4% YoY Passenger load factor of premium classes increased by 2.1 pts

0%

10%

20%

30%

40%

50%

60%

70%

2018 2019

2.1%RMB100 million

01020304050607080

Mainland China International Region2018 2019

1%4%

-11%

46.5%53.5%

Revenue from frequent fliers Others

Constantly deepened the transformation of business models

15

Ancillary services income continued to grow YoYE-commerce channel structure was optimised

Revenue from mobile APP increased by 39%RMB100 million RMB100 million

RMB100 million

0

1

2

3

4

2018 2019

57%

0

20

40

60

80

100

2018 2019

39%

2019

17%

33%50%

Website Mobile APP Flagship

0

0.5

1

1.5

2

2.5

Paid upgrade Paid seat selection Prepaid luggage

2018 2019

103%

21%

33%

Part 3 Financial Review

16

17

Profitability remained a leading position in the industry

(RMB100 million) 2019 2018 Year-on-Year change

Revenue 1,361.81 1,367.74 -0.43%

Operating expenses 1,255.98 1,265.37 -0.74%

Operating expenses (fuel cost exclusive) 896.33 880.55 1.79%

Profit from operations 146.42 143.46 2.06%

Finance costs 49.49 29.14 69.83%

Net exchange loss 12.11 23.77 -49.04%

Profit attributable to associates 2.16 5.27 -59.07%

Profit attributable to joint ventures 2.60 2.22 16.88%

Profit before taxation 91.20 99.77 -8.59%

Profit attributable to equity shareholders of the Company 64.20 73.51 -12.66%

EPS (RMB Yuan) 0.47 0.54 -12.67%

RMB100 million

Net debt to equity ratioMultiple

Net assets(Excluding minority interests)

Gearing ratio

Interest coverage ratio of EBITDAMultiple

%

Sound financial structure

18

543 597

688

860 932 935

0 100 200 300 400 500 600 700 800 900

1000

2014 2015 2016 2017 2018 2019

71.71 68.86 65.959.75 58.75

65.56

01020304050607080

2014 2015 2016 2017 2018 2019

5.62

8.98 8.98

7.28.15

4.45

0123456789

10

2014 2015 2016 2017 2018 2019

1.73

1.451.29

0.94 0.88

1.28

0

0.4

0.8

1.2

1.6

2

2014 2015 2016 2017 2018 2019

(RMB100 million) 2019 2018 Year-on-Year change

Jet fuel costs 359.65 384.81 -6.54%

Take-off, landing and depot charges 164.40 153.55 7.07%

Depreciation, amortisation and lease expenses of aircraft and engines

222.45 216.69 2.66%

Aircraft maintenance, repair and overhaul costs

61.20 66.13 -7.46%

Employee compensation costs 254.74 244.50 4.19%

Air catering charges 40.26 37.87 6.31%

Selling and marketing expenses 46.85 43.73 7.13%

General and administrative expenses 18.44 15.36 20.10%

Others 87.99 102.72 -14.34%

Total 1,255.98 1,265.37 -0.74%

Controlling increase of overall costs

19

2019

2018

Jet fuel costs 28.6%

Take-off, landing and de-pot

charges 13.1%

Depreciation, amortisation

and lease expenses of aircraft and

engines 17.7%

Aircraft maintenance, r

epair and overhaul costs

4.9%Employee

compensation costs 20.3%

Air catering charges 3.2%

Selling and marketing expenses

3.7%

General and administrative

expenses 1.5%

Others7.0%

Jet fuel costs 30.4%

Take-off, landing and de-pot

charges 12.1%

Depreciation,amortisation

and lease expenses of aircraft and

engines 17.1%

Aircraft maintenance,

repair and overhaul

costs 5.2%

Employee compensation costs 19.3%

Air catering charges 3.0%

Selling and marketing expenses

3.5%

General and administrativ

e expenses 1.2%

Others8.1%

Unit cost (excluding jet fuel)

Unit cost

Revenue to cost ratio

Jest fuel costs and operating expenses excluding jet fuel

RMB100 million RMB

RMB

Maintained the advantage in unit cost

20

3.57

3.01 2.89 3.15

3.45 3.40

2.32 2.25 2.242.35 2.41 2.43

00.5

11.5

22.5

33.5

4

2014 2015 2016 2017 2018 2019

Including jet fuel Excluding jet fuel

0.51 0.44 0.42 0.45 0.45 0.44

0.33 0.33 0.32 0.34 0.31 0.31

0

0.1

0.2

0.3

0.4

0.5

0.6

2014 2015 2016 2017 2018 2019

Including jet fuel Excluding jet fuel

345 240 220 284 385 360

642705 756

839880 896

0

200

400

600

800

1000

1200

1400

2014 2015 2016 2017 2018 2019

Jet fuel costs Operating expenses excluding jet fuel costs

987 945 9761123

1265 1256

93.15%85.87% 84.77%

92.51% 92.51% 92.23%

60.55% 64.02% 65.68% 69.10%64.38% 65.82%

40%50%60%70%80%90%

100%

2014 2015 2016 2017 2018 2019

% of operating expenses to revenue

% of operating expenses excluding jet fuel cost to revenue

Change in unit cost for fuel purchaseRMB/Tonne

Year-on-Year decrease in jet fuel costs

21

Sensitivity analysis

Oil price fluctuationUSD1/barrel

Annual fuel costs RMB430 million

Jet fuel costsRMB100 million

2019

10 thousand tons

Jet fuel consumption

2018

345

240 220

284

385360

050

100150200250300350400450

2014 2015 2016 2017 2018 2019

559619 666

716 738 769

0

200

400

600

800

1000

2014 2015 2016 2017 2018 2019

0

1500

3000

4500

6000

7500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Interest bearing debt

22

RMB/USD 1%Net profit RMB444 million

Exchange rate sensitivity analysis Interest rate sensitivity analysis

Interest rate 50bp

Net profitRMB145 million

(RMB100 million) 31 December 2019 Proportion 1 January 2019 Proportion 31 December 2018 Proportion

USD 603.57 43.48% 660.23 48.43% 288.14 30.09%

RMB 770.29 55.11% 685.49 50.28% 654.42 68.34%

EURO 12.25 0.88% 1.62 0.12% 1.21 0.13%

JPY 10.25 0.73% 11.29 0.83% 10.78 1.13%

MOP 0.83 0.06% 3.88 0.28% 2.98 0.31%

Other 0.58 0.04% 0.78 0.06% - -

Total 1,397.77 100% 1,363.29 100% 957.54 100%

Part 4 Outlook23

24

2020 prospects The positive fundamental trends of the Chinese economy remains unchanged

The potential is huge for China’s airline passenger market, showing a robust long-term demand

Strengthening production safety to consolidate the foundation of quality development

Enhancing competitiveness and innovation to build organic motivation for quality development

Scientifically planning top-level design to draw a picture of quality development

Continuously improving Party building to serve as a strong guarantee for quality development

The competition and cooperation methods of the global aviation industry keep changing, and the competition in Chinese aviation market becomes increasingly fierce

Appendix Other data for 2019

25

* Wet lease aircraft excluded in calculation of average ages

1. Fleet – The Group

26

31 December 2019 Introduction

Subtotal Self-owned

Finance Lease

Operation Lease

Average Age 2020 2021 2022

A319 43 32 6 5 12.40 - - -A320/A321 247 81 91 75 6.22 29 34 -A330 65 28 8 29 7.65 - - -A350 10 0 10 0 1.04 5 7 8B737 277 120 72 85 7.03 - - -

B747 10 8 2 0 10.47 - - -

B777 28 4 18 6 5.71 - - -

B787 14 12 0 2 2.86 - - -

ARJ21 - - - - - 3 6 8

Business Jet 5 1 0 4 7.41 - - -

Total 699 286 207 206 6.96 37 47 16

31 December 2019 Introduction

Subtotal Self-owned

Finance Lease

Operation Lease

Average Age 2020 2021 2022

A319 33 32 1 - 13.54 - - -

A320/A321 138 30 65 43 5.77 17 27

A330 59 28 5 26 8.25 - - -

A350 10 - 10 - 1.04 5 7 8

B737 134 63 24 47 7.78 - - -

B747 10 8 2 10.47 - - -

B777 28 4 18 6 5.71 - - -

B787 14 12 - 2 2.86 - - -

ARJ21 - - - - - 3 6 8

Total 426 177 125 124 7.25 25 40 16

2. Fleet – Air China

27

* Wet lease aircraft excluded in calculation of average ages

3. Profit indicators

28

2019 2018 YoY Change

EBITDA (RMB100 million) 243.72 288.50 -15.52%

EBITDA margin 17.90% 21.09% -3.20pts

EBITDAR (RMB100 million) 259.04 371.33 -30.24%

EBITDAR margin 19.02% 27.15% -8.13pts

ROE 6.88% 8.20% -1.32pts

4. Consolidated Balance Sheet (Condensed)

29

(RMB100 million) 31 December 2019 31 December 2018 YoY Change

Property, plant, equipment and right-of-use assets 2,215.35 1,716.63 29.05%

Current Assets 248.17 237.26 4.60%

- Cash and cash equivalents 89.35 67.63 32.12%

Total Assets 2,942.06 2,436.57 20.75%

Current Liabilities 779.73 725.40 7.49%

Non-current Liabilities 1,149.04 706.19 62.71%

Total Liabilities 1,928.77 1,431.59 34.73%

Total Equity attributable to Shareholders of the Company 934.59 931.57 0.32%

5. Consolidated Cash Flow Statement (Condensed)

30

(RMB100 million) 2019 2018 YoY Change

Net cash inflow from operating activities 335.99 286.83 17.14%

Net cash outflow from investing activities 119.67 89.49 33.71%

Net cash outflow from financing activities 195.10 186.47 4.63%

Net increase in cash and cash equivalents 21.22 10.86 95.37%

Cash and cash equivalents at beginning of the period 67.63 55.63 21.58%

Effect of exchange rate changes on cash and cash equivalents 0.50 1.14 -56.31%

Cash and cash equivalents at the end of the period 89.35 67.63 32.12%

6. Other Major Subsidiaries

Air Macau 2019 YoY Change

ASK (100 million) 77.54 17.50%

RPK (100 million) 61.31 15.07%

ATK (100 million) 8.97 17.31%

RTK (100 million) 6.39 13.19%

Passenger load factor (%) 79.07% -1.67pts

Overall load factor (%) 71.26% -2.59pts

Passenger yield (RMB) 0.58 -4.58%

31

32

Investor Relations - Beijing

Air China’s Website: www.airchina.com.cn

Air China’s APP:

Zhang YueTel: +8610-6146 2560Fax: +8610-6146 2805E-mail: joycezhang@airchina.com

Zhang Chen Tel: +8610-6146 2543Fax: +8610-6146 2805E-mail: zhangchen2017@airchina.com