2016 Interim Results

Under IFRS

Financial data included in this presentation is prepared under IFRS.

Unless otherwise specified, the unit for cost and income is RMB

million.

“Regions” or “Regional” used herein refers to Hong Kong,

Macau and Taiwan.

Transportation revenue mentioned herein includes income from

co-operational routes.

This presentation contains certain forward-looking forecast and

outlook. These opinions are based on certain assumptions, which

are subject to change. The actual results may deviate materially

from the forecast.

Disclaimer

2

1.Industry Circumstances & Results Overview

Favorable Factors

Chinese economy maintains medium-high speed growth; proportion of consumption out of GDP further increased

Paid holiday and VISA policies promoted rapid growth of private overseas travel

Increased Direct sale ability and proportion further lowered the agency commissions

Oil price remained at low level in general

Unfavorable Factors

Slow recovery of global economics; Chinese economy growth faces downward pressure; geopolitics risks and violent terrorist incidents affect traffic demand

High-speed railway route adjustment divert air traffic

Increased capacity deployment in international market brings about yield pressure

Exchange rate fluctuation caused exchange losses

Cargo business demand remained sluggish

Industry Circumstances of 2016H1

4

Results Overview

Data Overview 2016H1 2015H1 YoY

Total turnover 49,109 46,631 5.3%

Total turnover (fuel surcharges excluded) 45,920 42,830 7.2%

Operation Profit 7,158 5,726 25.0%

Gross Profit margin 14.6% 12.3% 2.3pt

EBITDAR 15,717 13,330 17.9%

Exchange losses 1,355 56 2319.6%

Net profit (attributable to shareholders) 3,230 3,562 -9.3%

Net profit (attributable to shareholders,excluding exchange)

4,276 3,608 18.5%

Number of aircraft 565 511 10.6%

ATK (Million) 13,559 12,035 12.7%

Passenger Load Factor 80.8 80.4 0.4pt

Daily utilization rate (hours) 9.80 9.92 -1.2%

Employees per aircraft 124 133 -6.5%

Cost per ATK (RMB, fuel excluded) 2.48 2.52 -1.7%

5

2.Marketing Performance

15.0%

0.4pt

15.5%

-8.0% -8.2%

6.0%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

Capacity Breakdown

Domestic

65.2%

International

30.9%

Regional

3.9%

Revenue Breakdown

Trend of PLF and Unit Revenue (fuel surcharges excluded)

YoY Changes of Major Passenger Business Indicators

7

Passenger Business

Domestic

62.8%

International

34.3%

Regional

2.8%0.52 0.52

0.52 0.52 0.47

0.41

0.42 0.42 0.41 0.38

77%

79%

81%

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2013 2014 2015 2015H1 2016H1

PLF RRPK RASK

Domestic

62.8%International

34.3%

Regional

2.8%

7.8%

0.5pt

8.4%

-3.1%-4.4%

3.7%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

Domestic Passenger BusinessCapacity Breakdown

YoY Changes of Major Domestic Passenger Business Indicators

Supply and demand generally in balance, PLF maintained flat

Intensified competition lead to yield decline

By strengthening all-network access layout and taking the advantage of slot release, increased capacity in core hub markets to further consolidate market shares

8

Total of

Shanghai,Kunming,

Xi'an,Beijing , 76.2%

Others, 23.8%

32.4%

0.2pt

32.8%

-16.4% -15.8%

11.9%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

International Passenger Business

YoY Changes of Major International Passenger Business Indicators

28.1%

13.7%

11.2%

27.3%

13.7%

6.0%

North

America

Europe

Australia

Southeast

Asia

Japan

Korea

Domestic

62.8%International

34.3%

Regional

2.8%

Implementing globalization strategy by opening five long-haul routes

PLF rose slightly, supply and demand well matched in general

Promoting all-network access and transfer business, enhancing JV cooperation

Yield decline but largely in line with our overall expectation

9

Capacity Breakdown

3.2% 2pt

5.9%

-1.7%

-5.2%

0.5%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

Regional Passenger Business

YoY Changes in Major Regional Passenger Business Indicators

Hong

Kong,

50.0%

Macau,

7.1%

Taiwan,

42.9%

Hong Kong

Macau

Taiwan

Domestic

62.8%

International

34.3%

Regional

2.8%

Steady overall performance, capacity deployed in Shanghai-Hong Kong and Shanghai-Taiwan trunk routes, PLF increased YoY

Make adjustment in capacity structure and pricing mechanism according to market demand

10

Capacity Breakdown

8.5%

-6.9%-4.8%

8.6%

-12.2%

-16.4%

AFTK FLF RFTK RRFTK (fuel

excluded)

RRFTK (fuel

included)

Cargo

Revenue

(fuel

included)

Revenue Proportion

Cargo Revenue Breakdown

YoY Changes of Major Cargo Business Indicators

Cargo Business

11

Cargo market remained sluggish; decrease in FLF and RRFTK leads to remarkable decrease in cargo revenue

Optimizing freight network, enhanced coordination between passenger and cargo business, focused on the transformation of logistic business

Overall logistics business achieved breakeven

Passenger

Business

93.8%

Cargo

Business

6.2%

Freighter

52.5%

Belly

47.5%

3.Operation Highlights

• Optimization of fleet structure

• Strengthening hub network

• Improving key operation indicators

• Promotion of low-cost transformation

• Long term benefit from Shanghai Disneyland

• Complete private offering and introduce

strategic investor

• Improving customer experience and brand

images

13

Optimization of Fleet Structure

* The fleet above does not include 16 business aircraft operated under entrustment

2015H1 2016H1

B773

A330

B737

A320

Others

94.7%96.6%

Major Models Prop

Increased

• Order New Generation Wide-body Aircraft

• 20 * A350-900 • 15* B787-9

FleetEnd of 2015

2016H1 End of 2016H1In Out

PassengerAircraft

526 42 -12 556

B777-300ER 9 5 14

A330 Series 51 51

B737 Series 211 21 -6 226

A320 Series 243 16 -4 255

B767 6 6

RegionalAircraft

6 -2 4

Freighters 9 9

Total 535 42 12 565

133

124

2015H1 2016H1

Person per Aircraft

Decreased

14

Direct Sale Revenue Frequent Flyers

Value-added Services Revenue Corporate Customers

Improving Key Operation Indicators

• Oversea orders on domestic official

website increased by 60% YoY;

overseas orders increased by 50%

• New users of e-commerce platform

increased by 10.58 million,

representing 8.7 times increase

• Mobile ticket sales revenue increased

6.6 times

• Direct sales revenue increased by

57%, accounting for 47% of revenue

• Global customers expanded to 55

• Uploaded “Priority Check-in”in

mobile APP

• Enhanced cooperation with world-

famous TMC; Two-party corporate

customers increased by 63% to 3019

• Introduced “most favorable price”

for official website members and

“Members’ Day” sales promotion

• Promoted priority security check

passage for VIP members in

Hongqiao and Pudong

• Number of members reached 27.4

million, with a YoY increase of 10.3%

• “Preferred Seat” covered all long-haul

routes departing from Shanghai and

most international, regional routes

• Multimodal transportation point

increased to 58, released 30 City tour

products and 203 packages products

• Passenger transformation service

revenue increased by 39%

+57% +10%

+39% +63%

Strengthen Hub Network Construction

北京

西安

昆明

上海Enhance Transfer

Connectivity

By vigorously promoting "all-

network access” expanding

transfer routes and through

check-in point (expanded to 89)

number of transfer passengers

increased by 27.5% YoY

Strengthen market

position in hub markets

Further strengthen our market

position in Shanghai, Kunming

and Xi’an and maintain our

first place in terms of market

shares in these markets

28.8% Xi’an

40.5% Shanghai

37.3% Kunming

Transfer connectivity chances increased by 12.4% YoY

Transfer connectivity chances increased by 22.2% YoY

Transfer connectivity chances increased by 3.9% YoY

Market Shares

(Passenger Turnover)

15

Densify cabin to

increase profit

The cabin of 20 aircraft was densified which contributed to profit of 100 million

Expand ancillary incomeIncrease income by 384% throughcharged services of VIP lounge, luggage fees and aircraft body advertising

Prop of direct sale income increased Direct sale income achieved1.26 billion, increased by 320% YoY, accounting for 72.4% of total income

Unit operating cost reducedCost per seat (fuel excluded) reduced by 5.7% YoY

16

LCC Transformation of CUA

Ｎet profit grows 163% YoY

Promote the Low-Cost Transformation

Long Term Benefit from Shanghai Disneyland

• Rolling out Disney painted aircraft

• Signed three major cooperation agreements with Disney

• The only authorized airline with rights to display in Shanghai Disneyland

• Direct access to CEA service call from two official hotels of Shanghai Disneyland

• Promoted package of all-cabin tickets + Disneyland ticket

• Disneyland ticket + Citytour product

• Design Yangtze River Delta integration products

• Package product of direct or transfer route to Hong Kong Disneyland

Exclusive Cooperation with Disney

Launch Disney-related products

17

80.8%79.8%

75.8%

2014 2015 2016H1

Complete Private Offering and Introduce Strategic Investors

• Issued 1.33 billion shares to 4 subscribers at price of 6.44 per share with total proceeds of RMB8.55 billion

• The asset-debt ratio of the Company lowered by 4% and the asset-debt structure further optimized

Introduced Ctrip as strategic investor

Cosco

Caitong

Fund

C-trip

China Air

Fuel

• Reached strategic cooperation agreement with Ctrip, which subscribed 465 million A-shares of the Company at total price of RMB3 billion

• To conduct comprehensive cooperation with Ctrip in areas of low-cost travelling, IT service, e-commerce, etc. to provide more competitive comprehensive travel products

A-share private placement

completed successfully

Asset-Liability Structure Optimized

Subscribers

18

Improve Customer Experience and Brand Images

Upgraded Ground ServiceExpanded self service on international route, all CEA subsidiaries and branches realized self-service of ticket change, promoting VIP lounge constructions in different airports

Platinum CardLaunched “Eastern Miles” platinum card and improved high-end customer service system

HonorsTTG China Tourism Awards “Best Chinese Airlines”; 2015 Golden Bees “Leading Enterprise”;“Most popular Airline APP”

On-board Wi-Fi36 wide-body aircraft equipped with on-board Wi-Fi, covering all North America routes and most domestic business routes

19

4.Financial Highlight

46,631

1,253

1,050

82

612 705

49,109

43,000

44,500

46,000

47,500

49,000

50,500

2015H1 Domestic

Passenger (fuel

surcharges

excluded)

International

and Regional

Passenger (fuel

surcharges

excluded)

Cargo (fuel

surcharges

excluded)

Fuel Surcharges Others

(excluding

revenue from

cooperating

routes)

2016H1

Revenue Change

21

Major Costs

22

Cost Items 2016H1 2015H1 YoY

Aircraft fuel 8,363 10,562 -20.8%

Take-off and landing charges 5,794 5,082 14.0%

Depreciation and amortization 5,801 5,011 15.8%

Wages, salaries and benefits 8,314 7,576 9.7%

Aircraft maintenance 2,259 1,896 19.1%

Food and beverages 1,401 1,212 15.6%

Aircraft operating lease rentals 2,317 2,200 5.3%

Sales and marketing expenses 1,631 1,888 -13.6%

Indirect operating expenses 2,009 1,348 49.0%

Others 4,062 4,130 -1.6%

Total operating expenses 41,951 40,905 2.6%

Total operating expenses（fuel excluded）

33,588 30,343 10.7%

Cost per ATK（RMB, fuel excluded）

2.48 2.52 -1.7%

3,562

3,090

-612

2,199

-790

-1,299

-2,920

3,230

0

1,500

3,000

4,500

6,000

7,500

9,000

2015H1 Revenue (fuel

surcharges

excluded)

Fuel

surcharges

Fuel Depreciation

and

Amortization

Exchange Others 2016H1

Others includes take-off and landing charges, aircraft maintenance, wages, salaries and benefits, food and beverages, aircraft operating lease rentals, etc.

Net Profits Change

23

200

600

1000

1400

2015.12.31 2016.6.30

USD RMB Other currency

Optimized Asset and Liabilities Structure

Asset Structure and Cash Flow

Total Liabilities

75.8%

Equity24.2%

Interest-bearing liabilities

76.2%

Other liabilities

23.8%

24

Strong Operating Cash Flows

Prop of USD debts largely decreased

695

-11,402

10,241

9,881

-16,372

10,535

2016H1 2015H1

Net cash flows from operating activities

Net cash flows from investing activities

Net cash flows from financing activities

RMB53.3%

RMB25.0%

USD73.3%

USD41.4%

-31.9pt

Equity Total Liabilities

Interest-Bearing Liabilities

Other Liabilities

5.Future Prospects

Prospects

26

The medium-high speed growth of Chinese economy, the continuous economic structural adjustment and consumption upgrade create favorable environment for the traffic demand of the aviation industry;

In short term, ticket price would face downward pressure due to intensified competition in domestic market and fast capacity increase in international route, but the yield decline is largely fit in with expectation and is expected to be narrowed in the long run;

The strengthening of hub network function and the stable promotion of intra-industry and cross-industry strategic cooperation will constantly add CEA’s comprehensive competitiveness;

Continuous optimization of fleet structure, increase in direct sales, and reduction of agency commission rates will further reduce unit operating costs;

International oil price is expected to fluctuate at a comparably low level;

Reduced proportion of foreign currency debt lowered exchange risks.

Prospects - Capacity

Allocation of Increased Capacity in 2016H2

Estimated growth in capacity in 2016H2

27

Fleet Plan2016H2 2017

In Out In Out

Passenger Aircraft

30 14 52 18

B773 2 4

A330 Series 7

B737 Series 14 -6 26 -15

A320 Series 14 -4 15 -1

B767 -2

RegionalAircraft

-4

Freighters -1

Total 30 14 52 19

Capex 2016H1 2016H2

(billion) 15.5 13.5

27.0%

4.0%

11.7%

International

Domestic

Total

Domestic

35.0%

International

65.0%

Q&A

IR Team

Tel : +86 21 2233 0928

+86 21 2233 0922

Email: ir@ceair.com

WeiChatSubscription

Official WeiChat CEA APP CUA APP