30
1 August 2015
1
August 2015
Part 1 Performance Highlights
Part 2 Business Overview
Part 3 Financial Review
Part 4 Outlook
2 Under IFRS
Part 1 Performance Highlights
3
Performance Highlights
Key Operational Metrics
1H2015 YoY
Change
ASK (million) 102,881.4 10.47%
RPK (million) 82,174.5 9.49%
ATK (million) 15,100.3 14.81%
RTK (million) 10,472.7 13.32%
Passenger Load Factor（%） 79.9 -0.72pts
ATK Load Factor（%） 69.4 -0.91pts
Key Financial Metrics
1H2015
YoY Change
Turnover (RMB million) 51,862.0 3.86%
Operating Expenses (RMB million) 45,233.4 -4.95%
Profit from Operations (RMB million) 6,628.5 182.84%
Profit for the Period (RMB million) 4,539.8 892.24%
Profit Attributable to Shareholders (RMB million)
4,190.9 721.15%
EPS (RMB cent/share) 34.09 721.45%
4
Part 2 Business Overview
5
Domestic 1H2015 YoY Change
Revenue (RMB million) 19,425.5 11.62%
ASK (million) 39,980.7 7.28%
RPK (million) 32,644.7 7.05%
Load Factor（%） 81.7 -0.18pts
Yield (RMB/RPK) 0.60 4.27%
International 1H2015 YoY Change
Revenue (RMB million) 8,440.9 9.70%
ASK (million) 30,969.0 12.93%
RPK (million) 23,946.2 10.67%
Load Factor（%） 77.3 -1.57pts
Yield (RMB/RPK) 0.35 -0.88%
Regional
(HK, Macau and Taiwan) 1H2015
YoY Change
Revenue (RMB million) 1,664.9 -0.86%
ASK (million) 2,736.0 6.98%
RPK (million) 2,038.4 1.31%
Load Factor（%） 74.5 -4.17pts
Yield (RMB/RPK) 0.82 -2.13%
6
Air China
Total 1H2015 YoY
Change
Revenue (RMB million) 29,531.3 10.28%
ASK (million) 73,685.7 9.57%
RPK (million) 58,629.3 8.28%
Load Factor（%） 79.6 -0.95pts
Yield (RMB/RPK) 0.50 1.85%
*Fuel surcharges excluded from revenue and yield.
42.03%
54.26%
3.71%
40.78%
55.42%
3.80%
国际 国内 地区
-10%
-5%
0%
5%
10%
15%
20%
ASK Change RPK Change
1H2015 YoY Change of Capacity & Passenger Traffic
13%
7% 7%
11%
7%
1%
-1.57pts
-0.18pts
-4.71pts
1H2015 Capacity Distribution
1H2015 1H2014
7
38.38%
30.75%
11.64%
19.23% 19.40%
38.06%
10.68%
31.86%
Domestic International HK, Macau and Taiwan
Passenger Load Factor Change
Southeast Asia and Others
Europe America Japan and South Korea
Optimized Capacity Deployment to Align with Market Driven Demand
Domestic International Regional
1H2014 1H2015
228 235 243 251
73 81 91 92
0
70
140
210
280
350
2012 2013 2014 1H2015
301 316 334
343 Aircraft
Total (as of 31 Dec,2014) 334
Introduced in 1H2015 16
B737-800（9）、A320（3）、A319（1）、B747-8 （3）
Retired in 1H2015 7
B737-800（4）、B757-200（1）、A340（2）
Total (as of 30 June, 2015) 343
8
Fleet Structural Adjustment Continued, Competitive Advantage Heightened
1.0
1.2
1.4
1.6
1.8
2.0
2012 2013 2014 1H2015
Seats of Narrow/Wide-body Aircraft Times
Wide-body Aircraft Narrow-body Aircraft
9
Strengthened Hub Construction Improves Network Value
Beijing 66.57%
Chengdu 14.33% Shanghai
11.92%
ASK
22.3%
74.6%
3.2%
Direct Sales Increased
0
10
20
30
40
50
Revenue from Premium Classes Increased
RMB hundred million 8.8% 9.3%
0.4%
Strengthened Channel Management, Improved E-commerce Platforms
10
27.0%
70.0%
3.0%
1H2014 1H2015
Domestic International Regional
Sales from other airlines Direct Sales Agency Sales
27
48
0
10
20
30
40
50
60
1H2014 1H2015
Revenue from E-commerce Increased 82%
1H2014 1H2015
54.2%
8.0%
37.8%
Flagship Store Mobile Website
Revenue Structure of E-commerce
11
Progressed Marketing Transformation and Innovation of Services
Flights with KU Satellite Networks
New App Launched
Ancillary Products Developed
1H2015 YoY
Change
AFTK (million) 5,441.8 22.99%
Freighter AFTK (million) 1,623.4 62.78%
RFTK (million) 2,911.1 25.15%
Freighter RFTK (million) 1,329.1 64.12%
Tonnage Carried (tonne) 636,941.6 10.00%
Freighter Tonnage Carried (tonne) 201,032.5 28.01%
Load Factor (%) 53.5 0.92pts
Freighter Load Factor (%) 81.9 0.67
Yield (RMB/RFTK) 1.10 0.93%
Utilization Factor of Cargo Fleet
Air China Cargo Continues on Solid Trajectory
12
8.05 8.85
9.4 8.52
10.12
0
2
4
6
8
10
12
2012 2013 2014 1H2014 1H2015
Hour/Aircraft, Day
*Fuel surcharges excluded from yield.
Subsidiaries
Shenzhen Airlines 1H2015 YoY Change
ASK (million) 25,217.7 12.41%
RPK (million) 20,705.0 12.34%
ATK (million) 2,584.3 12.87%
RTK (million) 2,067.5 11.57%
Passenger carried (thousand) 13,801.5 11.33%
Passenger Load Factor（%） 82.1 -0.05pts
ATK Load Factor（%） 80.0 -0.94pts
Passenger Yield (RMB/RPK) 0.50 2.85%
Air Macau 1H2015 YoY Change
ASK (million) 2,748.2 10.13%
RPK (million) 1,825.9 7.65%
ATK (million) 318.6 10.41%
RTK (million) 194.8 7.72%
Passenger carried (thousand) 1,089.6 6.51%
Passenger Load Factor（%） 66.4 -1.53pts
ATK Load Factor（%） 61.2 -1.53pts
Passenger Yield (RMB/RPK) 0.51 -16.54%
13
*Fuel surcharges excluded from yield.
13
Part 3 Financial Review
14
RMB million 1H2015 1H2014 YoY Change
Turnover 51,862 49,932 3.86%
Air Traffic Revenue 49,310 47,511 3.79%
Operating Expenses 45,233 47,589 -4.95%
Operating Expenses ex-fuel cost 33,174 30,400 9.13%
Profit from Operations 6,629 2,344 182.84%
Finance Cost 1,597 2,135 -25.20%
Share of Profit of Associates 649 245 165.24%
Profit Before Tax 5,749 560 927.00%
Profit for the Period 4,540 458 892.24%
Profit Attributable to Shareholders 4,191 510 721.15%
EPS (RMB cent/share) 34.09 4.15 721.45%
15
Revenue Increased, Profit Profile Enhanced
Interest Bearing Debt
（RMB million） 30 June 2015 Percentage(%) 31 December 2014 Percentage(%)
USD 81,454 71.30 83,334 72.81
RMB 29,504 25.83 30,164 26.35
EURO 2,024 1.77 146 0.13
JPY 989 0.87 814 0.71
MOP 264 0.23 - -
Total 114,235 100.00 114,458 100.00
27.95%
72.25%
30 June 2015 31 December 2014
29.87%
70.13%
16
Short term Interest Bearing Debt
Long term Interest Bearing Debt
RMB/USD 1% Fluctuation of exchange rate
Impact on Net Profit: 468 million (RMB)
Sensitivity Analysis
0
10,000
20,000
30,000
40,000
50,000
1H2014 1H2015
(RMB million) Passenger Services
YoY Change Cargo Services YoY Change Total YoY Change
Domestic 29,986 1.49% 1,144 21.79% 31,130 2.11% （%） 66.65 -1.18pts 26.48 2.71pts 63.13 -1.03pts
International 12,295 11.05% 3,030 6.44% 15,325 10.10% （%） 27.33 1.91pts 70.12 -1.90pts 31.08 1.78pts
Regional 2,707 -7.93% 147 -11.66% 2,854 -8.13% （%） 6.02 -0.73pts 3.40 -0.81pts 5.79 -0.75pts
Total 44,989 3.28% 4,321 9.32% 49,310 3.79%
8.32%
91.68%
RMB million
Revenue Breakdown
1H2014 1H2015
31.08%
63.13%
5.79%
29.30%
64.17%
6.53%
91.24%
Core Business Performance Continued to Improve
17
8.76%
Regional International Domestic
Percentage Changes on Passenger and Cargo Revenue
47,511 49,310
Cargo Revenue Passenger Revenue
(RMB million) 1H2015 1H2014 YoY Change
Jet Fuel 12,059 17,189 -29.84%
Take-off, landing and depot charges
5,563 5,046 10.25%
Depreciation 6,265 5,539 13.12%
Maintenance 1,936 1,697 14.09%
Staff 8,090 7,070 14.42%
Aircraft and engine operating lease expenses
2,528 2,194 15.22%
Air Catering 1,453 1,346 7.95%
Selling and marketing expenses
2,588 2,875 -9.98%
Others 4,751 4,633 2.54%
Total 45,233 47,589 -4.95%
Strengthened Operational Efficiency, Controlled Cost Increase
18
Jet fuel 26.7%
Take-off, landing
and depot charges 12.3%
Depreciation 13.9%
Maintenance 4.3%
Staff 17.9%
Lease expenses
5.6% Air
Catering 3.2%
Selling expenses
5.7% Others 10.4%
Jet fuel 36.1%
Take-off, landing
and depot
charges 10.6%
Staff 14.9%
Lease expenses
4.6%
Air Catering
2.8%
Selling expenses
6.0%
Others 9.8%
1H2015
1H2014
Maintenance
3.6% Depreciation
11.6%
0
1,600
3,200
4,800
6,400
8,000
1月 2月 3月 4月 5月 6月
1H2015 1H2014
Jet Fuel Cost and Jet Fuel Surcharge
1H2014Average：7,199
1H2015Average：4,484
Changes in Jet Fuel Purchase Price
人民币十亿
RMB/Tonne
Jet Fuel Unit Cost Decreased Year-on-Year
19
22.6
14.5
24.1
34.7 35.6 33.7 34.5
17.2
12.1 8.7
4 7.7
14 15.1 14.5 15.2
7.4 4.4
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
Sensitivity Analysis
Oil Price Changes Impact on 2H2015 Jet Fuel Cost （RMB hundred million）
20% 26.2
10% 13.1
-10% -13.1
-20% -26.2
RMB billion
Fuel Cost Jet Fuel Surcharge
Jan Feb Mar Apr May Jun
0.68 0.47 0.54 0.61 0.56 0.54 0.51 0.51 0.44
4.28
2.98
3.46
4.04 3.96 3.84 3.57 3.62
3.00
0
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
40,101 31,426
47,464 57,447 55,424 60,340 64,120
30,400 33,174
22,614
14,466
24,096
34,703 35,640 33,722
34,542
17,189 12,059
0
20,000
40,000
60,000
80,000
100,000
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
98,662
Ex-fuel Unit Cost
Unit Cost
Cost as Percentage of Revenue
RMB million RMB
人民币元
62,715
45,862
71,560
92,151 91,064
94,062
Strengthened Cost Control Measures, Enhanced Industry Leading Competitive Cost Base
20
47,589 45,233
118.54%
89.30% 86.75%
93.64% 91.55%
95.81% 93.18%
95.31%
87.22%
75.79%
61.15% 57.54% 58.38% 55.72% 61.46% 60.56% 60.88%
63.97%
40%
60%
80%
100%
120%
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
0.44 0.32 0.36 0.38 0.34 0.34 0.33 0.33 0.32
2.74
2.04 2.3
2.52 2.41 2.46 2.32 2.31 2.20
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
Fuel Cost and Non-fuel Operating Cost
Operating Cost exclude Fuel Cost Fuel Cost Cost per ASK Cost per ATK
RMB
Cost per ASK Cost per ATK Operating Cost as % of Revenue Ex-fuel Operating Cost as % of Revenue
79.63 77.8 73.94 72.52 71.23 71.94 71.76 70.39
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013 2014 1H2015
RMB million
Net Debt-to-Equity Ratio Times
Net Assets (Excluding Minority Interests)
Asset-to-Liability Ratio
EBITDA Interest Protection Multiples Times
%
Healthy Financial Position
21
19,943 23,916
41,438 46,116
49,944 53,757 53,978
58,201
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2008 2009 2010 2011 2012 2013 2014 1H2015
2.5 2.54
1.72 1.53
1.7 1.67 1.77 1.64
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2008 2009 2010 2011 2012 2013 2014 1H2015
-1.63
8.89
12.12
7.2 6.47
4.75 5.48
4.86
7.55
-4
-2
0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012 2013 2014 1H2014 1H2015
Part 4 Outlook
22
23
2015 New Business Focus
Enhance competitiveness of hubs to optimize network value
Embed customer insight to drive innovation in marketing strategies & implementation
Improve service management, strengthen product competitiveness and enrich
customer experience
Maintain industry-leading competitive of cost structure
Strengthen IT capabilities
Deepen collaboration with subsidiaries and partners to optimize synergistic value
Appendix
Other Financial and Operational Data
1H2015
24
*Wet lease aircraft excluded in calculation of average ages
30 June 2015 Delivery
Sub-total Owned Finance Lease
Operating Lease
Average Age
2015 2016 2017
A319 40 25 9 6 9.88 3 - -
A320/A321 167 62 66 39 4.79 15 17 17
A330 49 10 18 21 4.77 4 - -
A340 2 2 - - 16.45 - - -
A350 - - - - - - - 1
B737 237 105 62 70 6.28 37 21 21
B747 11 9 2 - 7.46 3 - -
B757 1 1 - - 22.89 - - -
B777 30 14 13 3 6.82 - - -
B787 - - - - - - 7 6
B747F 3 3 - - 13.02 - - -
B757F 4 4 - - 18.85 - - -
B777F 6 3 3 - 1.04 3 - -
Business Jet 9 1 - 8 4.13 - - -
Total 559 239 173 147 6.11 65 45 45
1. Fleet - The Group
25
30 June 2015 Delivery
Sub-Total Owned Finance Lease
Operating Lease
Average Age
2015 2016 2017
A319 31 22 9 - 9.63 3 - -
A320/A321 90 16 61 13 4.22 5 10 11
A330 49 10 18 21 4.77 4 - -
A340 2 2 - - 16.45 - - -
A350 - - - - - 1
B737 129 51 33 45 6.52 22 14 14
B747 11 9 2 - 7.46 3 - -
B757 1 1 - - 22.89 - - -
B777 30 14 13 3 6.82 - - -
B787 - - - - - - 7 6
Total 343 125 136 82 6.11 37 31 32
2. Fleet - Air China
26
*Wet lease aircraft excluded in calculation of average ages
3. Profit Index
27
1H2015 1H2014 YoY
EBITDA （RMB million） 12,894 7,909 63.03%
EBITDA Profit Margin 24.86% 15.84% 9.02pts
EBITDAR （RMB million） 15,863 10,591 49.79%
EBITDAR Profit Margin 30.59% 21.21% 9.38pts
Net Profit Margin 8.08% 1.02% 7.06pts
Return on Net Assets 7.47% 0.95% 6.52pts
（RMB million） 30 June 2015 31 December 2014 Change
Non-current Assets 155,510 148,180 4.95%
Current Assets 21,501 21,053 2.13%
- Cash and Cash Equivalents 9,201 9,660 -4.75%
Total Assets 216,553 209,311 3.46%
Current Liabilities 60,118 60,843 -1.19%
Non-current Liabilities 92,308 89,358 3.30%
Total Liabilities 152,426 150,201 1.48%
Shareholders’ equity 58,201 53,978 7.82%
4. Consolidated Balance Sheet ( Condensed)
28
(RMB million) 1H2015 1H2014 Change
Net cash flow from operating activities 12,316 6,691 84.07%
Net cash flow investing activities 4,830 4,943 -2.29%
Net cash inflow/(outflow) from financing activities
-7,950 -7,505 -5.92%
Net increase/(decrease) in cash and cash equivalents
-464 -5,758 91.94%
Cash and cash equivalents at beginning of year
9,660 14,762 -34.56%
Effect of exchange rate changes on cash and cash equivalents
5 58 -90.59%
Cash and cash equivalents 9,201 9,062 1.53%
5. Consolidated Cash Flow Statement (Condensed)
29
Fan Heyun
Tel: +8610-6146 2799
Fax: +8610-6146 2805
E-mail: [email protected]
Cao Yu
Tel: +8610-6146 2788
Fax: +8610-6146 2805
E-mail: [email protected]
Website：www.airchina.com.cn
Investor Relations-Beijing
