Air China Limited (the "Company", together with its subsidiaries, collectively the "Group") announced its results for the first three months ended March 31, 2007 (the "Period").

(Important Notice: All figures in this report are unaudited and are prepared in accordance with PRC GAAP. The operating numbers include those of Air Macau)

According to the quarterly report of the Company, the Company has achieved good results, evidenced by increase in operating revenue, operating profit as well as net profit. During the period, operating revenue totaled RMB10.47 billion, and operating profit was RMB514 million. Net profit was RMB403 million while earnings per share and net return on asset were RMB0.03 and 1.39% respectively. During the period, Air China was able to demonstrate stable growth and maintain its leading position among mainland Chinese airlines in terms of profitability.

Accelerated Development on International Routes; Stable Development in Domestic Market

Air China obtained good results even in the traditional down season of air traveling. However, due to the strong market demands, results for the first quarter was better than that of last year both in passenger traffic and cargo traffic. With the relatively steady increase in capacity, the number of passenger carried reached 8,403,000, an increase of 14.2% over the same period of the previous year, while the average passenger load factor was 74.6%, an increase of 2.8 percentage points over the last year. Cargo and mail traffic reached to 256,000 tons, up 11.7% over the same period last year. The cargo load factor decreased 3.7 percentage points to 51.7%. The increases in passenger load factor and the fare level helped improve the results of the Company.

During the period, passenger traffic measured by revenue passenger kilometer ("RPK") was 15.76 billion, an increase of 17.2% over the same period of 2006. RPK on international routes, domestic routes, and Hong Kong and Macau routes was 6,593 million, 8,465 million and 705 million respectively, representing increases of 23.3%, 14.1% and 3.6%. During the period, international operations experienced the fastest growth due to the appreciation of RMB, liberalization of the aviation market, increase in international trade as well as the recovery of global aviation industry. In the first quarter, passenger capacity measured by available seat-kilometers ("ASK") increased 12.8% to 21,123 million. The passenger load factor increased 2.98 percentage points to 74.6%.

Cargo and mail traffic experienced growth of 16.0% to 877 million revenue freight ton kilometers ("RFTK") during the review period. Cargo capacity measured by available freight ton kilometers ("AFTK") increased 24.2% to 1,698 million. The cargo load factor was 51.6%, decreased 3.65 percentage points.

Airline Consolidation and Co-operation Moving Forward at Accelerated Pace

During the review period, business co-operation between Air China and Cathay Pacific Airways progressed further. On January 25, 2007, Air China completed the privatization of China National Aviation Company (CNAC). According to Mr. Li Jiaxiang, Chairman of the Board, by holding CNAC as a wholly-owned subsidiary, Air China is able to control its operation directly. And furthermore, a more simplified and direct shareholding in Cathay Pacific will also enable the Company impose greater influence on Cathay Pacific.

Outlook

Looking ahead, Air China will continuously follow its business philosophy of stable development and profit-oriented strategies under the leadership of the management team. Air China will adhere to its mission to become the most recognized airline by mainstream passengers; the most valuable, the most profitable and the most globally competitive airline. The Company will also capitalize on its market dominance to achieve a balanced domestic and international operation as well as development in both passenger and cargo business.