On August 18, China Southern Airlines Company Limited ("China Southern Airlines" or the "Company") announced the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended on June 30, 2008 (the "Period"), prepared in accordance with International Accounting Standards ("IAS").

During the Period, the Group's total operating revenue amounted to 26,781 million yuan, an increase of 9.1% over the same period last year; profit before taxation amounted to 944 million yuan, an increase of 110.7% over the same period last year; profit attributable to equity shareholders of the Company amounted to 847 million yuan, an increase of 404% over the same period last year; and basic earnings per share was 0.19 yuan, an increase of 0.15 yuan over the same period last year. The board of directors of the Company did not recommend any interim dividend in 2008.

During the Period, as affected by various unfavorable factors including the US sub-prime mortgage crisis, ballooning inflation, stringent monetary policies and natural disasters, the growth in the Chinese mainland aviation market was much lower than what was expected at the beginning of the year.

The Group recorded a total traffic turnover of 4,544 million tonne kilometres, an increase of 6.9% year-on-year; and it carried 27.9563 million passengers and handled 427,700 tonnes of cargo and mail, representing increases of 5.7 and 6.0%, respectively as compared to the same period last year. The average utilization rate of the Group's aircraft was 8.99 hours per day, a decrease of 0.4 hour year-on-year. The average passenger load factor was 73.1%, an increase of 1.2 percentage-point year-on-year; and the average load factor was 64.6%, an increase of 1.8 percentage-point year-on-year.

During the Period, the Group has achieved a record of 5 million safe flying hours and was honored with the "Five-Star Flight Safety Award", currently the most prestigious award in safe flight operation in China, by the Civil Aviation Administration of China (CAAC). The Group became the first airline company obtaining such award in the Chinese mainland.

The International Air Transport Association (IATA) announced that the Group was ranked No. 1 in Asia and No. 4 in the world in terms of passenger carried in 2007.

Among the "Top 100 Listed Companies in China" named by Fortune China, the Group was ranked 32nd and was ranked the first in the air transportation industry, as well as being the company with the highest net profit growth in 2007.

Looking ahead into the second half of 2008, Mr. Liu Shao Yong, Chairman of the Company, said, "As affected by the international and domestic macro-economic environment, airlines are generally saddled with three major burdens, including insufficient market demand, fierce competition and high oil prices. As such, the Group expects to undergo a long period of hardship. The Group, therefore will rationally deploy its transportation capacity, optimize its routes structure, strengthen marketing and sales efforts, and raise revenues from first and business class cabins, as well as reducing production costs and the scale of infrastructure investment; thereby enhancing the Group's operating standards and creating better returns for our shareholders."