2015 Annual 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

Increase in domestic purchasing power promoted

consumption structure upgrading

Paid holiday and VISA policies spurred overseas

travelling

National strategies created favorable industry

environment

Regulatory policy relaxation broadened industry

development space

Mobile internet technique enhanced sales ability

and reduced agency costs

Oil price remained at low level

Unfavorable Factors

Uneven growth of global economy, slowdown in

domestic economic growth

Exchange rate fluctuation caused considerable

exchange loss

MERS and other incidents affected air travel

demand

Competition intensified in certain markets leaded

profit decline

Sluggish cargo business demand

Industry Circumstances in 2015

4

Results Overview

Data Overview 2015 2014 YoY Total turnover 99,244 93,881 5.7%

—Total turnover(excluding surcharge) 92,290 80,566 14.6%

Operating profit 12,625 6,058 108.4%

Gross profit margin 12.7% 6.5% 6.3pt

EBITDAR 28,314 20,507 38.1%

Exchange loss 4,987 202 2368.8%

Net profit (attributable to shareholders )

4,537 3,410 33%

Net profit (attributable to shareholders, excluding exchange)

9,524 3,612 163.7%

Number of aircraft 535 497 38

ATK (Million) 25,203 22,539 11.8%

Passenger Load Factor 80.5% 79.6% 1.0pt

Daily utilization rate (hours) 10.03 9.88 1.5%

Employees per aircraft 129 136 -5%

Cost per ATK (RMB Yuan, excluding fuel, same caliber*)

2.63 2.69 -2.3%

*Same caliber refers to restoring the post-retirement welfare policy adjustment in 2014

5

2.Market Performance

Passenger Business

66.6%

30.4%

3.0%

Capacity Breakdown

66.1%

30.0%

3.9%

Revenue Breakdown

0.60 0.57 0.52 0.52 0.52

0.47 0.45 0.41 0.42 0.42

77%

79%

81%

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2011 2012 2013 2014 2015

PLF RRPK RASK

Trend of PLF and Unit Revenue (fuel surcharges excluded)

YoY Changes of Major Passenger Business Indicators

7

13.2%

1pt

14.6%

-0.8% -8.4%

4.8%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

International

Domestic

Regional

International

Domestic

Regional

Hongqiao,

12.4% Pudong,

9.2%

Beijing,

10.8%

Kunming,

6.7%

Xi'an, 3.5%

Others,

57.3%

Hongqiao

Pudong

Beijing

Kunming

Xi'an

Others

66.6%

30.4%

3.0%

9.6%

1.3pt

11.5%

1.1%

-9.9%

0.5%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

Domestic Passenger Business

Capacity Breakdown

YoY Changes of Domestic Passenger Business Indicators Overall domestic demand exceeded expectation;

private demand outperformed business demand

Spring Festival rush and summer peak season results broke historical record

Acquired 389 new takeoff and landing slot in four core markets

Optimizing hub and core market network— opened 67 new routes and increased flight frequencies in 102 routes

8

International

Domestic

Regional

24.3%

0.2pt

24.6%

-3.9% -4.9%

18.3%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

International Passenger Business

YoY Changes of International Passenger Business Indicators

15.7%

22.5%

9.1% 30.6%

15.3%

6.8%

North America

Europe

Austratlia

Southeast Asia

Japan

Korea

66.6% 30.4%

3.0%

Capacity Breakdown

Added capacity in international routes; supply and demand maintained balanced

Intensified competition in certain markets leads yield decline

Newly introduced B773 and A330 covered North America and Europe route marginally enhanced international competitiveness

Deepened joint venture and cooperation improved premium classes operating ability and overall long-range route results

9

International Domestic

Regional

-4.3%

0.2pt

-4.1%

-0.5%

-4.4% -8.3%

ASK PLF RPK RRPK (fuel

excluded)

RRPK (fuel

included)

Revenue

(fuel

included)

Regional Passenger Business

YoY Changes in Regional Passenger Business Indicators

Hong

Kong,

50.2%

Macau,

9.0%

Taiwan,

40.8%

66.6%

30.4%

3.0%

Capacity Breakdown

Overall performance of regional market is

weak;

Capacity reduced according to market ;

yield maintained flat

Breakdown:

• Hong Kong capacity was reduced , fare price kept stable

• Taiwan capacity flat, yield declined

• Macau capacity and yield both increased

10

International

Domestic

Regional

9.3%

-4.4pt

1.3%

-0.1%

-13.7% -12.5%

AFTK FLF RFTK RRFTK (fuel

excluded)

RRFTK (fuel

included)

Revenue

(fuel

included)

Revenue Proportion

Revenue Breakdown

YoY Changes of Major Cargo Business Indicators

Cargo Business

11

Demand of cargo market remained weak;

Continued to phase out freighters, capacity growth mainly came from passenger aircraft belly;

Promoted business transformation; advanced into high-end logistics; built fast supply chain platform;

Overall results of logistics and cargo business improved

Passenger

Business

92.6%

Cargo

Business

7.4% Freight

59.9%

Passenger

Aircraft

Belly

40.1%

3.Operation Highlights • Continuously optimizing fleet structure

• Consolidating hub network and market shares

• Remarkable improvement in key operating indicators

• Steadily promoting LCC transformation

• Introducing strategic investor & expanding cooperation

• IT reform leading innovative development

• Improving customer experience and brand images

13

Major models accounted for 96.1%

Optimized the match of aircraft,

market and routes

Reduced operating costs and

enhanced operating efficiency

Fleet End of 2014

2015 End of 2015 In Out

Passenger Aircraft

485 80 39 526

B777-300ER 4 5 9

A330 Series 44 7 51

B737 Series 190 39 18 211

A320 Series 222 29 8 243

A340-600 4 4 -

B767 6 - 6

B757 5 5 -

Regional Aircraft

10 - 4 6

Freighters 12 - 3 9

Total 497 80 42 535

B777-300

A330 Series

B737 Series

Long-haul routes to North America

To Europe, Australia and for trunk routes

Medium-and short-haul routes

Continuous Optimizing Fleet Structure

A320 Series

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

Top 10 Markets in terms of air passenger volumes

Rank Airport CEA Market

Share

1 Shanghai Market

40.3%

2 Beijing Market

18.0%

3 Guangzhou 11.2%

4 Chengdu 12.9%

5 Shenzhen 8.8%

6 Kunming 36.9%

7 Xi’an 30.0%

8 Chongqing 9.3%

9 Hangzhou 10.8%

10 Xiamen 10.9%

14

Beijing

Xi’an

Kunming

Shanghai

Consolidating market

position in core markets

In 2015, by actively acquired newly

available slot resources in

Shanghai Pudong, Xi’an and

Kunming, we maintained our first

place in market shares in these

three core markets.

Enhance transit

connectivity

Through promoting “all-network

access”, optimizing flight

connectivity, enhancing sales of

connecting flights, transit

opportunities in Pudong, Kunming

and Xi’an increased 26.5%, 12.4%

and 21.3% YoY respectively.

Consolidating Hub Network and Market Shares

15

Direct Sales Revenue

Group Clients Value-Added Services Revenue

Frequent Flyer

Remarkable improvement in key operating indicators

• Optimized official website and App, increased

overseas payment completion ratio

• Diversified internet direct sales strategies and

products, highest daily sales exceeded

RMB120 million

• Direct sales revenue increased by 66%,

accounting 37% of the total revenue

• Improved members 'experience by

introducing E-card, diversifying members

admission channels and optimizing credit

redemption

• Number of frequent flyers improved 16%

to 26.4 million; returned passenger rate

increased by 2.7%

• Focused on the top 500 enterprises;

global clients expanded to 55

• Enhanced cooperation with international

TMCs, developed 385 group clients in

total

• Two-party group clients increased by

48% to 2642

• Introduced “Preferred Seats”, covering 12

major long-haul international routes

• Deepened multimodal combined

transportation, expanded cooperation with

railways and long-distance buses

• Further Developed tickets-packaged products,

transit and city-tour products

• Passenger transformation service revenue

increased by 47%

37%

47%

launched brand-new optimized official website and mobile

App ; introduced four types of tickets; direct sales proportion

increased to 47%, saved sales commission of 120milion RMB

Simplified service process under LCC mode; increased

efficiency; promoted charged services of baggage check-in,

on-board products, seat-selection and lounge; realized total

non-flight income of more than RMB 40 million

Completed cabin layout modification: available seats per

aircraft increased by 10%

Steadily Promoting LCC Transformation

Direct sales

Simplified Services

Modified cabin

LCC transformation of China United Airlines

16

Paris

Shanghai

Sydney

Atlanta

Introducing Strategic Investor & Expanding Cooperation

Commercial Cooperation

• Code-Sharing • Customers sharing • Cooperation in

domestic routes

Joint Venture

Equity Cooperation

17

• Code-Sharing • High-end

Customers Sharing

Joint Venture

Issued 460 million H-shares to Delta at HKD7.49/share, total value of USD450 million.

• Slot Coordination • Joint Sales • Facility Sharing • Personnel Exchange • IT Application

IT Construction Leading Innovative Development

Self-check-in

External: focus on client touch point; increase experience

Internal: create data link; increase efficiency

• Self-check-in rate reached 60%, leading domestic airlines

• 100% coverage of website, mobile phone and SMS check-in in domestic terminals

• More than 18 electronic channels for customers to access at all times

• Brand new on-board entertainment systems and on-board WiFi provided excellent in-flight experience

• Launched world’s first “Air-ground connected cloud payment platform”

• IT coverage within company exceeded 95%, initially reaching world-class airlines level

• Operating control system saved 10% working hours of ground services

• Operating network real-time monitoring 2,000 flights per day ensuring safety operation

• Application of big data enhanced sales forecast and seat revenue management

IT CEA

Digital CEA

18

Big Data

Control

Cabin

Sales

Flight Ground Service

Internet CEA

Customer Connectivity

Maintenance

In-flight WiFi

operation Logistics

Customer Experience and Brand Images

Lounge Experience Upgraded Pudong High-end self-check-in zone;

reconstructed flagship lounges in Pudong and

Hongqiao airports; opened Sky-team exclusive lounge

in HK

Upgraded Mobile App Upgraded and redesigned CEA App in UI,

function and use experience

Honors Awarded “Top 30 most valuable Chinese brands ”brand value

grew fastest of industry, "Best Chinese Airlines”,

“Most Honorable Chinese Enterprise for 2014~2015”,

Golden Bauhinia’s Award for "Best Innovative Listing

Company”and“2015 Best Innovative Business Model

Award in China”

New Model and On-board WiFi Newly introduced B777-300ER and A330 in North

America and Europe routes provided lying-flat seats in

first and business classes; provided on-board WiFi in

North America and certain domestic routes

19

4.Financial Highlights

Revenue Change

21

93,881

6,035

3,096

67

-6,361

2,526

99,244

90,000

94,000

98,000

102,000

106,000

2014 Domestic

Passenger (fuel

surcharges

excluded)

International

and Regional

Passenger (fuel

surcharges

excluded)

Cargo(fuel

surcharges

excluded)

Fuel Surcharges Others

(excluding

cooperational

routes income)

2015

Major Costs

Cost Items 2015 2014 YoY

Aircraft fuel 20,312 30,238 -32.8%

Wages, salaries and benefits 16,459 11,270 46.0%

-Wages, salaries and benefits (same caliber*)

16,459 14,399 14.3%

Take-off and landing charges 10,851 9,440 14.9%

Depreciation and amortization 10,471 9,183 14.0%

Indirect operating expenses 5,503 4,950 11.2%

Aircraft maintenance expenses 4,304 4,453 -3.3%

Aircraft operating lease rentals 4,254 4,502 -5.5%

Sales and marketing expenses 3,651 4,120 -11.4%

Food and beverages 2,469 2,364 4.4%

Others 8,345 7,303 14.3%

Total operating expenses 86,619 87,823 -1.4%

Total operating expenses (fuel excluded, same caliber)

66,307 60,714 9.2%

* Same caliber refers to restoring the post-retirement welfare policy adjustment in 2014

22

3,410

11,724

-6,361

9,926

-5,189

-4,785

-4,188

4,537

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

2014 Revenue (fuel

surcharges

excluded)

Fuel

Surcharges

Fuel Wages,

salaries and

benefit

Exchange Others 2015

Operating Profit Change

23

Assets and Liabilities Structure

Asset Structure and Cash Flow

Total Liabilities

79.8%

Equity

20.2%

Interest-Bearing

Liabilities 75.4%

Other Liabilities 24.6%

24

Change of Cash Flow

Interest-Bearing Liabilities Structure

USD-denominated Liabilities

97.7%

Others 2.3%

Foreign-currency-denominated

Liabilities

75%

RMB-denominated Liabilities

25% 11,112

-24,033

12,296

11,083

-27,800

24,325

2015

2014

Net cash inflow from operating activities

Net cash inflow from investing activities

Net cash inflow from financing activities

RMB-denominated Liabilities

Foreign-currency-denominated Liabilities

USD-denominated Liabilities

Others

Equity Total Liabilities

Interest-Bearing Liabilities

Other Liabilities

5. Future Prospects

Prospects - Investment Highlights

External Factors Internal Factors

26

Constant prosperity of industry

Supply and demand generally in balance

Fuel price expected to remain at low level

Favorable industrial regulatory policies

Regional advantage of Shanghai hub

Shanghai Disneyland bringing long-term

benefits

Optimizing debt structure reduces exchange risks

Optimizing fleet enhance operating efficiency

Expanding direct sales and reducing agency

commission saves distribution costs

IT strategy increases competitiveness

Constantly improving International routes

operation

Reformation and innovation stimulus vitality

Fleet Plan 2016 Plan 2017 Plan

In Out In Out

Passenger Aircraft

72 26 52 18

B777-300ER 7 - 4

A330 Series - - 7

B737 Series 35 12 26 17

A320 Series 30 8 15 1

B767 - - -

Regional Aircraft

- 6 -

Freighters - - - 1

Total 72 26 52 19

Capex (million) 2016 2017

27,847 26,642

Prospects - Capacity

Allocation of Increased Capacity in 2016

Capacity Growth in 2016 in Areas

27

52.5% 47.2%

0.3%

Domestic International Regional

1.3%

20.0%

10.0%

12.7%

Regional

International

Domestic

Total

Prospects: Optimize Asset and Liability Structure

Tasks Methods Targets

Optimizing Asset Structure;

Reducing Asset-Liability Ratio

Enhance earning ability;

Asset-liability ratio expected to be reduced by 6% percent after complete of RMB15 billion A-share private offering

Asset-Liability ratio lowered to

70%

Adjust Liability Structure

Reduce Exchange Risks

Expand financing channels, enhance the Scale and portion of RMB financing ; adjust RMB and Foreign Currency structure in the interesting-bearing debt

Proportion of USD-denominated debts out of total interest bearing debt had been reduced to around 50% by the end of 1Q of 2016

RMB debt and foreign-currency debt accounts for 50% respectively

28

New Routes in 2016

Shanghai – St. Petersburg

Opening Date: June 21, 2016

3 flights per week

Shanghai - Madrid

Opening Date: June 28, 2016

4 flights per week

Shanghai –Prague

Opening Date: June 22, 2016

3 flights per week

Shanghai - Chicago

Opening Date: March 18, 2016

7 flights per week

Shanghai – Amsterdamm

Opening Date: June 26, 2016

4 flights per week

29

Q&A

IR Team

Tel : +86 21 2233 0928

+86 21 2233 0922

Email: ir@ceair.com

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