REG - Air China Ld - ANNUAL REPORT 2025
27/04/2026 07:45
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RNS Number : 9993B Air China Ld 27 April 2026
Air China Limited (short name: Air China), is the only national flag carrier
of China.
As the old saying goes, "Phoenix, a bird symbolizing benevolence" and "The
whole world will be at peace once a phoenix reveals itself". The corporate
logo of Air China is composed of an artistic phoenix figure, the Chinese
characters of "中國國際航空公司" in calligraphy written by Deng
Xiaoping, by whom the China's reform and opening-up blueprint was designed,
and the characters of "AIR CHINA" in English. Signifying good auspices in the
ancient Chinese legends, phoenix is the king of all birds. It "flies from the
eastern Happy Land and travels over mountains and seas and bestows luck and
happiness upon all parts of the world". Air China advocates the core spirit of
phoenix which is to "serve the world, to lead and move forward to higher
goals". By virtue of the immense historical heritage, Air China strives to
create perfect travel experience and keep passengers safe by upholding the
spirit of phoenix of being a practitioner, promoter and leader for the
development of the Chinese civil aviation industry. The Company is also
committed to leading the industrial development by establishing itself as a
national brand, at the same time pursuing outstanding performance through
innovation and excelling efforts.
Air China was listed on The Stock Exchange of Hong Kong Limited (stock code:
00753) and the London Stock Exchange (stock code: AIRC) on 15 December 2004;
and was listed on the Shanghai Stock Exchange (stock code: 601111) on 18
August 2006.
Headquartered in Beijing, Air China has set up branches in Southwest China,
Zhejiang, Chongqing, Tianjin, Shanghai, Hubei, Xinjiang, Guangdong, Guizhou,
Tibet and Wenzhou. As at the end of the Reporting Period, the major
subsidiaries of Air China include Shenzhen Airlines Company Limited (including
Kunming Airlines Company Limited), Shandong Aviation Group Company Limited
(including Shandong Airlines Co., Ltd.), Air Macau Company Limited, Beijing
Airlines Company Limited, Dalian Airlines Company Limited, Air China Inner
Mongolia Co., Ltd., Aircraft Maintenance and Engineering Corporation, China
National Aviation Finance Co., Ltd., Air China Import and Export Co., Ltd.,
Chengdu Falcon Aircraft Engineering Service Co., Ltd., Air China Shantou
Industrial Development Company; its joint ventures mainly include Sichuan
Services Aero-Engine Maintenance Co., Ltd, Beijing Aero-Engine Services Co.,
Ltd. and GA Innovation China Co., Ltd.; moreover, the associates of Air China
include Cathay Pacific Airways Limited and Tibet Airlines Co., Ltd.
With the goal of becoming "the world's leading airline", Air China remains
committed to the mission of "put safety first, serve passengers with
credibility, convenience, comfort and choice, maintain stable development,
help employees achieve success and fulfill corporate responsibilities",
advocates the values of "people-oriented, accountable, excelling efforts and
enjoyable flights" and positions the brand as "professional and reliable with
both international quality and Chinese temperament". The "Air China Miles"
programme of Air China is the oldest frequent flier programme in China, under
which all members of the frequent flier programmes of Air China family
carriers have been consolidated into the brand of "PhoenixMiles".
Contents
3 Corporate Information
4 Chairman's Statement
6 Summary of Financial Information
7 Fleet Information
8 Summary of Operating Data
10 Business Overview
24 Management's Discussion and Analysis of Financial Position and Operating
Results
30 Corporate Governance Report
51 Report of the Directors
82 Profile of Directors and Senior Management
Financial Statements Prepared under
IFRS Accounting Standards
88 Independent Auditor's Report
93 Consolidated Statement of Profit or Loss
94 Consolidated Statement of Profit or Loss and Other Comprehensive Income
95 Consolidated Statement of Financial Position
97 Consolidated Statement of Changes in Equity
98 Consolidated Statement of Cash Flows
100 Notes to the Consolidated Financial Statements
195 Supplementary Information
196 Glossary of Technical Terms
197 Definitions
Corporate Information
REGISTERED CHINESE NAME:
中國國際航空股份有限公司
ENGLISH NAME:
Air China Limited
REGISTERED OFFICE:
1st Floor-9th Floor 101
Building 1
30 Tianzhu Road
Shunyi District
Beijing, the PRC
PRINCIPAL PLACE OF BUSINESS IN HONG KONG:
5th Floor
CNAC House
12 Tung Fai Road
Hong Kong International Airport
Hong Kong
WEBSITE:
www.airchina.com.cn
DIRECTORS:(1)
Mr. Liu Tiexiang
Mr. Qu Guangji
Mr. Cui Xiaofeng
Mr. Patrick Healy
Mr. Xiao Peng
Mr. Xu Niansha*
Mr. He Yun*
Ms. Winnie Tam Wan-chi*
Mr. Gao Chunlei*
LEGAL REPRESENTATIVE OF THE COMPANY:
Mr. Liu Tiexiang
COMPANY SECRETARY:
Mr. Xiao Feng
AUTHORISED REPRESENTATIVES:
Mr. Liu Tiexiang
Mr. Xiao Feng
LEGAL ADVISERS TO THE COMPANY:
DeHeng Law Offices
(as to domestic laws)
Jingtian & Gongcheng LLP
(as to overseas laws)
INTERNATIONAL AUDITOR:
KPMG
Certified Public Accountants
Public Interest Entity Auditor registered in accordance with the Accounting
and Financial Reporting Council Ordinance
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
H SHARE REGISTRAR AND TRANSFER OFFICE:
Computershare Hong Kong Investor Services Limited
Rooms 1712-1716, 17th Floor, Hopewell Centre
183 Queen's Road East
Wanchai, Hong Kong
LISTING VENUES:
Hong Kong, London and Shanghai
(
)
(1) Details of changes in the Company's Directors during the Reporting
Period and up to the date of this annual report are set out on page 60 of this
annual report.
* Independent Non-executive Directors
Chairman's Statement
The year 2025 marked the conclusion of the 14th Five-Year Plan and also served
as a year of planning and laying the groundwork for the 15th Five-Year Plan.
Throughout the year, guided by Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era, the Group thoroughly implemented the guiding
principles of the 20th National Congress of the Communist Party of China (CPC)
and the plenary sessions of the 20th Central Committee of the CPC, as well as
the work deployments of the Central Committee of the CPC and the State
Council. Steadfastly fulfilling the responsibilities and mission of a national
flag carrier, the Group has taken a coordinated approach to its core tasks of
ensuring operational safety, enhancing operating performance and passenger
services, and strengthening Party building. Positive outcomes have been
secured in all aspects, bringing the 14th Five-Year Plan to a successful
conclusion.
Ensuring safety first for stable and secure operations. The Group has always
prioritized safety as its primary political mission and top priority, taking
concrete actions to ensure "Two Absolute Safeties (兩個絕對安全)". The
Group advanced the three-year action plan for fundamental improvements,
deepened the development of its safety operation system, and steadily improved
the quality and efficiency of its safety management. By closely monitoring the
complex operational environment and key links in production organization, the
Group focused on strengthening its risk identification and control
capabilities, with its risk prevention and control system continuously
upgraded. Work safety responsibilities were enforced for all employees, a
long-term mechanism for improving work practices was established, and the
safety foundation was continuously strengthened. In 2025, the Group achieved
3.01 million safe flight hours, while successfully accomplishing critical
missions such as the Shanghai Cooperation Organization Summit, the Asian
Winter Games, the World Games and earthquake relief and rescue in Myanmar,
staying committed to fulfilling its responsibilities as a central enterprise.
Seeking progress while maintaining stability, with operating quality
continuing to improve. The Group further advanced initiatives to improve
quality and enhance efficiency, and its principal business operations
continued to improve. The Group steadfastly advanced its hub network strategy
and made dedicated efforts to increase the scale of effective capacity
deployment, achieving 367,600 million available seat kilometres for the year,
representing a year-on-year increase of 3.24%. Actively responding to
"involution-style" competition, the Group dynamically monitored market trends
and balanced capacity and pricing in a scientific manner, thereby consistently
consolidating its strengths in core markets and on main routes. The Group
upgraded its value-added aviation products to continuously increase the value
of such products, achieving a year-on-year increase of over 40% in sales
revenue. The integration of passenger and cargo operations was further
deepened, with capacity dynamically aligned with cargo transportation demand,
resulting in a year-on-year increase of 4.92% in bellyhold operating revenue.
The Group comprehensively upgraded its cost control system, focusing on key
areas such as jet fuel, take-off and landing and aircraft, striving to enhance
the precision of cost management.
Adhering to a people-oriented approach, with service quality and efficiency
continuing to improve. With a focus on its goal of serving passengers with
credibility, convenience, comfort and choice, the Group expanded the supply of
high-quality aviation services to enhance passengers' sense of fulfillment and
satisfaction. The Group promoted a comprehensive transformation towards a
"customer-centric" service model, established a database of comprehensive
evaluation indicators covering the entire passenger service process and
continuously improved the service system. An "aviation+" ecosystem was
developed, with vigorous promotion of through-check-in services and air-rail
intermodal products, continuously expanding the value of aviation services.
Flight regularity was enhanced and post-irregular flight handling services was
optimized to improve the seamlessness of the entire service process. In 2025,
the number of members of the "PhoenixMiles" frequent flyer programme exceeded
100 million with passenger satisfaction reaching 88.1 points.
Fulfilling the responsibilities of a central enterprise and serving the
Nation's Priorities. The Group has been fulfilling its mission and
responsibilities of serving national development, and stimulating endogenous
momentum through comprehensively deepening reform. The Group fully supported
high standard opening-up with 12 international routes opened or resumed in
2025, expanding the coverage of the Group's route network to six continents.
Actively contributing to the Belt and Road initiative, the Company is
operating 74 routes covering 32 countries under the Belt and Road Initiative.
The Group fully supported the development of China's domestically produced
civil aircraft. A total of 35 C909 and nine C919 aircraft were introduced and
commenced safe operation while engaging in the research and development of the
C929 aircraft. The Group actively fulfilled its social responsibilities and
integrated targeted assistance work into its entire industrial chain,
receiving the highest grade of "Good" in the Evaluation of Targeted Poverty
Alleviation Performance Among Centrally-administered State-owned Units for
eight consecutive years. The Group actively expanded its international
influence, participating deeply in the governance of international
organizations such as Star Alliance and IATA, expanding in-depth cooperation
with the international aviation industry and promoting the inclusion of
Renminbi as a settlement currency in IATA clearing.
Strengthening Party building and leadership to enhance corporate governance
effectiveness. The Group adheres to the principle of "Two Consistencies
(兩個一以貫之)", continuously improving the integration of Party
leadership into its corporate governance. The Group promoted the deep
integration of Party building with production and operation, and hosted a
series of themed publicity events titled "Air China C919 Retraces the Glorious
Northward Flight of the 'Two Airlines Uprising'
(重飛'兩航起義'北飛光輝航程)", effectively enhancing the power of
ideological guidance. The Group strictly implemented the "First Agenda
(第一議題)" system, consolidated and deepened the achievements of
rectification following the central inspections, thoroughly implemented the
education and study of the spirit of the central Party leadership's
eight-point decision on improving conduct, advanced the normalization and
long-term effectiveness of work style development, and took coordinated steps
to ensure that officials do not have the audacity, opportunity, or desire to
become corrupt. The Group continuously fostered a clean and upright political
ecosystem, safeguarding the building of a world-class enterprise.
The year 2026 marks the opening year of the 15th Five-Year Plan and a critical
juncture for building on the past and paving the way for the future. The Group
will thoroughly pursue initiatives to "improve quality, enhance efficiency and
optimize structure", accelerating the transformation from a quantitative
expansion model to a quality- and efficiency-oriented model, to achieve
effective improvement in quality and reasonable growth in quantity, and
effectively strengthen its core functions and core competitiveness. By
upholding fundamental principles and breaking new ground, working diligently
and delivering solid results, the Group will stride forward in its journey of
building a world-class enterprise with courage and determination, making new
and greater contributions to Chinese modernization.
Liu Tiexiang
Chairman
Beijing, China
26 March 2026
Summary of Financial Information
(RMB'000)
2025 2024 2023 2022 2021
Revenue 171,484,646 166,698,880 141,100,234 52,897,584 74,531,670
Profit/(loss) from operations (389,199) 2,218,203 2,889,523 (35,443,794) (16,862,176)
(Loss) before taxation (1,620,106) (1,598,868) (1,649,779) (45,876,891) (21,825,530)
(Loss) after taxation (including (loss) attributable to non-controlling (3,542,376) (2,445,342) (1,561,248) (45,173,910) (18,822,238)
interests)
(Loss) attributable to (1,754,433) (2,212,785) (522,837) (6,556,415) (2,187,060)
non-controlling interests
(Loss) attributable to equity (1,787,943) (232,557) (1,038,411) (38,617,495) (16,635,178)
shareholders of the Company
EBITDA((1)) 30,328,540 31,321,171 30,000,030 (14,210,120) 4,072,326
EBITDAR((2)) 31,817,804 32,278,677 30,839,752 (13,632,238) 4,981,874
(Loss) per share attributable to equity shareholders of the Company(RMB) (0.11) (0.01) (0.07) (2.81) (1.21)
(Loss) on equity attributable to equity shareholders of the Company (%) (4.21) (0.52) (2.79) (163.79) (27.11)
Notes:
(1) EBITDA represents earnings before finance income and finance
costs, exchange gains/losses, income tax, share of profits or losses of
associates and joint ventures, depreciation and amortization as computed under
IFRS Accounting Standards.
(2) EBITDAR represents EBITDA before deducting aircraft and
engine lease expense as well as other lease expenses.
(3) EBITDA and EBITDAR are non-IFRS measures employed by the
management to monitor business performance and may not be comparable to
similar measures presented by other companies.
(4) The EBITDA for the Reporting Period represents earnings
before finance income of RMB569 million, finance costs of RMB5,553 million,
exchange gains of RMB328 million, income tax expense of RMB1,922 million,
share of profits of associates and joint ventures of RMB3,426 million,
depreciation and amortization of RMB30,718 million, adjusted from the loss for
the year of RMB3,542 million computed under IFRS Accounting Standards. EBITDAR
for the Reporting Period represents the above EBITDA before deducting aircraft
and engine lease expenses of RMB765 million as well as other lease expenses of
RMB724 million.
(RMB'000)
31 December 31 December 31 December 31 December 31 December
2025
2024
2023
2022
2021
Total assets 343,010,455 345,750,173 335,278,694 294,979,377 298,381,190
Total liabilities 303,815,731 304,824,203 300,014,685 273,451,149 232,550,079
Non-controlling interests (3,320,062) (4,202,202) (1,941,966) (2,048,948) 4,462,554
Equity attributable to equity shareholders 42,514,786 45,128,172 37,205,975 23,577,176 61,368,557
of the Company
Equity attributable to equity shareholders 2.44 2.71 2.30 1.62 4.23
of the Company per share (RMB)
Fleet Information
During the year of 2025, the Group introduced a total of 45 aircraft,
including 25 A320 series aircraft, 12 B737 series aircraft, six C919 aircraft
and two C909 aircraft, and phased out a total of 11 aircraft, including four
A330 series aircraft, one B747 series aircraft, five A320 series aircraft and
one business jet.
As at the end of the Reporting Period, the Group had a total of 964 aircraft
with an average age of 10.36 years, of which the Company operated a fleet of
533 aircraft in total, with an average age of 9.85 years. The Company
introduced 37 aircraft and phased out 8 aircraft.
Details of the fleet of the Group are set out in the table below:
31 December 2025
Sub-total Self-owned Finance Operating Average age (year)
leases
leases
Airbus 449 195 136 118 10.07
A320 369 165 112 92 10.18
A330 50 20 4 26 12.50
A350 30 10 20 - 4.63
Boeing 468 193 101 174 11.40
B737 417 157 94 166 11.39
B747 9 7 2 - 14.75
B777 28 19 3 6 11.71
B787 14 10 2 2 8.86
COMAC 44 29 15 - 2.25
C909 35 23 12 - 2.70
C919 9 6 3 - 0.53
Business jets 3 1 - 2 9.81
Total 964 418 252 294 10.36
Introduction Plan Phase-out Plan
2026 2027 2028 2026 2027 2028
Airbus 18 30 20 15 7 8
A320 18 30 20 14 7 8
A330 - - - 1 - -
Boeing 12 21 35 5 5 3
B737 10 12 31 5 5 3
B787 2 9 4 - - -
COMAC 10 10 15 - - -
C919 10 10 15 - - -
Total 40 61 70 20 12 11
Note: Please refer to the actual operation for the introduction and
phase-out of the Group's fleet in the future.
Summary of Operating Data
The following is the operating data summary of the Company, Shenzhen Airlines
(including Kunming Airlines), Shandong Airlines, Air Macau, Beijing Airlines,
Dalian Airlines and Air China Inner Mongolia.
Current year Previous year Increase/
(decrease)
Capacity
ASK (million) 367,641.22 356,103.62 3.24%
International 107,065.14 95,626.32 11.96%
Chinese Mainland 250,315.08 250,051.04 0.11%
Hong Kong SAR, Macau SAR and Taiwan, China 10,261.00 10,426.25 (1.58%)
AFTK (million) 12,934.82 12,629.76 2.42%
International 6,275.77 5,593.32 12.20%
Chinese Mainland 6,415.24 6,764.65 (5.17%)
Hong Kong SAR, Macau SAR and Taiwan, China 243.81 271.79 (10.29%)
ATK (million) 46,060.88 44,726.10 2.98%
Traffic
RPK (million) 301,015.56 284,349.95 5.86%
International 83,742.89 72,918.97 14.84%
Chinese Mainland 209,605.32 203,880.63 2.81%
Hong Kong SAR, Macau SAR and Taiwan, China 7,667.35 7,550.35 1.55%
RFTK (million) 5,051.12 4,732.69 6.73%
International 3,302.01 3,001.96 10.00%
Chinese Mainland 1,684.85 1,663.75 1.27%
Hong Kong SAR, Macau SAR and Taiwan, China 64.26 66.98 (4.06%)
Passengers carried (thousand) 160,596.53 155,315.51 3.40%
International 18,817.99 16,317.71 15.31%
Chinese Mainland 136,880.24 134,256.06 1.95%
Hong Kong SAR, Macau SAR and Taiwan, China 4,898.30 4,741.74 3.30%
Cargo and mail carried (tonnes) 1,537,855.39 1,480,085.34 3.90%
Kilometres flown (million) 1,909.34 1,856.98 2.82%
Block hours (thousand) 3,013.26 2,950.89 2.11%
Number of flights 1,037,949 1,024,492 1.31%
International 116,299 102,399 13.57%
Chinese Mainland 885,006 886,944 (0.22%)
Hong Kong SAR, Macau SAR and Taiwan, China 36,644 35,149 4.25%
RTK (million) 31,568.50 29,743.08 6.14%
Load factor
Passenger load factor (RPK/ASK) 81.88% 79.85% 2.03 ppt
International 78.22% 76.25% 1.96 ppt
Chinese Mainland 83.74% 81.54% 2.20 ppt
Hong Kong SAR, Macau SAR and Taiwan, China 74.72% 72.42% 2.31 ppt
Cargo and mail load factor (RFTK/AFTK) 39.05% 37.47% 1.58 ppt
International 52.62% 53.67% (1.06 ppt)
Chinese Mainland 26.26% 24.59% 1.67 ppt
Hong Kong SAR, Macau SAR and Taiwan, China 26.36% 24.64% 1.71 ppt
Overall load factor (RTK/ATK) 68.54% 66.50% 2.04 ppt
Utilisation
Daily utilisation of aircraft 8.89 8.90 (0.02 hours)
(block hours per day per aircraft)
Yield
Yield per RPK (RMB) 0.5144 0.5338 (3.63%)
International 0.5095 0.5127 (0.62%)
Chinese Mainland 0.5107 0.5371 (4.92%)
Hong Kong SAR, Macau SAR and Taiwan, China 0.6718 0.6488 3.54%
Yield per RFTK (RMB) 1.5399 1.5665 (1.70%)
International 1.8124 1.8999 (4.60%)
Chinese Mainland 0.9324 0.8959 4.08%
Hong Kong SAR, Macau SAR and Taiwan, China 3.4680 3.2855 5.56%
Unit cost
Operating expenses per ASK (RMB) 0.4818 0.4824 (0.12%)
Operating expenses per ATK (RMB) 3.8458 3.8412 0.12%
Business Overview
Safe Operation
In 2025, the Group firmly upheld the base line of safe development and
maintained stable and secure operations. The Group refined the four major
systems of "safety management, flight training, aircraft maintenance, and
production and operations" as well as the accountability system for work
safety for all employees, leveraging technology to enhance its safe
transportation capacity. The Group strengthened process control and risk
prevention, ensured solid flight operation support during critical periods
such as the thunderstorm season and winter operations, intensified hidden
hazard identification, supervision and inspection, and paid close attention to
the health of personnel in key positions. The Group made solid progress in the
three-year action plan for fundamental improvements in operation safety,
improved emergency response capabilities for lithium battery incidents in the
fleet, and developed emergency measures to address contingencies such as
overseas terrorist attacks and riots. The Group provided high-quality support
for C919 aircraft operations, ensuring dynamic alignment between flight
operations and support capabilities. The Group optimized resource allocation
and improved safety efficiency to steadily implement the integrated operation
of Air China Inner Mongolia.
During the Reporting Period, the Group recorded 3.01 million safe flight
hours, and successfully completed the themed event of "Air China C919 Retraces
the Glorious Northward Flight of the 'Two Airlines Uprising'" and fulfilled
major transportation support missions of special charter flights, including
the Shanghai Cooperation Organization Summit and evacuation and rescue
missions for overseas Chinese, thereby consistently maintaining an overall
stable and safe operational environment.
Enhancing Operating Performance
In 2025, the Group seized market opportunities and pursued the overarching
goal of enhancing operating performance while ensuring safe operations. The
Group improved fleet efficiency through meticulous production organization,
stabilized yield quality by strengthening capacity and pricing management, and
advanced cost reduction and expenditure control through rigorous cost
controls. As a result, the Group's operational performance continued to
improve, achieving a year-on-year increase in revenue by RMB4.786 billion.
Focusing on the annual strategic production and operational targets, the Group
optimized production organization to ensure effective capacity deployment.
Guided by the principle of revenue maximization, the Group refined yield
management while simultaneously enhancing marketing organization capabilities.
The Group strengthened product innovation, expanded ancillary revenue streams
and achieved significant results in enhancing overall operating performance.
The Group improved aircraft utilization, actively exploring the international
market and continuously refining the Group's capacity deployment structure.
The Group deepened capacity synergy among Air China family carriers to
strengthen competitiveness of its main routes. In response to market changes,
the Group continuously enriched its premium cabin products, explored
incremental passenger traffic from connecting flights, upgraded the yield
management of Air China family carriers, and implemented refined management
and control to balance capacity and pricing. The Group refined marketing
products to actively generate revenue and increase profit. The Group deepened
platform partnerships to proactively innovate products tailored to
characteristics of its customer groups. The Group advanced the transformation
of the "PhoenixMiles" frequent flyer program, continuously optimizing the
benefits of frequent flyers. The Group comprehensively optimized mobile
service systems to enhance sales and service capabilities of direct sales
channels. The Group expanded ancillary revenue streams by optimizing flagship
products, strengthening development of new products, and continuously
promoting the synergistic development of ancillary businesses among Air China
family carriers.
The Group strictly controlled costs in line with the requirements of
"intensification, coordination and refinement". The Group optimised the
matching of aircraft types with routes and market demand to manage operating
costs, improved resource utilization efficiency and refined support cost
management. The Group strengthened fund coordination, optimised the debt
structure and reduced financial expenses. The Group increased labor
productivity at all levels while appropriately managing labor cost, thereby
effectively expanding profitability potential.
Products and Services
In 2025, focusing on passenger needs, the Group continuously improved its
service standards and quality, cultivated high-quality service and product
brands and accelerated service digitalization and upgrading, thereby providing
passengers with a better aviation service experience and contributing to the
high-quality development of civil aviation services.
The Group focused on addressing passengers' concerns by optimizing key service
standards, particularly for services for passengers requiring special
assistance and service compensation and reimbursement, thereby enhancing the
overall passenger experience. To strengthen its service and product brand, the
Group newly launched the "Zichen (紫宸)" premium lounge in Urumqi, with a
series of "Smart Enjoyment (智享)" services introduced in the "Zixuan
(紫軒)" and "Zichen (紫宸)" branded lounges. Brand awareness was further
strengthened through themed activities during holidays such as the Mid-Autumn
Festival and the National Day, as well as "Phoenix Pavilion (鳳庭薈)"
cultural exhibitions. The integration and upgrade of express route products
were completed, which now covered 13 routes. The "Air China Express Routes"
service brand was selected among the second batch of creative achievements
under the SASAC's Central Enterprise Brand Leadership Action. Cross-sector
integration was strengthened, creating the in-flight customized coffee product
"Coffee On-the-Go (隨行咖啡棒)", launching a new version of the safety
instruction video, and producing and launching a new boarding/disembarkation
music titled "Beyond the Horizon (遠方的遠方)". Through partnerships with
well-known automobile companies, the Group achieved reciprocal cross-sector
benefits. Collaboration was also undertaken with renowned cultural tourism,
sports and art IPs to create themed products, catering to the diverse needs of
passengers. Service system platforms, such as the end-to-end passenger service
information notification system and the global ground flight support platform,
were fully deployed. The in-flight catering reservation service was made
available to passengers on all domestic routes with catering services. The
iterative upgrading of basic service management systems such as the passenger
service compensation system and the service knowledge database system
continued. These initiatives continued to enhance the Group's digital service
capabilities.
Digital Transformation and Technological Innovation
In 2025, the Group accelerated its digital transformation, which is
value-oriented and customer-centric, thereby injecting strong and new digital
and intelligent momentum into high-quality development. In terms of safe
operation, the Group accelerated the global deployment of the ground
operations support platform, achieving full coverage across all branches and
114 global staffed stations. Through the rollout of this advanced platform,
the Group rapidly enhanced the overall standard of its ground support
services. The smart flight-digital task sheet system was launched, creating an
integrated digital application for flight crews. This "people-first, empowered
by digitalization and intelligence" approach improved the operational
efficiency and duty experience of frontline flight crews. The Group advanced
the development of a digital aviation safety platform, strengthening safety
risk prevention and control, and continuously reinforcing the dual foundation
of safety and efficiency. In terms of marketing services, the Group continued
to empower the transformation of marketing models and enhancement of service
quality. The second phase of the business model innovation system established
Air China's new retail system. The promotion of the passenger in-flight
catering reservation management system was accelerated, enhancing passenger
experience and promoting refined management for cost reduction. In terms of
management and synergy, the Group intensified group-wide coordination and
digital empowerment, pushing forward with development of platforms in respect
of human resources, finance and internal control. This enabled refined
management, cost reduction and efficiency enhancement, while meeting
regulatory and compliance requirements.
In 2025, the Group drove development through innovation, promoting in-depth
integration of technology with the industry. The Group deepened
industry-academia-research-application collaboration, partnering with
universities to develop a joint laboratory for intelligent aircraft operation,
maintenance and support. Innovative achievements accumulated rapidly. The
global ground flight support platform was awarded the First Prize for Science
and Technology by the China Communications and Transportation Association; the
passenger service unit project for A320 series aircraft received the
"Technology Breakthrough Award" at the 8th China Aviation Maintenance Red
Crown Awards. The Group fostered a culture of innovation and hosted an AI
Innovation Application Competition that attracted 239 teams from 63
universities, research institutes and internal units nationwide.
Risk Prevention and Control
In 2025, the Group continued to deepen its integrated collaboration mechanism
of "upholding the rule of law, reinforcing internal controls, preventing risks
and promoting compliance". The Group accelerated the implementation of
whole-process, full-chain and full-coverage risk prevention and control
efforts, comprehensively strengthening risk management and control for safe
operations and business risk prevention. The Board assumes overall
responsibility for risk management. The Audit and Risk Management Committee
(the Supervision Committee) is responsible for guiding, supervising and
evaluating risk management-related work. The management is responsible for
organizing, developing and implementing various requirements. The Company
specifically adopted a prudent risk appetite. Centered on the principle of
"zero tolerance for potential safety hazards, uninterrupted fund flows and
reasonable risk exposure", the Company established the "three lines of
defense" for risk management. All business departments, serving as the first
line of defense, are responsible for effectively identifying and controlling
risks, bearing primary responsibility for risks arising from their businesses
and operational processes. Functions such as legal, compliance, finance,
quality, safety and human resources act as the second line of defense,
providing risk management and control policies, methodologies and tools, and
organizing risk monitoring as well as internal control and compliance
management. The internal audit function acts as the third line of defense,
conducting independent evaluation of risk management and control outcomes, and
bearing responsibilities for risk assessment and supervision.
According to the "Implementation Rules for Risk Assessment and Reporting", the
Group refined its risk management framework and ensured effective execution of
the Company's responsibilities for risk identification and control. The Group
persistently strengthened the forward-looking research on various risks,
including those related to the economic environment, market conditions,
industrial policies and industry development trends. An annual forecast and
assessment of major business risks was conducted. The Company identified key
risk areas, achieving effective monitoring and closed-loop management of
risks. According to the "Risk Grading Standards and Risk Incident Reporting
Mechanism", the Group standardized the reporting of daily operational risks.
During the Reporting Period, the Company further deepened risk management for
significant matters by formulating the "Risk Management Measures for
Significant Matters", strengthening risk control at source, process monitoring
and outcome control, thereby enhancing the effectiveness of risk management
for significant matters.
Review of Enhancing Quality and Efficiency and Maximizing Returns
During the Reporting Period, the Group accelerated the improvement of the
quality and efficiency of core business operations, continuously enhanced
profitability, and carried out comprehensive and systematic work to improve
quality and efficiency, leading to sustained improvement in operating
performance. During the Reporting Period, the Group's cumulative available
seat kilometers (ASK) reached 367.641 billion, representing a year-on-year
increase of 3.24%; passenger carried reached 160.5965 million, representing a
year-on-year increase of 3.40%; revenue amounted to RMB171.485 billion,
representing a year-on-year increase of RMB4.786 billion; net loss
attributable to shareholders of the listed company amounted to RMB1.788
billion.
The Group continuously enhanced the efficiency of core resource utilization,
and accelerated the resumption and launch of "Belt and Road" related routes.
The Company operated 394 domestic routes and 131 international and regional
routes, the number of flights of the "Belt and Road" related routes exceeded
that of the same period in 2019. The Group improved its refined control
capabilities and adopted multiple measures to stabilize yield. It further
strengthened the top-level design of strategic synergy, reinforced the synergy
of capacity and yield management as well as marketing products and services
among Air China family carriers, and coordinated regional resource synergy to
achieve economies of scale. Adhering to the requirements of "intensification,
coordination and refinement", the Group reduced major costs such as aviation
fuel, take-off and landing, catering and aircraft maintenance, and
continuously deepened the refined control of costs across the entire operation
chain.
The Group persisted in standardized operation and continuously improved its
corporate governance mechanism. It leveraged the leadership role of the Party
Committee and strictly implemented the pre-research and discussion by the
Party Committee on major operation and management matters. During the
Reporting Period, the Board convened 12 meetings and considered and approved
73 proposals, among which the Standing Committee of the Party Committee
pre-researched 49 major operation and management matters; and heard 20 special
reports. In February 2025, the transition of the Board was completed, with the
establishment of the seventh session of the Board and the adjustment of the
members of various special committees and the joint working group. In
accordance with the new Company Law and the latest domestic and overseas
regulatory requirements, combined with the standardized construction of the
Board, the Group systematically revised the Articles of Association, the rules
of procedure for shareholders' meetings and Board meetings, and the working
rules of the Nomination Committee. Information relating to the Company's
production and operation and
having a material impact on the share price was disclosed in a true, accurate,
complete and timely manner, ensuring that all shareholders can obtain company
information equally and safeguarding the rights and interests of investors.
During the Reporting Period, the preparation and disclosure of regular
reports, temporary announcements and circulars to shareholders were completed
with high quality. The Company's information disclosure work for the year
2024-2025 was rated as Grade A by the Shanghai Stock Exchange, representing
the excellent category of information disclosure.
The Group actively advanced investor relations work and built a communication
bridge with the capital market. It organized the 2024 annual online results
briefing, the 2025 interim results briefing and the third quarter results
briefing, where the management of the Company promptly responded to the
concerns of small and medium investors and the capital market, building
investor confidence and consolidating its image in the capital market. It
conducted roadshows in Hong Kong and Shanghai for the 2024 annual and 2025
interim results to fully and deeply answer various questions of concern to
investors, thereby boosting investor confidence. It actively participated in
institutional strategy meetings, and organized and participated in nearly 50
investment conferences and telephone research meetings during the Reporting
Period. Through platforms such as the SSE e-interaction and the investor
relations webpage of the Company's official website, it timely updated various
corporate information, actively replied to questions of concern to investors,
and paid full attention to the needs of small and medium investors. It managed
market capitalization scientifically and formulated the "Market Capitalization
Management Work Plan of Air China Limited" to promote high-quality
development.
The Group strengthened the responsibilities of the "critical minority" to
drive the steady development of the Company. The Company's controlling
shareholder, CNAHC and CNACG, remain optimistic about the long-term prospects
of China's aviation industry. Based on their confidence in the Company's
future development prospects and recognition of its intrinsic investment
value, they committed not to reduce their holdings of the Company's tradable
shares not subject to selling restrictions in any manner for a period of 18
months starting from 8 April 2025. In December 2025, as considered and
approved at the Company's third extraordinary shareholders' meeting of 2025,
CNAHC and its wholly-owned subsidiary, China National Aviation Capital Holding
Co., Ltd., proposed to subscribe for A Shares issued by the Company to
specific investors in 2025. The number of A Shares to be issued shall not
exceed 3,044,140,030 (inclusive), with a subscription amount of no more than
RMB20 billion and a commitment to not transfer such shares within 18 months
from the date of issuance, conveying to the market the controlling
shareholder's firm confidence in the future development of the Company.
INDUSTRY LANDSCAPE DURING THE REPORTING PERIOD
1. Current Status of Industry Development
Overview of China's Air Transport Industry
In 2025, the civil aviation industry's transportation turnover reached a total
of 164.08 billion tonne kilometres, 770 million passengers carried and 10.172
million tonnes of cargo and mail carried throughout the year, representing
year-on-year increases of 10.5%, 5.5% and 13.3% respectively. Among these,
international flights recovered to over 90% of the 2019 level, while
international passenger transport volume increased by 21.6% year-on-year. With
the total number of air travellers exceeding 500 million, China became the
world's largest aviation market by travelling population.
According to CAAC's forecast, in 2026, China's civil aviation industry will
coordinate both domestic and international markets, actively support the
strategy of comprehensively expanding domestic demand and high-standard
opening-up, and is expected to achieve a total transportation turnover of 175
billion tonne kilometres, a passenger transport volume of 810 million and a
cargo and mail transport volume of 10.7 million tonnes.
2. Market Position of the Company
As the only national flag carrier of China, the Company shoulders the
historical mission of building a flagship national aviation brand and helping
to write a new chapter in building a country with strong transportation
network in civil aviation. The Company boasts a large fleet, a balanced and
extensive domestic and international route network, a highly valuable customer
base and strong brand influence, ranking in the first tier of global air
transport enterprises.
CORE COMPETITIVENESS ANALYSIS DURING THE REPORTING PERIOD
Strong brand advantage
Air China positioned its brand as "professional and reliable with
international quality and Chinese character". As a practitioner, promoter and
leader of the high-quality development of the aviation transportation industry
in the PRC, Air China has a profound historical heritage. It strives to create
a perfect travel experience and convey safety and auspiciousness to passengers
by upholding the spirit of the Phoenix; pursue excellence through innovation
and enterprise; and committed to leading industry development and establishing
itself as a "National Brand". The Group has world-class safety performance and
domestic-leading comprehensive operational strength, as well as extensive
brand recognition and excellent brand reputation.
In 2025, the Group continuously strengthened its brand building around two
directions: brand foundation management and brand communication management. In
terms of brand foundation management, it researched and compiled brand
building plan for the 15th Five-Year Plan period, and continuously established
and improved necessary working systems and mechanisms to resolve problems
relating to institutional mechanisms, resource constraints, channel
development, content planning, and capability support in overseas brand
communication. In terms of brand communication management, it planned and
launched a brand new brand communication slogan, and simultaneously advanced
the filming and production of the new official brand promotional video and
brand pictures; it participated at a high level in national and important
industry exhibitions, such as the 25th China International Fair for Investment
and Trade and the 3rd CATA Aviation Conference; it innovatively implemented
the integrated project of "National Mission + Brand Communication", and
jointly produced micro-documentaries with other central state-owned
enterprises to tell the stories of Chinese employees from various industries
posted overseas along the "Belt and Road" routes, among which two
documentaries were selected for the global image collection and online
exhibition activity "Chasing the Dream of the 'Belt and Road', Youth to the
Future" organized by the SASAC of the State Council; leveraging its overseas
social media presence, the Group continuously amplified its brand influence
around themes such as the Beijing hub, the 240-hour visa-free transit policy,
and Chinese travel destinations, and planned to carry out route and product
promotion activities by taking the opportunity presented by the opening and
resumption of international routes, and held the Air China Theme Day activity
"Accompany with Heart, Travel with Love" at the China Pavilion of the Osaka
World Expo. According to the ranking list released by Xinhua News Agency, the
Company ranked No. 26 in the "2025 Comprehensive List of Global Communication
Power of Chinese Brands", being the only airline to be included in the list.
Market leader at the Beijing hub
In 2025, anchoring itself in the domestic cycle, the Group actively promoted
hub construction in a bid to implement the national regional development
strategy. The Group accelerated the hub development of Beijing Capital
International Airport and Chengdu Tianfu International Airport, improved the
network structure and enhanced the quality of hub operations. Air China has
recorded an average of 760 scheduled flights per day at Beijing Capital
International Airport.
Air China continued to focus its resources and efforts on accelerating the
enhancement of hub functions, improving operation efficiency and service
support standards, and continuously optimising its route network. During the
Reporting Period, while increasing its investment, Air China meticulously
developed competitive express route products and well-recognised express route
brands. It continued to develop 13 express routes including Beijing-Shanghai,
Beijing-Chengdu, Beijing-Hangzhou, Beijing-Chongqing, Beijing-Shenzhen,
Beijing-Guangzhou, Beijing-Xiamen, Beijing-Urumqi, Beijing-Wuhan,
Chengdu-Shenzhen, Chengdu-Hangzhou, Chengdu-Tianjin and Chongqing-Shenzhen,
with a total deployment of more than 160 flights per day.
Balanced and complementary route network
In 2025, the Group proactively served the "Nation's Priorities" and the
overarching strategy, fully demonstrating its strategic leading role. It
unswervingly advanced its hub network strategy, continuously optimizing its
route network layout around the construction of the "3+7+N" hub system.
Seizing the new policy opportunities of international aviation hub
construction, the Group actively leveraged its network advantages in hubs such
as Beijing, Shenzhen, Shanghai, Hangzhou, Chengdu, Chongqing and Urumqi to
serve the development of world-class city clusters in Beijing-Tianjin-Hebei,
the Yangtze River Delta and the Guangdong-Hong Kong-Macau Greater Bay Area. It
promoted the high-quality development of the Chengdu-Chongqing Dual-Economic
Circle, enhanced the supporting role of western city clusters, and
concentrated capacity layout and premium resources on core markets, principal
bases, express routes and main routes, strengthening its control over
high-value markets. Furthermore, it further deepened collaboration among Air
China family carriers to achieve complementary network advantages and enhance
the overall core competitiveness of Air China family carriers.
The Group continued to serve for the national "Going Global" strategy by
actively promoting the resumption and launch of "Belt and Road" related
routes. In 2025, the Company operated a total of 131 international and
regional passenger routes and 394 domestic passenger routes, serving 46
countries and regions as well as 203 cities, comprising 68 international
cities, 3 regional cities, and 132 domestic cities. The number of executed
"Belt and Road" related routes reached 74, covering 32 countries, and the
number of flights exceeded that of the same period in 2019. During the
Reporting Period, Air China launched 8 new "Belt and Road" related routes,
including Beijing-Vladivostok, Beijing-Irkutsk, Beijing-Cairo,
Beijing-Tashkent, Urumqi-Tashkent, Beijing-Almaty, Hangzhou-Hanoi, and
Chengdu-Almaty.
High quality customer base
In line with the Company's strategy for hub network, the Group focuses on the
mainstream traveler markets of business travelers and PhoenixMiles members. It
launched the 31st-anniversary complimentary products and, through the
innovative delivery format of digital assets, achieved a total revenue
increase of RMB37.64 million during the off-peak season. It launched the pilot
"Exclusive Travel Privileges" product for VIP members to enhance the
experience and stickiness of core members. As at the end of the Reporting
Period, the number of "PhoenixMiles" members has exceeded 107.88 million, and
revenue contributed by frequent fliers accounted for 53.59% of the Company's
revenue. It promoted the full coverage of the account manager system
domestically and expanded it to overseas tier-1 and tier-2 sales offices. As
at the end of the Reporting Period, the total number of effective corporate
customers amounted to 7,887, achieving a revenue of RMB15.71 billion,
representing a year-on-year increase of 7.3%; the revenue contribution from
contracted customers accounted for 18.7%, representing a year-on-year increase
of 0.8 percentage points.
MAJOR SUBSIDIARIES AND ASSOCIATES AND THEIR OPERATING RESULTS
Notes:
1. As at the end of the Reporting Period, CNACG is a
wholly-owned subsidiary of CNAHC. Accordingly, CNAHC is directly and
indirectly interested in 53.71% of the shares of the Company.
2. On 28 August 2025, the sixth meeting of the seventh
session of the Board of the Company considered and approved the "Resolution on
the Implementation Plan for the Introduction of Strategic Investor and Capital
Increase in Shenzhen Airlines", agreeing that Shenzhen Airlines to seek one
investor through the Shenzhen United Property and Equity Exchange for cash
financing of RMB2 billion, and the Company would concurrently increase its
capital by RMB2.082 billion in cash through a non-public agreement. On 18
December 2025, the Company, Shenzhen International Total Logistics (Shenzhen)
Co., Ltd., Shenzhen Kunhang Investment Partnership (Limited Partnership) and
Shenzhen Airlines signed the "Capital Increase Agreement of Shenzhen Airlines
Company Limited" and the "Investment Contract of Shenzhen Airlines Company
Limited", completing the aforementioned capital increase. Following the
capital increase, the Company's shareholding in Shenzhen Airlines remained at
51.00%. For details, please refer to the announcements of the Company dated 28
August 2025 and 18 December 2025.
3. On 28 March 2025, as considered and approved at the
second meeting of the seventh session of the Board of the Company, the Company
completed the capital increase in Air Macau. Following the completion of the
capital increase, the Company's shareholding in Air Macau was changed to
74.94%.
4. On 6 January 2026, as considered and approved at the
eleventh meeting of the seventh session of the Board of the Company, the
Company's wholly-owned subsidiary, Easerich Investments Inc., commissioned a
placing agent to sell approximately 1.61% equity interest (i.e. 108,080,000
shares) in Cathay Pacific held by it through block trades in the Hong Kong
securities trading market. For details, please refer to the announcement of
the Company dated 6 January 2026. On 8 January 2026, the Company completed the
aforementioned transaction. On 24 February 2026, Cathay Pacific completed the
repurchase of 643,076,181 shares of Cathay Pacific held by Qatar Airways. On
26 March 2026, Cathay Pacific cancelled such repurchased shares. As at the
date of this annual report, the 1,822,436,334 shares of Cathay Pacific held by
the Company accounted for 29.97% of the total share capital of Cathay Pacific
of 6,081,128,038 shares.
5. The shareholding percentages of the Company's
shareholders in the diagram above are data as at the end of the Reporting
Period.
During the Reporting Period, the operating results of the major subsidiaries
and associates of the Company were as follows:
Shenzhen Airlines Shandong Aviation Group Corporation Beijing Airlines Dalian Airlines Air China Air Macau Ameco CNAF Cathay Pacific
Inner Mongolia
Year of establishment 1992 1995 2011 2011 2013 1994 1989 1994 1946
Place of domicile Shenzhen Shandong Beijing Dalian Inner Mongolia Macau Beijing Beijing Hong Kong
Principal business Air passenger and Air passenger and Business charter Air passenger and Air passenger and Air passenger and air cargo services Repair and Provision of Air passenger and air cargo services
air cargo services
air cargo services
and public air passenger and air cargo services
air cargo services
air cargo services
overhaul of
financial services
aircraft, engines and components
to CNAHC Group and the Group
Registered capital RMB9,351,082,184.24 RMB10,454,489,846.24 RMB1,000,000,000 RMB3,000,000,000 RMB2,000,000,000 MOP2,379,415,900 USD300,052,800 RMB1,127,961,864 6,722,856,511 shares in issue
Percentage of shareholding by 51% 66% 51% 80% 80% 74.94% 75% 51% 28.72%
the Company
Revenue (RMB100 million) 334.06 211.59 5.07 20.15 16.41 31.95 143.50 1.51 1,067.98
(on a consolidated basis)
(on a consolidated
(on a consolidated basis)
basis)
Year-on-year changes (%) 1.02 3.49 9.74 2.28 (7.18) 2.63 9.53 1.34 11.69
Total assets (RMB100 million) 635.26 335.92 9.49 32.53 27.61 61.92 77.05 233.31 1,599.16
Profit/(loss) attributable to (12.44) (7.80) (1.30) (1.87) (0.25) (6.55) 4.75 0.54 87.48
parent company
(RMB100 million)
Profit/(loss) attributable to (28.13) (5.06) (1.29) (3.49) (0.40) (5.95) 4.01 0.54 88.01
parent company in the corresponding period of
last year (RMB100 million)
The fleet information and operating data of the major subsidiaries and
associates of the Company were as follows:
As at the end of the Reporting Period/ Shenzhen Airlines Shandong Airlines Beijing Airlines* Dalian Airlines Air China Air Macau Cathay Pacific
During the Reporting Period
Inner Mongolia
Fleet size (aircraft) 239 139 6 13 11 23 237
(on a consolidated basis) (on a consolidated basis)
Average age (year) 10.66 11.62 12.95 12.24 11.30 9.14 11.8
ASK (100 million) 785.72 491.65 9.13 44.45 34.44 72.16 1,406.81
Year-on-year changes (%) 2.15 3.13 3.71 4.30 (2.37) (3.17) 25.8
RPK (100 million) 670.31 413.92 6.60 35.93 27.42 54.88 1,198.75
Year-on-year changes (%) 4.99 3.24 10.28 7.92 0.71 (1.29) 28.9
Passengers carried (10 thousand) 4,173.08 2,777.40 59.54 257.53 204.68 327.90 2,887.1
Year-on-year changes (%) 4.34 1.64 20.79 7.99 (0.55) 2.1 26.5
Average passenger load factor (%) 85.31 84.19 72.28 80.83 79.62 76.05 85.2
Year-on-year changes (ppt) 2.31 0.09 4.31 2.71 2.43 1.45 2.0
*Note: As at the end of the Reporting Period, Beijing Airlines operated a
fleet of two entrusted business jets and one self-owned business jet with an
average age of 9.81 years. During the Reporting Period, in terms of business
charter service, Beijing Airlines completed 197 flights, representing a
year-on-year decrease of 10.86%; it completed 707.77 flying hours,
representing a year-on-year decrease of 7.76%; it carried a total of 1,652
passengers, representing a year-on-year decrease of 17.56%.
OPERATIONAL PLAN
The Company has identified the following key priorities for 2026: (1) to
firmly secure the base line of safe development, ensuring high-quality
development with a high level of safety; (2) to enhance its value creation
capability and continue the campaign to enhance operating performance through
quality and efficiency enhancement; (3) to continue advancing deepened reform
and stimulate vitality and momentum through innovation-driven development; (4)
to continuously optimize the service system, creating a leading brand with
credibility, convenience, comfort and choice; and (5) to comprehensively
strengthen the Party's leadership and lead high-quality development with
high-quality Party building.
OUTLOOK
Industry Landscape and Trends
1. China's Civil Aviation Serving National Development
Strategies
The civil aviation industry, as a strategic sector, consistently aligns with
and serves the nation's overarching development goals. The industry is
accelerating the construction of aviation hubs while enhancing air transport
capabilities to drive coordinated regional economic growth. Through expanding
global aviation networks, it has actively established and increased flight
frequencies to countries along the Belt and Road routes, facilitating enhanced
connectivity and economic cooperation. The aviation sector plays a pivotal
role in technological innovation, contributing to breakthroughs in indigenous
technologies such as China's domestically-developed large aircraft and
advancing research and innovation in aircraft maintenance and other
industry-wide technological developments. This promotes deeper integration
between scientific innovation and industrial applications. To meet evolving
consumer demands, the industry continues to innovate its service offerings and
elevate service quality standards, thereby improving the overall travel
experience for passengers. Furthermore, it is actively developing a modern
integrated transportation system by steadily promoting multimodal transport
solutions and expanding the aviation market's service coverage.
2. China's Civil Aviation Passenger Transport Will Return to
Natural Growth
The fundamental trend of China's economy stabilizing and improving in the long
term remains unchanged, and China's development is still in a period of
strategic opportunity. Relying on the super-sized domestic demand market
formed by a population of 1.4 billion, efforts will be made to build a new
development pattern with domestic circulation as the mainstay and domestic and
international circulations reinforcing each other. The market potential is
enormous, and the prospects for civil aviation demand are optimistic. In
2026, China's civil aviation will adhere to coordinating both domestic and
international markets, vigorously serve the comprehensive expansion of
domestic demand and the promotion of consumption, actively promote
high-standard opening-up, and further enhance the industry's profitability
level.
3. Competitive Landscape of China's Aviation Market
China's aviation market is expected to experience steady growth and continuous
transformation. On the demand side, with the national economy recovering and
improving, the industry's development foundation will become more solid, the
domestic passenger market will grow steadily, the international passenger
market will recover at a faster pace, and Chinese airlines will play a more
important role in the global aviation market. On the policy side, the
continuous implementation of various development policies will effectively
stimulate domestic demand potential, especially in boosting household
consumption, which will provide demand momentum for the subsequent development
of civil aviation. On the industry side, the CAAC is advancing a series of
reform measures to strengthen the foundation for industry development, enhance
the international competitiveness of aviation hubs, and guide domestic
airlines to adopt differentiated operations, thereby reducing homogeneous
competition in the civil aviation market.
Company Development Strategy
The Group adheres to the development goal of "accelerating the development
into a world-class aviation transportation group with global competitiveness".
Upholding the four strategic directions of "hub network, balanced
passenger-cargo development, cost leadership, and brand strategy", the Group
will focus on key areas such as enhancing safety management, optimizing market
layout, adjusting resource structure, upgrading products and services, driving
digital innovation development, and promoting green and low-carbon development
to advance its operations.
Safety management will reach a new level. With the refinement of the safety
management system, flight training system, aircraft maintenance system, and
operational management system, the safety control mechanism will be further
improved, the efficiency of safety management continuously enhanced, and the
implementation of responsibilities more clearly defined, maintaining a
high-level safety operation.
Optimized market layout will create new advantages. By persistently serving
national strategies and major decisions and deployments, and under the new
development pattern of domestic and international dual circulation, the Group
will optimize the layout of its base markets, highlight strengths and
priorities, and consolidate new advantages for development. The core network
structure of the "four-corner rhombus and four-pole clusters" will be further
refined, and the network synergy within the Air China family carriers will be
continuously deepened.
Resource structure adjustment will present a new outlook. The alignment of
core resources with market characteristics will be enhanced, establishing
long-term advantages in fleet development. The efficiency of flight crew and
human resources allocation will be optimized, and the alignment of maintenance
and investment layouts with the development layout of the principal business
will be continuously strengthened.
Product and service upgrades will achieve a new level. Product and service
quality will see significant improvement, with service features becoming more
distinctive. An efficient and well-connected standards system will be
established, enabling smoother full-process service support and more efficient
service synergy across all business segments.
Digital innovation and development will enter a new stage. A sound
technological innovation management system and mechanism will be in place,
with the core role of innovation in the Group's development gradually
strengthening. The effectiveness of innovation-driven development will become
more prominent, digital transformation will achieve new breakthroughs, and the
development of digital platform will make key progress.
Green and low-carbon development will demonstrate new accomplishments. The
energy conservation and environmental protection management system will
operate more efficiently. Pollution and carbon reduction measures will be more
effective, pollution prevention achievements more substantial, carbon
emissions and carbon asset management more professionalized, and participation
in social welfare activities more extensive.
Management's Discussion and Analysis of
Financial Position and Operating Results
The following discussion and analysis are based on the Group's consolidated
financial statements and the notes thereto prepared in accordance with the
IFRS Accounting Standards and are designed to assist the readers in further
understanding the information provided in this report so as to better
understand the financial conditions and results of operations of the Group as
a whole.
REVENUE
During the Reporting Period, the Group's revenue was RMB171,485 million,
representing an increase of RMB4,786 million or 2.87% as compared with last
year. Among these, air traffic revenue was RMB162,634 million, representing an
increase of RMB3,431 million or 2.16% as compared with last year; other
operating revenue was RMB8,851 million, representing a year-on-year increase
of RMB1,355 million or 18.08%.
REVENUE CONTRIBUTED BY GEOGRAPHICAL SEGMENTS
2025 2024
(in RMB'000) Amount Percentage Amount Percentage Change
Chinese Mainland 117,457,528 68.50% 118,491,369 71.08% (0.87%)
International 48,653,480 28.37% 43,088,622 25.85% 12.91%
Hong Kong SAR, Macau SAR and Taiwan, China 5,373,638 3.13% 5,118,889 3.07% 4.98%
Total 171,484,646 100.00% 166,698,880 100.00% 2.87%
AIR PASSENGER REVENUE
During the Reporting Period, the Group recorded an air passenger revenue of
RMB154,856 million, representing an increase of RMB3,067 million over the
previous year. Among the air passenger revenue, the increase of capacity
contributed an increase of RMB4,918 million in the revenue, and the increase
of passenger load factor led to an increase of RMB3,978 million in the
revenue, while the decrease of passenger yield resulted in a decrease in
revenue of RMB5,829 million. The Group's capacity, passenger load factor and
yield per RPK in 2025 are as follows:
2025 2024 Change
ASK (million) 367,641.22 356,103.62 3.24%
Passenger load factor 81.88% 79.85% 2.03 ppt
Yield per RPK (RMB) 0.5144 0.5338 (3.63%)
AIR PASSENGER REVENUE CONTRIBUTED BY GEOGRAPHICAL SEGMENTS
2025 2024
(in RMB'000) Amount Percentage Amount Percentage Change
Chinese Mainland 107,036,024 69.12% 109,504,532 72.14% (2.25%)
International 42,668,978 27.55% 37,385,320 24.63% 14.13%
Hong Kong SAR, Macau SAR and Taiwan, China 5,150,777 3.33% 4,898,820 3.23% 5.14%
Total 154,855,779 100.00% 151,788,672 100.00% 2.02%
AIR CARGO AND MAIL REVENUE
During the Reporting Period, the Group's air cargo and mail revenue was
RMB7,778 million, representing an increase of RMB364 million as compared with
last year. Among them, the increase of capacity contributed an increase of
RMB179 million in the revenue, while the increase of cargo and mail load
factor resulted in an increase in revenue of RMB319 million, and the decrease
of yield of cargo and mail resulted in a decrease of RMB134 million in the
revenue. The capacity, cargo and mail load factor and yield per RFTK in 2025
are as follows:
2025 2024 Change
Available freight tonne kilometres (million) 12,934.82 12,629.76 2.42%
Cargo and mail load factor 39.05% 37.47% 1.58 ppt
Yield per RFTK (RMB) 1.5399 1.5665 (1.70%)
AIR CARGO AND MAIL REVENUE CONTRIBUTED BY GEOGRAPHICAL SEGMENTS
2025 2024
(in RMB'000) Amount Percentage Amount Percentage Change
Chinese Mainland 1,571,017 20.20% 1,490,484 20.10% 5.40%
International 5,984,503 76.94% 5,703,302 76.93% 4.93%
Hong Kong SAR, Macau SAR and Taiwan, China 222,860 2.86% 220,069 2.97% 1.27%
Total 7,778,380 100.00% 7,413,855 100.00% 4.92%
OPERATING EXPENSES
During the Reporting Period, the Group's operating expenses were RMB177,143
million, representing an increase of 3.11% from RMB171,801 million of last
year. The breakdown of the operating expenses is set out below:
2025 2024
(in RMB'000) Amount Percentage Amount Percentage Change
Jet fuel costs 50,041,444 28.25% 53,720,436 31.27% (6.85%)
Take-off, landing and depot charges 21,967,914 12.40% 20,915,459 12.18% 5.03%
Depreciation and amortisation 30,717,739 17.34% 29,102,968 16.94% 5.55%
Aircraft maintenance, repair and overhaul costs 14,813,651 8.36% 12,848,288 7.48% 15.30%
Employee compensation costs 37,047,474 20.91% 34,268,745 19.95% 8.11%
Air catering charges 4,505,386 2.54% 4,165,874 2.42% 8.15%
Selling and marketing expenses 4,918,115 2.78% 4,695,760 2.73% 4.74%
General and administrative expenses 1,922,452 1.09% 1,872,201 1.09% 2.68%
Others 11,208,968 6.33% 10,210,858 5.94% 9.77%
Total 177,143,143 100.00% 171,800,589 100.00% 3.11%
• Jet fuel costs decreased by RMB3,679 million on a
year-on-year basis, mainly due to the combined effect of the decrease in the
prices of jet fuel and increase in the consumption of jet fuel.
• Take-off, landing and depot charges increased by RMB1,052
million on a year-on-year basis, mainly due to the year-on-year increase in
the number of take-offs and landings.
• Depreciation and amortisation expenses increased by
RMB1,615 million on a year-on-year basis, mainly due to the expansion of fleet
as well as the year-on-year increase in flying hours.
• Aircraft maintenance, repair and overhaul costs increased
by RMB1,965 million on a year-on-year basis, mainly due to the year-on-year
increase in flying hours and the increase in business volume of the
subsidiaries engaged in repair business.
• Employee compensation costs increased by RMB2,779 million
on a year-on-year basis, mainly due to the year-on-year increase in flight
hour fees.
• Air catering charges increased by RMB340 million on a
year-on-year basis, mainly due to the increase in the number of passengers.
• Selling and marketing expenses increased by RMB222 million
on a year-on-year basis, mainly due to the increase in booking fees resulting
from the increase in the number of passengers.
• Other operating expenses mainly included aircraft and
engine operating lease expenses, civil aviation development fund and
non-above-mentioned ordinary expenses arising from the core air traffic
business, which increased by RMB998 million on a year-on-year basis, mainly
due to the increase in the investment in production and operation.
For details of the goodwill impairment for the Reporting Period, please refer
to note 20 to the financial statements of this annual report.
FINANCE INCOME, FINANCE COSTS AND NET EXCHANGE LOSSES
During the Reporting Period, the Group recorded a finance income of RMB569
million, representing a year-on-year increase of RMB48 million or 9.12%; and
incurred finance costs (excluding the capitalised portion) of RMB5,553
million, representing a year-on-year decrease of RMB846 million or 13.22%.
During the Reporting Period, the Group recorded net exchange gains of RMB328
million contrasting with net exchange losses of RMB760 million for last year.
SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
During the Reporting Period, the net gain from the Group's share of results of
its associates and joint ventures was RMB3,426 million, representing an
increase of RMB606 million from the previous year. Among them, during the
Reporting Period, the Group recognised a gain on investment of Cathay Pacific
of RMB2,998 million, representing a year-on-year increase of RMB499 million.
MATERIAL ACQUISITIONS AND DISPOSALS
The Company did not make any material acquisitions and disposals of
subsidiaries, associates or joint ventures during the Reporting Period.
ASSETS STRUCTURE ANALYSIS
As at the end of the Reporting Period, the total assets of the Group were
RMB343,010 million, representing a decrease of 0.79% from that of 31 December
2024, among which, current assets accounted for RMB34,803 million or 10.15% of
the total assets, while non-current assets accounted for RMB308,207 million or
89.85% of the total assets.
Among the current assets, cash and cash equivalents were RMB14,295 million,
accounting for 41.07% of the current assets and representing a decrease of
32.05% from that as at 31 December 2024, which was mainly due to flexible
adjustment of funds according to the capital arrangements.
Among the non-current assets, the aggregated book value of property, plant and
equipment and right-of-use assets as at the end of the Reporting Period
amounted to RMB249,032 million, accounting for 80.80% of the non-current
assets and representing an increase of 3.33% from that as at 31 December 2024.
ASSET MORTGAGE/PLEDGE
As of 31 December 2025, the Group, pursuant to certain bank loans agreements,
had secured aircraft and buildings with an aggregated book value of
approximately RMB4,539 million (RMB3,826 million as at 31 December 2024) and
land use rights with book value of approximately RMB23 million (RMB23 million
as at 31 December 2024). Meanwhile, the Group had monetary capital with
restricted ownership of approximately RMB1,564 million (approximately RMB1,428
million as at 31 December 2024), which were mainly statutory reserves
deposited in the People's Bank of China, pledged bank deposits, security
deposits and time deposits with a maturity of more than three months.
CAPITAL EXPENDITURE
In 2025, the Group's capital expenditure totalled RMB23,754 million, of which
the total investment in aircraft was RMB16,310 million, mainly including
procurement of aircraft and engines, aircraft modifications, flight
simulators, etc. The cash component for the long-term investments amounted to
RMB4,830 million, including capital injection projects for Shenzhen Airlines,
Air Macau, Air China Inner Mongolia and Sichuan Airlines. Other capital
expenditure investment amounted to RMB2,614 million, mainly including
infrastructure construction, IT system construction, ground equipment
procurement, etc.
EQUITY INVESTMENT
As at the end of the Reporting Period, the Group's equity investment in its
associates amounted to RMB15,788 million, representing an increase of 7.89%
from that of 31 December 2024, mainly due to the effect of recognising the
share of gains of associates and other comprehensive income during the year.
Among this, the balance of the equity investment of the Group in Cathay
Pacific amounted to RMB15,353 million.
As at the end of the Reporting Period, the Group's equity investment in its
joint ventures was RMB2,645 million, representing an increase of 9.12% from
that as at 31 December 2024, mainly due to new investments made and
recognition of the share of investment gains of joint ventures during the
Reporting Period.
DEBT STRUCTURE ANALYSIS
At the end of the Reporting Period, the Group's total liabilities were
RMB303,816 million, representing a decrease of 0.33% from that as at 31
December 2024. Among them, current liabilities amounted to RMB117,292 million,
accounting for 38.61% of the total liabilities; and non-current liabilities
amounted to RMB186,524 million, accounting for 61.39% of the total
liabilities.
Among the current liabilities, interest-bearing debts (including
interest-bearing borrowings and lease liabilities, and others) amounted to
RMB66,260 million, representing a decrease of 27.99% from that as at 31
December 2024. Among the non-current liabilities, interest-bearing debts
(including interest-bearing borrowings and lease liabilities) amounted to
RMB162,060 million, representing an increase of 12.56% from that as at 31
December 2024.
Details of interest-bearing debts of the Group categorised by currency are set
out below:
31 December 2025 31 December 2024
(in RMB'000) Amount Percentage Amount Percentage Change
RMB 204,117,822 89.40% 205,662,318 87.15% (0.75%)
US dollars 23,835,123 10.44% 29,874,295 12.66% (20.22%)
Others 366,592 0.16% 443,893 0.19% (17.41%)
Total 228,319,537 100.00% 235,980,506 100.00% (3.25%)
Details of the interest-bearing borrowings at fixed rates and floating rates
of the Group (including the range of interest rates) are set out in note 35 to
the financial statements of this annual report.
As at 31 December 2025, the Group did not use financial instruments for
hedging purposes.
CAPITAL COMMITMENTS
The Group's capital commitments, which mainly consisted of the expenditure in
the next few years for purchasing certain number of aircraft and related
equipment, increased by 14.44% from RMB95,175 million as at 31 December 2024
to RMB108,917 million as at 31 December 2025. The investment commitments
mainly represented the investment agreements entered into, amounted to RMB237
million as at 31 December 2025, as compared to RMB313 million as at 31
December 2024. The Company plans to finance the above payments by internal and
external resources.
GEARING RATIO
As at the end of the Reporting Period, the Group's gearing ratio (total
liabilities divided by total assets) was 88.57%, representing an increase of
0.41 percentage points from that of 31 December 2024.
WORKING CAPITAL AND ITS SOURCES
At the end of the Reporting Period, the Group's net current liabilities
(current liabilities minus current assets) were RMB82,489 million,
representing a decrease of RMB14,434 million from that as at 31 December 2024.
Based on the structure of current assets and current liabilities, the Group's
current ratio (current assets divided by current liabilities) was 0.30,
remaining unchanged as compared to that as at 31 December 2024.
The Group meets its working capital needs mainly through its operating
activities and external financing activities. During the Reporting Period, the
Group's net cash inflow from operating activities was RMB36,374 million,
representing an increase of RMB8,390 million from that in 2024, mainly due to
the impact of the year-on-year increase in sales revenue. Net cash outflow
from investing activities was RMB15,082 million, representing a decrease of
RMB2,781 million from that of 2024, mainly due to the year-on-year decrease in
advance payments for aircraft and flight equipment. Net cash outflow arising
from financing activities amounted to RMB27,980 million, representing an
increase of RMB23,984 million from that of 2024, mainly due to the
year-on-year increase in repayment of borrowings and bonds.
The Group has obtained bank facilities granted by several banks in China,
which are sufficient to meet the demands on working capital and future capital
commitments.
Details of the financial risk management objectives and policies of the Group
are set out in note 43 to the financial statements of this annual report.
RISK FACTORS
1. Risks of External Environment
Market Fluctuation
As China's economy maintained steady growth and residents' income increased
steadily, the likelihood of fluctuations in the domestic market was relatively
low. With the accelerated changes in the international landscape, external
risks, challenges and uncertainties increased significantly, and certain
international markets were exposed to some degree of volatility risk. Based on
the characteristics of the new development stage, the Group will fully,
precisely and comprehensively implement the new development philosophy,
coordinate development and safety, and take the initiative to contribute to
and integrate with the new development paradigm. Seizing the development
opportunities in the industry, the Group will further develop its domestic
route network and actively expand into emerging international markets, in a
bid to proactively adapt to the rapidly changing market environment.
Oil Price Fluctuation
Jet fuel is one of the main operating costs of the Group. The performance of
the Group is affected to a certain extent by fluctuations in jet fuel prices.
During the Reporting Period, with other variables remaining unchanged, if the
average price of the jet fuel rises or falls by 5%, the Group's jet fuel costs
will rise or fall by approximately RMB2.502 billion. The collection of fuel
surcharges has relieved the Company's jet fuel cost pressure to a certain
extent.
Exchange Rate Fluctuation
Certain assets and liabilities of the Group are denominated in US dollar.
Certain international income and expenses of the Group are also denominated in
currencies other than RMB. Assuming that the risk variables other than the
exchange rate stay unchanged, the appreciation or depreciation of RMB against
US dollar by 1% due to the changes in the exchange rate will result in the
increase or decrease in the Group's net profit and shareholders' equity as at
31 December 2025 by RMB140 million. As at 31 December 2025, the Group had no
foreign exchange hedging instruments.
For further details of currency risk and response measures, please refer to
note 43 to the financial statements of this annual report.
2. Risks of Competition
Industry competition
During the Reporting Period, the Company still faced considerable competitive
pressure within the industry. In respect of the domestic market, as there was
no significant reduction in the number of market participants, against the
backdrop of intensified competition from high-speed railway and changes in
passenger structure, homogeneous competition still existed. In respect of the
international market, the new routes of domestic airlines were mainly
concentrated in destinations such as Central Asia, Western Asia and Europe,
resulting in intensified competition in certain regions within a short period
of time. Adhering to its hub network strategy, the Company will spare no
efforts in building international aviation hubs in Beijing and Chengdu,
realising differentiated development from other market competitors. Main
routes and express routes will be launched centering on hubs as well as
principal bases and markets with a view to strengthening core market
competitiveness with high-quality products, services and travel experiences.
Alternative competition
With the increasing density of China's high-speed railway network, passengers
on existing short-and medium-haul routes have gradually shifted to high-speed
rail, which posed challenges to the civil aviation industry. At the same time,
the extensive transport network of high-speed rail has also provided civil
aviation with more punctual and efficient feeder traffic for medium- and
long-haul routes, while more and more passengers chose the air-rail intermodal
transport. Looking forward, leveraging the enhanced cooperation and
competition between civil aviation and high-speed railway with complementary
advantages, the integrated development of the air-rail intermodal transport
will accelerate the construction of a modern comprehensive transportation
system.
Corporate Governance Report
MEMBERS OF THE SEVENTH SESSION OF THE BOARD
Mr. Liu Tiexiang
Mr. Qu Guangji
Mr. Cui Xiaofeng
Mr. Patrick Healy
Mr. Xiao Peng
Mr. Xu Niansha
Mr. He Yun
Ms. Winnie Tam Wan-chi
Mr. Gao Chunlei
With the vision of becoming "the world's leading airline", the Company remains
committed to the mission of "put safety first, serve passengers with
credibility, convenience, comfort and choice, maintain stable development,
help employees achieve success and fulfill corporate responsibilities",
advocates the values of "people-oriented, accountable, excelling efforts and
enjoyable flights" and positions the brand as "professional and reliable with
both international quality and Chinese temperament". All Directors actively
promote the implementation of our corporate culture while diligently
performing their duties in strict compliance with the relevant laws and
regulations, the listing rules of the stock exchanges where the shares of the
Company are listed and the Articles of Association, ensuring that the
Company's development strategy as well as its corporate culture and principles
maintain a high level of integration.
The Company is committed to continuously enhancing the level of its corporate
governance so as to ensure greater accountability and transparency of the
Group and deliver long-term return to its shareholders. The Company has
complied with the code provisions as set out in the Corporate Governance Code
in Appendix C1 to the Listing Rules (the "Code") during the Reporting Period.
The Company has established a corporate governance system in accordance with
the requirements of the corporate governance policy stipulated in the Code.
The Company's corporate governance practices are summarized and discussed
below.
BOARD OF DIRECTORS
Governance Structure
As at the end of the Reporting Period, the structure of the Board and each
special committee is set out as follows:
As at the end of the Reporting Period, the seventh session of the Board
comprised nine Directors, four of whom were independent non-executive
Directors.
The following is the attendance records of Directors at the shareholders'
meetings, Board meetings and special committee meetings in person during the
Reporting Period:
Number of meetings attended in person/should be attended
Shareholders' Meeting Board Audit and Risk Management Committee Nomination Committee Remuneration and Appraisal Committee Strategy and Investment Committee Aviation
(the Supervision Committee)
Safety Committee
Executive Directors
Mr. Liu Tiexiang 1/1 2/2 - - - 1/1 1/1
(Appointed on 10 October 2025)
Mr. Ma Chongxian 2/2 7/9 - 3/3 - 2/3 1/1
(Ceased to act on 10 October 2025)
Mr. Wang Mingyuan 3/4 11/12 - - - - 2/2
(Ceased to act on 5 March 2026)
Non-executive Directors
Mr. Cui Xiaofeng 3/4 11/12 - - - - -
Mr. Patrick Healy 3/4 9/12 - - - - -
Employee Representative Director
Mr. Xiao Peng 0/4 8/12 - - - - -
Independent Non-executive Directors
Mr. Xu Niansha 3/3 10/10 7/8 - 4/4 3/3 2/2
(Appointed on 25 February 2025)
Mr. He Yun 4/4 11/12 8/9 3/3 4/5 2/3 -
Ms. Winnie Tam Wan-chi 3/4 11/12 8/9 2/2 - - -
Mr. Gao Chunlei 3/3 9/10 7/8 2/2 4/4 - -
(Appointed on 25 February 2025)
Mr. Xu Junxin 1/1 1/1 - - 1/1 1/1 -
(Ceased to act on 25 February 2025)
Notes: 1. On 25 February 2025, the Company convened the
2025 first extraordinary general meeting, and elected Mr. Ma Chongxian, Mr.
Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xu Niansha, Mr. He
Yun, Ms. Winnie Tam Wan-chi and Mr. Gao Chunlei as members of the seventh
session of the Board. The thirteenth meeting of the third session of the
employee representatives congress elected Mr. Xiao Peng as the employee
representative Director of the Company.
2. On 10 October 2025, the Company
convened the 2025 second extraordinary shareholders' meeting, and elected Mr.
Liu Tiexiang as an executive Director of the Company.
During the Reporting Period, the number of Board meetings held, the convening
procedures, record keeping, meeting protocols and related matters were in full
compliance with the relevant code provisions of the Code. The attendance
records demonstrate that all Directors have diligently discharged their duties
and are committed to making contributions to the interests of the Company and
its shareholders as a whole.
The Responsibilities of the Board
The Board is accountable to the shareholders' meeting and exercises the power
according to the Articles of Association and the "Rules and Procedures of the
Board". Pursuant to the Articles of Association, the main responsibilities of
the Board include: (1) to formulate the Company's development strategy and
planning; (2) to determine the Company's business plans and investment
proposals; (3) to formulate the Company's preliminary and final annual
financial budgets; (4) to formulate the Company's profit distribution
proposals and loss recovery proposals; (5) to determine the establishment of
the Company's internal management bodies; (6) to determine the appointment or
dismissal of the President of the Company, the Secretary to the Board and
other senior management personnel, as well as appraise them and determine
their remuneration, rewards and punishments; based on the nomination of the
President, to appoint or dismiss the Vice President, the Chief Accountant, the
Chief Pilot, the General Counsel and other senior management personnel of the
Company, as well as appraise them and determine their remuneration, rewards
and punishments; and (7) to establish and improve internal supervision and
management and risk control systems, strengthen internal compliance
management, determine the Company's risk management system, internal control
system, accountability system for illegal operations and investments, and
compliance management system, and to overall monitor and evaluate the
Company's risk management, internal control and legal compliance management
systems and their effective implementation, etc.
The Board shall be responsible for performing the following corporate
governance duties: (1) to develop and review the Company's policies and
practices on corporate governance, and provide recommendations; (2) to review
and monitor the training and continuous professional development of the
Directors and senior management; (3) to review and monitor the Company's
policies and practices on compliance with legal and regulatory requirements;
(4) to develop, review and monitor the code of conduct and compliance manual
applicable to employees and Directors; and (5) to review the Company's
compliance with the Corporate Governance Code and the disclosure in the
Corporate Governance Report. During the Reporting Period, the Board actively
performed the corporate governance duties, please refer to the disclosure in
this Corporate Governance Report for details of the implementation in this
regard.
The Board has independent access to the senior management personnel for
enquiries in relation to the Company's management. The Board has established
special committees to provide support to the Board in its decision-making
process. For details, please refer to the section headed "Special Committees
of the Board" below.
Procedure of Board Meeting
Board meetings are held regularly throughout the year and the regular meetings
generally include annual meeting, interim meeting and meetings for the first
and third quarters. The Board formulates meeting plans on an annual basis,
which mainly include matters such as the time and venue of the Board meeting
as well as routine proposals such as review of financial reports, such plans
will be informed to all Directors at the beginning of the year.
Board meetings shall be convened by the Chairman and a notice of 14 days shall
be given to all Directors before each meeting. The Directors may attend in
person or through other electronic means of communication. If an extraordinary
Board meeting is proposed to be convened, the Chairman of the Board shall
issue a notice of the extraordinary Board meeting within 10 days from the
receipt of the proposal(s). The relevant documents of the meeting shall be
given to all Directors at least three days in advance.
For the purpose of considering resolutions or matters during Board meetings,
the Directors may arrange senior management, the persons-in-charge of the
relevant departments of the Company and experts to attend the meetings as
necessary to interpret, answer queries or provide advisory opinions on the
resolutions involved. The General Counsel shall attend any Board meeting that
involves legal affairs to be considered and provide legal advice.
The Secretary to the Board shall be responsible for the communications and
liaison with all Directors from the time when the notice is served to the
commencement of the meeting, and shall provide in a timely manner the
necessary information to the Directors to facilitate their decision-making on
matters set out in the agenda. All Directors shall have access to the
Secretary to the Board. Under the leadership of the Board and the Chairman,
the Secretary to the Board shall take the initiative to keep himself or
herself abreast of the implementation progress of the Board resolutions, and
report to and advise the Board and the Chairman in a timely manner on major
issues arising in the course of implementation. Minutes of Board meetings
shall be kept by the Secretary to the Board and made available for inspection
by any Director at any time.
Election of Directors
Except for the employee representative Director, Directors are elected by the
shareholders' meeting of the Company, whereas the employee representative
Director is elected or dismissed by the employee representatives congress of
the Company. Directors shall serve a term of three years, and are eligible for
re-election and re-appointment upon expiry of their terms of office.
Chairman and President
The Chairman shall be elected and dismissed by a simple majority of the
Directors. The term of office of the Chairman shall be three years, and the
Chairman is eligible for re-election and re-appointment upon expiry of the
term. The Chairman is responsible for leading the Board and ensuring the
Board's efficient operation and that all major and relevant issues are
discussed by the Board in a prompt and constructive manner.
The Company has a President who shall be appointed or dismissed by the Board.
The President is authorized to oversee the Company's business, implement
various strategies and be responsible for the Company's daily operation to
attain overall commercial goals.
During the Reporting Period and as at the date of this annual report, the
Chairman and President of the Company are held by different persons. For
details, please refer to the section headed "Changes in Shareholdings and
Remuneration of the Existing and Resigned Directors and Senior Management
during the Reporting Period" of this report.
Mechanism for the Board to Obtain Independent Opinions
The Company understands that independent opinions for the Board are critical
to good corporate governance and effective operation. The Board has
established a mechanism to ensure the Board can obtain independent opinions
when necessary, so as to enhance the objectivity and effectiveness of decision
making. Moreover, the Board reviews the implementation and effectiveness of
the following mechanisms annually:
1. The composition of the Board shall comply with the
requirements of the Listing Rules that the Board must comprise at least three
independent non-executive Directors and the so appointed independent
non-executive Directors must account for at least one-third of the Board;
2. Independent non-executive Directors must receive
appraisals on independence, qualifications and ability when appointed, and
regular assessments on the aforementioned matters shall be conducted after
appointment. Each independent non-executive Director must promptly notify the
Company regarding any changes in circumstances that may affect their
independence;
3. The Board receives the performance report by independent
non-executive Directors annually, evaluates the time spent by independent
non-executive Directors on the affairs of the Company and their independent
opinions expressed during the year;
4. All Directors shall have the right to request further
information from the management on the matters under discussion at the Board
meetings. In order to facilitate the Directors in discharging their duties,
the Directors may seek the assistance of the Company Secretary and external
independent professional advice when necessary while the relevant expenses
shall be borne by the Company;
5. Directors (including independent non-executive Directors)
having material interest in any contract, transaction or arrangement shall
abstain from voting and shall not be counted in a quorum for any Board
meetings approving such matters; and
6. The Chairman shall hold meetings at least annually with
independent non-executive Directors without the presence of other Directors.
Board Diversity Policy
The Directors have extensive expertise and experience in the fields of
aviation, finance, law and financial management and provide substantial
support for the scientific and effective decision-making of the Board. The
Board has adopted the "Board Diversity Policy", which sets out the approach of
the Company towards achieving diversity of the Board.
• The Company takes into consideration a number of factors,
including but not limited to professional experience and qualifications,
cultural and educational background, skills, industry knowledge and
reputation, knowledge of the laws and regulations applicable to the Company,
gender, age, language skills and length of service, with a view to building a
diversified and inclusive Board. Members of the Board shall not be of a single
gender. The Nomination Committee shall take into overall consideration of the
abovementioned factors and actual situations such as business operation,
development and strategy of the Company in reviewing the structure and
composition of the Board and making recommendations to the Board on the
appointment, re-appointment and succession of Directors.
• In determining the optimal composition of the Board, the
Company will, where practicable, strike an appropriate balance among these
factors. For the appointment of Directors, the above factors shall be
considered on a case-by-case basis in light of the actual circumstances of the
Company and its business operations, development and strategies. Appointment
of the members of the Board should be made based on merits and the
contributions that the individual is expected to bring to the Board with due
regard for the benefits of diversity in the Board. The Board is structured to
include more external Directors than internal Directors, and the members of
the Board include one Chairman, one Vice Chairman, one
full-time deputy secretary of the Party Committee serving as Non-executive
Director, one equity Director, one employee representative Director and four
independent Directors. Among the four independent Directors, at least one
possesses extensive experience in accounting or relevant financial management
areas or holds the appropriate professional qualifications, and other
Directors possess extensive experience in the aviation, legal and management
areas to facilitate scientific decision-making of the Board. At least one
female Director shall be appointed to the Board of the Company (On 25 February
2022, the Company appointed Ms. Winnie Tam Wan-chi as an independent
non-executive Director of the Company). In terms of Board succession, the
Company will continue to focus on gender diversity in recruitment to reserve
potential Board successors for the future.
• The Nomination Committee shall monitor the implementation
of the Board Diversity Policy on an ongoing basis, and review this policy as
appropriate.
Directors' Training and Continuous Professional Development
The management of the Company provides Directors with appropriate and
sufficient information in a timely manner so as to update them with the latest
developments of the Company and facilitate their discharge of duties.
The Company provides orientation activities for newly appointed Directors and
provides induction materials to help them familiarize themselves with the
Group's management, business and governance practices. The Company also
encourages its Directors to participate in seminars and courses conducted by
recognized institutions so as to ensure that they constantly improve their
skills and are aware of the latest developments or changes in laws and
regulations, the Listing Rules and the Code with which they are required to
comply in discharging their duties.
The Directors confirmed that they have complied with code provision C.1.4 of
the Code in relation to the training of Directors. All Directors have
participated in continuing professional development by attending trainings and
courses or reading relevant materials to broaden their knowledge base and
sharpen their skills, and have provided their training records to the Company.
Training for Directors during the Reporting Period Category (Notes)
Executive Directors
Mr. Liu Tiexiang (Chairman) (Appointed on 10 October 2025) a
Mr. Ma Chongxian (Ceased to act on 10 October 2025) a, b
Mr. Wang Mingyuan (Ceased to act on 5 March 2026) a, b
Non-executive Directors
Mr. Cui Xiaofeng a, b
Mr. Patrick Healy a, b
Employee Representative Director
Mr. Xiao Peng a
Independent Non-executive Directors
Mr. Xu Niansha (Appointed on 25 February 2025) a, b
Mr. He Yun a, b
Ms. Winnie Tam Wan-chi a, b
Mr. Gao Chunlei (Appointed on 25 February 2025) a, b
Mr. Xu Junxin (Ceased to act on 25 February 2025) b
Notes:
a. Trainings on the responsibilities of the Directors
provided by the Company's legal advisers, and the information about the latest
laws and regulations and regulatory developments in the domestic and overseas
capital markets prepared by the Company on a regular basis for the Directors
to study by themselves.
b. Special trainings provided by the regulatory authorities.
Mr. Xu Niansha and Mr. Gao Chunlei were appointed as independent non-executive
Directors of the Company on 25 February 2025. They have obtained the legal
advice required under Rule 3.09D of the Listing Rules on 13 February 2025, and
each of them confirmed that he understands his obligations as a director of a
listed issuer under the Listing Rules.
Mr. Liu Tiexiang was appointed as an executive Director of the Company on 10
October 2025. He has obtained the legal advice required under Rule 3.09D of
the Listing Rules on 9 October 2025, and confirmed that he understands his
obligations as a director of a listed issuer under the Listing Rules.
Biographical Details and Other Information of Directors
The list of Directors and their respective roles on the Board and special
committees under the Board are set out in this annual report and published on
the websites of the Company and Hong Kong Stock Exchange. For biographical
details of the Directors, please refer to the section headed "Profile of
Directors and Senior Management" of this annual report.
On 5 September 2005, the Company formulated and adopted the Model Code for
Securities Transactions on terms no less exacting than the required standards
of the Model Code, which was subsequently amended on 19 March 2007 and 4
December 2009. In December 2025, the Company formulated and adopted the
"Management Provisions on Changes in Shareholdings of Directors and Senior
Management" on terms no less exacting than the Model Code, and repealed the
Model Code for Securities Transactions. The code of the Company also applies
to the relevant employees. After making specific enquiries, the Company
confirmed that each Director had complied with the required standards of the
Model Code set out in Appendix C3 to the Listing Rules and the Company's code
of conduct throughout their term of office during the Reporting Period, and
each Supervisor had complied with the required standards of the Model Code set
out in Appendix C3 to the Listing Rules and the Company's code of conduct from
the beginning of the Reporting Period to 24 June 2025.
The four independent non-executive Directors of the seventh session of the
Board of the Company as at the end of the Reporting Period, namely, Mr. Xu
Niansha, Mr. He Yun, Ms. Winnie Tam Wan-chi, and Mr. Gao Chunlei, have
confirmed their independence upon their election. The Company had also
received from those independent non-executive Directors the annual statements
concerning their independence in which their independent status was
re-confirmed. The Company considers all independent non-executive Directors
still possess the independence as defined in Rule 3.13 of the Listing Rules.
Besides the working relationships in the Company, there are no financial,
business, family relationship or other material/relevant relationships among
the Directors and senior management.
The Company has purchased liability insurance for the Directors and senior
management.
SPECIAL COMMITTEES OF THE BOARD
Audit and Risk Management Committee (the Supervision Committee)
As at the end of the Reporting Period, the Audit and Risk Management Committee
(the Supervision Committee) of the seventh session of the Board comprised
independent non-executive Directors, namely Mr. Gao Chunlei, Mr. Xu Niansha,
Mr. He Yun and Ms. Winnie Tam Wan-chi, with Mr. Gao Chunlei serving as the
chairman of the committee.
The primary duties of the Audit and Risk Management Committee (the Supervision
Committee) include: (1) responsible for appointing, dismissing, supervising
and evaluating the work related to external audit, including but not limited
to proposing the appointment, re-appointment and dismissal of external
auditors to the Board, approving the remuneration and terms of engagement of
the external auditors pursuant to relevant authorization, and handling any
issues related to the resignation or dismissal of the external auditors; (2)
guiding, supervising and evaluating the Company's internal audit work and
coordinating the internal and external audit work; (3) reviewing the Company's
financial information and its disclosures, including but not limited to
reviewing the financial information in the Company's financial reports and
periodic reports, and providing opinions on the truthfulness, accuracy and
completeness of the reports; (4) guiding, supervising and evaluating the risk
management, internal control and compliance management-related work, including
but not limited to assessing the effectiveness and implementation of the
Company's financial controls, risk management, internal control, compliance
management, accountability system for non-compliant operations and
investments, and related policies; (5) exercising the powers of the
Supervisory Committee stipulated in the Company Law; (6) other work, including
but not limited to establishing and inspecting the whistle-blowing policies
and systems; and (7) other matters as provided by laws, administrative
regulations, regulatory authorities, listing rules of the exchanges where the
Company is listed, and the Articles of Association, and as authorized by the
Board of the Company, and other matters involved in laws, regulations and
relevant rules of the listing exchanges.
The main work of the Audit and Risk Management Committee (the Supervision
Committee) during the Reporting Period includes:
Date of the meeting Subject of the meeting Other performance of duties
7 January 2025 The twenty-third meeting of the Audit and Risk Management Committee (the The committee received the report on the rectification of problems in the
Supervision Committee) of the sixth session of the Board was held to consider financial final accounts approval, arrangements for financial final accounts
the 2025 investment plan, the 2025 financial budget, and the use of proceeds work, the implementation of Board resolutions and authorized matters, and the
from the issuance to specific investors to replace self-raised funds. implementation of opinions and suggestions from external directors.
25 February 2025 The first meeting of the Audit and Risk Management Committee (the Supervision -
Committee) of the seventh session of the Board was held to consider the
election of the chairman of the Audit and Risk Management Committee (the
Supervision Committee).
26 March 2025 The second meeting of the Audit and Risk Management Committee (the Supervision The committee received the report from Deloitte Touche Tohmatsu summarizing
Committee) of the seventh session of the Board was held to consider the 2024 the 2024 financial report audit and internal control audit; and received the
annual report (financial report), the 2024 profit distribution plan, the report from the audit department on the Company's standardized operation
unrecovered losses of the Company exceeding one-third of the total paid-up status in the second half of 2024 and the rectification of issues found in the
share capital, the provision for asset impairment for 2024, the special report supervision and inspection of the effectiveness of the internal control
on the deposit and actual use of proceeds for 2024, the report of the Audit system.
and Risk Management Committee (the Supervision Committee) on the performance
of its supervision duties over the accounting firm for 2024, the change of
international and domestic auditors and internal control auditors for 2025,
the 2024 internal control assessment report and internal control audit report,
the 2024 internal audit work report and the 2025 internal audit work plan, the
2024 continuous risk assessment report of China National Aviation Finance Co.,
Ltd., and the 2024 performance report of the Audit and Risk Management
Committee (the Supervision Committee).
29 April 2025 The third meeting of the Audit and Risk Management Committee (the Supervision The committee received the report on the accountability work for non-compliant
Committee) of the seventh session of the Board was held to consider the first operations and investments in 2024.
quarterly report of 2025.
28 May 2025 The fourth meeting of the Audit and Risk Management Committee (the Supervision -
Committee) of the seventh session of the Board was held to consider the
continuing connected transactions between the Company and CNACG, and the
continuing connected transactions between the Company and Cathay Pacific.
29 July 2025 The fifth meeting of the Audit and Risk Management Committee (the Supervision -
Committee) of the seventh session of the Board was held to consider the
transfer of spare engines by the Company to Air China Cargo.
28 August 2025 The sixth meeting of the Audit and Risk Management Committee (the Supervision The committee received the report on the implementation of Board resolutions,
Committee) of the seventh session of the Board was held to consider the 2025 authorized matters and suggestions from directors for the first half of 2025,
interim report, the 2025 interim provision for impairment, the special report the 2025 internal control assessment work plan, the report on the audit work
on the deposit and actual use of proceeds for the first half of 2025, the for the first half of 2025, the audit report on standardized operations for
provision of non-assurance services by the external auditor, and the the first half of 2025, and the list of related parties for A shares.
continuous risk assessment report of China National Aviation Finance Co., Ltd.
for the first half of 2025.
30 October 2025 The seventh meeting of the Audit and Risk Management Committee (the -
Supervision Committee) of the seventh session of the Board was held to
consider the third quarterly report of 2025, the project of issuing A shares
to specific investors, the formulation of the "Working Rules for the
Management of Air China Limited", and the connected transactions with China
National Aviation (Beijing) Financial Leasing Co., Ltd.
30 December 2025 The eighth meeting of the Audit and Risk Management Committee (the Supervision The committee received the report on the implementation of rectification of
Committee) of the seventh session of the Board was held to consider the issues from the 2024 financial final accounts approval, the report on risk
revision of the "Measures for the Administration of Board Authorization" and control and compliance management work for 2025, and the report on the
the adjustment of the Board authorization plan, and the revision of the rectification of internal audits for 2025.
"Working Rules of the Audit and Risk Management Committee (the Supervision
Committee) of the Board".
The Audit and Risk Management Committee (the Supervision Committee) had
reviewed the Company's 2025 annual results and the annual report.
Mr. Li Fushen resigned on 30 August 2024 as an independent non-executive
Director of the Company, the chairman and member of the Audit and Risk
Management Committee (the Supervision Committee) of the Board, a member of the
Nomination Committee of the Board, a member of the Remuneration and Appraisal
Committee of the Board, a member of the Strategy and Investment Committee of
the Board and a member of the Aviation Safety Committee of the Board. In the
subsequent months, the Company had been actively considering and processing
matters regarding the adjustment of the composition of the Audit and Risk
Management Committee (the Supervision Committee) and the Nomination Committee,
including but not limited to exploring candidates to fill the vacancy left by
Mr. Li Fushen's resignation. The Company applied to the Hong Kong Stock
Exchange and the Hong Kong Stock Exchange agreed to grant a waiver from strict
compliance with Rules 3.21 and 3.27A of the Hong Kong Listing Rules, and to
extend the deadline for filling
the vacancy from 30 November 2024 to 28 February 2025. Following the election
of Directors of the seventh session of the Board and the change of members of
the Board committees, the Company has fully complied with the provisions of
Rules 3.21 and 3.27A of the Hong Kong Listing Rules. For details, please refer
to the announcements of the Company dated 30 August 2024, 27 December 2024 and
25 February 2025.
Nomination Committee
As at the end of the Reporting Period, the Nomination Committee of the seventh
session of the Board comprised Executive Director Mr. Liu Tiexiang and
Independent Non-executive Directors Mr. He Yun, Ms. Winnie Tam Wan-chi and Mr.
Gao Chunlei, with Mr. Liu Tiexiang serving as the chairman of the committee.
The primary duties of the Nomination Committee include: (1) to review the
structure, size and composition (including the skills, knowledge and
experience) of the Board at least annually and make recommendations on any
proposed changes to the Board to complement the Company's strategy; and to
assist the Board in compiling the Board's skill matrix; (2) to study the
selection criteria and procedures for candidates for Directors and senior
management of the Company, and make recommendations to the Board; (3) to make
recommendations to the Board on the appointment or re-appointment of
Directors, succession planning for Directors (in particular the Chairman or
the President) and the appointment of senior management; (4) to select
qualified candidates for Directors and senior management in accordance with
relevant requirements of Board diversity as well as review and make
recommendations to the Board on candidates for Directors and senior
management; (5) to assess the independence of the independent non-executive
Directors of the Company; (6) to assist the Company in regularly evaluating
the performance of the Board; and (7) to address other matters authorized by
the Board.
The main work of the Nomination Committee during the Reporting Period
includes:
Date of the meeting Subject of the meeting Other performance of duties
27 January 2025 The fourth meeting of the Nomination Committee of the sixth session of the -
Board was held to review the candidates for Directors of the seventh session
of the Board.
28 May 2025 The first meeting of the Nomination Committee of the seventh session of the -
Board was held to consider the revision of the "Working Rules of the
Nomination Committee".
18 September 2025 The second meeting of the Nomination Committee of the seventh session of the -
Board was held to propose Mr. Liu Tiexiang as a candidate for the executive
Director of the Company.
The policy for the nomination of Directors implemented by the Company during
the Reporting Period is as follows: the Nomination Committee assesses the
candidates for Directors and senior management based on the criteria
stipulated in the Articles of Association and the Board Diversity Policy, and
reports to the Board. For details of the diversity policy, please refer to the
section headed "Board Diversity Policy" above. Shareholders holding 1% or more
(inclusive of 1%) of the Company's shares are entitled to nominate Directors
to the Nomination Committee.
Remuneration and Appraisal Committee
As at the end of the Reporting Period, the Remuneration and Appraisal
Committee of the seventh session of the Board comprised Independent
Non-executive Directors Mr. Xu Niansha, Mr. He Yun and Mr. Gao Chunlei, with
Mr. Xu Niansha serving as the chairman of the committee.
The primary duties of the Remuneration and Appraisal Committee include: (1)
responsible for formulating the appraisal standards for Directors and senior
management and conducting appraisals, formulating and reviewing the
remuneration policies and plans, including the remuneration decision mechanism
and decision-making process for Directors and senior management; (2)
formulating or amending equity incentive plans and employee stock ownership
plans, the grant of equities to incentive targets, exercise conditions and
their satisfaction; (3) making recommendations to the Board on the proposed
arrangements for the stock ownership plans in spin-off subsidiaries for
Directors and senior management; (4) reviewing and approving the compensation
payable to executive Directors and senior management for their loss or
termination of office or appointment, ensuring that such compensation is
consistent with the contractual terms; if inconsistent with the contractual
terms, the compensation should be fair and reasonable; (5) reviewing and
approving the compensation arrangements related to the dismissal or removal of
Directors for misconduct, ensuring that such arrangements are consistent with
the contractual terms; if inconsistent with the contractual terms, the
compensation should be fair and appropriate; (6) studying the remuneration and
welfare policies and plans such as the Company's gross payroll budget and
settlement, employee income distribution, and corporate annuity; and (7) other
matters as provided by laws, administrative regulations, regulatory
authorities, listing rules of the exchanges where the Company is listed, the
Articles of Association, and as authorized by the Board of the Company.
The main work of the Remuneration and Appraisal Committee during the Reporting
Period includes:
Date of the meeting Subject of the meeting Other performance of duties
27 January 2025 The fifth meeting of the Remuneration and Appraisal Committee of the sixth -
session of the Board was held to consider the remuneration plan for the
Directors of the seventh session of the Board.
25 February 2025 The first meeting of the Remuneration and Appraisal Committee of the seventh -
session of the Board was held to elect the chairman of the Remuneration and
Appraisal Committee.
28 May 2025 The second meeting of the Remuneration and Appraisal Committee of the seventh -
session of the Board was held to consider the 2024 annual gross salary
settlement plan and the 2025 annual gross salary budget, and the operation
performance appraisal plan for the management members for 2025 and the
2025-2027 term.
30 October 2025 The third meeting of the Remuneration and Appraisal Committee of the seventh -
session of the Board was held to consider the operation performance appraisal
results and remuneration realization plan for the management members for 2024
and the 2021-2024 term.
30 December 2025 The fourth meeting of the Remuneration and Appraisal Committee of the seventh The committee received the report on employee remuneration management and
session of the Board was held to consider the revision of the "Working Rules salary distribution for 2025.
of the Remuneration and Appraisal Committee of the Board".
The remuneration policy for Directors implemented by the Company during the
Reporting Period is as follows: the remuneration of the Directors and senior
management of the Company is determined in accordance with relevant national
policies and the relevant rules of the Company, and the remuneration of
independent non-executive Directors is implemented in accordance with relevant
national policies. The remuneration of the Company's Directors is determined
by the shareholders' meeting, and the remuneration of the senior management is
determined by the Board after being reviewed by the Remuneration and Appraisal
Committee. On 30 October 2025, at the third meeting of the Remuneration and
Appraisal Committee of the seventh session of the Board, the operation
performance appraisal results and remuneration realization plan for the
management members for 2024 and the 2021-2024 term were considered and
approved. The committee focused on reviewing the consistency of the
performance appraisal results of the management members and the appraisal
indicators, and the alignment between the salary distribution and the
performance appraisal results. The committee believed that the operation
performance appraisal results and the salary distribution plan met the
requirements of higher-level policies and the needs of the Company's
high-quality development. The salary distribution was closely linked to the
operation performance appraisal results, reasonably widening the gaps. After
voting, the committee unanimously considered and approved the proposal, and
agreed to submit it to the Board for consideration.
Remuneration of the Existing and Resigned Directors and Senior Management
during the Reporting Period
Name Position Gender Age Starting date of Expiry date of Total remuneration payables received Whether received remuneration from the Company's related parties or not
term of office
term of office
from the Company during the Reporting Period (RMB0'000)
Liu Tiexiang Secretary of the Party Committee Male 59 1 September 2025 - - Yes
Chairman 10 October 2025 - -
Executive Director 10 October 2025 - -
Ma Chongxian Secretary of the Party Committee Male 60 27 September 2022 1 September 2025 - Yes
Chairman 27 September 2022 10 October 2025 -
Executive Director 20 July 2021 10 October 2025 -
Qu Guangji Deputy Secretary of the Party Committee Male 55 2 February 2026 - - Yes
President 5 March 2026 - -
Executive Director, Vice Chairman 25 March 2026 - -
Wang Mingyuan Deputy Secretary of the Party Committee Male 60 13 February 2023 2 February 2026 - Yes
President 13 March 2023 5 March 2026 -
Executive Director, Vice Chairman 30 March 2023 5 March 2026 -
Cui Xiaofeng Deputy Secretary of the Party Committee Male 56 24 June 2024 - - Yes
Non-executive Director 9 August 2024 - -
Patrick Healy Non-executive Director Male 60 19 December 2019 - - Yes
Xiao Peng Chairman of the Labour Union Male 60 15 November 2022 16 September 2025 92.53 No
Chief Engineer 28 November 2022 23 October 2025 -
Employee Representative Director 2 March 2023 - -
Xu Niansha Independent Non-executive Director Male 68 25 February 2025 - 5.5 No
He Yun Independent Non-executive Director Male 64 25 February 2025 - - No
Winnie Tam Wan-chi Independent Non-executive Director Female 64 25 February 2025 - 14.8 No
Gao Chunlei Independent Non-executive Director Male 59 25 February 2025 - - No
Tan Huanmin Secretary of Committee for Discipline Inspection Male 61 19 January 2019 25 August 2025 - Yes
Zhang Sheng Vice President Male 53 9 June 2020 - - Yes
Sun Yuquan Standing Committee Member of the Party Committee Male 52 7 April 2022 - - Yes
Chief Accountant 13 March 2023 - -
Ni Jiliang Vice President Male 59 12 May 2022 - - Yes
Zheng Weimin Vice President Male 60 23 August 2023 - - Yes
Yan Fei Vice President Male 57 5 March 2024 - - Yes
Yi Xuedong General Counsel Male 55 5 March 2026 - - No
Zhang Hua General Counsel Male 60 9 August 2017 7 November 2025 97.80 No
Xiao Feng Chief Economist Male 57 13 March 2023 - 111.96 No
Secretary to the Board 28 March 2024 - -
Yan Simeng Chief Information Officer Male 43 7 September 2021 - 196.45 No
Shen Jianming Chief Safety Officer Male 58 19 October 2022 - 204.67 No
Li Yunchuan Chief Pilot Male 58 26 October 2023 - 212.28 No
Total / / / / / 935.99 /
Notes: 1. The remuneration of Mr. Xu Niansha, Mr. He Yun,
Ms. Winnie Tam Wan-chi and Mr. Gao Chunlei, being independent Directors, will
be determined pursuant to relevant national policies.
2. Directors and senior management's
total remuneration payables received from the Company during the Reporting
Period include pre-tax remuneration and the portion of benefits and security,
including social insurance, housing fund and enterprise annuity, contributed
by the enterprise, of which pre-tax remuneration includes the actual amount of
pre-tax remuneration received for the term of office in 2025 and annual
performance salary for 2024.
3. For personnel with status changes
during the year, total remuneration is calculated based on actual service
period.
4. Mr. Shen Jianming and Mr. Li
Yunchuan are pilots and their remunerations are inclusive of crew allowance.
Details of the emoluments for the Directors during the Reporting Period are
set out in note 13 to the financial statements of this annual report.
Strategy and Investment Committee
As at the end of the Reporting Period, the Strategy and Investment Committee
of the seventh session of the Board comprised Executive Director Mr. Liu
Tiexiang and Independent Non-executive Directors Mr. Xu Niansha and Mr. He
Yun, with Mr. Liu Tiexiang serving as the chairman of the committee.
The primary duties of the Strategy and Investment Committee include: (1) to
research and provide recommendations on the long-term development strategies
and plans of the Company; (2) to research and provide recommendations on the
annual investment plans and investment proposals; (3) to research and provide
recommendations on major investment and financing project proposals requiring
Board approval; (4) to research and provide recommendations on major
production and operation decision projects requiring Board approval; (5) to
research and provide recommendations on other major matters that may affect
the Company's development and require Board decisions, such as M&A and
restructuring, asset restructuring, asset disposal, property rights transfer,
capital operation, and reform and transformation of the Company and its
subsidiaries; (6) to review the merger, division, and dissolution plans of the
Company and its key subsidiaries; (7) to review the establishment, merger, and
cancellation plans for internal management bodies and branch offices; (8) to
research and formulate the market capitalization management system, and
provide recommendations to the Board on matters relating to market
capitalization management; (9) to formulate the framework, objectives,
management policies and strategies for the Company's environmental, social and
governance (ESG); to review ESG-related work and reports; (10) to supervise
and inspect the implementation of the above matters; and (11) other matters as
provided by laws, administrative regulations, regulatory authorities, listing
rules of the exchanges where the Company is listed, the Articles of
Association, and as authorized by the Board of the Company.
The main work of the Strategy and Investment Committee during the Reporting
Period includes:
Date of the meeting Subject of the meeting Other performance of duties
7 January 2025 The nineteenth meeting of the Strategy and Investment Committee of the sixth The committee received the report on the completion of the 2024 investment
session of the Board was held to consider the 2025 investment plan. plan and the evaluation of key investment projects.
26 March 2025 The first meeting of the Strategy and Investment Committee of the seventh -
session of the Board was held to consider the implementation plan for the
capital increase in Air Macau, the disposal of 5 A319ceo aircraft by Shenzhen
Airlines, the 2024 Sustainability and ESG Report, and the formulation of the
"Market Capitalization Management Work Plan of Air China Limited".
27 August 2025 The second meeting of the Strategy and Investment Committee of the seventh -
session of the Board was held to consider the implementation plan for the
introduction of strategic investors and capital increase in Shenzhen Airlines,
and the summary and evaluation report on the Company's "14th Five-Year Plan".
30 December 2025 The third meeting of the Strategy and Investment Committee of the seventh -
session of the Board was held to consider the introduction of 60 A320NEO
series aircraft, and the revision of the "Working Rules of the Strategy and
Investment Committee of the Board".
Aviation Safety Committee
As at the end of the Reporting Period, the Aviation Safety Committee of the
seventh session of the Board comprised Executive Director Mr. Wang Mingyuan,
Independent Non-executive Director Mr. Xu Niansha, and Executive Director Mr.
Liu Tiexiang, with Mr. Wang Mingyuan serving as the chairman of the committee.
As at the date of this annual report, the Aviation Safety Committee of the
seventh session of the Board comprised Executive Director Mr. Qu Guangji,
Independent Non-executive Director Mr. Xu Niansha, and Executive Director Mr.
Liu Tiexiang, with Mr. Qu Guangji serving as the chairman of the committee.
The primary duties of the Aviation Safety Committee include: (1) adhering to
the "safety first" policy, to supervise and guide the production and the
allocation of human, financial, material and other resources of the Company to
ensure they meet the needs of the Company's safe operations; (2) to regularly
receive the analysis of the Company's safety situation and report to the
Board; (3) to research and resolve major issues in the Company's aviation
safety work; and (4) other matters authorized by the Board of the Company.
The main work of the Aviation Safety Committee during the Reporting Period
includes:
Date of the meeting Subject of the meeting Other performance of duties
25 February 2025 The first meeting of the Aviation Safety Committee of the seventh session of -
the Board was held to consider the election of the chairman of the Aviation
Safety Committee.
30 December 2025 The second meeting of the Aviation Safety Committee of the seventh session of -
the Board was held to consider the revision of the "Working Rules of the
Aviation Safety Committee of the Board".
MANAGEMENT
Duties of the Management
The management of the Company shall be accountable to the Board, and the main
responsibilities of the management include: (1) to manage the production and
operation of the Company and organize the implementation of the resolutions of
the Board; (2) to organize the implementation of annual business plans and
investment proposals; (3) subject to applicable laws and the Articles of
Association, to make decisions on transactions relating to the Company's main
business involving a value not exceeding a certain amount or a certain
proportion of the Company's latest audited net asset value; (4) to sign
contracts and agreements on behalf of the Company in accordance with the
authorization granted by the Board or the legal representative; (5) to draft
plans for the establishment of the Company's internal management structure; to
determine general institutional adjustment plans based on operational needs;
(6) to formulate the Company's basic management system; (7) to formulate
specific rules and regulations for the Company; (8) to propose to the Board
the appointment or dismissal of the Vice President, Chief Accountant, Chief
Pilot and General Counsel of the Company; (9) to appoint or dismiss
responsible management personnel other than those required to be appointed or
dismissed by the Board, etc.; (10) to propose the convening of extraordinary
Board meetings; and (11) other functions and powers granted by the Articles of
Association or the Board.
The Company formulated the "Working Rules for the Management" to regulate the
daily operation of the President's Office meetings.
FINANCIAL REPORTING
The Company prepares and publishes annual reports, interim reports and
quarterly reports in accordance with the requirements of the regulatory rules
of the listing places of the Company and other relevant laws and regulations
in a timely manner each year, and the information disclosed is adequate for
the shareholders to evaluate the performance, financial position and prospects
of the Company.
Key operating data of the Company are published monthly in order to improve
the transparency of the Company's performance and to provide the latest
developments of the Company in a timely manner.
The Company has a sound environment for implementing internal controls; it has
set up effective electronic information systems to support business
development, including various operation systems, settlement systems and core
accounting and audit platforms, namely the ORACLE financial information
system; for treasury management, a global online banking management system was
implemented; an effective accounting information system was also established.
The responsibilities of the Directors in relation to the financial statements
are set out below and shall be read together with the "Independent Auditor's
Report" set out in this annual report. The statement of reporting
responsibility of the auditor is included in the section headed "Independent
Auditor's Report" set out in this annual report.
• Annual reports and accounts
The Directors acknowledge that they are responsible for preparing the
financial statements for each financial year so as to present a true and fair
view of the financial position of the Company and the Group, and of the
financial performance and cash flows of the Group.
• Accounting policies
When preparing the financial statements of the Company and the Group, the
Directors have consistently applied appropriate accounting policies under the
relevant accounting standards.
• Accounting records
The Directors are responsible for ensuring that the Company shall keep the
accounting records, which will reflect the financial position of the Company
with reasonable accuracy, enabling the Group to prepare the financial
statements in accordance with the requirements of the Listing Rules, the Hong
Kong Companies Ordinance and the relevant accounting standards.
• Going concern
After making appropriate enquiries, the Directors believe that the Group has
sufficient resources to continue its operation in the foreseeable future.
Accordingly, it is appropriate to prepare the financial statements on a going
concern basis.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board bears the ultimate responsibility for the Group's risk management
and internal control system and has the responsibility to review the
effectiveness of the system. The risk management and internal control system
is designed to manage rather than eliminate the risk of failing to achieve
business objectives and to make reasonable, but not absolute, assurances that
there will be no material misstatement or loss. The Board monitors the risk
level with the assistance of the Audit and Risk Management Committee (the
Supervision Committee) and the management of the Company.
The Company conducts a review of the soundness and effectiveness of the risk
management and internal control system at least once annually. The Board will
publish the annual self-assessment report on internal control after it is
reviewed by the Audit and Risk Management Committee (the Supervision
Committee) and reported to the Board.
The Board has reviewed the Group's risk management and internal control system
for the Reporting Period through the Audit and Risk Management Committee (the
Supervision Committee) and considered that the system was adequate and
effective. The review of the Audit and Risk Management Committee (the
Supervision Committee) covered material control aspects, including financial
controls, operational controls and compliance controls. The Audit and Risk
Management Committee (the Supervision Committee) also reviewed the Group's
resources, qualifications and experience of the responsible staff, employee
training courses and related budgets in respect of the accounting, internal
audit, financial reporting functions, and resources relating to environmental,
social and governance performance and reporting, and expressed satisfaction
with the adequacy of such measures. The Board also confirmed that the Company
has established effective systems and procedures to ensure the control and
management capabilities for strategic risks, financial risks, operational
risks, legal risks, and contingent risks, etc.
The basic procedures of the Group's risk management include: (1) collection of
risk information; (2) identification and assessment of risks; (3) formulation
and implementation of risk reduction measures; and (4) monitoring of risk
management.
The Company has established a clear organizational structure to allocate
responsibilities for formulation, implementation and monitoring as required.
An information reporting mechanism has been formed for risk management, which
covers the Company's main business units to ensure that significant risks are
effectively monitored and coped with within the Group.
The Group ranks the risks based on priority so as to pay special attention to
critical risks. It sets risk indicators for critical risks, and monitors and
judges the key indicators on a regular basis so that the risks are always
under control. All the business units are required to compile a summary of the
risks and report to the Risk Management Working Group Office on a regular
basis. The Risk Management Working Group Office has set up a monthly reporting
procedure to regularly report the risk status and risk tracking to the
management and regulatory authorities.
The main risks that the Group faces are detailed in the section headed
"Management's Discussion and Analysis of Financial Position and Operating
Results - Risk Factors" of this annual report.
The audit department and legal department of the Company assist the Audit and
Risk Management Committee (the Supervision Committee) to analyze and evaluate
the adequacy and effectiveness of the Group's internal control and risk
management system, and to supervise and evaluate the risk management and
internal control of the Group. The audit department and legal department
regularly report the annual, interim work reports and annual audit plans to
the Audit and Risk Management Committee (the Supervision Committee) for review
of risk management and internal control system. The Audit and Risk Management
Committee (the Supervision Committee) reviews the reporting compliance,
reviews and monitors the effectiveness of the internal audit, internal control
development and risk compliance, keeps track of the corrective actions for the
problems spotted and guides business units to operate efficiently.
The Company has implemented a registration and record-keeping system for the
insiders and established records on such insiders, who are obligated to
maintain confidentiality for the inside information they are aware of. The
Board should ensure the truthfulness, accuracy and completeness of the records
of the insiders. The Company will conduct regular and occasional inquiries on
the trading of shares and derivatives of the Company by the insiders. If
insiders are found to have involved in insider dealing or have breached the
laws and regulations due to dereliction of duty, the Company will ensure that
the relevant personnel are held accountable in accordance with relevant laws
and regulations and the Company's policies. The Company is also aware of its
obligations under the SFO and the Listing Rules for the handling and
disclosure of inside information, and unless the information falls within the
"Safe Harbor", the Company will disclose such inside information to the public
as soon as practicable.
COMPANY SECRETARY
From 1 January 2025 to 31 July 2025, the joint company secretaries of the
Company were Mr. Xiao Feng and Mr. Huen Ho Yin. As Mr. Xiao Feng was admitted
as a Fellow of The Hong Kong Chartered Governance Institute and The Chartered
Governance Institute, Mr. Huen Ho Yin ceased to be a joint company secretary
of the Company with effect from 1 August 2025. During the period when Mr. Huen
Ho Yin served as a Joint Company Secretary, Mr. Xiao Feng was the primary
contact person for Mr. Huen Ho Yin within the Company. For details, please
refer to the announcement of the Company dated 31 July 2025. From 1 August
2025 to the present, the company secretary of the Company has been Mr. Xiao
Feng.
The company secretary is responsible for facilitating the procedures of the
Board and communications among Directors and between the Directors and
shareholders and management. The biography of the company secretary is set out
in the section headed "Profile of Directors and Senior Management" of this
annual report. During the Reporting Period, the company secretary had attended
a total of more than 15 hours of professional training to update his skills
and knowledge.
AUDITORS AND THEIR REMUNERATION
In 2025, the international and domestic auditors of the Company were KPMG and
KPMG Huazhen LLP, respectively. For the Reporting Period, the breakdown of the
remuneration paid/payable to the external auditors for providing audit and
non-audit services is as follows:
RMB10.1490 million (including value-added tax) was charged in aggregate for
the review of the Group's condensed consolidated financial statements for the
six months ended 30 June 2025 and for the audit of the Group's consolidated
financial statements for the year ended 31 December 2025; an aggregate amount
of RMB6.7043 million (including value-added tax) was charged for the audit of
the financial statements of certain subsidiaries of the Group for the year
ended 31 December 2025 and RMB0.48 million (including value-added tax) was
charged for other audit services; an aggregate of RMB1.00 million (including
value-added tax) was charged for providing internal control audit services to
the Group; and an aggregate of RMB0.075 million (including value-added tax)
was charged for the rendering of other non-audit services, such as tax
advisory services, to the Group.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
In accordance with the "Company Law of the People's Republic of China", the
"Guidelines for the Articles of Association of Listed Companies", the "Rules
for Shareholders' Meetings of Listed Companies" and other laws, regulations,
normative documents and regulatory requirements, combined with the actual
operation and management needs of the Company, the Board proposed to amend the
Articles of Association on 28 May 2025, and correspondingly amend the rules of
procedure for shareholders' meetings and the rules of procedure for Board
meetings. These proposed amendments to the Articles of Association were
approved by the shareholders at the annual shareholders' meeting held on 24
June 2025. For details, please refer to the announcements of the Company dated
28 May 2025 and 24 June 2025.
SHAREHOLDERS' COMMUNICATION POLICY
The Company attaches great importance to the communication with shareholders
and has formulated the "Measures for Investor Relations Management" to guide
and strengthen the communication between the Company and the shareholders and
investors. During the Reporting Period, the Company continued to establish
various communication channels with its shareholders through the publication
of annual reports, interim reports and quarterly reports, press releases and
announcements on the websites of the Company and the stock exchanges,
organizing results presentations and roadshows, and holding results briefings,
thus maintaining active, effective and transparent communication with
shareholders.
Moreover, the annual shareholders' meeting provides an effective means for the
shareholders to exchange their views with the Board. The Chairman of the
Board, as well as the respective chairmen of the Audit and Risk Management
Committee (the Supervision Committee), Remuneration and Appraisal Committee,
Nomination Committee, Strategy and Investment Committee, and Aviation Safety
Committee shall answer queries raised by shareholders at the annual
shareholders' meeting.
Other than the annual shareholders' meeting, the Company would also hold
extraordinary general meetings when necessary. In accordance with articles 57
and 58 of the Articles of Association, shareholder(s), individually or in
aggregate, holding 10% or more of the shares of the Company may request the
Board to convene an extraordinary shareholders' meeting by making one or more
written request(s) in the same form and content and specifying the topics for
discussion. The Board shall respond to such written request(s) within ten days
of receipt. If the Board agrees to convene an extraordinary shareholders'
meeting, it shall issue a notice convening the extraordinary shareholders'
meeting within five days after the Board resolution is passed. If the Board
does not agree to the proposal of the shareholders to convene a meeting, it
shall explain the reasons and make an announcement. If the Board does not
agree to the proposal of the shareholders to convene an extraordinary
shareholders' meeting or fails to respond within ten days after receiving the
request, the shareholders shall propose to the Audit and Risk Management
Committee (the Supervision Committee) in writing to convene an extraordinary
shareholders' meeting. If the Audit and Risk Management Committee (the
Supervision Committee) agrees to convene the meeting, it shall issue a notice
of convening the meeting within five days after receiving the request. If the
Audit and Risk Management Committee (the Supervision Committee) fails to issue
a notice of meeting within the prescribed time limit, it shall be deemed that
the Audit and Risk Management Committee (the Supervision Committee) does not
convene and preside over the meeting, and shareholders who individually or
jointly hold 10% or more of the Company's shares for 90 consecutive days or
more may convene and preside over the meeting by themselves. Before the
announcement of the resolution of the shareholders' meeting, the shareholding
ratio of the convening shareholders shall not be less than 10%.
To include a resolution relating to other matters in a shareholders' meeting,
shareholders are required to follow the provisions and procedures set out in
article 59 of the Articles of Association, which provides that shareholder(s),
individually or in aggregate, holding 1% or more of the shares of the Company
may put forward interim proposal(s) and submit it in writing to the convener
ten days before the shareholders' meeting. The convener shall issue a
supplementary notice of the shareholders' meeting within two days after
receiving the proposal, announce the content of the interim proposal, and
submit the interim proposal to the shareholders' meeting for consideration,
unless the interim proposal violates laws, administrative regulations or the
provisions of the Articles of Association, or does not fall within the scope
of the terms of reference of the shareholders' meeting.
During the Reporting Period, the Company convened one annual shareholders'
meeting and three extraordinary shareholders' meetings. In 2025, a total of 3
online results briefings were held: the 2024 annual results briefing, the 2025
interim results briefing and the third quarter results briefing, fully
addressing market concerns and deepening the market's recognition of the
Company's long-term investment value. The Company conducted roadshows in Hong
Kong and Shanghai for the 2024 annual and 2025 interim results, visiting 26
major institutional investors to thoroughly address investors' concerns and
boost investor confidence. It actively participated in institutional strategy
meetings, and organized and participated in nearly 50 investment conferences
and telephone research meetings during the Reporting Period. Through platforms
such as the SSE e-interaction and the investor relations webpage on the
Company's official website, the Company actively replied to issues concerned
by investors. The Company has reviewed the implementation and effectiveness of
the aforementioned shareholder communication policies during the Reporting
Period and is satisfied with the review results.
The Board values the views and input of shareholders. Shareholders may send
their enquiries and opinions to the Board at any time by communicating through
the company secretary, whose contact details are as follows:
Address: Air China Headquarter Building, 30 Tianzhu Road, Shunyi District,
Beijing, 101312
Email: ir@airchina.com
Telephone number: 86-10-61462799
Report of The Directors
STRATEGIC OBJECTIVES
The Group will, on the basis of strengthening safety management, continuously
advance the implementation of its strategies; improve the global network
layout and enhance the commercial value of the hub; optimize the allocation of
core resources to improve the utilization efficiency of resources; seize
market opportunities to deploy capacity scientifically; take multiple measures
to elevate marketing capabilities; deepen service management, promote product
innovation, and improve customer experience, to realize stable operation and
achieve better results to reward shareholders and investors.
GROUP ACTIVITIES AND RESULTS
The Group is a provider of air passenger, air cargo and airline-related
services. The results of the Group for the year ended 31 December 2025 and the
financial positions of the Group and the Company as at that date are set out
in the audited financial statements in this annual report.
REVIEW OF BUSINESS
A fair review of the Group's business and an analysis using financial key
performance indicators, a description of the principal risks and uncertainties
facing the Group, the future outlook for the Group's business, the Group's
environmental policies and performance, an explanation of compliance with laws
and regulations that have a significant impact on the Group and of key
relationships with employees, customers and suppliers are set out in this
Report of the Directors, the "Business Overview" section and the "Management's
Discussion and Analysis of Financial Position and Operating Results" section
of this annual report, as well as the "2025 Sustainability and ESG Report"
published by the Group.
SUMMARY OF FIVE-YEAR FINANCIAL INFORMATION
A summary of the results and the balance sheets of the Group for the five
years ended 31 December 2025 prepared in accordance with IFRS Accounting
Standards is set out in the "Summary of Financial Information" section of this
annual report.
SHARE CAPITAL STRUCTURE
As at the end of the Reporting Period, the total share capital of the Company
was RMB17,448,421,000, divided into 17,448,421,000 shares with a par value of
RMB1.00 each. The share capital structure of the Company as at the end of the
Reporting Period is as follows:
Type of shares Number of shares Percentage of the total issued share capital
A Shares 12,492,810,328 71.60%
H Shares 4,955,610,672 28.40%
Total 17,448,421,000 100.00%
INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS IN THE SHARES AND
UNDERLYING SHARES OF THE COMPANY
As at the end of the Reporting Period, to the knowledge of the Directors and
chief executive of the Company, the interests or short positions of the
following persons (other than the Directors and chief executive of the
Company) in the shares or underlying shares of the Company as recorded in the
register required to be kept under section 336 of the Securities and Futures
Ordinance (SFO) were as follows:
Aggregate long positions in the shares and underlying shares of the Company
Name Nature of interest Number and type of shares held in the Company Percentage of total issued shares of the Company Percentage of total issued A Shares of the Company Percentage of total issued H Shares of the Company Short position
CNAHC Beneficial owner 7,421,462,701 A Shares 42.53% 59.41% - -
CNAHC((1)) Equity attributable 1,332,482,920 A Shares 7.64% 10.67% - -
CNAHC((1)) Equity attributable 616,779,308 H Shares 3.54% - 12.45% -
CNACG Beneficial owner 1,332,482,920 A Shares 7.64% 10.67% - -
CNACG Beneficial owner 616,779,308 H Shares 3.54% - 12.45% -
Cathay Pacific Beneficial owner 2,633,725,455 H Shares 15.09% - 53.15% -
Swire Pacific Limited((2)) Equity attributable 2,633,725,455 H Shares 15.09% - 53.15% -
John Swire & Sons (H.K.) Limited((2)) Equity attributable 2,633,725,455 H Shares 15.09% - 53.15% -
John Swire & Sons Limited((2)) Equity attributable 2,633,725,455 H Shares 15.09% - 53.15% -
Notes: Based on the information available to the Directors and chief
executive (including information available on the website of the Hong Kong
Stock Exchange) and to the knowledge of the Directors and chief executive, as
at the end of the Reporting Period:
1. By virtue of CNAHC holds 100% equity interest in CNACG,
CNAHC is deemed to be interested in the 1,332,482,920 A Shares and 616,779,308
H Shares directly held by CNACG.
2. By virtue of John Swire & Sons Limited's 100% equity
interest in John Swire & Sons (H.K.) Limited and their approximately
64.45% equity interest and 70.97% voting rights in Swire Pacific Limited, and
Swire Pacific Limited's approximately 43.09% equity interest in Cathay Pacific
as at the end of the Reporting Period, John Swire & Sons Limited, John
Swire & Sons (H.K.) Limited and Swire Pacific Limited were deemed to be
interested in the 2,633,725,455 H Shares of the Company directly held by
Cathay Pacific.
Aggregate short positions in the shares and underlying shares of the Company
As at the end of the Reporting Period, the Company was not aware of any
substantial shareholders holding short positions in the shares or underlying
shares of the Company.
Save as disclosed above, to the knowledge of the Directors and chief executive
of the Company, as at the end of the Reporting Period, there was no other
person whose interests or short positions in the shares or underlying shares
of the Company were recorded in the register required to be kept under section
336 of the SFO.
INFORMATION OF SHAREHOLDERS
Total number of shareholders
Total number of holders of ordinary shares as at the end of the 112,896 accounts (including 2,717 registered H shareholders)
Reporting Period (accounts)
Total number of holders of ordinary shares at the end of the 124,869 accounts (including 2,683 registered H shareholders)
previous month before the disclosure date of the annual report (accounts)
Shareholdings of the top 10 shareholders and the top 10 holders of tradable
shares (or shareholders not subject to selling restrictions) as at the end of
the Reporting Period:
Unit: Share
Shareholdings of the top 10 shareholders (excluding shares lent through
securities lending and refinancing)
Name of shareholder (full name) Change(s) during the Reporting Period Number of shares held as at the end of the Reporting Period Shareholding percentage (%) Number of shares held subject to selling restrictions Shares pledged, Nature of shareholder
marked or frozen
Status Number
China National Aviation Holding Corporation Limited 0 7,421,462,701 42.53 854,700,854 Frozen 127,445,536 State-owned legal person
Cathay Pacific Airways Limited 0 2,633,725,455 15.09 0 Nil 0 Foreign legal person
China National Aviation Corporation (Group) Limited 0 1,949,262,228 11.18 392,927,308 Frozen 36,454,464 Foreign legal person
HKSCC NOMINEES LIMITED 605,046 1,690,210,381 9.69 0 Nil 0 Foreign legal person
China Securities Finance Corporation Limited 0 311,302,365 1.78 0 Nil 0 Other
China National Aviation Fuel Group Limited -1,300,000 237,224,158 1.36 0 Nil 0 State-owned legal person
Hong Kong Securities Clearing Company Limited -143,398,621 156,956,819 0.90 0 Nil 0 Foreign legal person
National Social Security Fund 114 Portfolio 82,746,370 82,746,370 0.47 0 Nil 0 Other
Industrial and Commercial Bank of China - Huatai-PineBridge CSI 300 -2,400,600 62,222,469 0.36 0 Nil 0 Other
Exchange-traded Open-end Index Securities Investment Fund
China Structural Reform Fund Co., Ltd. -411,000 52,422,706 0.30 0 Nil 0 State-owned legal person
Shareholdings of the top 10 shareholders not subject to selling restrictions
(excluding shares lent through securities lending and refinancing)
Name of shareholder Number of Type and number of shares
tradable shares held not subject to selling restrictions
Type Number
China National Aviation Holding Corporation Limited 6,566,761,847 RMB ordinary shares 6,566,761,847
Cathay Pacific Airways Limited 2,633,725,455 Overseas listed foreign shares 2,633,725,455
HKSCC NOMINEES LIMITED 1,690,210,381 Overseas listed foreign shares 1,690,210,381
China National Aviation Corporation (Group) Limited 1,556,334,920 RMB ordinary shares 1,332,482,920
Overseas listed foreign shares 223,852,000
China Securities Finance Corporation Limited 311,302,365 RMB ordinary shares 311,302,365
China National Aviation Fuel Group Limited 237,224,158 RMB ordinary shares 237,224,158
Hong Kong Securities Clearing Company Limited 156,956,819 RMB ordinary shares 156,956,819
National Social Security Fund 114 Portfolio 82,746,370 RMB ordinary shares 82,746,370
Industrial and Commercial Bank of China - Huatai-PineBridge CSI 300 62,222,469 RMB ordinary shares 62,222,469
Exchange-traded Open-end Index Securities Investment Fund
China Structural Reform Fund Co., Ltd. 52,422,706 RMB ordinary shares 52,422,706
Explanation on the repurchase special accounts among Nil
the top 10 shareholders
Explanation on the right to vote by proxy, proxy and abstention from voting Nil
among the above shareholders
Explanation on connected relationship or action in CNACG is a wholly-owned subsidiary of CNAHC. Accordingly, CNAHC is directly
concert among the above shareholders and indirectly interested in 53.71% of the shares of the Company.
Explanation on preference shareholders whose voting rights have been restored Nil
and the number of shares held
Notes:
1. HKSCC NOMINEES LIMITED is a subsidiary of The Stock
Exchange of Hong Kong Limited and its principal business is acting as nominee
for and on behalf of other corporate shareholders or individual shareholders.
H Shares held by it in the Company do not include the 166,852,000 shares held
by it as nominee of CNACG.
2. According to the "Implementation Measures on Partial
Transfer of State-owned Shares to the National Social Security Fund in the
Domestic Securities Market" (Cai Qi 2009 No.
94)(《境內證券市場轉持部分國有股充實全國社會保障基金實施辦法》（財企 2009 94號）)
and the Notice (2009 No. 63) jointly issued by the Ministry of Finance, the
State-owned Assets Supervision and Administration Commission of the State
Council, China Securities Regulatory Commission and the National Council for
Social Security Fund, 127,445,536 and 36,454,464 shares held by CNAHC, the
controlling shareholder of the Company, and CNACG respectively are frozen at
present.
Number of shares held by top 10 shareholders subject to selling restrictions
and selling restrictions:
Unit: Share
Listing and trading status of shares subject to selling restrictions
No. Name of shareholder subject to Number of shares held subject to selling restrictions Date of being permitted for listing and trading Number of shares to be newly listed and traded Selling
selling restrictions
restrictions
1 China National Aviation Holding Corporation Limited 854,700,854 10 December 2027 854,700,854 Lock-up period of 36 months
2 China National Aviation Corporation (Group) Limited 392,927,308 8 February 2027 392,927,308 Lock-up period of 36 months
Explanation on connected relationship or action in concert among the above CNACG is a wholly-owned subsidiary of CNAHC.
shareholders
PUBLIC FLOAT
Based on information publicly available to the Company and to the knowledge of
the Directors as at the latest practicable date prior to the issue of this
annual report, the Company has maintained the public float as required by the
Listing Rules and agreed by the Hong Kong Stock Exchange.
DIVIDEND POLICY
In accordance with Article 173 of the Articles of Association, the basic
principles of the Company's dividend distribution are: (1) the Company shall
give full consideration to returning to investors and implement an active
dividend distribution policy; (2) the Company's dividend distribution policy
shall maintain continuity and stability, while simultaneously taking into
account the long-term interests of the Company, the overall interests of all
shareholders, and the sustainable development of the Company; (3) the Company
shall prioritize cash dividends as the method of dividend distribution.
Whenever conditions permit, the Company may distribute interim dividends.
In accordance with the relevant requirements of the CSRC and the CSRC Beijing
Bureau on the cash dividends of listed companies and the provisions of the
Articles of Association, the Company implements an active dividend
distribution policy and attaches importance to the reasonable return for
investment of investors. The Company maintains a consistent and stable
dividend distribution policy and prioritizes cash dividends when distributing
profits. It is clearly stipulated in the Articles of Association that in the
case that the distributable profits realized for the current year in the
financial statement of the parent company prepared in accordance with
applicable domestic and overseas accounting standards and regulations are
positive, the Company will distribute dividends in cash with the cash
dividends to be distributed each year no less than 15% of the applicable
distributable profits. Applicable distributable profits refer to the lower of
the distributable profits in the financial statements of the parent company
prepared in accordance with applicable domestic and overseas accounting
standards and regulations. The distributable profits equal the profit after
tax remaining after making up for losses, setting aside of the statutory
reserve fund in accordance with the provisions of these Articles of
Association, and deducting other items recognized by relevant national
authorities. The Company can actively communicate with shareholders,
especially minority shareholders, through various means (including online
voting and inviting minority shareholders to participate in the meetings) to
fully understand the opinions and needs of minority shareholders and timely
answer the questions of their concerns.
Please refer to Article 173, Article 174 and Article 175 of the Articles of
Association for details of the principles and policies of dividend
distribution of the Company.
TAXATION ON DIVIDENDS
In accordance with the "Enterprise Income Tax Law of the People's Republic of
China" and the "Rules for the Implementation of the Enterprise Income Tax Law
of the People's Republic of China", both of which came into effect and were
implemented on 1 January 2008 and the "Circular on Issues Concerning
Withholding of Enterprise Income Tax on Dividends Paid by PRC Resident
Enterprises to Offshore Non-resident Enterprise Holders of H Shares" (Guo Shui
Han 2008 No. 897)
(《關於中國居民企業向境外H股非居民企業股東派發股息代扣代繳企業所得稅有關問題的通知》(國稅函 2008 897號))
promulgated by the State Administration of Taxation on 6 November 2008, the
Company is obliged to withhold and pay PRC enterprise income tax on behalf of
non-resident enterprise shareholders at a tax rate of 10% from 2008 onwards
when the Company distributes any dividends to non-resident enterprise
shareholders whose names appear on the register of members of H Shares.
Any H Shares which are not registered in the name(s) of individual(s) (which,
for this purpose, includes shares registered in the name(s) of HKSCC Nominees
Limited, other nominees, trustees, or other organizations or bodies) shall be
deemed to be H Shares held by non-resident enterprise shareholder(s), and
their entitlement to dividends will be subject to deduction of enterprise
income tax. After receiving the dividends, the non-resident enterprise
shareholders may apply for a tax refund (if any) in accordance with the
relevant requirements, such as tax agreements (arrangements).
In accordance with the "Circular on Certain Issues Concerning the Policies of
Individual Income Tax" (Cai Shui Zi 1994 No. 020)
(《關於個人所得稅若干政策問題的通知》
(財稅字 1994 020號)) promulgated by the Ministry of Finance of the PRC and
the State Administration of Taxation on 13 May 1994, overseas individuals are,
tentatively exempted from the PRC individual income tax on dividends or
bonuses received from foreign-invested enterprises. As the Company is a
foreign-invested enterprise, the Company will not withhold and pay the PRC
individual income tax on behalf of individual shareholders whose names appear
on the register of members of H Shares of the Company at the time of payment
of the final dividends.
Pursuant to the Circular on Tax Policies Concerning the Pilot Programme of the
Shanghai and Hong Kong Stock Market Trading Interconnection Mechanism (Cai
Shui 2014 No. 81)
(《關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知》
(財稅 2014 81號)) promulgated on 31 October 2014 and the Circular on the
Tax Policies Concerning the Pilot Programme of the Shenzhen and Hong Kong
Stock Market Trading Interconnection Mechanism (Cai Shui 2016 No. 127)
(《關於深港股票市場交易互聯互通機制試點有關稅收政策的通知》
(財稅 2016 127號)) promulgated on 5 November 2016 by the Ministry of
Finance of the PRC, the State Administration of Taxation and the CSRC:
The Company is obliged to withhold PRC individual income tax on behalf of
Mainland individual shareholders at a tax rate of 20% when the Company
distributes the final dividends to Mainland individual investors who invest in
the H Shares of the Company through Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect. Where individual investors have already paid
foreign withholding taxes for such income, investors may apply to the
competent tax authorities of China Securities Depository and Clearing
Corporation Limited for foreign tax credit with valid tax withholding
certificates. The Company is obliged to withhold PRC individual income tax on
behalf of Mainland securities investment funds investing in H Shares of the
Company through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock
Connect in accordance with the aforementioned requirements when the Company
distributes the final dividends; and the Company will not withhold income tax
on behalf of Mainland enterprise investors investing in H Shares of the
Company through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock
Connect when the Company distributes the final dividends. The Mainland
enterprise investors shall report the income and make tax payment by
themselves.
Shareholders are recommended to consult their tax advisors regarding the PRC,
Hong Kong and other tax implications of owning and disposing of the H Shares
of the Company.
DIVIDENDS
According to the audited financial statements of the Company prepared in
accordance with the CASs and the IFRS Accounting Standards, the Company
recorded negative profits available for distribution to shareholders in 2025.
As considered and approved by the 14th meeting of the seventh session of the
Board of the Company, the Company proposed not to make profit distribution for
the year of 2025.
ANNUAL SHAREHOLDERS' MEETING
The Company proposed to hold the annual shareholders' meeting (the "AGM") on
Thursday, 28 May 2026. The register of members of H Shares will be closed from
Friday, 22 May 2026 to Thursday, 28 May 2026 (both days inclusive), during
which period no transfer of H shares will be effected. In order to qualify for
attendance and voting at the AGM, the holders of H Shares must return all the
transfer documents to the Company's H Shares registrar in Hong Kong,
Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17/F,
Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong by 4:30 p.m. on
Thursday, 21 May 2026. The holders of H Shares whose names appear on the
register of members of the Company at the close of business on Thursday, 21
May 2026 are entitled to attend and vote at the AGM.
PURCHASES, SALES OR REDEMPTION OF LISTED SECURITIES
During the Reporting Period, neither the Company nor any of its subsidiaries
purchased, sold or redeemed any listed securities (including Treasury Shares)
(the term "securities" has the meaning ascribed to it under Paragraph 1 of
Appendix D2 to the Listing Rules) of the Company.
As at the end of the Reporting Period, the Company did not hold any Treasury
Shares.
PRE-EMPTIVE RIGHTS
The Articles of Association does not provide for any pre-emptive rights
requiring the Company to offer new shares to the existing shareholders in
proportion to their existing shareholdings.
USE OF PROCEEDS RAISED FROM THE ISSUANCE OF A SHARES TO SPECIFIC INVESTOR
On 10 December 2024, the Company issued 854,700,854 A Shares to CNAHC (with a
total nominal value of RMB854,700,854) at the issue price of RMB7.02 per share
(the "Issuance of A Shares to Specific Investor"), raising net proceeds of
RMB5,995,841,631.45 or net proceeds of RMB7.0151 per A Share issued to the
specific investor. Please refer to the announcement of the Company dated 12
December 2024 for details. On 22 December 2023 (being the date on which the
terms of the issue were fixed), the closing price of the Company's A Shares
was RMB7.17 per share. During the Reporting Period, the net proceeds from the
Issuance of A Shares to Specific Investor have been utilized according to the
plan disclosed by the Company. The following table shows the use of net
proceeds from the Issuance of A Shares to Specific Investor:
Unit: RMB
Committed investment project Total committed investment of proceeds raised Outstanding amount as at the beginning of the Reporting Period Investment Outstanding amount as at the end of the Reporting Period Expected timeline for the completion of utilization of proceeds raised
during the Reporting Period
Introduction of 17 aircraft 4,195,841,631.45 3,396,240,456.16 3,396,240,456.16 0 N/A
Replenishing working capital 1,800,000,000.00 Nil Nil Nil N/A
DIRECTORS OF THE COMPANY
Set out below is the list of Directors during the Reporting Period and as at
the date of this annual report (unless otherwise stated).
Name Date of election and, if applicable, ceasing to act as Director
Mr. Liu Tiexiang (Chairman, Executive Director) Elected as Executive Director and appointed as Chairman
on 10 October 2025.
Mr. Qu Guangji (Vice Chairman, Executive Director) Elected on 25 March 2026.
Mr. Cui Xiaofeng (Non-executive Director) Elected on 9 August 2024, and re-appointed on 25 February 2025.
Mr. Patrick Healy (Non-executive Director) Elected on 19 December 2019, and re-appointed on 25 February 2025.
Mr. Xiao Peng (Employee Representative Director) Elected on 2 March 2023, and re-appointed on 25 February 2025.
Mr. Xu Niansha (Independent Non-executive Director) Elected on 25 February 2025.
Mr. He Yun (Independent Non-executive Director) Elected on 25 February 2022, and re-appointed on 25 February 2025.
Ms. Winnie Tam Wan-chi (Independent Non-executive Director) Elected on 25 February 2022, and re-appointed on 25 February 2025.
Mr. Gao Chunlei (Independent Non-executive Director) Elected on 25 February 2025.
Mr. Ma Chongxian (Former Executive Director) Elected on 20 July 2021, and ceased to act on 10 October 2025.
Mr. Wang Mingyuan (Former Executive Director) Elected on 30 March 2023, and ceased to act on 5 March 2026.
Mr. Xu Junxin (Former Independent Non-executive Director) Elected on 25 February 2022, and ceased to act on 25 February 2025.
SUPERVISORS
The following is the list of Supervisors from the beginning of the Reporting
Period to 24 June 2025. With effect from 24 June 2025, the Company no longer
maintains a Supervisory Committee or Supervisors, and the Audit and Risk
Management Committee (the Supervision Committee) under the Board exercises the
powers of the Supervisory Committee stipulated in the Company Law.
Name Date of election and ceasing to act as Supervisor
Mr. Xiao Jian (Former Chairman of the Supervisory Committee, Former Elected as shareholder representative Supervisor on 10 February 2023, elected
Shareholder Representative Supervisor) as Chairman of the Supervisory Committee on 10 March 2023, and ceased to act
on 24 June 2025.
Ms. Lyu Yanfang (Former Shareholder Representative Supervisor) Elected on 18 December 2020, and ceased to act on 24 June 2025.
Ms. Guo Lina (Former Shareholder Representative Supervisor) Elected on 25 February 2022, and ceased to act on 24 June 2025.
Mr. Wang Mingzhu (Former Employee Representative Supervisor) Elected on 2 March 2023, and ceased to act on 24 June 2025.
Mr. Li Shuxing (Former Employee Representative Supervisor) Elected on 2 March 2023, and ceased to act on 24 June 2025.
CHANGES IN THE DIRECTORS AND SENIOR MANAGEMENT OF THE COMPANY DURING THE
REPORTING PERIOD AND UP TO THE DATE OF THIS ANNUAL REPORT
1. On 25 February 2025, at the 2025 first extraordinary
general meeting of the Company, Mr. Ma Chongxian, Mr. Wang Mingyuan, Mr. Cui
Xiaofeng, and Mr. Patrick Healy were elected as non-independent Directors of
the seventh session of the Board of the Company, and Mr. Xu Niansha, Mr. He
Yun, Ms. Winnie Tam Wan-chi, and Mr. Gao Chunlei were elected as independent
non-executive Directors of the Company. Mr. Xu Junxin ceased to act as an
independent non-executive Director of the Company due to the expiry of his
term of office. At the thirteenth meeting of the third session of the employee
representatives congress of the Company, Mr. Xiao Peng was elected as the
employee representative Director of the seventh session of the Board of the
Company.
2. On 10 October 2025, Mr. Ma Chongxian resigned as an
executive Director and the Chairman of the Company due to work adjustments.
3. On 10 October 2025, at the 2025 second extraordinary
shareholders' meeting of the Company, Mr. Liu Tiexiang was elected as an
executive Director of the Company. On the same day, at the eighth meeting of
the seventh session of the Board of the Company, the "Resolution on the
Election of Mr. Liu Tiexiang as Chairman" was considered and approved, with
Mr. Liu Tiexiang elected as the Chairman of the Company.
4. On 23 October 2025, Mr. Xiao Peng resigned as Chief
Engineer to the Board of the Company due to his age.
5. On 7 November 2025, Mr. Zhang Hua resigned as General
Counsel to the Board of the Company due to retirement.
6. On 5 March 2026, as considered and approved at the
thirteenth meeting of the seventh session of the Board of the Company, Mr. Yi
Xuedong was appointed as the General Counsel and Chief Compliance Officer of
the Company.
7. On 5 March 2026, Mr. Wang Mingyuan ceased to serve as the
President, Executive Director and Vice Chairman of the Company due to
retirement. On the same day, as considered and approved at the thirteenth
meeting of the seventh session of the Board of the Company, Mr. Qu Guangji was
appointed as the President of the Company, and Mr. Qu Guangji was nominated as
a candidate for the executive Director of the Company. On 25 March 2026, at
the 2026 first extraordinary shareholders' meeting of the Company, Mr. Qu
Guangji was elected as an executive Director of the Company, and he was
appointed as the Vice Chairman of the Company.
Directors and Supervisors' Rights to Acquire Shares or Debentures
At any time during the Reporting Period or as at the end of the Reporting
Period (for Supervisors, referring to the period from the beginning of the
Reporting Period to 24 June 2025), none of the Company, its holding company,
any of the Company's subsidiaries or fellow subsidiaries was a party to any
agreement or arrangement which enables the Directors and Supervisors of the
Company to acquire benefits by means of the acquisition of Shares in, or
debentures, of the Company or any other body corporate.
Interests and Short Positions of Directors and the Chief Executive in the
Shares, Underlying Shares and Debentures of the Company
As at the end of the Reporting Period, none of the Directors or the chief
executive of the Company had interests or short positions in the shares,
underlying shares and/or debentures (as the case may be) held by the Company
or its associated corporations (within the meaning of Part XV of the SFO)
which shall be recorded and maintained in the register pursuant to section 352
of the SFO, or which shall be notified to the Company and the Hong Kong Stock
Exchange pursuant to the Model Code.
Interests of Directors and Supervisors in Contracts and Service Contracts
Each of the Directors has entered into a service contract with the Company.
All Directors shall serve a term of three years.
None of the Directors or Supervisors has any existing or proposed service
contract with any member of the Group which is not terminable by the Group
within one year without payment of compensation (other than statutory
compensation).
Save as disclosed in the section headed "Connected Transactions" set out in
this Report of the Directors, none of the Company, its holding company, or any
of the Company's subsidiaries or fellow subsidiaries has entered into any
significant transactions, arrangements or contracts relating to the Group's
business, in which a Director or Supervisor or his or her connected entity
directly or indirectly had any material interest, and which subsisted at the
end of the Reporting Period (for Supervisors, referring to the period from the
beginning of the Reporting Period to 24 June 2025) or at any time during the
Reporting Period.
During the Reporting Period, the Company's executive Director Mr. Liu
Tiexiang, Non-executive Director Mr. Patrick Healy, and former executive
Directors Mr. Ma Chongxian and Mr. Wang Mingyuan also served as directors of
Cathay Pacific. Cathay Pacific competes or is likely to compete either
directly or indirectly with some aspects of the business of the Company as it
operates airline services to certain destinations, which are also served by
the Company.
Save as disclosed above, during the Reporting Period, none of the Directors
and their respective close associates (as defined in the Listing Rules) has
any competing interests which would be required to be disclosed under Rule
8.10 of the Listing Rules.
Permitted Indemnity Provision
The Company has purchased appropriate directors' liability insurance coverage
to indemnify the Directors for liabilities arising from corporate activities.
Such directors' liability insurance was valid throughout the financial year
ended 31 December 2025 and remains in effect as at the date of this annual
report.
Employees
The Company implements an open, fair and equal employment policy, insists on
equal pay for equal work and is committed to avoiding any discrimination in
respect of gender, race, nationality, physical condition, religion and marital
status of employees. The Company continues to promote the diversity of
employees and protect employees' legitimate rights and interests. The Group
will continue to take measures, including recruiting and treating employees in
accordance with the principle of gender equality, provide gender equality
training and development opportunities, and ensure the rights and interests of
female employees, to promote gender diversity at all levels and focus on
diversified management talent reserves.
As at the end of the Reporting Period, the Group had a total of 107,795
employees (including 66,447 male employees and 41,348 female employees,
accounting for 61.6% and 38.4% of the total employees of the Group
respectively), among which, the Company had 48,675 employees and the
subsidiaries of the Company had 59,120 employees. The differences in employee
background and job requirements are the main factors affecting the gender
diversity of employees.
The categories of employees of the Group are as follows:
Professional Categories As at 31 December 2025
Management personnel 7,245
Functional personnel 5,974
Marketing and sales personnel 5,470
Operation personnel 5,903
Ground handling personnel 13,133
Cabin service personnel 28,625
Logistics and support personnel 6,166
Flight crew 14,756
Engineering and maintenance personnel 17,421
Information technology personnel 1,240
Other personnel 1,862
Total 107,795
Remuneration Policy
In accordance with the requirements for optimizing the income distribution
system and based on the principle of "paying salary with reference to the job
value, personal ability as well as performance appraisal", the Company
established an income distribution mechanism that maintained balance between
incentives and constraints and emphasized both efficiency and fairness, so as
to drive high-quality corporate development. During the Reporting Period, the
Company continuously strengthened the linkage between salary and efficiency,
improved the differentiated gross payroll management mechanism, and optimized
the internal income distribution relations. It strengthened the incentive
guarantee for employees in key groups, established a distribution mechanism
that determines remuneration based on performance contributions, and promoted
salary distribution to lean towards units with outstanding performance
contributions, technological innovation fields, and hard, dirty, dangerous,
and strenuous frontline positions. The Company further standardized the
remuneration management for persons in charge, enforced strict performance
appraisals, perfected market benchmarking mechanisms, and reasonably
determined the remuneration of persons in charge at all levels. It solidly
advanced the development of the remuneration management information system,
established and improved the supporting management mechanisms, and elevated
the level of digitalization and intelligence in labor costs and remuneration
management.
Training Programme
In 2025, the Group adhered to the guidance with Xi Jinping's Thought on
Socialism with Chinese Characteristics for a New Era, comprehensively studied
and implemented the philosophy of General Secretary Xi Jinping's important
thoughts on talent work in the new era, fully implemented the spirit of the
20th National Congress of the CPC, the successive Plenary Sessions of the 20th
Central Committee of the CPC, and the relevant requirements of higher-level
authorities regarding talent work in the new era. It actively coordinated with
higher-level authorities in an orderly manner to organize training, and
conducted rotational training classes for secretaries of primary-level Party
organizations and other higher-level training courses, covering nearly 4,400
person-times. The Group vigorously implemented various full-time off-job
training projects to enhance the performance capabilities of leaders and
cadres at all levels. Relying on the Group's party school and internal
resources, it held the first training classes for young and middle-aged
cadres, young cadres, and special ability enhancement classes for
technological talents. The Group systematically promoted the training of a
high-quality cadre team, holding ability enhancement classes respectively for
newly appointed senior and middle-level management personnel, and launching
international exchange projects in regions such as the UK, France, Germany,
and Singapore. The Leadership Academy of the online training college added
four categories of online thematic courses: policy interpretation, new quality
productive forces, brand building, and management capabilities.
Regarding the qualification trainings for pilots, flight attendants, cadet
pilots, flight dispatchers and ground service personnel, respectively the
Group offered 491,600 person-hours of online training, delivered 169,638.5
hours of flight simulator training and provided 80,097.5 hours of other
training programmes to maintain all operational personnel's valid
certifications. The Company's training department was officially approved by
the CAAC in February 2025 as a training institution for aviation security
officers. During the Reporting Period, it completed one initial training class
for 68 aviation security officers and five periodic training classes for a
total of 305 people. By continuously strengthening the development of training
capabilities and expanding the scope of businesses for training, the Company
has consistently improved the relevance, practicality and effectiveness of
training. The high-quality completion of annual training programmes has
provided a solid foundation for the Company's high-quality development.
In 2026, the Company will continue to strictly comply with the requirements of
the "Regulations on Cadre Education and Training" and the "National Cadre
Education and Training Plan (2023-2027)". Structured around a stratified and
classified training system and based on the overall development of the
management team, it will precisely align with the growth patterns and training
needs of cadres at different levels and in different fields. This will achieve
a precise match between the training supply and the needs for cadre capability
enhancement. It will create specialized and branded training projects, expand
international training channels, and comprehensively forge the performance
capabilities of leading cadres. Enhancing the ability to fight the "five tough
battles" will provide solid talent support for accelerating the high-quality
development of the Group and building a world-class enterprise.
SUPPLIER MANAGEMENT
The Company adhered to promoting "open procurement, sunshine procurement,
clean procurement and green procurement". It was committed to integrating the
concept of sustainable development into the cooperation of upstream and
downstream enterprises in the supply chain and working closely with suppliers
to jointly build a transparent, win-win and responsible supply chain system.
The Company continued to promote the establishment of a procurement system and
foster refined management of suppliers throughout their lifecycle. It
persisted in working with suppliers to build a clean and upright supply
ecosystem and integrate the concept of "green and low carbon" into the
Company's procurement, thereby building a stable, efficient, high-quality and
cost-effective supply chain and jointly promote the sustainable development of
the aviation industry.
EMPLOYEES AND EMPLOYEES' PENSION SCHEME
Details of the employees' pension scheme and other welfare are set out in note
9 to the financial statements of this annual report, and retired employees are
entitled to benefits under the social pension scheme approved and provided by
the labor and social security authority of the local governments.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Details of the subsidiaries, associates and joint ventures of the Group as at
the end of the Reporting Period are set out respectively in notes 21, 22 and
23 to the financial statements of this annual report.
BANK LOANS AND OTHER BORROWINGS
Details of the bank loans and other borrowings of the Company and the Group
are set out in note 35 to the financial statements of this annual report.
FIXED ASSETS
Changes in the fixed assets of the Group for the year ended 31 December 2025
are set out in note 18 to the financial statements of this annual report.
AIRCRAFT AND FLIGHT EQUIPMENT
The aggregate net book value of the Group's aircraft, engines and flight
equipment as at the end of the Reporting Period are set out in note 18 to the
financial statements of this annual report. The Group's capital commitment
amounts for aircraft and flight equipment as at the end of the Reporting
Period are included in note 42 to the financial statements of this annual
report.
CAPITALISED INTERESTS
Details of the capitalized interests of the Group for the year ended 31
December 2025 are set out in note 12 to the financial statements of this
annual report.
RESERVES
Changes in the reserves of the Company and the Group during the year are set
out in note 40 to the financial statements and the consolidated statement of
changes in equity of this annual report.
DONATIONS
During the Reporting Period, the Group made donations for charitable and other
purposes amounting to RMB42.9817 million.
MAJOR CUSTOMERS AND SUPPLIERS
During the Reporting Period, the purchases of the Group from the largest
supplier accounted for 28.64% of the total purchases of the Group, while the
purchases of the Group from the five largest suppliers accounted for 41.20% of
the total purchases of the Group. None of the Directors, their associates, nor
any shareholder of the Company, who to the knowledge of the Directors owns 5%
or more of the Company's share capital, had any interest in the five largest
suppliers of the Company.
During the Reporting Period, the sales to the five largest customers of the
Group accounted for not more than 30% of the total sales of the Group.
PROPERTY TITLE CERTIFICATE
The Company effected the changes of titles of assets (land, buildings and
vehicles), in accordance with its undertakings as disclosed in the Company's
prospectus when shares were issued. The title transfer procedures for the
underlying assets relating to the above undertakings have been completed.
ENVIRONMENTAL POLICY AND PERFORMANCE OF THE GROUP
During the Reporting Period, the Group adhered to the guidance of Xi Jinping
Thought on Socialism with Chinese Characteristics for a New Era, implemented
the philosophy of the 20th National Congress of the Communist Party of China
and all its Plenary Sessions, and intensively implemented the work
requirements for the green and low-carbon transition and high-quality
development of civil aviation, which has resulted in improved effectiveness in
key areas such as energy conservation and emission reductions, ecological and
environmental protection, as well as carbon peak and carbon neutrality.
The management system has been continuously improved, ensuring a continuous
enhancement in management capabilities through work conferences at the
beginning of the year, strengthening assessment and supervision, and carrying
out special inspections and rectifications. Focusing on the national "dual
carbon" strategy, the Group steadily advanced the dual-carbon related work,
actively promoted the collaborative development of sustainable aviation fuels,
built a dual-carbon smart management platform, and completed the
carbon-verification monitoring, reporting, verification, and compliance work
of the European Union, Beijing municipality, and civil aviation on time and
efficiently, thus contributing to the carbon management of the aviation
industry. Adhering to low-carbon operations, the Group continuously optimized
the introduction and phase-out of aircraft, operational management and ground
support to ensure the green and sustainable development of the Company. It
devoted significant efforts in pollution control, proactively introduced new
energy vehicles, exercised strict controls over the compliant emission of all
kinds of pollutants, comprehensively implemented plastic reduction and waste
reduction, and adhered to the baseline of compliance. To demonstrate corporate
social responsibility, the Group launched a series of green travel products,
and carried out a public welfare project for biodiversity conservation in
Jinfo Mountain, Nanchuan District, Chongqing, giving back to nature with
public welfare and continuously meeting the people's new expectations for a
better ecological environment.
Launching flights with sustainable aviation fuel, the Group participated in
the domestic pilot work of application of sustainable aviation fuel, and
cumulatively refueled 1,501 tonnes of sustainable aviation fuels. It optimized
the fleet structure, increasing the proportion of high fuel efficiency
aircraft models to 31%. It deeply implemented green fuel-saving measures,
cumulatively saving 158,800 tonnes of fuel and reducing carbon dioxide
emissions by 500,300 tonnes through measures such as dispatch and release
optimization, flight plan fuel optimization, and residue fuel management on
landing. It proactively used bridge-mounted power and GPU to replace aircraft
APU, reducing fuel consumption by 168,000 tonnes and carbon dioxide emissions
by 529,000 tonnes. It promoted the green and low-carbon transition of ground
buildings, with the use of green electricity in the Beijing area reaching 1
million kWh. It accelerated the energy transition of ground support vehicles,
with an electrification rate of 43% for vehicles and 91% for newly introduced
vehicles. It strictly controlled the compliant emission of aircraft
maintenance pollution, and all kinds of pollutants were disposed of harmlessly
to ensure that emissions met the standards. Further promoting the series of
green travel products, the Group joined hands with passengers to practise the
concept of green and low-carbon travel through voluntary carbon offset,
biodiversity conservation, self-selected meals, electronic invoice processing,
"paperless" self-service check-in, and commitment not to use disposable
plastic tableware. During the 14th Five-Year Plan period, over 30,000
passenger-times have participated in voluntary carbon offset.
COMPLIANCE OPERATIONS
As a Chinese company listed on the Hong Kong Stock Exchange and the Shanghai
Stock Exchange, the Company shall comply with regulations in relation to
listed companies' securities issue and trading, such as the Company Law of the
People's Republic of China, the Securities Law of the People's Republic of
China, the SFO of Hong Kong, the Companies Ordinance of Hong Kong, the Stock
Listing Rules of the Shanghai Stock Exchange
(《上海證券交易所股票上市規則》) and the Listing Rules of the
Hong Kong Stock Exchange. CNAF, a non-wholly owned subsidiary of the Company,
as a non-bank financial institution established in Chinese Mainland, shall
comply with rules in respect of financial regulation in Chinese Mainland. The
Group, with civil aviation transportation and related services as its
principal businesses, shall comply with requirements in relation to civil
aviation safety regulations of locations where the Group operates, and laws
and regulations in respect of consumer rights protection, environmental
protection, anti-monopoly, anti-unfair competition and tax, etc.
The Group has the procedure of compliance in place to ensure compliance with
applicable laws, regulations and normative legal documents, and in particular
those having a significant impact on its principal businesses. The Group will
notify the relevant employees and operating teams of any change in applicable
laws, regulations and normative legal documents relating to its principal
businesses from time to time.
During the Reporting Period, so far as the Directors of the Company were
aware, the Group did not commit any violations of laws and regulations in all
material aspects that would have a significant impact on the Group.
As at the end of the Reporting Period, the Company was not involved in any
significant litigation or arbitration and to the knowledge of the Company,
there was no litigation or claim of material importance pending, threatened or
initiated against the Company.
CONNECTED TRANSACTIONS
The Group has entered into several connected transaction agreements with
certain connected persons of the Group during the Reporting Period, details of
which are set out in the paragraphs below. The Company has complied with the
disclosure requirements of the connected transactions in accordance with
Chapter 14A of the Listing Rules.
For the purpose of this section headed "Connected Transactions" in this Report
of the Directors, "CNAHC Group" refers to CNAHC, its subsidiaries and
associates (as defined under the Listing Rules) excluding the Group, "ACC
Group" refers to Air China Cargo, its subsidiaries and its 30%-controlled
companies (as defined under the Listing Rules), "Cathay Pacific Group" refers
to Cathay Pacific and its subsidiaries (as defined under the Listing Rules).
ONE-OFF CONNECTED TRANSACTIONS
On 29 July 2025, the Company (as the seller) and Air China Cargo (as the
purchaser) entered into an engine sale and purchase agreement (the "Engine
Sale and Purchase Agreement"), pursuant to which the Company agreed to sell
two Trent700 spare engines and one GTCP331-350 spare APU to Air China Cargo at
a consideration of RMB151.4405 million (tax exclusive). Air China Cargo shall
pay the above consideration to the Company by telegraphic transfer in RMB
within 60 days from the effective date of the Engine Sale and Purchase
Agreement. The disposal could lower the Company's overall holding costs of
spare engines and improve the efficiency of asset utilization. As Air China
Cargo is a subsidiary of CNAHC, the controlling shareholder of the Company,
Air China Cargo is therefore a connected person of the Company. The
transactions under the Engine Sale and Purchase Agreement constitute connected
transactions of the Company under Chapter 14A of the Listing Rules, and are
subject to the reporting and announcement requirements but are exempt from the
independent shareholders' approval requirement under Chapter 14A of the
Listing Rules. For details of such transactions, please refer to the
announcement of the Company dated 29 July 2025.
On 30 October 2025, the Board of the Company approved the issuance of A Shares
to specific investors (the "Issuance of A Shares to Specific Investors"),
pursuant to which the Company entered into a subscription agreement with CNAHC
and CNAC Holding, for the issuance, in aggregate, of not more than
3,044,140,030 new A Shares (inclusive) at the issue price (i.e. RMB6.57 per
share) to CNAHC and CNAC Holding, with expected total gross proceeds (before
deduction of relevant issuance expenses) of not more than RMB20.00 billion
(inclusive). Among which, CNAHC intended to subscribe for no less than RMB5.00
billion; and CNAC Holding intended to subscribe for no more than RMB15.00
billion. The net proceeds after deduction of relevant issuance expenses are
intended to be fully used for repayment of debts and replenishment of working
capital. Since CNAHC is the controlling shareholder of the Company, and CNAC
Holding is a wholly-owned subsidiary of CNAHC, CNAHC and CNAC Holding are
connected persons of the Company, and the Issuance of A Shares to Specific
Investors constitutes a connected transaction of the Company under Chapter 14A
of the Listing Rules. On 16 December 2025, the relevant resolutions in
relation to the Issuance of A Shares to Specific Investors were considered and
approved by the shareholders of the Company at the extraordinary shareholders'
meeting. As at the date of this annual report, the application for the
Issuance of A Shares to Specific Investors has been considered and approved by
the Shanghai Stock Exchange, and the CSRC has made a decision to consent to
the registration. For details, please refer to the announcements of the
Company dated 30 October 2025, 16 December 2025, 8 January 2026, 9 February
2026 and 9 March 2026, and the circular of the Company dated 28 November 2025.
CONTINUING CONNECTED TRANSACTIONS
During the Reporting Period, the transactions under the following continuing
connected transaction framework agreements constituted non-exempt continuing
connected transactions of the Company:
Agreement Parties and Connected Relationship Execution Date and Term of Agreement Contents of Agreement Pricing Policy
1 Properties Leasing Framework Agreement The Company and CNAHC (a substantial shareholder of the Company and therefore Renewed on 30 October 2024 with a term from 1 January 2025 to 31 December 2027 The Group and CNAHC Group agreed to lease from each other certain properties The Group (as lessor) may rent out its own properties (including properties
a connected person of the Company)
(including ancillary facilities) and land use rights owned by each other for constructed by the Group or customized upon the request of CNAHC Group) or
their respective production and operation, office and storage use. land with legal use rights to CNAHC Group for its production and operation,
office and storage use. The pricing principles and conducting of the
The details are set out in the announcement of the Company dated 30 October transaction shall be as follows: First, the Group shall provide quotation for
2024 the leased properties or land to CNAHC Group after taking into account the
factors including the relevant costs, tax and reasonable profit margin
relating to the properties or land. The related costs include, among others,
construction costs, depreciation costs, funding costs and maintenance costs.
Then, the rent payable for the leased properties or land shall be determined
through arm's length negotiations between the Group and CNAHC Group after
CNAHC Group takes into account the factors such as the location of the leased
properties or land and the service quality. Such rent shall not be lower than
the rent offered by the Group to an independent third party (if any) in
comparable circumstances.
The Group (as lessee) may lease properties owned by CNAHC Group and land with
legal use right from CNAHC Group based on its production and operation, office
and storage needs. The pricing principles and conducting of the transaction
shall be as follows: First, the Group shall conduct market research and
collect, consolidate and analyze information in respect of provision of
leasing services by independent third parties for the same type of properties
or land (if any) in close proximity to the properties or land. Then, (i) if
there is comparable market of the same type found through market research, the
parties shall determine the rental prices for the leased properties or land
through arm's length negotiations with reference to the market price for the
same type of services available from at least two independent third parties
and take into account relevant factors; (ii) if there is no comparable market
of the same type found in the neighboring areas through market research, the
price shall be determined by adopting the cost-plus approach: the rental price
of the leased properties or land shall be determined through arm's length
negotiations between the parties based on the relevant costs, tax and
reasonable profit margin of the properties or land offered by CNAHC Group. The
relevant costs include construction costs, depreciation costs, funding costs
and maintenance costs. Reasonable profit margin will be determined with mainly
making reference to the historical average prices on similar services (where
possible) published regarding the property leasing industry, and/or the profit
margin of the comparable services disclosed by other listed companies, and the
reasonable profit margin of CNAHC Group shall not exceed 10%. The
abovementioned rental prices shall not be higher than those offered by CNAHC
Group to the independent third parties (if any) in comparable circumstances.
When leasing each other's properties or land, the parties may determine the
price for leasing their respective properties or land based on the above
pricing principles, and then exchange the properties and land use right in
accordance with the principle of equivalent exchange.
2 Comprehensive Services Framework Agreement The same as above Entered into on (i) The Group accepts CNAHC Group's appointment to provide CNAHC Group For the services mentioned in item (i), the price to be charged by the Group
30 October 2024 with a term from 1 January 2025 to 31 December 2027 with products or services including but not limited to retiree management will be determined after arm's length negotiations between the parties on the
services, human resources services, information technology services, basis of the costs of the Group adding a reasonable service fee (generally
procurement services, training services, air passenger transportation and ranging from 3% to 10% of the costs) and/or with reference to the price for
sales services, comprehensive support services, entrusted operational the same type of products or services provided by the Group to other parties
The details are set out in the announcement of the Company dated 30 October management and provision of in-flight supplies. under non-related (non-connected) transactions.
2024
(ii) CNAHC Group was appointed by the Group as the provider of ancillary For the services mentioned in item (ii), the parties shall, according to the
production services or the administrator of supply services of the Group for service items and specific needs, determine the relevant service fees through
which CNAHC Group shall provide the following products or services to the arm's length negotiations in accordance with the following principles: (1) the
Group including but not limited to (provided that the provider has obtained final transaction price shall be determined after arm's length negotiations
the relevant qualifications and certifications): (1) on-board catering and between the parties based on the quotations provided by CNAHC Group, with
food supply management services on global flights; (2) catering and meal reference to the market price (if any) for the same type of services available
support and cleaning services; (3) distribution, placement and washing from at least two independent third parties in the market and take into
services for various in-flight supplies; (4) operation and management services account factors including the service standard, service scope, business volume
of office buildings; (5) property management services in office buildings and and specific needs of the parties; and/or (2) the service fee shall be
the regions at which the office buildings are located; (6) support services determined after arm's length negotiations between the parties based on the
for resident group, support services for delayed flights passengers and site costs of CNAHC Group adding a reasonable service fee, and offering rewards or
usage services; (7) information technology services; (8) in-flight supplies imposing penalties depending on the management of CNAHC Group, the final
and scenario mileage payment products; and (9) other commissioned services settlement of which shall be made on the basis of the actual transaction
such as labor services and entrusted operational management. amount.
(iii) CNAHC Group was engaged by the Group as one of the providers of For the services mentioned in item (iii), (1) if government-set or guided
ancillary production or supply services of the Group, during which CNAHC Group price is available, government-set or guided price shall be adopted; (2) in
shall provide the Group with the following products or services (provided that the absence of government-set or guided price, the final transaction price
the provider has obtained the relevant qualifications and certifications), shall be determined after arm's length negotiations between the parties with
including but not limited to: (1) hotel accommodation and staff recuperation reference to the market price (if any) for the same type of products or
services; and (2) air ticket printing services and other printed materials. services available from at least two independent third parties in the market,
by taking into account certain factors including the service standard, service
scope, business volume and specific needs of the parties; (3) if open market
price is not available or there are no identical or similar business
(iv) The Group and CNAHC Group commission each other for the human activities in the market, the parties shall settle the actual transaction
resources sharing business within the two groups. amount based on the costs of CNAHC Group adding a reasonable service fee, and
offering rewards or imposing penalties depending on the management of CNAHC
Group.
(v) CNACD Group is regarded by the Group as the primary service provider
for its property management projects.
For the services mentioned in item (iv), in principle, the transaction price
shall be determined through arm's length negotiations between the parties
based on the labor costs incurred, and the transaction price shall be fully
borne by the worksite employer.
For the services mentioned in item (v), the service fees charged by CNACD
Group will be determined based on the engineering and financial audit amounts
of the specific entrusted projects in accordance with the entrusted management
contracts. The fees will be calculated as follows: (i) 3% of the financial
audit amount of the investment relating to the management entrusted by the
Company; or/and (ii) based on the scale or investment of the project, the fees
will be determined according to the labor input of CNACD Group verified by the
Company.
For the entrusted operational management services provided by the Group or
CNAHC Group to the other party, both parties will (1) determine the service
fees after arm's length negotiation and based on the service projects and
specific requirements, considering the service provider's costs and reasonable
service fee rates, with rewards given based on the entrusted management
performance; or (2)
determine the relevant financial/business indicators based on the service
projects and specific requirements, and determine the service fees using a
fixed management fee plus a variable management fee approach through arm's
length negotiation.
3 Government Charter Flight Service Framework Agreement The same as above Renewed on 30 October 2024 with a term from 1 January 2025 to 31 December 2027 CNAHC shall use the charter flight services of the Company for fulfilling its The parties will determine the price for the Government Charter Flight
government charter flight assignments. Services through arm's length negotiations based on the cost incurred by the
carrier in providing the Government Charter Flight Services adding a
reasonable profit (by referring to the historical data, the reasonable profit
The details are set out in the announcement of the Company dated 30 October margin generally ranges from 5% to 10%). The costs include direct costs and
2024 indirect costs.
4 Media Services Framework Agreement The Company and CNAMC (CNAMC is a wholly-owned subsidiary of CNAHC and The same as above CNAMC has agreed to provide media business services to the Group. Of which, For the Entrusted Services, the Group will make reference to the service items
therefore a connected person of the Company) the Company grants CNAMC an exclusive right to distribute in-flight reading and specific requirements, and (1) the parties shall determine the final
materials, movies, TV series, music, sound track and other cultural contents. transaction price through arm's length negotiations based on the quotations
provided by CNAMC with reference to the market price (if any) for the same
type of services available from at least two independent third parties after
taking into account factors including the service standard, service scope,
The Company has commissioned CNAMC as the general service provider with business volume and specific needs of the parties; and/or (2) the service fees
respect to the media business of the Company in which CNAMC shall provide the shall be determined after arm's length negotiations between the parties based
Company with the following media business (the "Entrusted Services"): (1) on the costs of CNAMC adding a reasonable service fee, and offering rewards or
in-flight entertainment system business and in-flight network platform imposing penalty depending on the management of CNAMC, the final settlement of
business; (2) brand communication and product marketing business: including which shall be made on the basis of the actual transaction amount.
but not limited to brand research, consulting and planning, design and
copywriting planning, graphic and film shooting and production, public
relations activities, media advertising placement, promotional materials and
IP image production and management, social media operation and maintenance, In respect of the media products or services other than the Entrusted Services
intellectual property management; (3) news and publicity business, including that are purchased by the Company from CNAMC, the Group shall determine and
but not limited to external media operation and maintenance and internal pay the relevant services fees in accordance with the following principles and
newspaper production; (4) advertisement management business and media the arm's length negotiations with CNAMC: (1) if government-set or guided
cooperation and management business; (5) other media business entrusted by the price is available, government-set or guided price shall be adopted; (2) in
Company. the absence of government-set or guided price, the final transaction price
shall be determined after arm's length negotiations between the parties based
on the quotation provided by CNAMC with reference to the market price (if any)
for the same type of services available from at least two independent third
parties in the market after taking into account certain factors including the
service standard, service scope, business volume and specific needs of the
parties; (3) if open market price is not available or there are no identical
or similar business activities in the market, the parties shall settle the
actual transaction amount based on the costs of CNAMC adding a reasonable
service fee, and offering rewards or imposing penalties depending on the
management of CNAMC.
CNAMC shall provide information including but not limited to costs, external
procurement, and actual settlement; the service fee charged by CNAMC shall not
exceed 10% of the costs, and shall be determined mainly with reference to the
historical average price for similar products or services (where possible)
published in the relevant industry and/or the profit margin of comparable
products and services.
In respect of the Company's media used by CNAMC in operating the media
business of the Company, CNAMC shall pay the Company an annual media resource
fee of RMB13.8915 million for each of the three years of 2025, 2026 and 2027.
5 Financial Services Framework Agreement The Company and CNAF (CNAF is a non-wholly owned subsidiary of the Company Renewed on 30 March 2023 with a term from 1 January 2024 to 31 December 2026 CNAF agreed to provide the Group with a range of financial services including Interest rates applicable to deposits: should (i) comply with the requirements
that CNAHC holds 49% of its equity interest and therefore a connected
deposit services, credit services and other financial services. on the interest rates prescribed by the People's Bank of China for such type
subsidiary of the Company) of deposits; and (ii) not be lower than the interest rates offered by
state-owned commercial banks to the Group for the same type of services under
The details are set out in the announcement of the Company dated 30 March 2023 the same conditions.
Interest rates applicable to credit services: should (i) comply with the
requirements on the interest rates prescribed by the People's Bank of China
for such type of services; and (ii) not be higher than the interest rates
charged by state-owned commercial banks to the Group for the same type of
services under the same conditions.
Fees for other paid financial services: should (i) comply with the relevant
rate standards (if any) prescribed by the People's Bank of China, CBIRC, CSRC,
NAFMII or other regulatory authorities; and (ii) not be higher than those for
the same type of services charged by state-owned commercial banks to the Group
under the same conditions.
6 CNAHC Financial Services Framework Agreement CNAF (a non-wholly owned subsidiary of the Company), and CNAHC (a substantial The same as above CNAF agreed to provide CNAHC Group with a range of financial services Interest rates applicable to deposits: should (i) comply with the requirements
shareholder of the Company and therefore a connected person of the Company) including deposit services, comprehensive credit line services and other on interest rates prescribed by the People's Bank of China for such type of
financial services. deposits; and (ii) not be higher than the interest rates offered by
state-owned commercial banks to CNAHC Group for the same type of services
under the same conditions.
Interest rates applicable to loan and bill discounting services: should (i) be
in compliance with the requirements on interest rates prescribed by People's
Bank of China for such type of services; and (ii) be not lower than the
interest rates charged by state-owned commercial banks to the CNAHC Group for
the same type of services under the same conditions.
Fees for other paid financial services: should (i) comply with the relevant
rate standards (if any) prescribed by the People's Bank of China, CBIRC, CSRC,
NAFMII or other regulatory authorities; and (ii) not be lower than those for
the same type of services charged by state-owned commercial banks to the CNAHC
Group under the same conditions.
7 ACC Financial Services Agreement CNAF and Air China Cargo Entered into on 30 March 2023 with a term from 1 January 2024 to 31 December CNAF has agreed to provide the ACC Group with a range of financial services Interest rates applicable to deposits: should (i) comply with the requirements
2026 including deposit services, comprehensive credit line services and other on interest rates prescribed by the People's Bank of China for such type of
financial services. deposits; and (ii) not be higher than the interest rates offered by
state-owned commercial banks to ACC Group for the same type of services under
the same conditions.
The details are set out in the announcement of the Company dated 30 March 2023
Interest rates applicable to loan and bill discounting services: should (i) be
in compliance with the requirements on interest rates prescribed by People's
Bank of China for such type of services; and (ii) be not lower than the
interest rates charged by state-owned commercial banks to ACC Group for the
same type of services under the same conditions.
Fees for other paid financial services: should (i) comply with the relevant
rate standards (if any) prescribed by the People's Bank of China, CBIRC, CSRC,
NAFMII or other regulatory authorities; and (ii) not be lower than those for
the same type of services charged by state-owned commercial banks to ACC Group
under the same conditions.
8 Framework Agreement The Company and CNACG (CNACG is a substantial shareholder of the Company and Renewed on 20 September 2022 with a term from 1 January 2023 to 31 December Finance and operating lease services: CNACG Group agreed to provide finance Finance and operating lease services: the final transaction price will be
therefore a connected person of the Company) 2025, details of which are set out in the announcement of the Company dated 20 and operating lease services in respect of, including but not limited to, determined on arm's length negotiations between both parties with reference to
September 2022 aircraft, engines, simulators, aircraft-related materials, equipment and the prices for the same type of lease services offered by independent third
vehicles to the Group; the Group agreed to provide finance and operating lease parties and after taking into account certain factors. Such factors include
services in respect of, including but not limited to, equipment and vehicles purchasing price of the leasing subject, interest rate and arrangement fees
to CNACG Group. (if any) (for finance lease), rental fee (for operating lease), the lease
Subsequently renewed on 28 May 2025 with a term from 1 January 2026 to 31
terms, the features of the leasing subject and the comparable market rental
December 2028, details of which are set out in the announcement of the Company prices. The final transaction price shall not be higher than the transaction
dated 28 May 2025
prices offered by at least two independent third parties on the same
Ground support services and other services: including but not limited to the conditions.
following transactions conducted between any member of the Group on the one
hand and any member of CNACG Group on the other hand: ground support services,
aircraft maintenance services, aircraft repair services, property investment
and management services, ticket and tourism services, logistics services, Ground support services and other services:
administrative management services, cleaning and washing services, resident
security services, lounge supplies procurement services and aircraft material
procurement services.
(1) Follow the government pricing or guidance price if it is available;
(2) If no government pricing or guidance price is available: the final
transaction price will be determined on arm's length negotiations between the
parties, with reference to the market prices offered by at least two
independent third parties on the market for the same type of service, and
after taking into account certain factors such as the service standard,
service scope, business volume and specific needs of the parties. If any
service needs of the service recipient change, appropriate adjustment will be
made to the transaction price after negotiation between both parties based on
the extent of variation in the relevant costs, service quality or other
factors;
(3) If neither of the above cases is applicable: the price will be
determined on the basis of costs plus reasonable profit. The costs are mainly
based on the costs and expenses of the service provider, including costs of
human resources and costs of facility, equipment and materials. Reasonable
profit margin will be determined with mainly making reference to the
historical average prices of similar products or services (where possible)
published in the relevant industry, and/or the profit margin of the comparable
products and services disclosed by other listed companies. The profit margin
of CNACG Group shall not exceed 10%. The final transaction prices shall be
determined on terms that, to the Group, are no less favorable than those
provided by independent third parties to the Group or those provided by CNACG
Group to independent third parties (with regards to the receiving of services
by the Group), or no more favorable than those provided by the Group to the
independent third parties (with regards to the rendering of services by the
Group).
9 Aircraft Sale Framework Agreement The Company and Beijing Leasing Company (Beijing Leasing Company is a Entered into on 30 October 2025 with a term from 30 October 2025 to 31 During the term of the Aircraft Sale Framework Agreement, the Company will The consideration under the Aircraft Sale Framework Agreement shall be
subsidiary of CNAHC, and therefore a connected person of the Company) December 2027 from time to time sell aircraft owned by the Company to Beijing Leasing determined after arm's length negotiation between the Company and Beijing
Company by way of agreement transfer, and Beijing Leasing Company will pay the Leasing Company, and conducted on normal commercial terms. The tax-exclusive
consideration to the Company. selling price of the aircraft shall be the asset valuation value issued by an
independent third-party valuation institution.
The details are set out in the announcement of the Company dated 30 October
2025
10 Framework Agreement The Company and Cathay Pacific (Cathay Pacific is a substantial shareholder of Renewed on 30 August 2022 with a term from 1 January 2023 to 31 December 2025, Providing a framework for the transactions between the Group and Cathay Interline arrangements and codeshare arrangements: revenue is apportioned
the Company and therefore a connected person of the Company) details of which are set out in the announcement of the Company dated 30 Pacific Group arising from interline arrangements, code sharing arrangements, between the parties in accordance with bilateral prorate agreements which
August 2022 joint operating arrangements, aircraft leasing, frequent flyer programmes, the follow the principles in the Multi-lateral Prorate Agreement of International
provision of airline catering, ground support and engineering services and Air Transport Association.
other services and transactions agreed.
Subsequently renewed on 28 May 2025 with a term from 1 January 2026 to 31
December 2028, details of which are set out in the announcement of the Company Joint operating arrangements: revenue is apportioned between the parties
dated 28 May 2025 having regard to the fleet capacity of both parties and the values of seats
sold by each party.
Aircraft leasing: rentals payable under aircraft leases are determined after
negotiations at arm's length between the parties having regard to rentals
payable under comparable leases between unconnected parties for comparable
aircraft and comparable periods and prevailing long-term interest rates.
Frequent flyer programmes: frequent flyers of either party can earn mileage
credits by taking the other party's flights. Payments by each party to the
other for mileage values are determined by the parties on an arm's length
basis having regard to comparable mileage values payable by unconnected
airlines to each other.
Airline catering: the parties determine the pricing of airline catering having
regard to quotations provided by unconnected caterers, taking due account of
material and labor costs, quality, assurance of supply, safety and innovation
(including changes in the foregoing matters).
Ground support and engineering services: the pricing is required to be no less
favorable than that offered for comparable services to unconnected parties
taking due account of the quality of services.
Other products and services (including leasing premises and handling customs
clearance): the pricing is determined having regard to relevant market
information (including independent third-party quotations for comparable
products and services), costs incurred by the relevant party and the quality
of products and services (including changes in any of the foregoing).
11 ACC Framework Agreement The Company and Air China Cargo (a 45%-owned subsidiary of CNAHC, and Renewed on 30 October 2024 Exclusive operation of the passenger aircraft cargo business: through arm's Exclusive operation of the passenger aircraft cargo business:
therefore a connected person of the Company)
length negotiation between both parties, the Group and the ACC Group have
with a term from 1 January 2025 to 31 December 2027, details of which are set determined to carry out a long-term collaboration for the passenger aircraft
out in the announcement of the Company dated 30 October 2024 cargo business under an exclusive operating model. The entire passenger
aircraft cargo business of the Group will be operated exclusively by the ACC During the exclusive operation term, the Group shall charge the ACC Group the
Group. The ACC Group shall undertake the overall responsibilities for transportation service fee regularly in each year. Such transportation service
transporting the cargos to the consignors with respect to the cargos which are fee shall be determined based on the ACC Group's actual cargo revenue
transported through the passenger aircraft. generated from the exclusive operation of the Group's passenger aircraft cargo
business after deducting certain operating fee rate. The specific formulas are
as follows:
Ground support services and other services: the ground support services and
other services provided by the Group to the ACC Group include but are not
limited to operation support services, IT sharing services, comprehensive Transportation service fee = actual revenue from the passenger aircraft cargo
support services, engine and aircraft-related materials sharing services, business × (1 - operating fee rate)
retiree management services, training services, human resources services, and
procurement and maintenance services. The ground support services and other
services provided by the ACC Group to the Group include but are not limited to
ground support services (cargo terminal services and airport apron services), Operating fee rate = operating expense rate + reward and penalty fee rate
container and pallet management services, engine and aircraft-related
materials sharing services.
Reward and penalty fee rate = (growth rate of passenger aircraft cargo yield
for the current year - industry growth rate of cargo yield for the current
Property leasing: the Group may rent out its own properties or land with legal year) × 50%
use rights to ACC Group for its production and operation, office and storage
use, and the Group may lease ACC Group's self-owned properties and land with
legal use rights from the ACC Group in the event that its own properties could
not be able to meet its business needs such as production and operation, Ground support services and other services:
office and storage.
(1) Follow the government and industry pricing or guidance price if it is
available, and taking into account the comparable market price (if any),
relevant laws, tax policies and other factors, the final transaction price
shall be determined through arm's length negotiation between both parties;
(2) If no government pricing or guidance price is available: first
identify the market prices offered by at least two independent third parties
on the market for the same type of service, and after taking certain factors
into account such as the service standard, service scope, business volume and
specific needs of parties, both parties shall determine the final transaction
price through arm's length negotiation. If any service needs of the service
recipient change, appropriate adjustment will be made to the transaction price
after negotiation between both parties based on the extent of variation in
relevant costs, service quality or other factors;
(3) If neither of the above cases is applicable: the price shall be
determined on the basis of costs plus reasonable profit. The costs are mainly
based on the costs and expenses of the service provider, including costs of
human resources and costs of facility, equipment and materials. Reasonable
profit margin will be determined with mainly making reference to the
historical average prices of similar products or services (where possible)
published in the relevant industry, and/or the profit margin of the comparable
products and services disclosed by other listed companies. The reasonable
profit margin of ACC Group shall not exceed 10%. The final transaction prices
shall be determined on terms that, to the Group, are no less favorable than
those provided by independent third parties to the Group or those provided by
ACC Group to independent third parties.
Property leasing services:
(1) The Group as lessor: first, the Group shall provide quotation of the
leased properties or land to ACC Group after taking into account the factors
including the relevant costs, tax and reasonable profit margin relating to the
properties or land. Then, the rental prices for the leased properties or land
shall be determined through arm's length negotiations between the Group and
ACC Group after ACC Group takes into account the factors such as the location
of the leased properties or land and the service quality. Such rental prices
shall not be lower than the rent offered by the Group to an independent third
party (if any) in comparable circumstances.
(2) The Group as lessee: first, the Group shall conduct market research
and collect, consolidate and analyze information in respect of provision of
leasing services by independent third parties for the same type of properties
or land (if any) in close proximity to the properties or land to be leased.
Then, (a) if there is comparable market of the same type identified through
market research, the parties shall determine the rental prices for the leased
properties or land through arm's length negotiations with reference to the
market price for the same type of services available from at least two
independent third parties after taking into account the relevant factors. The
relevant factors include the geographical location, function and layout,
furnishing, ancillary facilities and property services of the property or land
as well as the specific needs of the lessee; and (b) if there is no comparable
market of the same type found in the neighboring areas through market
research, the price shall be determined by adopting the cost-plus approach:
the rental price of the leased properties or land shall be determined through
arm's length negotiations between the parties based on the relevant costs, tax
and reasonable profit margin of the properties or land offered by ACC Group.
The relevant costs include construction costs, depreciation costs, funding
costs and maintenance costs. Reasonable profit margin will be determined with
mainly making reference to the historical average prices on similar services
(where possible) published regarding the property leasing industry, and/or the
profit margin of the comparable services disclosed by other listed companies,
and the reasonable profit margin of ACC Group shall not exceed 10%. The
abovementioned rental prices shall not be higher than those offered by ACC
Group to the independent third parties (if any) in comparable circumstances.
(3) The Group as lessee and lessor: as a separate matter, when leasing
each other's properties or land, the parties may determine the quotation for
the rental prices of their respective properties or land based on the above
pricing principles, and then exchange the properties and land use right in
accordance with the principle of equivalent exchange.
The Company has confirmed that the execution and implementation of the
specific agreements under the continuing connected transactions set out above
during the Reporting Period has followed the pricing policies of such
continuing connected transactions.
Transaction Caps and Actual Transaction Amounts for the Reporting Period
Actual transaction amounts and transaction caps of the above-mentioned
continuing connected transactions for the Reporting Period are as follows:
Total amount for
the Reporting Period
Currency Annual cap Actual amount
(in millions) (in millions)
Transactions with CNAHC Group:
Revenue from government charter flight services RMB 900 490
Revenue from comprehensive services RMB 150 64
Expenditure on comprehensive services RMB 3,200 2,717
Revenue from property leasing RMB 120 18
Total value of right-of-use assets involved in property leasing RMB 250 95
Expenditure on media and advertising services RMB 400 155
Maximum daily balance of loans granted by CNAF to RMB 5,500 338
CNAHC Group
Transactions with CNACG Group:
Expenditure on ground support services and other services RMB 850 413
Total value of right-of-use assets involved in financing and operating leasing RMB 17,500 9,784
Annual rental fee in relation to the operating leases not accounted for as RMB 220 0.42
right-of-use assets provided by the CNACG Group
Aggregate amount of consideration for aircraft sale paid RMB 120 53
by Beijing Leasing Company to the Company under the
Aircraft Sale Framework Agreement
Transactions with Cathay Pacific Group:
Aggregate amount payable/paid by the Group to HKD 900 134
Cathay Pacific Group
Aggregate amount payable/paid by Cathay Pacific Group to HKD 900 382
the Group
Transactions with ACC Group:
Transportation service fee of the passenger aircraft cargo business RMB 11,000 7,194
Transaction amount of ground handling and other services provided by the Group RMB 2,100 1,161
to ACC Group
Transaction amount of ground handling and other services provided by ACC Group RMB 1,500 858
to the Group
Revenue from property leasing services provided by the Group to ACC Group RMB 250 134
Transactions with CNAF:
Maximum daily balance of deposits placed by the Group with CNAF RMB 23,000 16,798
CONFIRMATION FROM INDEPENDENT NON-EXECUTIVE DIRECTORS
The independent non-executive Directors of the Company have confirmed that
during the Reporting Period, all continuing connected transactions to which
the Company was a party have been entered into in the ordinary and usual
course of business of the Company, on normal commercial terms or better and
have been carried out according to the agreements governing them and that the
terms of them were fair and reasonable and in the interests of the
shareholders of the Company as a whole.
CONFIRMATION FROM THE AUDITOR
Pursuant to Rule 14A.56 of the Listing Rules, the listed issuer must engage
its auditors to report on the continuing connected transactions every year.
The auditor must provide a letter to the listed issuer's board of directors
confirming whether anything has come to their attention that causes them to
believe that the continuing connected transactions:
(1) have not been approved by the listed issuer's board of
directors;
(2) were not, in all material respects, in accordance with the
pricing policies of the listed issuer's group for transactions involving the
provision of goods or services by the listed issuer's group;
(3) were not entered into, in all material respects, in
accordance with the relevant agreements governing the transactions; and
(4) have exceeded the annual cap.
Pursuant to the above requirement under Rule 14A.56 of the Listing Rules, the
Board engaged the auditors of the Company to report on the Group's continuing
connected transactions in accordance with Hong Kong Standard on Assurance
Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews
of Historical Financial Information" and with reference to Practice Note 740
(Revised) "Auditor's Letter on Continuing Connected Transactions under the
Hong Kong Listing Rules" issued by the Hong Kong Institute of Certified Public
Accountants. The auditors have issued their unmodified letter containing their
conclusion in respect of the continuing connected transactions disclosed on
page 76 of this annual report in accordance with Rule 14A.56 of the Listing
Rules.
RELATED PARTY TRANSACTIONS
Details of the significant related party transactions entered into by the
Group during the Reporting Period are set out in note 45 to the financial
statements of this annual report. On 26 April 2023, the Company (as the
seller) entered into the aircraft sale and purchase agreement with Air China
Cargo (as the purchaser), pursuant to which the Company shall transfer to Air
China Cargo eight A330-200 aircraft. The disposals of the eight A330-200
aircraft are scheduled to be completed in tranches during the period from 2023
to 2025. Except for the aforementioned transaction and the transactions
described in the section headed "Connected Transactions" in this Report of the
Directors, in respect of which the disclosure requirements under Chapter 14A
of the Listing Rules have been complied with, none of these related party
transactions constitutes a disclosable connected transaction as defined under
the Listing Rules.
CONTRACT OF SIGNIFICANCE
Save as disclosed in the section headed "Connected Transactions" of this
Report of the Directors, none of the Company or any of its subsidiaries
entered into any contract of significance with the controlling shareholder or
any of its subsidiaries, and there is no contract of significance in relation
to provision of services by the controlling shareholder or any of its
subsidiaries to the Company or any of its subsidiaries.
CORPORATE BONDS AS AT THE END OF THE REPORTING PERIOD
The Group's corporate bonds as at the end of the Reporting Period are
summarized as the followings:
BASIC INFORMATION ON DEBT FINANCING INSTRUMENTS AS AT THE END OF THE REPORTING
PERIOD
Unit: RMB100 million, Currency: RMB
Name of Bond Abbreviation Code Issue Date Value Date Expiry Date Balance of the Bond Interest Rate (%) Payment of
principal and interest
Air China Limited 2025 Super Short-term Commercial Paper (Fourth Tranche) 25ACSCP004 012581468 20 June 2025 23 June 2025 20 March 2026 20.16 1.51 One-off payment of principal and interest on maturity
Air China Limited 2025 Super Short-term Commercial Paper (Fifth Tranche) 25ACSCP005 012581770 24 July 2025 24 July 2025 20 April 2026 20.13 1.51 One-off payment of principal and interest on maturity
Air China Limited 2025 Super Short-term Commercial Paper (Sixth Tranche) 25ACSCP006 012582753 13 November 2025 14 November 2025 11 August 2026 20.04 1.63 One-off payment of principal and interest on maturity
Air China Limited 2025 Super Short-term Commercial Paper (Seventh Tranche) 25ACSCP007 012582852 21 November 2025 24 November 2025 21 August 2026 20.03 1.63 One-off payment of principal and interest on maturity
Air China Limited 2025 Short-term Commercial Paper (First Tranche) 25ACCP001 042580496 18 September 2025 19 September 2025 18 September 2026 30.15 1.70 One-off payment of principal and interest on maturity
Air China Limited 2024 Medium Term Note (First Tranche) 24ACMTN001 102482159 4 June 2024 5 June 2024 5 June 2027 10.13 2.25 Interest on annual basis Repayment of principal on maturity
Air China Limited 2024 Medium Term Note (Second Tranche) 24ACMTN002 102484189 19 September 2024 20 September 2024 20 September 2027 30.17 2.03 Interest on annual basis Repayment of principal on maturity
Air China Limited 2024 Medium Term Note (Third Tranche) 24ACMTN003 102484862 11 November 2024 12 November 2024 12 November 2027 20.06 2.15 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (First Tranche) 25ACMTN001 102581251 19 March 2025 20 March 2025 20 March 2028 25.40 2.03 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Second Tranche) 25ACMTN002 102581322 21 March 2025 24 March 2025 24 March 2030 20.33 2.15 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Third Tranche) 25ACMTN003 102581710 17 April 2025 18 April 2025 18 April 2028 20.26 1.82 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Fourth Tranche) 25ACMTN004 102581862 24 April 2025 25 April 2025 25 April 2028 25.32 1.85 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Fifth Tranche) 25ACMTN005 102582133 22 May 2025 23 May 2025 23 May 2028 30.32 1.77 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Sixth Tranche) 25ACMTN006 102582162 26 May 2025 27 May 2025 27 May 2028 30.32 1.76 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Seventh Tranche) 25ACMTN007 102582570 23 June 2025 24 June 2025 24 June 2028 20.18 1.74 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Eighth Tranche) 25ACMTN008 102583943 17 September 2025 18 September 2025 18 September 2028 30.17 1.96 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Ninth Tranche) 25ACMTN009 102584041 22 September 2025 23 September 2025 23 September 2028 30.16 1.96 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Tenth Tranche) 25ACMTN010 102585302 18 December 2025 19 December 2025 19 December 2028 15.01 1.85 Interest on annual basis Repayment of principal on maturity
Air China Limited 2025 Medium Term Note (Eleventh Tranche) 25ACMTN011 102585322 22 December 2025 23 December 2025 23 December 2028 15.01 1.81 Interest on annual basis Repayment of principal on maturity
In terms of the place of trading, the bonds listed in the table, namely
"25ACSCP004", "25ACSCP005", "25ACSCP006", "25ACSCP007", "25ACCP001",
"24ACMTN001", "24ACMTN002", "24ACMTN003", "25ACMTN001", "25ACMTN002",
"25ACMTN003", "25ACMTN004", "25ACMTN005", "25ACMTN006", "25ACMTN007",
"25ACMTN008", "25ACMTN009", "25ACMTN010" and "25ACMTN011" are all traded on
the interbank bond market. In terms of investor suitability arrangement, they
are all issued to institutional investors in the national interbank bond
market. In terms of trading mechanism, they all follow the trading rules of
the National Interbank Funding Centre, and are not subject to the risk of
termination of listing and trading.
Payment of principal and interest for corporate bonds during the Reporting
Period
Name of Bond Payment of Principal and Interest
Air China Limited 2024 Super Short-term Commercial Paper (Fourth Tranche) On 9 May 2025, Air China completed the payment of principal and interest on
"24ACSCP004" Super Short-term Commercial Paper.
Air China Limited 2024 Super Short-term Commercial Paper (Fifth Tranche) On 9 May 2025, Air China completed the payment of principal and interest on
"24ACSCP005" Super Short-term Commercial Paper.
Air China Limited 2024 Medium Term Note (First Tranche) On 5 June 2025, Air China completed the interest payment on "24ACMTN001"
Medium Term Note.
Air China Limited 2024 Super Short-term Commercial Paper (Third Tranche) On 20 June 2025, Air China completed the payment of principal and interest on
"24ACSCP003" Super Short-term Commercial Paper.
Air China Limited 2024 Medium Term Note (Second Tranche) On 20 September 2025, Air China completed the interest payment on "24ACMTN002"
Medium Term Note.
Air China Limited 2022 Medium Term Note (First Tranche) On 23 September 2025, Air China completed the payment of principal and
interest on "22ACMTN001" Medium Term Note.
Air China Limited 2025 Super Short-term Commercial Paper (Third Tranche) On 8 October 2025, Air China completed the payment of principal and interest
on "25ACSCP003" Super Short-term Commercial Paper.
Air China Limited 2024 Medium Term Note (Third Tranche) On 12 November 2025, Air China completed the interest payment on "24ACMTN003"
Medium Term Note.
Air China Limited 2025 Super Short-term Commercial Paper (First Tranche) On 15 November 2025, Air China completed the payment of principal and interest
on "25ACSCP001" Super Short-term Commercial Paper.
Air China Limited 2025 Super Short-term Commercial Paper (Second Tranche) On 18 November 2025, Air China completed the payment of principal and interest
on "25ACSCP002" Super Short-term Commercial Paper.
AUDITOR
Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public
Accountants LLP (collectively, "Deloitte") served as the Company's
international auditor, domestic auditor and internal control auditor
respectively for the years from 2017 to 2024.
On 27 March 2025, the Board of the Company proposed to appoint KPMG Huazhen
LLP as the Company's domestic auditor and internal control auditor for 2025
and KPMG as the Company's international auditor for 2025; such appointments
have been considered and approved by the shareholders of the Company at the
annual general meeting held on 24 June 2025. For details, please refer to the
announcements of the Company dated 27 March 2025 and 24 June 2025.
The sections, reports or notes of this annual report mentioned above
constitute a part of this Report of the Directors.
By Order of the Board
Liu Tiexiang
Chairman
26 March 2026
Profile of Directors and Senior Management
DIRECTORS
Mr. Liu Tiexiang, aged 59, graduated from the Air Force No.1 Aviation
University with a major in aviation flight and from the Party School of the
Central Committee of the Communist Party of China with a major in economic
management, and holds the title of Senior Pilot. Mr. Liu started his career in
June 1983. Mr. Liu consecutively served as the general manager of the flight
technology management department, the chief captain of the chief flight team,
the chief pilot, the vice president, member of the Standing Committee of the
Party Committee and the chief operating officer of Air China Limited; the vice
general manager, member of the Party Leadership Group, the general manager,
the deputy secretary of the Party Leadership Group and a director of China
Eastern Air Holding Company Limited; the vice general manager, member of the
Standing Committee of the Party Committee, the general manager, the deputy
secretary of the Party Committee and the vice chairman of China Eastern
Airlines Corporation Limited. Mr. Liu has been serving as the director,
chairman and the secretary of the Party Leadership CNAHC Group since August
2025, and has been also serving as member of the Party Committee, member of
the Standing Committee and the secretary of the Party Committee of the Company
since September 2025. With effect from October 2025, he was appointed as the
Chairman of the Company. Since December 2025, he has concurrently served as a
non-executive director and the vice chairman of the board of directors of
Cathay Pacific.
Mr. Ma Chongxian, aged 60, graduated from the department of economics of Inner
Mongolia University majoring in planning and statistics with a bachelor's
degree, and holds a degree of EMBA in Tsinghua University. Mr. Ma started his
career in the civil aviation industry in July 1988. Mr. Ma served as the Vice
President and a member of the Standing Committee of the Party Committee of Air
China from April 2010 to May 2021. From December 2016 to April 2021, he served
as the deputy general manager and a member of the Party Leadership Group of
CNAHC. He was the deputy secretary of the Party Leadership Group of CNAHC from
April 2021 to September 2022, as well as the director of CNAHC from May 2021.
He was the general manager of CNAHC, and concurrently the President and deputy
secretary of the Party Committee of the Company from May 2021 to September
2022. He concurrently served as the non-executive director and the vice
chairman of the board of directors of Cathay Pacific from November 2022 to
December 2025, and an executive Director of the Company from July 2021 to
October 2025. He served as the Vice Chairman of the Company from July 2021 to
September 2022. He served as the chairman and secretary of the Party
Leadership Group of CNAHC from September 2022 to August 2025, the secretary of
the Party Committee of the Company from September 2022 to September 2025, and
the Chairman of the Company from September 2022 to October 2025.
Mr. Qu Guangji, aged 55, graduated from the Department of Economics and
Statistics of Xi'an Institute of Statistics with a bachelor's degree in
Statistics, and obtained a master's degree in Economics from Dongbei
University of Finance and Economics, and achieved an Executive Master of
Business Administration (EMBA) degree from Tsinghua University, French
National School of Bridges and Roads and National School of Civil Aviation
when he was on the job. He is an economist. Mr. Qu started his career in July
1993, once served as the General Manager of Transportation Network Department
of the Marketing Committee, the General Manager of the Network Revenue
Department of the Marketing Committee, the Deputy Director General of the
Marketing Committee, the President of Hubei Branch, the President of Xinjiang
branch, and the President of Shenzhen Branch of China Southern Airlines
Company Limited. From July 2023 to January 2026, Mr. Qu served as the Deputy
General Manager and a member of the Party Leadership Group of China Southern
Air Holding Company Limited, and the Deputy General Manager and a member of
the Party Committee of China Southern Airlines Company Limited. Since January
2024, Mr. Qu has been serving as a non-executive director of TravelSky
Technology Limited. He has been serving as a director, the General Manager,
and the Deputy Secretary of the Party Leadership Group of CNAHC since January
2026. He has been serving as the Deputy Secretary of the Party Committee of
the Company since February 2026, and as the President, executive Director, and
Vice Chairman of the Company since March 2026.
Mr. Wang Mingyuan, aged 60, graduated from Xiamen University majoring in
planning and statistics. Mr. Wang started his career in the civil aviation
industry in July 1988. Mr. Wang was appointed as a member of the Standing
Committee of the Party Committee of the Company in February 2011, and served
as the Vice President of the Company from February 2011 to March 2023. He was
appointed as a member of the Party Leadership Group of CNAHC in April 2020,
and served as the deputy general manager of CNAHC from April 2020 to January
2023. He has also served as the vice chairman of Tibet Airlines Co., Ltd.
since June 2020 and the chairman of Air Macau Company Limited from March 2022
to February 2025. He served as a director, the general manager and the deputy
secretary of the Party Leadership Group of CNAHC from January 2023 to January
2026, and served as the deputy secretary of the Party Committee of the Company
from February 2023 to February 2026. He served as the President, Director and
Vice Chairman of the Company from March 2023 to March 2026, and was appointed
as a non-executive director of Cathay Pacific in July 2023.
Mr. Cui Xiaofeng, aged 56, graduated from Shaanxi Normal University majoring
in political education with a bachelor's degree, and holds a master's degree
in engineering and a master's degree in business administration. Mr. Cui
started working in the civil aviation industry in July 1992. Mr. Cui served as
the deputy director and a member of the Party Leadership Group of the Civil
Aviation Administration of China from June 2019 to June 2024. He has served as
a director and the deputy secretary of the Party Leadership Group of CNAHC
since June 2024, and has served as the deputy secretary of the Party Committee
of the Company since July 2024. He has been serving as a non-executive
Director of the Company since August 2024.
Mr. Patrick Healy, aged 60, graduated from the University of Cambridge with a
master's degree in Modern Languages. He has acted as an executive director of
the beverages division of Swire Pacific Limited since January 2013 and a
director of John Swire & Sons (H.K.) Limited since December 2014. He has
been serving as the chairman of Swire Coca-Cola Limited since October 2019 and
the executive director and chairman of Cathay Pacific since November 2019. He
has been serving as a non-executive Director of the Company since December
2019, and a director of Swire Pacific Limited since August 2021. He is a
member of the International Air Transport Association Board of Governors and
its Chair Committee.
Mr. Xiao Peng, aged 60, graduated from Civil Aviation College of China
majoring in maintenance of aircraft engine under the department of aviation
machinery. He started his career in the civil aviation industry in August
1988. He served as the chairman of the labor union of CNAHC and the chairman
of the labor union of the Company from November 2022 to September 2025, and as
the Chief Engineer of the Company from November 2022 to October 2025, as well
as the employee representative Director of CNAHC and the employee
representative Director of the Company since March 2023.
Mr. Xu Niansha, aged 68, holds a doctorate degree in economics from Peking
University and a doctorate degree in law from China University of Political
Science and Law. He has acted as the chairman of CITIC Offshore Helicopter
Co., Ltd., the chairman of China Ocean Aviation Group Limited, and the
secretary of the Party Committee and the vice chairman of China National
Machinery Industry Corporation. He served as the secretary of the Party
Committee and the chairman of China Poly Group Corporation Limited from May
2013 to March 2021, and an external director of COFCO Corporation from July
2021 to December 2024. He has been serving as the secretary of the Party
Committee of the China Machinery Industry Federation since August 2021 and as
the chairman of the China Machinery Industry Federation since August 2022. He
has been an independent non-executive Director of the Company since February
2025. He has been serving as an external director of China FAW Group Co., Ltd.
since April 2025. He is concurrently the chairman of the ICC China Commission
on Corporate Responsibility and Anti-Corruption, the vice president of China
National Light Industry Council and the president of the China Arts and Crafts
Association.
Mr. He Yun, aged 64, holds a postgraduate diploma in software engineering from
Beijing Institute of Technology. He served as the head of the fourth corporate
audit office of the National Audit Office from April 2018 to March 2021. He
has been serving as an independent non-executive Director of the Company since
February 2022.
Ms. Winnie Tam Wan-chi, aged 64, graduated from the Faculty of Law of The
University of Hong Kong, a barrister, international arbitrator and mediator.
She was appointed as a "Senior Counsel" in 2006, and was awarded the Justice
of the Peace and the Silver Bauhinia Star for her contributions to public
service. She is currently the co-chairlady of Des Voeux Chambers, a member of
the 14th National Committee of the Chinese People's Political Consultative
Conference, a member of the Independent Commission on Remuneration of the
HKSAR and a vice-chairlady of the Board of Governors of Hong Kong Philharmonic
Society Limited. She has been serving as an independent non-executive Director
of the Company since February 2022.
Mr. Gao Chunlei, aged 59, holds a doctorate degree in business administration
and is a senior economist. Mr. Gao served as the chief accountant of China
Tower Corporation Limited from August 2014 to February 2022, and served as a
director and the deputy secretary of the Party Committee of China Tower
Corporation Limited from February 2022 to November 2024. He has been a
full-time external director for state-owned enterprises since November 2024.
He has been serving as an independent
non-executive Director of the Company since February 2025. He has been serving
as an external director of China Satellite Network Group Co., Ltd. since April
2025. He has been serving as an external director of China Communications
Construction Group (Limited) and the non-executive director of China
Communications Construction Company Limited since January 2026.
SENIOR MANAGEMENT
Mr. Qu Guangji: Please refer to "Directors" for his biographies.
Mr. Wang Mingyuan: Please refer to "Directors" for his biographies.
Mr. Tan Huanmin, aged 61, graduated from Jilin University School of Law
majoring in constitutional law and holds a postgraduate diploma. Mr. Tan is a
senior political work specialist. From December 2016 to January 2019, Mr. Tan
was a member of the Party Leadership Group and team leader of the Discipline
Inspection Group of Party Leadership Group of China Aerospace Science &
Technology Corporation. From January 2019 to August 2025, Mr. Tan served as
team leader of the Discipline Inspection and Supervision Group and a member of
the Party Leadership Group of CNAHC, and a standing member of the Party
Committee and the secretary of Committee for Discipline Inspection of the
Company.
Mr. Zhang Sheng, aged 53, graduated from the Renmin University of
China/American City University with a bachelor's degree in business
administration and a master's degree in business administration. Mr. Zhang
started his career in the civil aviation industry in July 1992. In May 2020,
he was appointed as the deputy general manager and a member of the Party
Leadership Group of CNAHC as well as a member of the Standing Committee of the
Party Committee of the Company. In June 2020, he was appointed as the Vice
President of the Company.
Mr. Sun Yuquan, aged 52, graduated from Nanjing University of Science &
Technology majoring in accounting. He is a professional senior engineer and a
senior accountant. He served as the general manager of the finance department
of China Rong Tong Asset Management Group Corporation Limited from July 2019
to February 2022. He has been serving as the chief accountant and a member of
the Party Leadership Group of CNAHC since February 2022. Since March 2022, he
has been serving as a member of the Standing Committee of the Party Committee
of the Company, and concurrently as the non-executive director of Cathay
Pacific Airways Limited, the chairman of China National Aviation Capital
Holding Co., Ltd. and the chairman of China National Aviation Media Co., Ltd.
He became the Chief Accountant of the Company in March 2023. He also served as
the chairman of China National Aviation Finance Co., Ltd. from November 2023
to April 2025. He has been the director of TravelSky Technology Limited since
January 2024. Concurrently, he has been serving as the chairman of China
National Aviation Corporation (Group) Limited since April 2024.
Mr. Ni Jiliang, aged 59, graduated from Civil Aviation College of China
majoring in maintenance of aircraft, engines and equipment under the
department of aviation machinery. He joined Air China in July 1988. He served
as the chief executive officer and the deputy secretary of the Party Committee
of Aircraft Maintenance and Engineering Corporation between September 2017 and
April 2020, and the Chief Engineer of the Company from January 2020 to
November 2022. Since April 2020, he has served as the chairman and secretary
of the Party Committee of Ameco. He has been serving as the deputy general
manager and a member of the Party Leadership Group of CNAHC since April 2022,
and the Vice President and a member of the Standing Committee of the Party
Committee of the Company since May 2022. He was also appointed as the chairman
of Beijing Aero-Engine Services Co., Ltd. in August 2022, and the chairman of
Sichuan Services Aero-Engine Maintenance Co., Ltd. in September 2022.
Mr. Zheng Weimin, aged 60, graduated from the First Aviation Academy of Air
Force majoring in aviation and holds a postgraduate diploma. Mr. Zheng is a
senior pilot. He started his career in civil aviation industry in 1987 and
served as the chief captain of the general fleet and deputy secretary of the
Party Committee of the Company from December 2014 to March 2021. Between March
2021 to July 2023, he served as an assistant to the general manager of CNAHC.
He was also appointed as the chairman of Air China Inner Mongolia Co., Ltd.
from March 2023 to December 2024, and was appointed as the deputy general
manager and a member of the Party Leadership Group of CNAHC, as well as a
standing member of the Party Committee of the Company in July 2023. He has
been serving as the Vice President of the Company since August 2023.
Mr. Yan Fei, aged 57, graduated from Tianjin University majoring in business
administration and holds a master's degree in business administration. Mr. Yan
started his career in civil aviation industry in July 1992. From December 2018
to September 2021, he served as the general manager of the ground service
department and the deputy secretary of the Party Committee of the Company.
Between September 2021 and June 2022, he was the deputy general manager of
Tianjin Branch of the Company, being responsible for overseeing the works of
the branch. He served as the general manager and the deputy secretary of the
Party Committee of Tianjin Branch of the Company from June 2022 to January
2024. He has been serving as the deputy general manager and a member of the
Party Leadership Group of CNAHC since January 2024. He has also been serving
as the Vice President and a member of the Party Committee of the Company since
March 2024. Since May 2024, he has concurrently served as the chairman of Air
China Development Corporation (Hong Kong) Limited. From June 2024 to August
2025, he also served as the chairman of Air China Cargo Co., Ltd.
Mr. Yi Xuedong, aged 55, graduated from the Department of Law of Northwest
Institute of Politics and Law with a major in law, and obtained a master's
degree in law from the Renmin University of China Law School, possessing a
senior professional title of associate researcher. He started his career in
August 1992, and successively served as a division head, a deputy director
general, and a first-level inspector of the Bureau of Policies and Regulations
of the State-owned Assets Supervision and Administration Commission of the
State Council (SASAC), and the director and the secretary of the Party
Committee of the Research Center of SASAC. In January 2026, he was appointed
as the general legal counsel and the chief compliance officer of CNAHC. Since
March 2026, he has been serving as the general legal counsel and the chief
compliance officer of the Company.
Mr. Zhang Hua, aged 60, graduated from Zhongnan University of Finance and
Economics majoring in industrial economics and is an on-job postgraduate of
the Party School of the Central Committee of the Communist Party of China
majoring in economics and management. He served as the general legal counsel
of CNAHC from August 2016 to October 2025, and as the general legal counsel of
the Company from August 2017 to November 2025. He has been a chairman of
Dalian Airlines Company Limited since March 2020 and chairman of Beijing
Airlines Company Limited from September 2022 to August 2024. He concurrently
served as the chief compliance officer of CNAHC from December 2022 to October
2025, and the chief compliance officer of the Company from December 2022 to
November 2025.
Mr. Xiao Peng: Please refer to "Directors" for his biographies.
Mr. Xiao Feng, aged 57, graduated from the Management Engineering Department
of Harbin Civil Engineering & Architectural Institute majoring in
accounting. He holds a master's degree in business administration from China
Europe International Business School and is a senior accountant. He joined Air
China in July 1990. He served as the Chief Accountant of the Company from July
2014 to March 2023. Since November 2015, he has been serving as the chairman
of China National Aviation Company Limited, and from February 2016 to November
2023, he became the chairman of China National Aviation Finance Co., Ltd. He
has served as a non-executive director of Cathay Pacific Airways Limited since
January 2017. He became the Chief Economist of the Company in March 2023. He
has concurrently served as the secretary to the Board of the Company since
March 2024.
Mr. Yan Simeng, aged 43, graduated from the Department of Physics of Peking
University and obtained his doctorate in theoretical and computational physics
from the University of California, Irvine. Mr. Yan has been serving as Chief
Information Officer of the Company since September 2021.
Mr. Shen Jianming, aged 58, graduated from the First Flying Academy of the
China Air Force with a bachelor's degree in airplane piloting. Mr. Shen is a
senior pilot. He started his career in the civil aviation industry in 1987. He
has been serving as the Chief Safety Officer of the Company since October
2022.
Mr. Li Yunchuan, aged 58, graduated from Civil Aviation Flight University of
China majoring in flight technology and holds a postgraduate diploma. Mr. Li
is a senior pilot. He started his career in the civil aviation industry in
1988. He has been serving as the Chief Pilot of the Company since October 2023
and the director of Beijing Airlines since March 2024.
COMPANY SECRETARY
Mr. Xiao Feng: Please refer to "Senior Management" for his biographies.
Independent Auditor's Report
TO THE SHAREHOLDERS OF AIR CHINA LIMITED
(中國國際航空股份有限公司)
(Established in the People's Republic of China with limited liability)
Opinion
We have audited the consolidated financial statements of Air China Limited
(the "Company") and its subsidiaries (collectively referred to as the "Group")
set out on pages 93 to 194, which comprise the consolidated statement of
financial position as at 31 December 2025, the consolidated statement of
profit or loss, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended and notes,
comprising material accounting policy information and other explanatory
information.
In our opinion, the consolidated financial statements give a true and fair
view of the consolidated financial position of the Group as at 31 December
2025 and of its consolidated financial performance and its consolidated cash
flows for the year then ended in accordance with IFRS Accounting Standards as
issued by the International Accounting Standards Board ("IASB") and have been
properly prepared in compliance with the disclosure requirements of the Hong
Kong Companies Ordinance.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
("ISAs") as issued by the International Auditing and Assurance Standards Board
("IAASB"). Our responsibilities under those standards are further described in
the Auditor's responsibilities for the audit of the consolidated financial
statements section of our report. We are independent of the Group in
accordance with the International Ethics Standards Board for Accountants'
International Code of Ethics for Professional Accountants (including
International Independence Standards) (the "Code"), as applicable to audits of
financial statements of public interest entities. We have also fulfilled our
other ethical responsibilities in accordance with the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the consolidated financial statements for
the current period. These matters were addressed in the context of our audit
of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters (continued)
Passenger revenue recognition
Refer to the note 6 to consolidated financial statements and the accounting
policies in note 4.
Key audit matter How the matter was addressed in our audit
The Group's revenue is primarily generated from the provision of airline Our audit procedures in relation to the recognition of passenger revenue
services. Passenger revenue is recognised when transportation services are included the following:
provided.
• Evaluating, with the assistance of our IT specialists, the
We identified the recognition of passenger revenue as a key audit matter design, implementation and operating effectiveness of key internal controls
because passenger revenue is one of the key performance indicators of the over the Group's IT systems related to the recognition of passenger revenue,
Group and because of the significance in amount, large volumes of including:
transactions, the use of complex information technology systems, and the
presence of instances of manual journal entries or adjustments to passenger
revenue made outside the systems, both of which give rise to a risk of
material misstatement in respect of recognition of passenger revenue. - the general IT controls over the third-party business
systems and the Group's financial systems;
- the application controls over the completeness and accuracy
of sales data, carriage data and data from passenger revenue statements; and
those over the interface and reconciliation between the Group's financial
system and the third-party business systems;
• Comparing the passenger revenue recorded in the Group's
financial system with the statements generated from third-party business
systems;
• Inspecting passenger tickets, on a sample basis, and
comparing with the carriage information provided by third-party business
systems and corresponding payment records; and
• Inspecting underlying documentation for passenger revenue
related journal entries which met specific risk-based criteria.
Information other than the consolidated financial statements and auditor's
report thereon
The directors are responsible for the other information. The other information
comprises all the information included in the annual report, other than the
consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon as
part of our engagement to audit the consolidated financial statements. We have
performed an assurance engagement on the disclosed continuing connected
transactions that form part of the other information and provided a separate
assurance practitioner's conclusion thereon.
In connection with our audit of the consolidated financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the directors for the consolidated financial statements
The directors are responsible for the preparation of the consolidated
financial statements that give a true and fair view in accordance with IFRS
Accounting Standards as issued by the IASB and the disclosure requirements of
the Hong Kong Companies Ordinance and for such internal control as the
directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
The directors are assisted by the Audit and Risk Management Committee in
discharging their responsibilities for overseeing the Group's financial
reporting process.
Auditor's responsibilities for the audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. This report is made solely to you, as a body, and
for no other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
Auditor's responsibilities for the audit of the consolidated financial
statements (continued)
As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related disclosures made by
the directors.
• Conclude on the appropriateness of the directors' use of
the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures
in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content
of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient
appropriate audit evidence regarding the financial information of the entities
or business units within the Group as a basis for forming an opinion on the
consolidated financial statements. We are responsible for the direction,
supervision and review of the audit work performed for purposes of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Audit and Risk Management Committee regarding, among
other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
Auditor's responsibilities for the audit of the consolidated financial
statements (continued)
We also provide the Audit and Risk Management Committee with a statement that
we have complied with relevant ethical requirements regarding independence and
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence and, where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with Audit and Risk Management Committee, we
determine those matters that were of most significance in the audit of the
consolidated financial statements for the current period and are therefore the
key audit matters. We describe these matters in our auditor's report unless
law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor's
report is Chen Yuhong.
KPMG Huazhen LLP
Certified Public Accountants
(Registered as a Third Country Auditor with the UK Financial Reporting
Council)
Beijing, China
26 March 2026
Consolidated Statement of
Profit or Loss
For the Year Ended 31 December 2025
(Expressed in Renminbi ("RMB"))
2025 2024
NOTE RMB'000 RMB'000
Revenue 6 171,484,646 166,698,880
Other income and gains 8 5,269,298 7,319,912
176,753,944 174,018,792
Operating expenses
Jet fuel costs (50,041,444) (53,720,436)
Employee compensation costs 9 (37,047,474) (34,268,745)
Depreciation and amortisation 11 (30,717,739) (29,102,968)
Take-off, landing and depot charges (21,967,914) (20,915,459)
Aircraft maintenance, repair and overhaul costs (14,813,651) (12,848,288)
Air catering charges (4,505,386) (4,165,874)
Aircraft and engine lease expense (764,843) (358,885)
Other lease expenses (724,421) (598,621)
Other flight operation expenses (9,158,771) (9,119,619)
Selling and marketing expenses (4,918,115) (4,695,760)
General and administrative expenses (1,922,452) (1,872,201)
Impairment loss recognised on non-current assets 11 (96,292) (143,240)
Net impairment loss reversed under expected credit loss model 10 18,911 9,507
Impairment loss recognised on goodwill 20 (483,552) -
(177,143,143) (171,800,589)
(Loss)/profit from operations 11 (389,199) 2,218,203
Finance income 568,911 521,356
Finance costs 12 (5,553,051) (6,398,748)
Share of results of associates 3,135,745 2,610,723
Share of results of joint ventures 289,927 209,121
Exchange differences 327,561 (759,523)
Loss before taxation (1,620,106) (1,598,868)
Income tax expense 14 (1,922,270) (846,474)
Loss for the year (3,542,376) (2,445,342)
Attributable to:
- Equity shareholders of the Company (1,787,943) (232,557)
- Non-controlling interests (1,754,433) (2,212,785)
(3,542,376) (2,445,342)
Loss per share
- Basic and diluted (RMB) 15 RMB(0.11) RMB(0.01)
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Year Ended 31 December 2025
(Expressed in RMB)
2025 2024
NOTE RMB'000 RMB'000
Loss for the year (3,542,376) (2,445,342)
Other comprehensive income for the year
Items that will not be reclassified to profit or loss:
- Change in fair value of investments in equity instruments at fair value (50,780) (79,126)
through other comprehensive income
- Remeasurement of net defined benefit liability 954 (15,130)
- Share of other comprehensive income of an associate 34,324 (31,632)
- Related tax 12,695 19,782
Items that are or may be reclassified subsequently to profit or loss:
- Change in fair value of investments in debt instruments at fair value (18,160) 27,772
through other comprehensive income
- Impairment loss reversed on investments in debt instruments at fair value 1,114 394
through other comprehensive income
- Share of other comprehensive income of associates and joint ventures (250,132) (28,272)
- Exchange differences on translation of foreign operations (567,236) 434,021
- Related tax 4,261 (7,042)
Other comprehensive income for the year (net of tax) 16 (832,960) 320,767
Total comprehensive income for the year (4,375,336) (2,124,575)
Attributable to:
- Equity shareholders of the Company (2,576,314) 114,293
- Non-controlling interests (1,799,022) (2,238,868)
(4,375,336) (2,124,575)
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Consolidated Statement of Financial Position
At 31 December 2025
(Expressed in RMB)
31 December 31 December
2025 2024
NOTE RMB'000 RMB'000
Non-current assets
Property, plant and equipment 18 127,360,692 122,180,871
Right-of-use assets 19 121,670,850 118,832,142
Investment properties 659,519 693,059
Intangible assets 105,612 106,563
Goodwill 20 3,612,180 4,095,732
Interests in associates 22 15,787,587 14,632,923
Interests in joint ventures 23 2,644,892 2,423,853
Advance payments for aircraft and flight equipment 20,185,779 24,689,737
Deposits for aircraft under leases 488,745 526,004
Equity instruments at fair value through other comprehensive income 24 1,924,573 1,791,273
Debt instruments at fair value through other comprehensive income 25 1,093,435 1,426,851
Deferred tax assets 26 11,367,646 12,959,766
Other non-current assets 1,305,636 704,196
308,207,146 305,062,970
Current assets
Inventories 27 4,809,698 4,224,992
Accounts receivable 28 3,480,157 3,670,252
Bills receivable 12,516 7,785
Prepayments, deposits and other receivables 29 4,866,352 5,223,257
Financial assets at fair value through profit or loss 151,633 37,559
Time deposits and restricted deposits 30 1,564,056 1,428,429
Cash and cash equivalents 30 14,295,268 21,039,472
Assets held for sale - 94,829
Other current assets 31 5,623,629 4,960,628
34,803,309 40,687,203
Total assets 343,010,455 345,750,173
Current liabilities
Air traffic liabilities (11,221,885) (11,098,740)
Accounts payable 32 (18,716,316) (18,869,784)
Bills payable (1,500,000) -
Contract liabilities 37 (1,720,744) (1,171,172)
Dividends payable (103,367) (98,000)
Other payables and accruals 33 (16,671,365) (13,437,502)
Advance (73,656) (36,270)
Current taxation (109,089) (130,653)
Lease liabilities 34 (17,548,753) (17,464,654)
Interest-bearing borrowings 35 (47,210,707) (74,544,705)
Provision for return condition checks 36 (2,416,213) (758,575)
(117,292,095) (137,610,055)
Net current liabilities (82,488,786) (96,922,852)
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Total assets less current liabilities 225,718,360 208,140,118
Non-current liabilities
Lease liabilities 34 (61,452,171) (59,134,187)
Interest-bearing borrowings 35 (100,607,906) (84,836,960)
Provision for return condition checks 36 (20,149,949) (19,228,054)
Provision for early retirement benefit obligations (262) (359)
Contract liabilities 37 (2,873,684) (2,565,188)
Defined benefit obligations 38 (168,765) (186,700)
Deferred income 39 (401,549) (406,943)
Deferred tax liabilities 26 (137,992) (128,016)
Other non-current liabilities (731,358) (727,741)
(186,523,636) (167,214,148)
NET ASSETS 39,194,724 40,925,970
CAPITAL AND RESERVES
Issued capital 40 17,448,421 17,448,421
Reserves 25,066,365 27,679,751
Total equity attributable to equity shareholders of the Company 42,514,786 45,128,172
Non-controlling interests (3,320,062) (4,202,202)
TOTAL EQUITY 39,194,724 40,925,970
Approved and authorised for issue by the board of directors on 26 March 2026.
Liu Tiexiang Qu Guangji
Director Director
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Consolidated Statement of
Changes in Equity
For the Year Ended 31 December 2025
(Expressed in RMB)
Attributable to equity shareholders of the Company
NOTE Issued Capital Reserve General Foreign Accumulated Subtotal Non- Total
capital reserve and funds reserve and exchange losses controlling equity
revaluation safety fund translation interests
reserve reserve
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
As at 1 January 2024 16,200,793 40,368,217 11,564,287 156,687 (1,176,240) (29,907,769) 37,205,975 (1,941,966) 35,264,009
Changes in equity for 2024
Loss for the year - - - - - (232,557) (232,557) (2,212,785) (2,445,342)
Other comprehensive income - (86,365) - - 433,215 - 346,850 (26,083) 320,767
Total comprehensive income - (86,365) - - 433,215 (232,557) 114,293 (2,238,868) (2,124,575)
Issue of new shares 40 1,247,628 6,563,956 - - - - 7,811,584 - 7,811,584
Disposal of equity instruments - (12,082) - - - 12,082 - - -
at fair value through other comprehensive income
Equity transaction with non-controlling shareholders - (360) - - - - (360) (362) (722)
Dividends paid to non-controlling shareholders - - - - - - - (19,491) (19,491)
Appropriation of general reserve - - - 23,759 - (23,759) - - -
Others - (380) - (2,940) - - (3,320) (1,515) (4,835)
As at 31 December 2024 and 17,448,421 46,832,986 11,564,287 177,506 (743,025) (30,152,003) 45,128,172 (4,202,202) 40,925,970
1 January 2025
Changes in equity for 2025
Loss for the year - - - - - (1,787,943) (1,787,943) (1,754,433) (3,542,376)
Other comprehensive income - (217,356) - - (571,015) - (788,371) (44,589) (832,960)
Total comprehensive income - (217,356) - - (571,015) (1,787,943) (2,576,314) (1,799,022) (4,375,336)
Capital contribution by non-controlling shareholders - - - - - - - 2,711,901 2,711,901
Dividends paid to non-controlling shareholders - - - - - - - (29,833) (29,833)
Reclassification - (27,882) - - - 27,882 - - -
Others - (37,072) - - - - (37,072) (906) (37,978)
As at 31 December 2025 17,448,421 46,550,676 11,564,287 177,506 (1,314,040) (31,912,064) 42,514,786 (3,320,062) 39,194,724
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2025
(Expressed in RMB)
2025 2024
RMB'000 RMB'000
Operating activities
Loss before taxation (1,620,106) (1,598,868)
Adjustments for:
Share of results of associates and joint ventures (3,425,672) (2,819,844)
Exchange differences (327,561) 759,523
Finance income (568,911) (521,356)
Finance costs 5,553,051 6,398,748
Change in fair value of financial assets at fair value (2,413) (54)
through profit or loss
Gain on disposal of property, plant and equipment, right-of-use assets and (133,761) (994,891)
investment properties
(Loss)/gain on disposal of assets held for sale (4,325) 17,527
Depreciation of property, plant and equipment 14,910,278 13,439,898
Depreciation of right-of-use assets 15,773,927 15,629,518
Depreciation of investment properties 33,531 33,535
Amortisation of intangible assets 3 17
Impairment loss recognised on property, plant and equipment 96,292 143,240
Impairment loss recognised on goodwill 483,552 -
Inventories provision 6,236 12,760
Impairment loss recognised on accounts receivable, net 5,190 4,000
Impairment losses (reversed)/recognised in financial assets included in other (12,010) 2,918
current assets, net
Impairment losses reversed on deposits and other receivables, net (12,585) (18,960)
Impairment loss reversed on debt instruments at fair value through other 1,114 394
comprehensive income, net
Dividend income (16,578) (36,740)
Operating cash flows before movements in working capital 30,739,252 30,451,365
Changes in:
Deposits for aircraft under leases 37,259 (541)
Other non-current assets (601,440) 306
Inventories (584,706) (432,413)
Accounts receivable 188,089 (565,195)
Bills receivable (4,731) (4,184)
Prepayments, deposits and other receivables 5,049,950 4,564,222
Other current assets (650,991) (948,131)
Air traffic liabilities 123,145 2,372,236
Accounts payable (153,468) 504,009
Bills payable 1,500,000 (500,160)
Other payables and accruals 3,333,926 (2,264,047)
Provision for return condition checks 2,579,533 1,423,711
Provision for early retirement benefit obligations (97) (361)
Defined benefit obligations (17,935) (22,951)
Deferred income (5,394) 2,840
Contract liabilities 858,068 549,881
Advance (37,386) (36,270)
Other non-current liabilities 3,617 (354,560)
Cash generated from operations 42,356,691 34,739,757
Income tax paid (311,478) (194,050)
Interest paid (5,670,983) (6,561,686)
Net cash generated from operating activities 36,374,230 27,984,021
The notes on pages 100 to 194 form part of these consolidated financial
statements.
2025 2024
NOTE RMB'000 RMB'000
Investing activities
Advance payments for aircraft and flight equipment (6,188,314) (10,948,426)
Payments for the purchase of property, plant and equipment (11,372,962) (9,155,889)
Payments for the interest in a joint venture (66,791) (148,991)
Payments for the purchase of debt instruments and equity instruments at fair (1,191,531) (752,861)
value through other comprehensive income
Placement of term deposits (875,063) (627,763)
Payments for purchase of debt instruments at amortised cost - (500,000)
Decrease in restricted bank deposits against aircraft leases and others (7,173) (917)
Proceeds from disposal of property, plant and equipment, and assets held for 1,885,877 1,673,765
sale
Proceeds from disposal of interest in joint venture - 5,915
Dividends received from associates and joint ventures 1,430,221 1,514,842
Interest received 568,912 521,356
Proceeds from disposal of debt instruments and equity instruments at fair 673,447 476,033
value through other comprehensive income
Interests received from debt instruments at fair value through other 45,049 43,644
comprehensive income
Dividends received from equity instruments at fair value through other 16,578 36,740
comprehensive income
Net cash used in investing activities (15,081,750) (17,862,552)
Financing activities
Repayments of bank loans and other borrowings (72,986,148) (53,977,115)
Repayments of lease liabilities (19,002,842) (19,121,281)
Repayments of corporate bonds and short-term commercial papers (19,700,000) (6,000,000)
Dividends paid (29,833) (19,491)
Proceeds from new bank loans and other borrowings 36,526,783 54,310,833
Proceeds from issue of corporate bonds and short-term 44,500,000 13,000,000
commercial papers
Proceeds from issue of new shares - 7,816,860
Transaction costs attributable to issue of new shares - (5,276)
Payments for acquisition of non-controlling interests - (722)
Capital contribution from a non-controlling shareholder of a subsidiary 2,711,901 -
Net cash used in financing activities (27,980,139) (3,996,192)
Net (decrease)/increase in cash and cash equivalents (6,687,659) 6,125,277
Cash and cash equivalents at 1 January 30 21,039,472 15,016,804
Effect of foreign exchange rate changes (56,545) (102,609)
Cash and cash equivalents at 31 December 30 14,295,268 21,039,472
The notes on pages 100 to 194 form part of these consolidated financial
statements.
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2025
(Expressed in RMB)
1. CORPORATE INFORMATION
Air China Limited (the "Company") was established as a joint stock limited
company in Beijing, the People's Republic of China (the "PRC"), on 30
September 2004. The registered office of the Company is located at 1st Floor -
9th Floor 101, Building 1,30 Tianzhu Road, Shunyi District, Beijing, the PRC.
The Company's H shares are listed on The Stock Exchange of Hong Kong Limited
(the "HKSE") and the London Stock Exchange (the "LSE") while the Company's A
shares are listed on the Shanghai Stock Exchange. In the opinion of the
directors of the Company (the "Directors"), the Company's parent and ultimate
holding company is China National Aviation Holding Corporation Limited
("CNAHC"), a PRC state-owned enterprise under the supervision of the State
Council. CNAHC does not produce financial statements available for public use.
The principal activities of the Company and its subsidiaries (together
referred to as the "Group") are provision of airline and airline-related
services, including aircraft engineering services and airport ground handling
services.
The consolidated financial statements are presented in Renminbi ("RMB"), the
functional currency of the Company, and all values are rounded to the nearest
thousand ('000) unless otherwise indicated.
2. BASIS OF PREPARATION
As at 31 December 2025, the Group's current liabilities exceeded its current
assets by approximately RMB82,489 million. Considering the Group's expected
operating cash flows and the Company's unutilised bank facilities as at 31
December 2025, the Directors believe that the Group has sufficient financial
resources to finance its operation and to meet its financial obligations as
and when they fall due within the next twelve months from the end of the
reporting period. Accordingly, the consolidated financial statements have been
prepared on a going concern basis.
These financial statements have been prepared in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board
("IASB") and the disclosure requirements of the Hong Kong Companies Ordinance.
These financial statements also comply with the applicable disclosure
provisions of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited. Material accounting policies adopted by the
Group are disclosed below.
The IASB has issued certain new or amended IFRS Accounting Standards that are
first effective or available for early adoption for the current accounting
period of the Group. Note 3 provides information on any changes in accounting
policies resulting from initial application of these developments to the
extent that they are relevant to the Group for the current accounting period
reflected in these financial statements.
2. BASIS OF PREPARATION (continued)
The consolidated financial statements for the year comprise the Group and the
Group's interests in associates and joint ventures.
The measurement basis used in the preparation of the financial statements is
the historical cost basis except that the following assets and liabilities are
stated at their fair value as explained in the accounting policies set out
below:
- investments in debt and equity securities (see Note 4); and
- Non-current assets and disposal groups held for sale are
stated at the lower of carrying amount and fair value less costs to sell (see
Note 4).
The preparation of financial statements in conformity with IFRS Accounting
Standards requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Judgements made by management in the application of IFRS Accounting Standards
that have significant effect on the financial statements and major sources of
estimation uncertainty are discussed in Note 5.
3. CHANGES IN ACCOUNTING POLICIES
The Group has applied amendments to IAS 21, The effects of changes in foreign
exchange rates - Lack of exchangeability issued by the IASB to these financial
statements for the current accounting period. The amendments do not have a
material impact on these financial statements as the Group has not entered
into any foreign currency transactions in which the foreign currency is not
exchangeable into another currency.
4. MATERIAL ACCOUNTING POLICY INFORMATION
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company and its subsidiaries.
Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary.
Specifically, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated statement of profit or loss
from the date the Group gains control until the date when the Group ceases to
control the subsidiary.
Profit or loss and each item of other comprehensive income are attributed to
the owners of the Company and to the non-controlling interests ("NCI"). Total
comprehensive income of subsidiaries is attributed to the owners of the
Company and to the NCI even if this results in the NCI having a deficit
balance.
When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the Group's
accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in full
on consolidation.
NCI in subsidiaries are presented separately from the Group's equity therein,
which represent present ownership interests entitling their holders to a
proportionate share of net assets of the relevant subsidiaries upon
liquidation.
Business combinations
Acquisitions of businesses, other than business combination under common
control, are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value, which is
calculated as the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to the former
owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are generally
recognised in profit or loss as incurred.
The identifiable assets acquired and liabilities assumed must meet the
definitions of an asset and a liability in the Conceptual Framework for
Financial Reporting (the "Conceptual Framework") except for transactions and
events within the scope of IAS 37 Provisions, Contingent Liabilities and
Contingent Assets or IFRIC-Int 21 Levies, in which the Group applies IAS 37 or
IFRIC-Int 21 instead of the Conceptual Framework to identify the liabilities
it has assumed in a business combination. Contingent assets are not
recognised.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Business combinations (continued)
At the acquisition date, the identifiable assets acquired and the liabilities
assumed are recognised at their fair value, except that:
• deferred tax assets or liabilities, and assets or
liabilities related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits
respectively;
• liabilities or equity instruments related to share-based
payment arrangements of the acquiree or share-based payment arrangements of
the Group entered into to replace share-based payment arrangements of the
acquiree are measured in accordance with IFRS 2 Share-based Payment at the
acquisition date (see the accounting policy below);
• assets (or disposal groups) that are classified as held
for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that standard; and
• lease liabilities are recognised and measured at the
present value of the remaining lease payments (as defined in IFRS 16 Leases)
as if the acquired leases were new leases at the acquisition date, except for
leases for which (a) the lease term ends within 12 months of the acquisition
date; or (b) the underlying asset is of low value. Right-of-use assets are
recognised and measured at the same amount as the relevant lease liabilities,
adjusted to reflect favourable or unfavourable terms of the lease when
compared with market terms.
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any NCI in the acquiree, and the fair value of the
acquirer's previously held equity interest in the acquiree over the net amount
of the identifiable assets acquired and the liabilities assumed as at
acquisition date. If, after re-assessment, the net amount of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any NCI in the acquiree and the fair value of the
acquirer's previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a bargain purchase gain.
NCI that are present ownership interests and entitle their holders to a
proportionate share of the relevant subsidiary's net assets in the event of
liquidation are initially measured at the NCIs' proportionate share of the
recognised amounts of the acquiree's identifiable net assets or at fair value.
When a business combination is achieved in stages, the Group's previously held
equity interest in the acquiree is remeasured to fair value at the acquisition
date (i.e. the date when the Group obtains control), and the resulting gain or
loss, if any, is recognised in profit or loss or other comprehensive income,
as appropriate. Amounts arising from interests in the acquiree prior to the
acquisition date that have previously been recognised in other comprehensive
income and measured under IFRS 9 would be accounted for on the same basis as
would be required if the Group had disposed directly of the previously held
equity interest.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business (see the accounting
policy above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the
Group's cash-generating units (or group of cash-generating units) that is
expected to benefit from the synergies of the combination, which represent the
lowest level at which the goodwill is monitored for internal management
purposes and not larger than an operating segment.
A cash-generating unit (or group of cash-generating units) to which goodwill
has been allocated is tested for impairment annually or more frequently when
there is indication that the unit may be impaired. For goodwill arising on an
acquisition in a reporting period, the cash-generating unit (or group of
cash-generating units) to which goodwill has been allocated is tested for
impairment before the end of that reporting period. If the recoverable amount
is less than its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill and then to the other assets on a
pro-rata basis based on the carrying amount of each asset in the unit (or
group of cash-generating units).
The Group's policy for goodwill arising on the acquisition of an associate and
a joint venture is described below.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control
over those policies.
A joint venture is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are
incorporated in these consolidated financial statements using the equity
method of accounting. Under the equity method, an investment in an associate
or a joint venture is initially recognised in the consolidated statement of
financial position at cost and adjusted thereafter to recognise the Group's
share of the profit or loss and other comprehensive income of the associate or
joint venture. When the Group's share of losses of an associate or a joint
venture exceeds the Group's interest in that associate or joint venture (which
includes any long-term interests that, in substance, form part of the Group's
net investment in the associate or joint venture), the Group discontinues
recognising its share of further losses. Additional losses are recognised only
to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the
equity method from the date on which the investee becomes an associate or a
joint venture. On acquisition of the investment in an associate or a joint
venture, any excess of the cost of the investment over the Group's share of
the net fair value of the identifiable assets and liabilities of the investee
is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the
identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Investments in associates and joint ventures (continued)
The Group assesses whether there is objective evidence that the interest in an
associate or a joint venture may be impaired. When any objective evidence
exists, the entire carrying amount of the investment (including goodwill) is
tested for impairment in accordance with IAS 36 as a single asset by comparing
its recoverable amount (higher of value in use and fair value less costs of
disposal) with its carrying amount. Any impairment loss recognised is not
allocated to any asset, including goodwill, that forms part of the carrying
amount of the investment. Any reversal of that impairment loss is recognised
in accordance with IAS 36 to the extent that the recoverable amount of the
investment subsequently increases.
When the Group ceases to have significant influence over an associate or joint
control over a joint venture, it is accounted for as a disposal of the entire
interest in the investee with a resulting gain or loss being recognised in
profit or loss. When the Group retains an interest in the former associate or
joint venture and the retained interest is a financial asset within the scope
of IFRS 9 Financial instruments, the Group measures the retained interest at
fair value at that date and the fair value is regarded as its fair value on
initial recognition. The difference between the carrying amount of the
associate or joint venture and the fair value of any retained interest and any
proceeds from disposing relevant interest in the associate or joint venture is
included in the determination of the gain or loss on disposal of the associate
or joint venture. In addition, the Group accounts for all amounts previously
recognised in other comprehensive income in relation to that associate or
joint venture on the same basis as would be required if that associate or
joint venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognised in other comprehensive
income by that associate or joint venture would be reclassified to profit or
loss on the disposal of the related assets or liabilities, the Group
reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) upon disposal/partial disposal of the relevant
associate or joint venture.
When a group entity transacts with an associate or a joint venture of the
Group, profits and losses resulting from the transactions with the associate
or joint venture are recognised in the Group's consolidated financial
statements only to the extent of interests in the associate or joint venture
that are not related to the Group.
Revenue from contracts with customers
Information about the Group's accounting policies relating to revenue from
contracts with customers is provided in Notes 5, 6 and 37.
Maintenance and overhaul costs
In respect of aircraft and engines, costs of major overhauls are recognised in
the carrying amount of the property, plant and equipment or right-of-use
assets as a replacement if the recognition criteria are satisfied. Overhaul
components subject to replacement during major overhauls are depreciated over
the expected life between major overhauls.
The Group has the responsibility to fulfil certain return conditions under the
relevant leases agreements. In order to fulfil these return conditions, major
overhauls are required to be conducted. Accordingly, estimated overhaul costs
for aircraft under leases are accrued and charged to the profit or loss over
the lease terms using the ratios per flying hours/cycles. Differences between
the estimated costs and the actual costs of overhauls are included in the
profit or loss in the period of overhaul.
All other routine repair and maintenance costs incurred in restoring such
property, plant and equipment and leased assets to their normal working
condition are charged to the profit or loss as and when incurred.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Leases
The Group assesses whether a contract is or contains a lease based on the
definition under IFRS 16 at inception of the contract. Such contract will not
be reassessed unless the terms and conditions of the contract are subsequently
changed.
Definition of a lease
A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for
consideration.
For contracts entered into or modified on or after the date of initial
application or arising from business combinations, the Group assesses whether
a contract is or contains a lease based on the definition under IFRS 16 at
inception, modification date or acquisition date, as appropriate. Such
contract will not be reassessed unless the terms and conditions of the
contract are subsequently changed.
The Group as a lessee
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to leases of
buildings and other equipment that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option. It also applies
the recognition exemption for lease of low-value assets. Lease payments on
short-term leases and leases of low-value assets are recognised as expense on
a straight-line basis or another systematic basis over the lease term.
Right-of-use assets
The cost of right-of-use assets includes:
• the amount of the initial measurement of the lease
liability;
• any lease payments made at or before the commencement
date, less any lease incentives received;
• any initial direct costs incurred by the Group; and
• an estimate of costs to be incurred by the Group in
dismantling and removing the underlying assets, restoring the site on which it
is located or restoring the underlying asset to the condition required by the
terms and conditions of the lease.
Right-of-use assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease
liabilities.
Right-of-use assets in which the Group is reasonably certain to obtain
ownership of the underlying leased assets at the end of the lease term are
depreciated from commencement date to the end of the useful life. Otherwise,
right-of-use assets are depreciated on a straight-line basis over the shorter
of its estimated useful life and the lease term.
When the Group obtains ownership of the underlying leased assets at the end of
the lease term, upon exercising purchase options, the cost of the relevant
right-of-use assets and the related accumulated depreciation and impairment
loss are transferred to property, plant and equipment.
The Group presents right-of-use assets as a separate line item on the
consolidated statement of financial position.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Leases (continued)
The Group as a lessee (continued)
Lease liabilities
At the commencement date of a lease, the Group recognises and measures the
lease liability at the present value of lease payments that are unpaid at that
date. In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest rate
implicit in the lease is not readily determinable.
The lease payments include:
• fixed payments (including in-substance fixed payments)
less any lease incentives receivable;
• variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;
• amounts expected to be payable by the Group under residual
value guarantees;
• the exercise price of a purchase option if the Group is
reasonably certain to exercise the option; and
• payments of penalties for terminating a lease, if the
lease term reflects the Group exercising an option to terminate the lease.
Variable lease payments that reflect changes in market rental rates are
initially measured using the market rental rates as at the commencement date.
Variable lease payments that do not depend on an index or a rate are not
included in the measurement of lease liabilities and right-of-use assets, and
are recognised as expense in the period on which the event or condition that
triggers the payment occurs.
After the commencement date, lease liabilities are adjusted by interest
accretion and lease payments.
The Group remeasures lease liabilities (and makes a corresponding adjustment
to the related right-of-use assets) whenever:
• the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the related lease
liability is remeasured by discounting the revised lease payments using a
revised discount rate at the date of reassessment.
• the lease payments change due to changes in market rental
rates following a market rent review/expected payment under a guaranteed
residual value, in which cases the related lease liability is remeasured by
discounting the revised lease payments using the initial discount rate.
• a lease contract is modified and the lease modification is
not accounted for as a separate lease.
The Group presents lease liabilities as a separate line item on the
consolidated statement of financial position.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Leases (continued)
The Group as a lessee (continued)
Lease modifications
The Group accounts for a lease modification as a separate lease if:
• the modification increases the scope of the lease by
adding the right to use one or more underlying assets; and
• the consideration for the leases increases by an amount
commensurate with the stand-alone price for the increase in scope and any
appropriate adjustments to that stand-alone price to reflect the circumstances
of the particular contract.
For a lease modification that is not accounted for as a separate lease, the
Group remeasures the lease liability based on the lease term of the modified
lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification.
The Group accounts for the remeasurement of lease liabilities by making
corresponding adjustments to the relevant right-of-use assets.
When the modified contract contains a lease component and one or more
additional lease or non-lease components, the Group allocates the
consideration in the modified contract to each lease component on the basis of
the relative stand-alone price of the lease component and the aggregate
stand-alone price of the non-lease components.
The Group as a lessor
Classification and measurement of leases
Leases for which the Group is a lessor are classified as finance or operating
leases. Whenever the terms of the lease transfer substantially all the risks
and rewards incidental to ownership of an underlying asset to the lessee, the
contract is classified as a finance lease. All other leases are classified as
operating leases.
Rental income from operating leases is recognised in profit or loss on a
straight-line basis over the term of the relevant lease. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset, and such costs are recognised as an
expense on a straight-line basis over the lease term.
Sale and leaseback transactions
The Group applies the requirements of IFRS 15 Revenue from Contracts with
Customers to assess whether sale and leaseback transaction constitutes a sale
by the Group.
For a transfer that does not satisfy the requirements as a sale, the Group as
a seller-lessee continues to recognise the assets and accounts for the
transfer proceeds as borrowings within the scope of IFRS 9.
Foreign currencies
In preparing the financial statements of each individual group entity,
transactions in currencies other than the functional currency of that entity
(foreign currencies) are recognised at the rates of exchanges prevailing on
the dates of the transactions.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Foreign currencies (continued)
At the end of the reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non-monetary
items carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the fair value was
determined. When a fair value gain or loss on a non-monetary item is
recognised in profit or loss, any exchange component of that gain or loss is
also recognised in profit or loss. When a fair value gain or loss on a
non-monetary item is recognised in other comprehensive income, any exchange
component of that gain or loss is also recognised in other comprehensive
income. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are recognised in profit or loss in the
period in which they arise.
For the purposes of presenting the consolidated financial statements, the
assets and liabilities of the Group's foreign operations are translated into
the presentation currency of the Group (i.e. RMB) at the rate of exchange
prevailing at the end of the reporting period. Income and expenses are
translated at the average exchange rates for the year, unless exchange rates
fluctuate significantly during the year, in which case, the exchange rates
prevailing at the dates of transactions are used. Exchange differences
arising, if any, are recognised in other comprehensive income and accumulated
in equity under the heading of foreign exchange translation reserve
(attributed to NCI as appropriate).
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Any specific borrowing that remains outstanding after the related asset is
ready for its intended use or sale is included in the general borrowing pool
for calculation of capitalisation rate on general borrowings. Investment
income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible
for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in
which they are incurred.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Government grants
Government grants are not recognised until there is reasonable assurance that
the Group will comply with the conditions attaching to them and that the
grants will be received.
Government grants are recognised in profit or loss on a systematic basis over
the periods in which the Group recognises as expenses the related costs for
which the grants are intended to compensate. Specifically, government grants
whose primary condition is that the Group should purchase, construct or
otherwise acquire non-current assets are recognised as deferred income in the
consolidated statement of financial position and transferred to profit or loss
on a systematic and rational basis over the useful lives of the related
assets.
Government grants related to income that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving immediate
financial support to the Group with no future related costs are recognised in
profit or loss in the periods in which they become receivable.
Employee benefits
Retirement benefit costs
Payments to defined contribution retirement benefit plans are recognised as an
expense when employees have rendered service entitling them to the
contributions.
For defined benefit retirement benefit plans, the cost of providing benefits
is determined using the projected unit credit method, with actuarial
valuations being carried out at the end of each annual reporting period. In
determining the present value of the Group's defined benefit obligations and
the related current service cost and, where applicable, past service cost, the
Group attributes benefit to periods of service under the plan's benefit
formula. However, if an employee's service in later years will lead to a
materially higher level of benefit than earlier years, the Group attributes
the benefit on a straight-line basis from:
(a) the date when service by the employee first leads to
benefits under the plan (whether or not the benefits are conditional on
further service); until
(b) the date when further service by the employee will lead to
no material amount of further benefits under the plan, other than from further
salary increases.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Employee benefits (continued)
Retirement benefit costs (continued)
Remeasurement, comprising actuarial gains and losses, the effect of the
changes to the asset ceiling (if applicable) and the return on plan assets
(excluding interest), is reflected immediately in the consolidated statement
of financial position with a charge or credit recognised in other
comprehensive income in the period in which they occur. Remeasurement
recognised in other comprehensive income will not be reclassified to profit or
loss.
Past service cost is recognised in profit or loss in the period of a plan
amendment or curtailment and a gain or loss on settlement is recognised when
settlement occurs. When determining past service cost, or a gain or loss on
settlement, an entity shall remeasure the net defined benefit liability or
asset using the current fair value of plan assets and current actuarial
assumptions, reflecting the benefits offered under the plan and the plan
assets before and after the plan amendment, curtailment or settlement, without
considering the effect of asset ceiling (i. e. the present value of any
economic benefits available in the form of refunds from the plan or reductions
in future contributions to the plan).
Termination benefits
A liability for a termination benefit is recognised at the earlier of when the
Group entity can no longer withdraw the offer of the termination benefit and
when it recognises any related restructuring costs.
Short-term and other long-term employee benefits
Short-term employee benefits are recognised at the undiscounted amount of the
benefits expected to be paid as and when employees rendered the services. All
short-term employee benefits are recognised as an expense unless another IFRS
requires or permits the inclusion of the benefit in the cost of an asset.
A liability is recognised for benefits accruing to employees (such as wages
and salaries, annual leave and sick leave) after deducting any amount already
paid.
Liabilities recognised in respect of other long-term employee benefits are
measured at the present value of the estimated future cash outflows expected
to be made by the Group in respect of services provided by employees up to the
reporting date. Any changes in the liabilities' carrying amounts resulting
from service cost, interest and remeasurements are recognised in profit or
loss except to the extent that another IFRS requires or permits their
inclusion in the cost of an asset.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Taxation
Income tax expense represents the sum of current and deferred income tax
expense.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit/loss before tax because of income or expense that
are taxable or deductible in other years and items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax is recognised on temporary differences between the carrying
amounts of assets and liabilities in the consolidated financial statements and
the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit and at the time of the
transaction does not give rise to equal taxable and deductible temporary
differences. In addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences
associated with investments in subsidiaries and associates, and interests in
joint ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient
taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of the
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the periods in which the liability is settled or the
asset is realised, based on tax rate (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group expects, at
the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
For the purposes of measuring deferred tax for leasing transactions in which
the Group recognises the right-of-use assets and the related lease
liabilities, the Group first determines whether the tax deductions are
attributable to the right-of-use assets or the lease liabilities.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Taxation (continued)
For leasing transactions in which the tax deductions are attributable to the
lease liabilities, the Group applies IAS 12 Income Taxes requirements to the
lease liabilities, the provision for return condition checks, the provision
for major overhauls and the related assets separately. The Group recognises a
deferred tax asset related to lease liabilities to the extent that it is
probable that taxable profit will be available against which the deductible
temporary difference can be utilised and a deferred tax liability for all
taxable temporary differences.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied to the same taxable
entity by the same taxation authority.
Current and deferred tax are recognised in profit or loss, except when they
relate to items that are recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for business
combination.
Property, plant and equipment
Property, plant and equipment including buildings held for use in the
production or supply of goods or services, or for administrative purposes
(other than construction in progress), are stated in the consolidated
statement of financial position at cost, less subsequent accumulated
depreciation and subsequent accumulated impairment losses, if any.
Properties in the course of construction for production, supply or
administrative purposes are carried at cost, less recognised impairment loss,
if any. Costs include any costs directly attributable to bringing the asset to
the location and condition necessary for it to be capable of operating in the
manner intended by management, including costs of testing whether the related
assets are functioning properly, and, for qualifying assets, borrowing costs
capitalised in accordance with the Group's accounting policy. Depreciation of
these assets, on the same basis as other property assets, commences when the
assets are ready for their intended use.
Depreciation of overhaul components of engines is calculated using the units
of production method based on the estimated flying hours. Depreciation for
other property, plant and equipment is recognised so as to write off the cost
of items of property, plant and equipment less their residual values over
their estimated useful lives, using the straight-line method. The estimated
useful lives as well as the estimated flying hours, residual values and
depreciation method are reviewed at the end of the reporting period, with the
effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in
profit or loss.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Impairment of tangible and intangible assets (other than goodwill)
At the end of the reporting period, the Group reviews the carrying amounts of
its tangible and intangible assets with finite useful lives to determine
whether there is any indication that these assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the relevant
asset is estimated in order to determine the extent of the impairment loss (if
any). Intangible assets with indefinite useful lives are tested for impairment
at least annually, and whenever there is an indication that they may be
impaired.
The recoverable amount of tangible and intangible assets is estimated
individually. When it is not possible to estimate the recoverable amount of an
asset individually, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, corporate assets are
allocated to the relevant cash-generating unit when a reasonable and
consistent basis of allocation can be established, or otherwise they are
allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be established. The recoverable
amount is determined for the cash-generating unit or group of cash-generating
units to which the corporate asset belongs, and is compared with the carrying
amount of the relevant cash-generating unit or group of cash-generating units.
Recoverable amount is the higher of fair value less costs of disposal and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset (or a cash-generating unit) for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or a cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or a
cash-generating unit) is reduced to its recoverable amount.
For corporate assets or portion of corporate assets which cannot be allocated
on a reasonable and consistent basis to a cash-generating unit, the Group
compares the carrying amount of a group of cash-generating units, including
the carrying amounts of the corporate assets or portion of corporate assets
allocated to that group of cash-generating units, with the recoverable amount
of the group of cash-generating units. In allocating the impairment loss, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill (if applicable) and then to the other assets on a pro-rata basis
based on the carrying amount of each asset in the unit or the group of
cash-generating units. The carrying amount of an asset is not reduced below
the highest of its fair value less costs of disposal (if measurable), its
value in use (if determinable) and zero. The amount of the impairment loss
that would otherwise have been allocated to the asset is allocated pro rata to
the other assets of the unit or the group of cash-generating units. An
impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or a cash-generating unit or a group of cash-generating units) is
increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or a
cash-generating unit or a group of cash-generating units) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of
inventories are determined on a weighted average method. Net realisable value
represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
Costs necessary to make the sale include incremental costs directly
attributable to the sale and non-incremental costs which the Group must incur
to make the sale.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits
with banks and other financial institutions, and short-term, highly liquid
investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value, having been within
three months of maturity at acquisition. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are also
included as a component of cash and cash equivalents for the purpose of the
consolidated cash flow statement. Cash and cash equivalents are assessed for
ECL.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash
flows (when the effect of the time value of money is material).
Present obligations arising under onerous contracts are recognised and
measured as provisions. An onerous contract is considered to exist where the
Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be
received from the contract. The unavoidable costs under a contract reflect the
least net cost of exiting from the contract, which is the lower of the net
cost of fulfilling it and any compensation or penalties arising from failure
to fulfil it.
When assessing whether a contract is onerous or loss-making, the Group
includes costs that relate directly to the contract, consisting of both the
incremental costs and an allocation of other costs that relate directly to
fulfilling contracts.
Provisions for the costs to restore leased assets to their original condition,
as required by the terms and conditions of the lease, are recognised at the
date of inception of the lease at the Directors' best estimate of the
expenditure that would be required to restore the assets. Estimates are
regularly reviewed and adjusted as appropriate for new circumstances.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments
Financial assets and financial liabilities are recognised when a group entity
becomes a party to the contractual provisions of the instrument. All regular
way purchases or sales of financial assets are recognised and derecognised on
a trade date basis. Regular way purchases or sales are purchases or sales of
financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
Financial assets and financial liabilities are initially measured at fair
value except for accounts receivable arising from contracts with customers
which are initially measured in accordance with IFRS 15. Transaction costs
that are directly attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss ("FVTPL")) are added to or
deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities
at FVTPL are recognised immediately in profit or loss.
The effective interest method is a method of calculating the amortised cost of
a financial asset or financial liability and of allocating interest income and
interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated
future cash receipts and payments (including all fees and points paid or
received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life
of the financial asset or financial liability, or, where appropriate, a
shorter period, to the net carrying amount on initial recognition.
Financial assets
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditions are subsequently measured
at amortised cost:
• the financial asset is held within a business model whose
objective is to collect contractual cash flows; and
• the contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal
amount outstanding.
Financial assets that meet the following conditions are subsequently measured
at fair value through other comprehensive income ("FVTOCI"):
• the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling
the financial assets; and
• the contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal
amount outstanding.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments (continued)
Financial assets (continued)
Classification and subsequent measurement of financial assets (continued)
All other financial assets are subsequently measured at FVTPL, except that at
initial recognition of a financial asset the Group may irrevocably elect to
present subsequent changes in fair value of an equity investment in other
comprehensive income if that equity investment is neither held for trading nor
contingent consideration recognised by an acquirer in a business combination
to which IFRS 3 Business Combinations applies.
In addition, the Group may irrevocably designate a financial asset that are
required to be measured at the amortised cost or FVTOCI as measured at FVTPL
if doing so eliminates or significantly reduces an accounting mismatch.
Impairment of financial assets and other items subject to impairment
assessment under IFRS 9
The Group performs impairment assessment under expected credit loss ("ECL")
model on financial assets (including accounts receivable, bills receivable,
deposits and other receivables, deposits for aircraft under leases, restricted
bank deposits, cash and cash equivalents, financial assets included in other
current assets and other non-current assets, and debt instruments at FVTOCI)
which are subject to impairment assessment under IFRS 9. The amount of ECL is
updated at each reporting date to reflect changes in credit risk since initial
recognition.
Lifetime ECL represents the ECL that will result from all possible default
events over the expected life of the relevant instrument. In contrast,
12-month ECL ("12m ECL") represents the portion of lifetime ECL that is
expected to result from default events that are possible within 12 months
after the reporting date. Assessment is done based on the Group's historical
credit loss experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current conditions
at the reporting date as well as the forecast of future conditions.
The Group always recognises lifetime ECL for accounts receivable.
For all other instruments, the Group measures the loss allowance equal to 12m
ECL, unless there has been a significant increase in credit risk since initial
recognition, in which case the Group recognises lifetime ECL. The assessment
of whether lifetime ECL should be recognised is based on significant increases
in the likelihood or risk of a default occurring since initial recognition.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments (continued)
Financial assets (continued)
Impairment of financial assets and other items subject to impairment
assessment under IFRS 9 (continued)
(i) Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial
recognition, the Group compares the risk of a default occurring on the
financial instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition.
In making this assessment, the Group considers both quantitative and
qualitative information that is reasonable and supportable, including
historical experience and forward-looking information that is available
without undue cost or effort.
In particular, the following information is taken into account when assessing
whether credit risk has increased significantly:
• an actual or expected significant deterioration in the
financial instrument's external (if available) or internal credit rating;
• significant deterioration in external market indicators of
credit risk, e.g., a significant increase in the credit spread, the credit
default swap prices for the debtor;
•
existing or forecast adverse changes in business, financial or economic
conditions that are expected to cause a significant decrease in the debtor's
ability to meet its debt obligations;
• an actual or expected significant deterioration in the
operating results of the debtor;
•
an actual or expected significant adverse change in the regulatory, economic,
or technological environment of the debtor that results in a significant
decrease in the debtor's ability to meet its debt obligations.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments (continued)
Financial assets (continued)
Impairment of financial assets and other items subject to impairment
assessment under IFRS 9 (continued)
(ii) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of that financial asset
have occurred. Evidence that a financial asset is credit-impaired includes
observable data about the following events:
(a) significant financial difficulty of the issuer or the
borrower;
(b) a breach of contract, such as a default or past due event;
(c) the lender(s) of the borrower, for economic or contractual
reasons relating to the borrower's financial difficulty, having granted to the
borrower a concession(s) that the lender(s) would not otherwise consider;
(d) it is becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or
(e) the disappearance of an active market for that financial
asset because of financial difficulties.
(iii) Write-off policy
The Group writes off a financial asset when there is information indicating
that the counterparty is in severe financial difficulty and there is no
realistic prospect of recovery, for example, when the counterparty has been
placed under liquidation or has entered into bankruptcy proceedings. Financial
assets written off may still be subject to enforcement activities under the
Group's recovery procedures, taking into account legal advice where
appropriate. A write-off constitutes a derecognition event. Any subsequent
recoveries are recognised in profit or loss.
(iv) Measurement and recognition of ECL
The measurement of ECL is a function of the probability of default, loss given
default (i. e., the magnitude of the loss if there is a default) and the
exposure at default. The assessment of the probability of default and loss
given default is based on historical data and forward-looking information.
Estimation of ECL reflects an unbiased and probability-weighted amount that is
determined with the respective risks of default occurring as the weights. The
Group uses a practical expedient in estimating ECL on accounts receivable
using a provision matrix taking into consideration historical credit loss
experience and forward-looking information that is available without undue
cost or effort.
Generally, the ECL is the difference between all contractual cash flows that
are due to the Group in accordance with the contract and the cash flows that
the Group expects to receive, discounted at the effective interest rate
determined at initial recognition.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments (continued)
Financial assets (continued)
Impairment of financial assets and other items subject to impairment
assessment under IFRS 9 (continued)
(iv) Measurement and recognition of ECL (continued)
For a lease receivable, the cash flows used for determining the ECL is
consistent with the cash flows used in measuring the lease receivable in
accordance with IFRS 16.
For collective assessment, the Group takes into consideration the following
characteristics when formulating the grouping:
• Past-due status;
• Nature, size and industry of debtors; and
• External credit ratings where available.
The grouping is regularly reviewed by management to ensure the constituents of
each group continue to share similar credit risk characteristics.
Interest income is calculated based on the gross carrying amount of the
financial asset unless the financial asset is credit impaired, in which case
interest income is calculated based on amortised cost of the financial asset.
Except for investments in debt instruments that are measured at FVTOCI, the
Group recognises an impairment gain or loss in profit or loss for all
financial instruments by adjusting their carrying amount through a loss
allowance account. For investments in debt instruments that are measured at
FVTOCI, the loss allowance is recognised in other comprehensive income and
accumulated in the capital reserve and revaluation reserve without reducing
the carrying amounts of these debt instruments. Such amount represents the
changes in the capital reserve and revaluation reserve in relation to
accumulated loss allowance.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified either as financial liabilities or
as equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity instrument.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Financial instruments (continued)
Financial liabilities and equity (continued)
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the group entities after deducting all of its liabilities. Equity
instruments issued by the Group are recognised at the proceeds received, net
of direct issue costs.
Repurchase of the Company's own equity instruments (treasury shares) is
recognised and deducted directly in equity. No gain or loss is recognised in
profit or loss on the purchase, sale, issue or cancellation of the Group's own
equity instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using
the effective interest method or at FVTPL.
Financial liabilities at amortised cost
Financial liabilities (including accounts payable, bills payable, dividends
payables, other payables, interest-bearing borrowings and financial
liabilities included in long-term payables) are subsequently measured at
amortised cost using the effective interest method.
Non-current assets held for sale
Non-current assets, or disposal group comprising assets and liabilities, are
classified as held for sale if it is highly probable that they will be
recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their
carrying amount and fair value less costs to sell. Any impairment loss on a
disposal group is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro-rata basis, except that no loss is allocated
to deferred tax assets, employee benefits assets and financial assets (other
than investments in subsidiaries, associates and joint ventures), which
continue to be measured in accordance with the Group's other accounting
policies. Impairment losses on initial classification as held for sale or held
for distribution and subsequent gains and losses on remeasurement are
recognised in profit or loss.
Once classified as held for sale, intangible assets, investment properties and
property, plant and equipment are no longer amortised or depreciated, and any
equity-accounted investee is no longer equity accounted.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Related parties
(i) A person, or a close member of that person's family, is
related to the Group if that person:
(a) has control or joint control over the Group;
(b) has significant influence over the Group; or
(c) is a member of the key management personnel of the Group or
the Group's parent.
(ii) An entity is related to the Group if any of the following
conditions applies:
(a) The entity and the Group are members of the same group
(which means that each parent, subsidiary and fellow subsidiary is related to
the others).
(b) One entity is an associate or joint venture of the other
entity (or an associate or joint venture of a member of a group of which the
other entity is a member).
(c) Both entities are joint ventures of the same third party.
(d) One entity is a joint venture of a third entity and the
other entity is an associate of the third entity.
(e) The entity is a post-employment benefit plan for the benefit
of employees of either the Group or an entity related to the Group.
(f) The entity is controlled or jointly controlled by a person
identified in (i).
(g) A person identified in (i)(a) has significant influence over
the entity or is a member of the key management personnel of the entity (or of
a parent of the entity).
(h) The entity, or any member of a group of which it is a part,
provides key management personnel services to the Group or to the Group's
parent.
Close members of the family of a person are those family members who may be
expected to influence, or be influenced by, that person in their dealings with
the entity.
4. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Segment reporting
Operating segments, and the amounts of each segment item reported in the
financial statements, are identified from the financial information provided
regularly to the Group's most senior executive management for the purposes of
allocating resources to, and assessing the performance of, the Group's various
lines of business and geographical locations.
Individually material operating segments are not aggregated for financial
reporting purposes unless the segments have similar economic characteristics
and are similar in respect of the nature of products and services, the nature
of production processes, the type or class of customers, the methods used to
distribute the products or provide the services, and the nature of the
regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies, which are described in
Note 4, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and underlying assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The following are the key assumptions concerning the future, and other key
sources of estimation uncertainty at the end of the reporting period, that
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY (continued)
Impairment test on goodwill
Determining whether goodwill is impaired requires an estimation of the
recoverable amount of the cash-generating unit (or group of cash-generating
units) to which goodwill has been allocated, which is the higher of the value
in use or fair value less costs of disposal. The value in use calculation
requires the Group to estimate the future cash flows expected to arise from
the cash-generating unit (or group of cash-generating units) and a suitable
discount rate in order to calculate the present value. Where the actual future
cash flows are less than expected, or change in facts and circumstances which
results in downward revision of the future cash flows or upward revision of
discount rate, a further impairment loss may rise.
As at 31 December 2025, the carrying amount of goodwill was RMB3,612 million
(2024: RMB4,096 million) (net of impairment). Details of the recoverable
amount calculation are disclosed in Note 20.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all
non-financial assets at the end of each reporting period. Intangible assets
with indefinite life are tested for impairment annually and at other times
when such indicator exists. Other non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be
fully recoverable. If any such indication exists, the recoverable amount of
the individual asset or the cash-generating unit to which the asset belongs is
estimated in order to determine the extent of the impairment loss (if any).
The recoverable amount of the individual asset or the cash-generating unit is
determined based on the higher of fair value less costs of disposal and value
in use.
In estimating the aforesaid recoverable amount of the individual asset or the
cash-generating unit, management consider all relevant factors, including but
not limited to the future cash flows and discount rate with reasonable and
supportable assumptions to make significant accounting estimations and
judgement.
The calculation of the fair value less costs of disposal is based on available
data from binding sales transactions in an arm's length transaction of similar
assets or observable market prices less incremental costs for disposal of the
asset.
When value in use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a
suitable discount rate in order to calculate the present value of those cash
flows.
During the year, the Group recognised impairment loss of approximately RMB96
million (2024: RMB143 million) for certain aircrafts that are about to retire
from service in advance. As at 31 December 2025, the aggregate carrying amount
of property, plant and equipment, right-of-use assets, investment properties,
intangible assets, interests in associates and interests in joint ventures was
RMB268,229 million (2024: RMB258,869 million). Details of related items are
disclosed in Notes 18, 19, 22 and 23.
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY (continued)
Overhaul provisions
Overhaul provisions for aircraft under leases are accrued using the estimated
maintenance costs for aircraft to fulfil these return conditions. Management
estimates the maintenance costs of major overhauls for aircraft held under
leases at the end of each reporting period and accrues such costs over the
lease term. The calculation of such costs includes a number of variable
factors and assumptions, including the anticipated utilisation of the aircraft
and the expected costs of maintenance. Different estimates could significantly
affect the estimated overhaul provision and the results of operations.
As at 31 December 2025, provision for major overhauls of the Group amounted to
RMB18,166 million (2024: RMB15,939 million) and details are disclosed in Note
36.
Frequent-flyer programme
The transaction price allocated to the miles earned by the members of the
Group's frequent-flyer programme is estimated based on the stand-alone selling
price of the miles awarded. The stand-alone selling price of the miles awarded
is estimated based on expected redemption rate. The expected redemption rate
was estimated considering expected future redemption activities, including the
number of the miles that will be available for redemption in the future after
allowing for miles which are not expected to be redeemed. Any change in
estimate would affect profit or loss in future years.
As at 31 December 2025, the contract liabilities related to frequent-flyer
programme was RMB3,574 million (2024: RMB2,757 million) and details are
disclosed in Note 37.
Expected breakage
For those passenger flight tickets the Group expects to be entitled to
breakage because the passenger has not required the Group to perform and is
unlikely to do so, the Group recognises the expected breakage amount as
revenue in proportion to the pattern of rights exercised by the passenger (or
flown revenue) based on historical experience. The air traffic liabilities
recorded in the consolidated statement of financial position is after
adjusting the effect of expected breakage.
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses and deductible
temporary differences to the extent that it is probable that taxable profit
will be available against which the losses and deductible temporary
differences can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon
the likely timing and level of future taxable profits together with future tax
planning strategies. In cases where the actual future profits generated are
less or more than expected, or effective tax rate is changed, or change in
facts and circumstances which result in revision of future taxable profits
estimation, a material reversal or further recognition of deferred tax assets
may arise, which would be recognised in profit or loss for the period in which
such change takes places.
As at 31 December 2025, deferred tax assets of RMB19,932 million (2024:
RMB21,991 million) in relation to deductible temporary differences and tax
losses have been recognised. No deferred tax asset has been recognised on the
deductible tax losses of RMB78,546 million (2024: RMB66,710 million) and other
deductible temporary differences of RMB283 million (2024: RMB268 million) due
to the unpredictability of the future streams and details are disclosed in
Note 26.
6. REVENUE
Disaggregation of revenue
2025 2024
RMB'000 RMB'000
Revenue from contracts with customers
Airline operations
Passenger 154,855,779 151,788,672
Cargo and mail 7,778,380 7,413,855
Others 2,290,763 1,876,406
164,924,922 161,078,933
Other operations
Aircraft engineering income 6,012,036 5,179,776
Others 152,360 132,016
6,164,396 5,311,792
Sub-total 171,089,318 166,390,725
Rental income (included in revenue of airline operations segment) 395,328 308,155
Total revenue 171,484,646 166,698,880
Performance obligations for contracts with customers
Passenger revenue is recognised when transportation services are provided.
Besides, the Group recognises the expected breakage amount as passenger
revenue in proportion to the pattern of rights exercised by the passenger (or
flown revenue) based on historical experience. Ticket sales for transportation
not yet provided are recorded in air traffic liabilities.
The Group operates frequent-flyer programme and provides free services or
products to the customers according to the miles they earn. The Group
allocates the transaction price to each performance obligation on a relative
stand-alone selling price basis. The amount allocated to the miles earned by
the frequent-flyer programme members is recorded in contract liabilities and
deferred until the miles are redeemed when the Group fulfils its obligations
to supply services or products or when the miles expire. During the year, the
Group recognised revenue of RMB1,166 million (2024: RMB1,351 million) which
was included in contract liabilities in relation to frequent-flyer programme
at the beginning of the year.
6. REVENUE (continued)
Performance obligations for contracts with customers (continued)
Cargo and mail revenue is recognised when contract services are provided.
Revenue from other airline-related services is recognised when the related
performance obligations are satisfied.
Sale of goods is recognised when control of the goods has transferred to the
customer, being at the point the goods are delivered to the customer.
Transaction price allocated to the remaining performance obligation for
contracts
with customers
The customer loyalty points in frequent-flyer programme have a three-year term
and these points can be redeemed anytime at customers' discretion during the
valid period.
7. SEGMENT INFORMATION
The Group's businesses are structured and managed, according to the nature of
its operations and the services it provides. The Group has the following
reportable operating segments:
(a) the "airline operations" segment which mainly comprises the
provision of air passenger and air cargo services; and
(b) the "other operations" segment which comprises the provision
of aircraft engineering and other airline-related services.
Inter-segment sales and transfers are transacted with reference to the then
prevailing market prices.
The Company's chief operating decision maker monitors the results, assets and
liabilities of the Group based on the financial results prepared in accordance
with the Accounting Standards for Business Enterprises issued by the Ministry
of Finance of the PRC ("CASs"). As such, the segment information is presented
in accordance with CAS with reconciliation to financial information presented
in IFRS Accounting Standards.
7. SEGMENT INFORMATION (continued)
Year ended 31 December 2025
Airline operations Other operations Elimination Total
RMB'000 RMB'000 RMB'000 RMB'000
Revenue
Sales to external customers 165,320,250 6,164,396 - 171,484,646
Inter-segment sales 273,944 9,582,483 (9,856,427) -
Segment revenue under CASs and 165,594,194 15,746,879 (9,856,427) 171,484,646
IFRS Accounting Standards
Segment results before taxation
(Loss)/profit before taxation for reportable segments under CASs (2,484,013) 926,783 (39,477) (1,596,707)
Effect of differences between IFRS Accounting Standards and CASs (23,399)
Loss before taxation for the year under IFRS Accounting Standards (1,620,106)
7. SEGMENT INFORMATION (continued)
Year ended 31 December 2024
Airline operations Other Elimination Total
operations
RMB'000 RMB'000 RMB'000 RMB'000
Revenue
Sales to external customers 161,387,088 5,311,792 - 166,698,880
Inter-segment sales 229,651 9,268,619 (9,498,270) -
Segment revenue under CASs and 161,616,739 14,580,411 (9,498,270) 166,698,880
IFRS Accounting Standards
Segment results before taxation
(Loss)/profit before taxation for reportable segments under CASs (2,239,127) 795,124 (161,195) (1,605,198)
Effect of differences between IFRS Accounting Standards and CASs 6,330
Loss before taxation for the year under IFRS Accounting Standards (1,598,868)
7. SEGMENT INFORMATION (continued)
As at 31 December 2025 and 2024
Airline operations Other Elimination Total
operations
RMB'000 RMB'000 RMB'000 RMB'000
Segment assets
Segment assets as at 31 December 2025 under CASs 331,428,979 34,473,118 (22,854,853) 343,047,244
Effect of differences between IFRS Accounting Standards and CASs (36,789)
Total assets as at 31 December 2025 under IFRS Accounting Standards 343,010,455
Segment assets as at 31 December 2024 under CASs 335,387,462 35,068,041 (24,686,091) 345,769,412
Effect of differences between IFRS Accounting Standards and CASs (19,239)
Total assets as at 31 December 2024 under IFRS Accounting Standards 345,750,173
Segment liabilities
Segment liabilities under CASs and
IFRS Accounting Standards
As at 31 December 2025 300,925,989 25,209,071 (22,319,329) 303,815,731
As at 31 December 2024 301,829,477 27,135,795 (24,141,069) 304,824,203
7. SEGMENT INFORMATION (continued)
Year ended 31 December 2025
Airline operations Other operations Elimination Total Effect of differences between IFRS Amounts under IFRS Accounting Standards
Accounting Standards and CASs
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Other segment information
Share of profit of associates and joint ventures 3,038,666 387,006 - 3,425,672 - 3,425,672
Net impairment losses (recognised)/ reversed on financial assets 2,458 (38,972) 55,425 18,911 - 18,911
Net impairment losses (recognised)/ reversed on non-financial asset (591,487) 5,407 - (586,080) - (586,080)
Depreciation and amortisation (30,455,837) (437,594) 170,703 (30,722,728) 4,989 (30,717,739)
Income tax expense (1,702,387) (227,097) 1,365 (1,928,119) 5,849 (1,922,270)
Interests in associates and joint ventures 15,393,010 2,995,984 (96,434) 18,292,560 139,919 18,432,479
Additions to other non-current assets 38,170,770 1,002,365 (216,742) 38,956,393 - 38,956,393
7. SEGMENT INFORMATION (continued)
Year ended 31 December 2024
Airline operations Other operations Elimination Total Effect of differences between IFRS Amounts under IFRS Accounting Standards
Accounting Standards
and CASs
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Other segment information
Share of profit of associates and joint ventures 2,535,142 284,702 - 2,819,844 - 2,819,844
Net impairment losses (recognised)/ reversed on financial assets 11,792 (27,985) 25,700 9,507 - 9,507
Impairment losses recognised on non-financial assets (145,588) (10,412) - (156,000) - (156,000)
Depreciation and amortisation (28,827,562) (448,312) 166,617 (29,109,257) 6,289 (29,102,968)
Income tax expense (656,490) (211,035) 22,633 (844,892) (1,582) (846,474)
Interests in associates and joint ventures 14,310,136 2,693,530 (86,809) 16,916,857 139,919 17,056,776
Additions to other non-current assets 34,264,696 401,343 (442,547) 34,223,492 - 34,223,492
7. SEGMENT INFORMATION (continued)
Geographical information
The following table presents the Group's consolidated revenue to external
customers by geographical location for the years ended 31 December 2025 and
2024, respectively:
2025 2024
RMB'000 RMB'000
Chinese Mainland 117,457,528 118,491,369
Hong Kong SAR, Macau SAR and Taiwan, China 5,373,638 5,118,889
International 48,653,480 43,088,622
171,484,646 166,698,880
In determining the Group's geographical information, revenue is based on the
origin and destination of each flight. Assets, which principally consist of
aircraft and ground equipment, supporting the Group's worldwide transportation
network, are mainly registered/located in Chinese Mainland. According to the
business demand, the Group flexibly allocates aircraft to match the need of
the route network. An analysis of the assets of the Group by geographical
distribution has therefore not been presented.
There was no individual customer that contributed 10% or more of the Group's
revenue during the year ended 31 December 2025 (2024: Nil).
8. OTHER INCOME AND GAINS
2025 2024
RMB'000 RMB'000
Co-operation routes income and subsidy income 4,518,005 4,295,552
Dividend income 16,578 36,740
Gains/(losses) on disposal of:
- Property, plant and equipment and right-of-use assets 131,431 1,029,912
- Asset held for sale 4,325 (17,527)
Change in fair value of financial assets at FVTPL 2,413 54
Others 596,546 1,975,181
5,269,298 7,319,912
9. EMPLOYEE COMPENSATION COSTS
An analysis of the Group's employee compensation costs, including the
emoluments of Directors and supervisors, is as follows:
2025 2024
RMB'000 RMB'000
Wages, salaries and other benefits 32,481,112 29,898,033
Retirement benefit costs:
- Contributions to defined contribution retirement scheme 4,554,108 4,360,431
- Early retirement benefits 12,254 10,281
37,047,474 34,268,745
The employees of the Group in the PRC are members of a state-managed
retirement benefit scheme operated by the PRC government. The Group is
required to contribute a specific percentage of the total monthly basic
salaries of its current employees to the retirement benefits scheme to fund
the benefits.
In addition to the above benefits scheme, the Group also provides annuity
schemes for certain qualified employees in the PRC. The employees' and the
Group's contributions for the annuity schemes are calculated based on certain
percentage of the Group's salaries and recognised in profit or loss as expense
in profit or loss when incurred.
There were no forfeited contributions in respect of the Group's defined
contribution plan as mentioned above.
10. NET IMPAIRMENT LOSS REVERSED UNDER EXPECTED CREDIT LOSS MODEL
2025 2024
RMB'000 RMB'000
Impairment losses reversed/(recognised) on financial assets:
- Deposits and other receivables 12,585 18,960
- Accounts receivable (5,190) (4,000)
- Financial assets included in other current assets 12,010 (2,918)
- Debt instruments at FVTOCI (1,114) (394)
- Others 620 (2,141)
18,911 9,507
Details of impairment assessment are set out in Note 43.
11. (LOSS)/PROFIT FROM OPERATIONS
The Group's (loss)/profit from operations is arrived at after charging:
2025 2024
RMB'000 RMB'000
Depreciation of property, plant and equipment 14,910,278 13,439,898
Depreciation of right-of-use assets 15,773,927 15,629,518
Depreciation of investment properties 33,531 33,535
Amortisation of intangible assets 3 17
Total depreciation and amortisation 30,717,739 29,102,968
Impairment losses recognised on property, plant and equipment 96,292 143,240
Impairment losses recognised on goodwill 483,552 -
Inventories provision 6,236 12,760
Auditors' remuneration:
- Audit related services 18,333 21,847
- Other services 75 1,540
12. FINANCE COSTS
2025 2024
RMB'000 RMB'000
Interest on interest-bearing borrowings 3,711,041 4,025,619
Interest on lease liabilities 2,144,357 2,683,519
Imputed interest expenses on defined benefit obligations 3,241 5,147
5,858,639 6,714,285
Less: Interest capitalised (Note) (305,588) (315,537)
5,553,051 6,398,748
Note: The interest capitalisation rates ranged from 1.95% to 2.80% per
annum (2024: 2.40% to 4.00% per annum) relating to the costs of related
borrowings during the year.
13. DIRECTORS', CHIEF EXECUTIVE'S, SUPERVISORS' AND EMPLOYEES'
EMOLUMENTS
Directors', chief executive's and supervisors' remuneration for the year,
disclosed pursuant to the applicable Listing Rules and Companies Ordinance,
was as follows:
13. DIRECTORS', CHIEF EXECUTIVE'S, SUPERVISORS' AND EMPLOYEES'
EMOLUMENTS (continued)
For the year ended 31 December 2025
Directors' Salaries and Discretionary Retirement benefit scheme Total
fee
other
bonus
contributions
allowances
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Executive directors
Liu Tiexiang (Notes (a) and (e)) (Appointed on 10 October 2025) - - - - -
Ma Chongxian (Notes (a) and (e)) (Resigned on 10 October 2025) - - - - -
Wang Mingyuan (Note (a)) - - - - -
- - - - -
Non-executive directors
Cui Xiaofeng (Note (a)) - - - - -
Patrick Healy (Note (b)) - - - - -
Xiao Peng - 393 425 107 925
- 393 425 107 925
Independent non-executive directors
Xu Niansha 55 - - - 55
(Appointed on 25 February 2025)
He Yun (Note (a)) - - - - -
Winnie Tam Wan-chi 148 - - - 148
Gao Chunlei (Note (a)) - - - - -
(Appointed on 25 February 2025)
Xu Junxin (Note (a)) - - - - -
(Resigned on 25 February 2025)
203 - - - 203
Supervisors (Note)
Xiao Jian (Note (a)) - - - - -
Lyu Yanfang - 193 107 79 379
Guo Lina - 294 137 74 505
Wang Mingzhu - 178 164 94 436
Li Shuxing - 374 182 77 633
- 1,039 590 324 1,953
203 1,432 1,015 431 3,081
Note: The abolishment of the Supervisory Committee was approved at the
2024 Annual General Meeting on 24 June 2025. The Company will no longer
maintain the Supervisory Committee and Supervisor positions, with the Audit
and Risk Management Committee (the Supervision Committee) under the Board
exercising the functions and powers of the Supervisory Committee as stipulated
under the Company Law. The supervisors' remuneration disclosed above is for
the period between 1 January 2025 and 24 June 2025 only.
13. DIRECTORS', CHIEF EXECUTIVE'S, SUPERVISORS' AND EMPLOYEES'
EMOLUMENTS (continued)
For the year ended 31 December 2024
Directors' Salaries and Discretionary Retirement benefit scheme Total
fee
other
bonus
contributions
allowances
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Executive directors
Ma Chongxian (Notes (a) and (e)) - - - - -
Wang Mingyuan (Note (a)) - - - - -
- - - - -
Non-executive directors
Feng Gang (Note (a)) - - - - -
(Resigned on 15 July 2024)
Cui Xiaofeng (Note (a)) - - - - -
(Appointed on 9 August 2024)
Patrick Healy (Note (b)) - - - - -
Xiao Peng - 585 248 137 970
- 585 248 137 970
Independent non-executive directors
Li Fushen - - - - -
(Resigned on 30 August 2024)
He Yun - - - - -
Xu Junxin - - - - -
Winnie Tam Wan-chi 107 - - - 107
107 - - - 107
Supervisors
Xiao Jian (Note (a)) - - - - -
Lyu Yanfang - 383 483 122 988
Guo Lina - 539 585 100 1,224
Wang Mingzhu - 354 682 133 1,169
Li Shuxing - 532 612 125 1,269
- 1,808 2,362 480 4,650
107 2,393 2,610 617 5,727
13. DIRECTORS', CHIEF EXECUTIVE'S, SUPERVISORS' AND EMPLOYEES'
EMOLUMENTS (continued)
Notes:
(a) These directors or supervisors did not receive any
remuneration for their services in the capacity of the directors or
supervisors of the Company. They also held management positions in CNAHC and
their remuneration were borne by CNAHC.
(b) This director did not receive any remuneration for his
services in the capacity of the director. He also holds management positions
in Cathay Pacific Airways Limited (''Cathay Pacific''), the associate of the
Group, and his remuneration was borne by Cathay Pacific.
(c) None of the directors, supervisors and chief executive has
waived any emoluments during the years ended 31 December 2025 and 2024.
(d) For the year ended 31 December 2025, the Group received
service fee of Hong Kong Dollar ("HKD") 2,672,000 (2024: HKD2,672,000) from
Cathay Pacific for the directors' services provided by certain directors and
management to Cathay Pacific.
(e) Being the chief executive of the Company.
Five highest paid individuals
For both 2025 and 2024, none of the five highest paid employees were
directors, supervisors nor chief executive of the Group.
Details of the remuneration of the five highest paid individuals during the
year were as follows:
2025 2024
RMB'000 RMB'000
Salaries and other allowances 11,672 11,493
Discretionary bonuses 16 125
Retirement benefit scheme contributions 270 246
11,958 11,864
Discretionary bonuses are calculated based on the Group's or respective
employee's performance for such financial year.
The number of the five highest paid individuals whose remuneration fell within
the following bands is as follows:
2025 2024
HKD2,500,001 to HKD3,000,000 5 5
During both years, no emoluments were paid by the Group to any of the
directors, supervisors, chief executive, or the five highest paid individuals
as an inducement to join or upon joining the Group or as compensation for loss
of office.
14. INCOME TAX EXPENSE
2025 2024
RMB'000 RMB'000
Current income tax
- Provision for the year 293,042 247,162
- Under provision in respect of prior years 1,496 879
Deferred tax (Note 26) 1,627,732 598,433
1,922,270 846,474
Under the Law of the PRC on Enterprise Income Tax (the "EIT Law") and
Implementation Regulation of the EIT Law, except for certain branches and
subsidiaries of the Group which are taxed at a preferential rate of 15% (2024:
15%), all group companies located in Chinese Mainland are subject to an income
tax rate of 25% during the year (2024: 25%). Subsidiaries in Hong Kong SAR,
China and Macau SAR are taxed at profits tax rate of 16.5% (2024: 16.5%) and
12% (2024: 12%), respectively.
The taxation for the year can be reconciled to the loss before taxation per
consolidated statement of profit or loss as follows:
2025 2024
RMB'000 RMB'000
Loss before taxation (1,620,106) (1,598,868)
Tax at the applicable tax rate of 25% (405,026) (399,717)
Preferential tax rates on income of group entities 76,543 111,747
Tax effect of share of results of associates and joint ventures (856,418) (713,367)
Tax effect of non-deductible expenses 277,265 190,830
Tax effect of non-taxable income (18,696) (16,259)
Tax effect of deductible temporary differences and tax losses not recognised 2,847,106 1,948,635
Under provision in respect of prior years 1,496 879
Others - (276,274)
Income tax expense 1,922,270 846,474
15. LOSS PER SHARE
The calculation of the basic and diluted loss per share attributable to equity
shareholders of the Company is based on the following data:
2025 2024
RMB'000 RMB'000
Loss
Loss for the purpose of basic and diluted loss per share (1,787,943) (232,557)
2025 2024
'000 '000
Number of shares
Issued ordinary shares at 1 January 17,448,421 16,200,793
Effect of reciprocal shareholding (779,089) (789,854)
Effect of share issued in 2024 - 453,621
Weighted-average number of ordinary shares 16,669,332 15,864,560
for the purpose of basic and diluted
loss per share
The number of ordinary shares for the purpose of basic and diluted loss per
share is calculated based on the number of ordinary shares in issue during the
year, as adjusted to reflect the reciprocal shareholding with Cathay Pacific
(Note 22).
As at 31 December 2025, the potential ordinary shares (convertible bonds) of
the Group's associate, Cathay Pacific, assuming their conversion into ordinary
shares, would reduce the loss per share and have an anti-dilutive effect. As
potential ordinary shares that are anti-dilutive are excluded from the
calculation of diluted loss per share, the basic and diluted loss per share of
the Company are the same in both years.
16. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income do not have significant tax
effect for the years ended 31 December 2025 and 2024.
17. DIVIDENDS
No dividend was paid or proposed for ordinary shareholders of the Company
during the years ended 31 December 2025 and 2024, nor has any dividend been
proposed since the end of both reporting periods.
18. PROPERTY, PLANT AND EQUIPMENT
Aircraft, engines Buildings Other Construction Total
and flight
equipment
in progress
equipment
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Cost
At 1 January 2024 184,226,686 19,910,527 14,520,573 12,300,365 230,958,151
Additions 3,267,965 615,283 394,283 18,668,581 22,946,112
Transfer from construction in progress 9,627,710 831,228 711,792 (11,170,730) -
Transfer from right-of-use assets upon obtaining ownership of the underlying 6,635,654 - - - 6,635,654
leased assets
Transfer to right-of-use assets - - - (7,714,233) (7,714,233)
Transfer to assets held for sale (1,626,634) - - - (1,626,634)
Disposals (5,321,996) (423,722) (382,317) - (6,128,035)
Exchange realignment 34,011 - 3,294 - 37,305
At 31 December 2024 196,843,396 20,933,316 15,247,625 12,083,983 245,108,320
Additions 4,741,808 89,351 825,454 11,070,388 16,727,001
Transfer from construction in progress 5,737,245 393,939 686,123 (6,817,307) -
Transfer from right-of-use assets upon obtaining ownership of the underlying 16,933,061 - - - 16,933,061
leased assets
Transfer to right-of-use assets - - - (2,185,383) (2,185,383)
Disposals (8,920,411) (314,020) (626,853) - (9,861,284)
Exchange realignment (79,512) - (5,267) - (84,779)
At 31 December 2025 215,255,587 21,102,586 16,127,082 14,151,681 266,636,936
18. PROPERTY, PLANT AND EQUIPMENT (continued)
Aircraft, engines Buildings Other Construction Total
and flight
equipment
in progress
equipment
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Accumulated depreciation
At 1 January 2024 (96,314,211) (6,863,033) (9,524,024) - (112,701,268)
Depreciation charge for the year (11,791,655) (711,380) (936,863) - (13,439,898)
Transfer from right-of-use assets upon obtaining ownership of the underlying (2,897,676) - - - (2,897,676)
leased assets
Transfer to assets held for sale 1,445,651 - - - 1,445,651
Eliminated on disposals 4,783,102 56,354 357,765 - 5,197,221
Exchange realignment (14,984) - (2,879) - (17,863)
At 31 December 2024 (104,789,773) (7,518,059) (10,106,001) - (122,413,833)
Depreciation charge for the year (12,997,128) (890,521) (1,022,629) - (14,910,278)
Transfer from right-of-use assets upon obtaining ownership of the underlying (9,308,093) - - - (9,308,093)
leased assets
Eliminated on disposals 7,026,195 238,671 488,250 - 7,753,116
Exchange realignment 37,244 - 4,343 - 41,587
At 31 December 2025 (120,031,555) (8,169,909) (10,636,037) - (138,837,501)
Impairment
At 1 January 2024 (521,945) - - (6,440) (528,385)
Recognised for the year (143,240) - - - (143,240)
Transfer to assets held for sale 93,798 - - - 93,798
Eliminated on disposals 64,211 - - - 64,211
At 31 December 2024 (507,176) - - (6,440) (513,616)
Recognised for the year (96,292) - - - (96,292)
Eliminated on disposals 171,165 - - - 171,165
At 31 December 2025 (432,303) - - (6,440) (438,743)
Net book value
At 31 December 2025 94,791,729 12,932,677 5,491,045 14,145,241 127,360,692
At 31 December 2024 91,546,447 13,415,257 5,141,624 12,077,543 122,180,871
18. PROPERTY, PLANT AND EQUIPMENT (continued)
During the year, the Group recognised impairment losses amounting to
approximately RMB96 million (2024: RMB143 million) for certain aircrafts held
for sale. The impairment provisions refer to the difference between the
recoverable amounts of RMB155 million and the carrying amounts of the assets,
approximately RMB251 million. The recoverable amount is estimated based on
fair value less cost of disposal. The fair value is determined based on
depreciated replacement cost method. The fair value measurement falls into
level 3 of the fair value hierarchy.
In addition, the Company and its subsidiaries, primarily operating as airline
operators, performed impairment assessments on their airline operation related
assets other than those mentioned above. The airline operation related assets
include aircrafts and other operating non-current assets (including property,
plant and equipment, right-of-use assets and intangible assets) and are
grouped as separate cash-generating unit. The recoverable amounts for each of
these cash-generating units were determined based on value in use
calculations. The calculations used cash flow projections based on financial
budgets approved by management covering a five-year period. Key assumptions
for the value in use calculations include budgeted sales and gross margins
which are based on each of these cash-generating units' past performances and
management's market development expectations. The discount rates used are
pre-tax rates that reflect the risks specific to each unit, ranging from 9% to
10.5% (2024: 9% to 10.5%). The cash flows beyond the five-year period were
extrapolated using a 2% (2024: 2.5%). As the recoverable amounts are above the
carrying amounts of respective cash-generating unit, no further impairment
loss was recognised during the year.
Depreciation of overhaul components of engines is calculated using the units
of production method based on the estimated flying hours. The items of other
property, plant and equipment, less their estimated residual value, if any,
except for construction in progress, are depreciated on a straight-line basis
at the following rates per annum.
Estimated Residual Depreciation rate
useful life/flying
value
per annum/per
hours
thousand hours
Aircraft, engines and flight equipment:
Core parts of airframe and engines 15 to 30 years Nil-5% 3.17% - 6.67%
Overhaul of airframe and cabin refurbishment 6 to 12 years Nil 8.33% - 16.67%
Overhaul components of engines 8 to 43 thousand hours Nil 2.33% - 12.50%
Rotable 3 to 15 years Nil 6.67% - 33.33%
Buildings 5 to 50 years Nil-10% 1.80% - 20.00%
Other equipment 3 to 20 years Nil-5% 4.75% - 33.33%
As at 31 December 2025, the Group's aircraft and flight equipment, buildings
and other equipment with an aggregate net book value of approximately RMB4,539
million (2024: RMB3,825 million) were pledged to secure certain bank loans of
the Group (Note 35).
As at 31 December 2025, the Group was in the process of applying for the title
certificates of certain buildings with an aggregate net book value of
approximately RMB5,891 million (2024: RMB6,906 million). The Directors are of
the opinion that the Group is entitled to lawfully and validly occupy and use
the above-mentioned buildings, and the aforesaid matter did not have any
significant impact on the Group's consolidated financial position as at 31
December 2025.
19. RIGHT-OF-USE ASSETS
Aircraft and engines Land Buildings Others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Cost
At 1 January 2024 198,861,289 5,597,401 3,441,391 360,681 208,260,762
Additions 8,271,333 390,704 1,185,888 269,428 10,117,353
Transfer from property, plant and equipment 7,419,413 294,820 - - 7,714,233
Transfer to property, plant and equipment upon obtaining ownership of the (6,635,654) - - - (6,635,654)
underlying leased assets
Reduction upon completion/early termination of leases (3,079,755) (419,710) (664,737) (10,205) (4,174,407)
Exchange adjustments 79,551 - 3,071 - 82,622
At 31 December 2024 204,916,177 5,863,215 3,965,613 619,904 215,364,909
Additions 22,984,088 483,375 917,629 33,288 24,418,380
Transfer from property, plant and equipment 2,185,383 - - - 2,185,383
Transfer to property, plant and equipment upon obtaining ownership of the (16,933,061) - - - (16,933,061)
underlying leased assets
Reduction upon completion/early termination of leases (2,211,516) (25,179) (904,251) (125,919) (3,266,865)
Exchange adjustments (126,687) - (3,343) - (130,030)
At 31 December 2025 210,814,384 6,321,411 3,975,648 527,273 221,638,716
19. RIGHT-OF-USE ASSETS (continued)
Aircraft and engines Land Buildings Others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Accumulated depreciation
At 1 January 2024 (83,680,314) (969,245) (2,435,705) (204,439) (87,289,703)
Depreciation charged for the year (14,541,088) (122,276) (850,246) (115,908) (15,629,518)
Transfer to property, plant and equipment upon obtaining ownership of the 2,897,676 - - - 2,897,676
underlying leased assets
Reduction upon completion/early termination of leases 2,851,654 17,983 650,757 9,203 3,529,597
Exchange adjustments (38,961) - (1,858) - (40,819)
At 31 December 2024 (92,511,033) (1,073,538) (2,637,052) (311,144) (96,532,767)
Depreciation charged for the year (14,723,414) (135,148) (809,353) (106,012) (15,773,927)
Transfer to property, plant and equipment upon obtaining ownership of the 9,308,093 - - - 9,308,093
underlying leased assets
Reduction upon completion/early termination of leases 1,989,265 6,594 870,708 94,532 2,961,099
Exchange adjustments 67,371 - 2,265 - 69,636
At 31 December 2025 (95,869,718) (1,202,092) (2,573,432) (322,624) (99,967,866)
Net book value
At 31 December 2025 114,944,666 5,119,319 1,402,216 204,649 121,670,850
At 31 December 2024 112,405,144 4,789,677 1,328,561 308,760 118,832,142
During the year, expense relating to short-term leases amounted to
approximately RMB1,492 million (2024: RMB956 million).
As at 31 December 2025, the Group had future undiscounted lease payments under
non-cancellable period of RMB227
million (2024: RMB188 million), which was not recognised as lease liabilities
since the leases have yet to be commenced.
During the year, total cash outflow for leases was RMB20,497 million (2024:
RMB20,079 million).
Details of the lease maturity analysis of lease liabilities and future
undiscounted lease payments are set out in Notes 34 and 43.
As at 31 December 2025, all the Group's land use rights are located in Chinese
Mainland. Land use rights of approximately RMB23 million (2024 RMB23 million)
were pledged to secure certain bank loans and other borrowings of the Group
(Note 35).
20. GOODWILL
2025 2024
RMB'000 RMB'000
Cost
At 1 January and 31 December 4,225,467 4,225,467
Impairment
At 1 January (129,735) (129,735)
Impairment loss (483,552) -
At 31 December (613,287) (129,735)
Carrying amount
At 31 December 3,612,180 4,095,732
Goodwill is allocated to the Group's cash-generating units in airline
operations segment as follows:
2025 2024
RMB'000 RMB'000
Shandong Aviation Group Company Limited ("Shandong Aviation") 2,512,205 2,995,757
Shenzhen Airlines Company Limited ("Shenzhen Airlines") 1,099,975 1,099,975
3,612,180 4,095,732
20. GOODWILL (continued)
The recoverable amounts for both Shenzhen Airlines and Shandong Aviation
cash-generating units were determined based on value in use calculations.
These calculations used cash flow projections based on financial budgets
approved by the managements covering a five-year period. The key assumptions
used in estimating the recoverable amount are as follows:
Shandong Aviation Shenzhen Airlines
2025 2024 2025 2024
Pre-tax discount rate 9.5% 10.5% 9.4% 10.0%
Terminal growth rate 2.0% 2.5% 2.0% 2.5%
Due to fierce competition in the domestic market and diversion to high-speed
rail, the actual performance of Shandong Aviation in 2025 failed to reach the
expected level. An impairment loss of RMB483,552,000 was recognised in 2025.
As the cash-generating unit has been reduced to its recoverable amount, any
adverse change in the assumptions used in the calculation of recoverable
amount would result in further impairment losses.
As the recoverable amounts are significantly above the carrying amounts of
Shenzhen Airlines cash-generating units respectively, the management believes
that any reasonably possible change in any of these assumptions would not
result in impairment.
21. INTERESTS IN SUBSIDIARIES
Details of the principal subsidiaries held by the Company at the end of the
reporting period are set out below:
Name of Subsidiaries Place of incorporation/registration/operations Paid up issued/ Proportion of ownership Principal activities
registered capital
interest and voting power
held by the Company
2025 2024
% %
China National Aviation Company Limited Hong Kong SAR, China HKD331,268,000 100 100 Investment holding
("CNAC")
(中航興業有限公司)
Air China Import and Export Co., Ltd. PRC/Chinese Mainland RMB95,080,786 100 100 Import and export trading
(國航進出口有限公司) (Note (a))
Zhejiang Aviation Service Co., Ltd. PRC/Chinese Mainland RMB20,000,000 100 100 Provision of cabin service and
(浙江航空服務有限公司) (Note (a))
airline catering
Air China Development Corporation (Hong Kong) Limited Hong Kong SAR, China HKD9,379,010 100 100 Provision of air ticketing services
(國航香港發展有限公司)
Air China Shantou Industrial Development Company PRC/Chinese Mainland RMB18,000,000 51 51 Airline related service
(中國國際航空汕頭實業發展公司) (Note (a))
Beijing Golden Phoenix Human Resource Co., Ltd. PRC/Chinese Mainland RMB2,000,000 100 100 Provision of human resources services
(北京金鳳凰人力資源服務有限公司) (Note (a))
Total Transform Group Ltd. British Virgin Islands ("BVI") HKD13,765,440,000 100 100 Investment holding
(國航海外控股有限公司)
Beijing Airlines Co., Ltd. PRC/Chinese Mainland RMB1,000,000,000 51 51 Airline operator
(北京航空有限責任公司) (Note (a))
Dalian Airlines Co., Ltd. PRC/Chinese Mainland RMB3,000,000,000 80 80 Airline operator
(大連航空有限責任公司) (Note (a))
21. INTERESTS IN SUBSIDIARIES (continued)
Name of Subsidiaries Place of incorporation/registration/operations Paid up issued/ Proportion of ownership Principal activities
registered capital
interest and voting power
held by the Company
2025 2024
% %
Air China Inner Mongolia Co., Ltd. PRC/Chinese Mainland RMB2,000,000,000 80 80 Airline operator
(中國國際航空內蒙古有限公司) (Note (a))
China National Aviation Finance Co., Ltd. PRC/Chinese Mainland RMB1,127,961,864 51 51 Provision of financial services
("CNAF")
(中國航空集團財務有限責任公司) (Note (a))
Chengdu Falcon Aircraft Engineering Service Co., Ltd. PRC/Chinese Mainland RMB80,000,000 60 60 Provision of aircraft overhaul and maintenance services
(成都富凱飛機工程服務有限公司) (Note (a))
Shenzhen Airlines PRC/Chinese Mainland RMB9,351,082,184.24 51 51 Airline operator
(深圳航空有限責任公司) (Note (a))
Aircraft Maintenance and Engineering Corporation PRC/Chinese Mainland United State Dollar 75 75 Provision of aircraft overhaul and maintenance services
("AMECO")
(北京飛機維修工程有限公司) (Note (a)) ("USD") 300,052,800
Shandong Aviation PRC/Chinese Mainland RMB10,454,489,846.24 66 66 Airline related service
(山東航空集團有限公司) (Note (a))
Notes:
(a) These companies are limited liability companies.
The above table lists the subsidiaries of the Company which, in the opinion of
the Directors, principally affected the results or assets of the Group. To
give details of other subsidiaries would, in the opinion of the Directors,
result in particulars of excessive length.
21. INTERESTS IN SUBSIDIARIES (continued)
Details of non-wholly owned subsidiaries that have material NCI
Summarised financial information in respect of the Company's subsidiaries that
have material NCI is set out below. The summarised financial information below
represents amounts before intra-group elimination.
Shenzhen Airlines
2025 2024
RMB'000 RMB'000
Current assets 8,113,989 11,897,107
Non-current assets 55,411,858 57,295,324
Current liabilities (26,934,026) (37,233,895)
Non-current liabilities (47,130,475) (45,336,096)
Total equity (10,538,654) (13,377,560)
- Equity contributed to equity shareholders of Shenzhen Airlines (10,554,823) (13,391,586)
- Equity contributed to the NCI of Shenzhen Airlines' subsidiaries 16,169 14,026
Carrying amount of NCI (5,155,694) (6,547,851)
Revenue 33,406,065 33,069,720
Loss for the year (1,241,498) (2,811,279)
Total comprehensive income (1,242,727) (2,843,537)
- attributable to equity shareholders of Shenzhen Airlines (1,244,870) (2,845,758)
- attributable to NCI of Shenzhen Airlines' subsidiaries 2,143 2,221
Loss allocated to NCI (607,241) (1,376,394)
Other comprehensive income allocated to NCI (603) (15,807)
Cash from operating activities 6,050,481 6,897,524
Cash from/(used in) investing activities 514,878 (1,803,852)
Cash (used in)/from financing activities (10,114,269) 1,400,496
21. INTERESTS IN SUBSIDIARIES (continued)
Details of non-wholly owned subsidiaries that have material NCI (continued)
Shandong Aviation
2025 2024
RMB'000 RMB'000
Current assets 5,435,859 5,919,023
Non-current assets 28,155,747 27,566,976
Current liabilities (6,606,605) (6,945,388)
Non-current liabilities (25,868,429) (23,259,019)
Total equity 1,116,572 3,281,592
- Equity contributed to equity shareholders of Shandong Aviation 7,604,594 8,420,192
- Equity contributed to the NCI of Shandong Aviation' subsidiaries (6,488,022) (5,138,600)
Carrying amount of NCI (1,078,124) 15,581
Revenue 21,158,596 20,446,285
Loss for the year (2,067,002) (1,580,837)
Total comprehensive income (2,151,279) (1,619,505)
- attributable to equity shareholders of Shandong Aviation (815,598) (544,435)
- attributable to NCI of Shandong Aviation' subsidiaries (1,335,681) (1,075,070)
Loss allocated to NCI (1,038,228) (662,362)
Other comprehensive income allocated to NCI (41,737) (19,170)
Dividend paid to NCI 12,835 11,990
Cash from operating activities 3,945,124 3,936,596
Cash used in investing activities (2,919,068) (1,867,814)
Cash used in financing activities (1,466,780) (1,752,279)
22. INTERESTS IN ASSOCIATES
2025 2024
RMB'000 RMB'000
Listed shares in Hong Kong SAR, China 15,353,413 14,310,718
Unlisted investments 434,174 322,205
As at 31 December 15,787,587 14,632,923
Market value of listed shares 21,673,954 17,054,995
22. INTERESTS IN ASSOCIATES (continued)
Details of the principal associates of the Group at the end of the reporting
period are as follows:
Company name Place of incorporation/registration and operations Paid up issued/ Percentage of equity interests attributable to the Group Principal activities
registered capital
as at 31 December
2025 2024
% %
Cathay Pacific (國泰航空有限公司) Hong Kong SAR, China HKD31,123,000,000 28.72 29.98 Airline operator
Menzies Macau Airport Services Limited Macau SAR, China MOP10,000,000 41 41 Provision of airport ground handling services
(明捷澳門機場服務有限公司)
Chongqing Civil Aviation Cares Information Technology Co., Ltd. PRC/Chinese Mainland RMB14,800,000 24.5 24.5 Provision of airline-related information system services
(重慶民航凱亞信息技術有限公司)
Chengdu Civil Aviation Southwest Cares Co., Ltd. PRC/Chinese Mainland RMB10,000,000 35 35 Provision of airline-related information system services
(成都民航西南凱亞有限責任公司)
Tibet Airlines Co., Ltd. (西藏航空有限公司) PRC/Chinese Mainland RMB280,000,000 31 31 Airline operator
Staeco (Beijing) Business Jet Maintenance Co., Ltd. PRC/Chinese Mainland RMB5,000,000 40 40 Provision of overhaul and maintenance services
(北京山太公務機維修技術有限公司)
Chongqing Zhonghang Foodstuff Co., Ltd. PRC/Chinese Mainland RMB80,000,000 6.25 6.25 Provision of airline catering
(重慶中航食品有限責任公司)
Guangzhou Baiyun International Airport GroundService Co., Ltd. PRC/Chinese Mainland RMB100,000,000 21 21 Provision of airport ground handling services
(廣州白雲國際機場
地勤服務有限公司)
The above table lists the associates of the Group which, in the opinion of the
Directors, principally affected the results or assets of the Group. To give
details of other associates would, in the opinion of the Directors, result in
particulars of excessive length.
22. INTERESTS IN ASSOCIATES (continued)
Summarised financial information in respect of Cathay Pacific, the only
individually material associate of the Group, and a reconciliation to the
carrying amount in the consolidated financial statements, are set out below.
The summarised financial information below represents amounts shown in the
associate's financial statements.
Cathay Pacific
2025 2024
RMB'000 RMB'000
Gross amounts of the associate's
Current assets 20,349,547 17,822,566
Non-current assets 139,566,458 140,756,228
Current liabilities (53,328,818) (46,523,324)
Non-current liabilities (52,288,309) (63,431,888)
Equity contributed to equity shareholders of the associate 54,290,749 48,130,929
Revenue 106,797,687 95,617,404
Profit for the year 9,903,614 9,058,693
Other comprehensive income (770,118) (420,504)
Total comprehensive income 9,133,496 8,638,189
Dividend received from the associate 1,218,339 1,114,220
Reconciled to the Group's interests in the associate
Gross amounts of net assets of the associate attributable to 54,290,749 48,130,929
equity shareholders
Group's effective interest 28.72% 29.98%
Group's share of net assets of the associate 15,589,977 14,429,653
Elimination of reciprocal shareholding (2,690,959) (2,747,008)
Goodwill 2,454,395 2,628,073
Carrying amount in the consolidated financial statements 15,353,413 14,310,718
22. INTERESTS IN ASSOCIATES (continued)
Aggregate information of associates that are not individually material:
2025 2024
RMB'000 RMB'000
Aggregate carrying amounts of individually immaterial associates 434,174 322,205
in the consolidated financial statements
Aggregate amounts of the Group's share of those associates'
- Profit for the year 137,258 111,957
- Other comprehensive income for the year (1,420) 1,482
- Total comprehensive income for the year 135,838 113,439
23. INTERESTS IN JOINT VENTURES
Details of the principal joint ventures of the Group at the end of the
reporting period are as follows:
Company name Place of incorporation/registration and operations Paid up issued/ Percentage of equity interests attributable to the Group Principal activities
registered capital
as at 31 December
2025 2024
% %
Shanghai Pudong International Airport West Area Public Freight Station Co., PRC/Chinese Mainland RMB680,000,000 39 39 Provision of cargo carriage services
Ltd.
(上海浦東國際機場西區公共貨運站有限公司)
Sichuan Services Aero-Engine Maintenance Co., Ltd. PRC/Chinese Mainland USD88,000,000 60 60 Provision of engine overhaul and maintenance services
(四川國際航空發動機維修有限公司)
GA Innovation China Co., Ltd. PRC/Chinese Mainland RMB62,689,000 50 50 Wholesale and import of aircraft and components
(北京集安航空資產管理有限公司)
Shanghai International Airport Ground Services Ltd. PRC/Chinese Mainland RMB360,000,000 24 24 Provision of airport ground handling services
(上海國際機場地面服務有限公司)
Beijing Aero Engine Services Company Limited PRC/Chinese Mainland USD190,000,000 50 50 Provision of engine overhaul and maintenance services
(北京航空發動機維修有限公司)
All joint ventures are unlisted. The decisions about the relevant activities
of the above investees require unanimous consent of the Group and certain
other investors pursuant to the articles of association of these investees.
23. INTERESTS IN JOINT VENTURES (continued)
The Directors are of the opinion that no joint ventures are individually
material to the Group. Aggregate information of joint ventures that are not
individually material are listed as follows:
2025 2024
RMB'000 RMB'000
Aggregate carrying amounts of individually immaterial joint 2,644,892 2,423,853
ventures in the consolidated financial statements
Aggregate amounts of the Group's share of those joint ventures'
- Profit for the year 289,927 209,121
- Total comprehensive income for the year 289,927 209,121
24. EQUITY INSTRUMENTS AT FVTOCI
The balance represents the Group's equity interests in a number of unlisted
entities established in the PRC and certain interest in unlisted securities of
a listed company. The Directors have elected to designate these investments in
equity instruments at FVTOCI as these equity instruments are not held for
trading and not expected to be sold in the foreseeable future.
25. DEBT INSTRUMENTS AT FVTOCI
2025 2024
RMB'000 RMB'000
Investments in listed bonds 1,400,332 1,426,851
Less: Portion classified as current assets (306,897) -
1,093,435 1,426,851
The above investments are held by the Group within a business model whose
objective is both to collect their contractual cash flows which are solely
payments of principal and interest on the principal amount outstanding and to
sell these financial assets. Hence, these investments are classified as at
debt instruments at FVTOCI.
Details of impairment assessment are set out in Note 43.
26. DEFERRED TAXATION
The movements in net deferred tax assets during the year were as follows:
2025 2024
RMB'000 RMB'000
As at 1 January 12,831,750 13,409,270
Charged to profit or loss (Note 14) (1,627,732) (598,433)
Others 26,079 20,638
Exchange realignment (443) 275
Net deferred tax assets as at 31 December 11,229,654 12,831,750
26. DEFERRED TAXATION (continued)
The principal components of the Group's deferred tax assets and liabilities
were as follows:
2025 2024
RMB'000 RMB'000
Deferred tax assets:
Deductible tax losses 3,964,920 6,305,985
Provisions and accruals 7,248,152 6,251,603
Lease liabilities and provisions 8,081,120 8,750,652
Impairment 312,959 364,452
Unrealised profit of intra-group transactions 267,278 266,152
Differences in value of property, plant and equipment 57,485 51,636
Others 19 213
Gross deferred tax assets 19,931,933 21,990,693
Deferred tax liabilities:
Right-of-use assets (7,346,832) (7,545,854)
Depreciation allowances in excess of the related depreciation (1,037,793) (1,221,173)
Changes in fair value of equity instruments at FVTOCI (155,758) (177,748)
Unrealised equity investment income (56,104) (113,878)
Changes in fair value of debt instruments at FVTOCI (7,712) (11,591)
Others (98,080) (88,699)
Gross deferred tax liabilities (8,702,279) (9,158,943)
Net deferred tax assets 11,229,654 12,831,750
The following amounts, determined after appropriate offsetting, are shown
separately on the consolidated statement of financial position:
2025 2024
RMB'000 RMB'000
Net deferred tax assets 11,367,646 12,959,766
Net deferred tax liabilities (137,992) (128,016)
11,229,654 12,831,750
26. DEFERRED TAXATION (continued)
Details of tax losses and other deductible temporary differences not
recognised are set out below:
2025 2024
RMB'000 RMB'000
Deductible tax losses 78,545,630 66,710,308
Other unrecognised deductible temporary differences 283,096 268,117
78,828,726 66,978,425
At the end of the reporting period, the Group has unused tax losses of
approximately RMB95,263 million (2024: RMB93,101 million) available for offset
against future profits. Deferred tax asset has been recognised in respect of
approximately RMB16,717 million (2024: RMB26,391 million) of such losses. No
deferred tax asset has been recognised in respect of the remaining tax losses
of approximately RMB78,546 million (2024: RMB66,710 million) which relate to
the Company and its subsidiaries that have been loss-making for some years and
it is not considered probable that sufficient taxable profits will be
available in the near future against which the tax losses can be utilised.
Included in unrecognised tax losses are losses of approximately RMB78,524
million (2024: RMB66,678 million) with expiry dates as disclosed in the
following table. Other tax losses may be carried forward indefinitely.
2025 2024
RMB'000 RMB'000
2025 - 450,281
2026 20,732,108 16,685,095
2027 42,822,456 38,534,790
2028 11,601,462 6,779,635
2029 2,595,792 4,227,979
2030 771,881 -
78,523,699 66,677,780
27. INVENTORIES
An analysis of inventories as at the end of the reporting period is as
follows:
2025 2024
RMB'000 RMB'000
Spare parts of flight equipment 2,475,324 2,175,766
Costs to fulfil a contract 1,946,643 1,704,509
Onboard supplies 95,123 95,489
Others 292,608 249,228
4,809,698 4,224,992
28. ACCOUNTS RECEIVABLE
2025 2024
RMB'000 RMB'000
Accounts receivable 3,646,894 3,834,983
Less: Allowance for expected credit losses (166,737) (164,731)
3,480,157 3,670,252
The ageing analysis of the accounts receivable as at the end of the reporting
period, based on the transaction date, net of allowance for expected credit
losses, was as follows:
2025 2024
RMB'000 RMB'000
Within 30 days 2,877,838 2,963,962
31to 60 days 101,849 147,934
61to 90 days 245,924 139,120
Over 90 days 254,546 419,236
3,480,157 3,670,252
Details of impairment assessment of accounts receivable are set out in Note
43.
29. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES
An analysis of prepayments, deposits and other receivables as at the end of
the reporting period, net of allowance for expected credit losses, was as
follows:
2025 2024
RMB'000 RMB'000
Manufacturers' credits 1,390,911 1,311,700
Prepayments of jet fuel 146,444 116,961
Other prepayments 444,383 345,284
1,981,738 1,773,945
Deposits and other receivables 2,884,614 3,449,312
4,866,352 5,223,257
Details of impairment assessment of deposits and other receivables are set out
in Note 43.
30. TIME DEPOSITS AND RESTRICTED DEPOSITS, CASH AND CASH
EQUIVALENTS
2025 2024
RMB'000 RMB'000
Time deposits with banks 1,564,480 956,572
Bank and cash 14,294,844 21,511,329
Less: Restricted bank deposits (Note) (1,564,056) (1,428,429)
Cash and cash equivalents 14,295,268 21,039,472
Note: As at 31 December 2025 and 2024, the Group's restricted bank
deposits mainly include deposits with the People's Bank of China by CNAF,
security deposits and bank deposits with an original maturity of more than
three months.
31. OTHER CURRENT ASSETS
2025 2024
RMB'000 RMB'000
The value added tax credit 4,422,128 4,107,817
Debt instruments at amortised cost - 500,000
Loans to related parties 45,029 288,223
Debt instruments at FVTOCI 1,005,616 49,862
Others 153,075 28,955
5,625,848 4,974,857
Impairment (2,219) (14,229)
5,623,629 4,960,628
Loans to related parties mainly represented loans to CNAHC and its
subsidiaries by CNAF at a rate of 2.11%-2.80% (2024: 2.20%-3.00%) per annum
and the loans are repayable within one year.
Details of impairment assessment of other current assets are set out in Note
43.
32. ACCOUNTS PAYABLE
The ageing analysis of the accounts payable, based on the transaction date, as
at the end of the reporting period was as follows:
2025 2024
RMB'000 RMB'000
Within 30 days 7,839,031 8,354,764
31to 60 days 1,968,175 2,009,755
61to 90 days 4,171,265 4,806,725
Over 90 days 4,737,845 3,698,540
18,716,316 18,869,784
The accounts payable are non-interest-bearing and have normal credit terms up
to 90 days.
33. OTHER PAYABLES AND ACCRUALS
An analysis of other payables and accruals as at the end of the reporting
period was as follows:
2025 2024
RMB'000 RMB'000
Accrued salaries, wages and benefits 4,178,319 3,507,037
Payables for construction in progress 934,865 1,365,753
Deposits received from sales agents 507,604 593,809
Other tax payables 574,487 524,754
Deposits received by CNAF from related parties 8,212,687 4,891,502
Others 2,263,403 2,554,647
16,671,365 13,437,502
34. LEASE LIABILITIES
The Group has obligations under lease agreements expiring during the years
from 2026 to 2035 (2024: from 2025 to 2033). An analysis of the present values
of the lease payments as at the end of the reporting period is as follows:
2025 2024
RMB'000 RMB'000
Amounts repayable
- Within 1 year 17,548,753 17,464,654
- After 1 year but within 2 years 14,175,868 14,744,586
- After 2 years but within 5 years 28,681,650 28,948,310
- After 5 years 18,594,653 15,441,291
Total 79,000,924 76,598,841
Less: Portion classified as current liabilities (17,548,753) (17,464,654)
Non-current portion 61,452,171 59,134,187
The incremental borrowing rates applied to lease liabilities ranged from 0.82%
to 7.00% per annum at 31 December 2025 (2024: from 0.64% to 7.16%).
Under the terms of certain lease agreements, the Group has the option to
purchase the aircraft at the end of or during the lease term, at the price as
stipulated in those lease agreements.
35. INTEREST-BEARING BORROWINGS
2025 2024
RMB'000 RMB'000
Bank loans and other borrowings:
- Secured 3,915,909 3,583,562
- Unsecured 100,567,469 137,370,418
104,483,378 140,953,980
Corporate bonds and short-term commercial papers:
- Unsecured 43,335,235 18,427,685
147,818,613 159,381,665
2025 2024
RMB'000 RMB'000
Bank loans and other borrowings repayable:
- Within 1 year 35,875,472 62,117,020
- After 1 year but within 2 years 46,098,600 30,458,552
- After 2 years but within 5 years 22,130,180 43,561,628
- After 5 years 379,126 4,816,780
104,483,378 140,953,980
Corporate bonds and short-term commercial papers repayable:
- Within 1 year 11,335,235 12,427,685
- After 1 year but within 2 years 6,000,000 -
- After 2 years but within 5 years 26,000,000 6,000,000
43,335,235 18,427,685
Total interest-bearing borrowings 147,818,613 159,381,665
Less: Portion classified as current liabilities (47,210,707) (74,544,705)
Non-current portion 100,607,906 84,836,960
35. INTEREST-BEARING BORROWINGS (continued)
Bank and other borrowings denominated in currencies other than the functional
currencies of respective entities are set out below:
2025 2024
RMB'000 RMB'000
European Dollar ("EURO") 140,078 116,451
The interest rate information of the Group's bank and other borrowings is as
follows:
2025 2024
RMB'000 % RMB'000 %
Fixed rate bank loans and 37,043,798 1.25-3.75 69,595,812 1.95-4.38
other borrowings
Fixed rate corporate bonds and 43,335,235 1.51-2.25 18,427,685 2.03-3.46
short-term commercial papers
Floating rate bank loans and other borrowings 67,439,580 1.00-3.95 71,358,168 1.60-4.20
147,818,613 159,381,665
The floating rates of bank and other borrowings are linked to the benchmark
interest rates of The People's Bank of China.
At the end of the reporting period, the carrying amount of the Group's assets
pledged to secure the Group's borrowings is as follows:
2025 2024
RMB'000 RMB'000
Aircraft and flight equipment, buildings and other equipment 4,538,610 3,825,292
Land use rights 22,645 23,433
4,561,255 3,848,725
36. PROVISION FOR RETURN CONDITION CHECKS
Movements of provision for return condition checks in respect of aircraft
under leases at the end of the reporting period are as follows:
2025 2024
RMB'000 RMB'000
As at 1 January 19,986,629 17,847,759
Provision for the year 3,239,802 2,831,892
Utilisation during the year (660,269) (693,022)
As at 31 December 22,566,162 19,986,629
Less: Portion classified as current liabilities (2,416,213) (758,575)
Non-current portion 20,149,949 19,228,054
As at 31 December 2025, provision for major overhauls was RMB18,166 million
(2024: RMB15,939 million). Provision for major overhauls is calculated based
on a number of variable factors and assumptions, including the anticipated
utilisation of the aircraft and the expected costs of maintenance. The
estimates are reviewed on an ongoing basis and revised whenever appropriate.
37. CONTRACT LIABILITIES
2025 2024
RMB'000 RMB'000
Frequent-flyer programme (Note) 3,574,119 2,757,040
Others 1,020,309 979,320
4,594,428 3,736,360
Analysed as:
Current portion 1,720,744 1,171,172
Non-current portion 2,873,684 2,565,188
4,594,428 3,736,360
37. CONTRACT LIABILITIES (continued)
Note:
The movements of the Group's frequent-flyer programme during the year were as
follows:
2025 2024
RMB'000 RMB'000
As at 1 January 2,757,040 2,172,125
Additions during the year 1,982,870 1,936,051
Recognised as revenue during the year (1,165,791) (1,351,136)
As at 31 December 3,574,119 2,757,040
Less: Portion classified as current liabilities (700,435) (191,852)
Non-current portion 2,873,684 2,565,188
The Group operates frequent-flyer programme and provides free services or
products to the customers according to the mileage points they earn. The Group
maintains IT systems to track the point of service provision for each sale and
also to track the issuance, subsequent redemption, utilisation and expiry of
mileage points. The amount allocated to the mileage points earned by the
members of the frequent-flyer programme is deferred, and is subsequently
recognised as revenue when the mileage points are redeemed and the related
goods or services were provided or when the miles expire.
38. DEFINED BENEFIT OBLIGATIONS
The liabilities recognised in the consolidated statement of financial position
represent:
2025 2024
RMB'000 RMB'000
Post-retirement benefit obligations 189,093 208,098
Less: current portion (20,328) (21,398)
Long-term portion 168,765 186,700
AMECO, a subsidiary of the Company, provides monthly retirement benefits for
those staff who were retired before AMECO adopted its own enterprise annuity
plan (the "Plan"). These retirement benefits are recognised as defined benefit
obligations.
38. DEFINED BENEFIT OBLIGATIONS (continued)
Movements of the defined benefit obligations were set out as follows:
2025 2024
RMB'000 RMB'000
At 1 January 208,098 210,054
Remeasurement (954) 15,130
Interest cost 3,241 5,147
Payments (21,292) (22,233)
At 31 December 189,093 208,098
Less: current portion (20,328) (21,398)
Non-current portion 168,765 186,700
Expenses recognised in the consolidated statement of profit or loss and other
comprehensive income are as follows:
2025 2024
RMB'000 RMB'000
Finance costs
- Interest cost 3,241 5,147
Other comprehensive income
- Remeasurement (954) 15,130
Total defined benefit costs 2,287 20,277
The Plan exposes the Group to actuarial risks such as interest rate risk and
longevity risk.
Interest rate risk The present value of the defined
benefit plan obligation is calculated using a discount rate determined by
reference to government bond yields. A decrease in the bond interest rate will
increase the plan liability.
Longevity risk The present value of the defined benefit plan obligation is
calculated by reference to the best estimate of the mortality of plan
participants after their employment. An increase in the life expectancy of the
plan participants will increase the plan liability.
The most recent actuarial valuations of the present value of the defined
benefit obligations as at 31 December 2025 and 2024 were carried out by an
independent firm of actuaries, Ernst & Young (China) Advisory Limited. The
present value of the defined benefit obligations, and the related past cost
were measured using the projected unit credit method.
38. DEFINED BENEFIT OBLIGATIONS (continued)
Significant actuarial assumptions (expressed as weighted averages) are as
follows:
2025 2024
Discount rate 1.75% 1.65%
Average expected remaining life of eligible participants 10.3 years 10.8 years
Significant actuarial assumptions for the determination of the defined benefit
obligation are discount rate and mortality. The sensitivity analyses below
have been determined based on reasonably possible changes of the respective
assumptions occurring at the end of the reporting period, while holding all
other assumptions constant.
• If the discount rate on benefit obligation decreases by
0.5%, the defined benefit obligations would increase by RMB6.80 million (2024:
increase by RMB7.77 million).
• If the mortality changes to 95% of original assumption,
the defined benefit obligations would increase by RMB4.74 million (2024:
increase by RMB5.12 million).
39. DEFERRED INCOME
2025 2024
RMB'000 RMB'000
Government grants 314,599 315,573
Others 86,950 91,370
401,549 406,943
40. CAPITAL AND RESERVES
(a) Movements in components of equity
The reconciliation between the opening and closing balances of each component
of the Group's consolidated equity is set out in the consolidated statement of
changes in equity. Details of the changes in the Company's individual
components of equity between the beginning and the end of the year are set out
below:
Issued Capital Reserve Accumulated losses Total
capital
reserve and revaluation reserve
funds
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
As at 1 January 2024 16,200,793 40,853,715 11,527,181 (26,972,989) 41,608,700
Total comprehensive - - - (227,112) (227,112)
income for the year
Others 1,247,628 6,563,956 - - 7,811,584
As at 31 December 2024 17,448,421 47,417,671 11,527,181 (27,200,101) 49,193,172
Total comprehensive - 47,831 - (2,980,025) (2,932,194)
income for the year
Others - (27,882) - 27,882 -
As at 31 December 2025 17,448,421 47,437,620 11,527,181 (30,152,244) 46,260,978
Under the PRC Company Law and the Company's articles of association, profit
after taxation as reported in the PRC statutory financial statements can only
be distributed as dividends after allowances have been made for the following:
(i) making up prior years' cumulative losses, if any;
(ii) allocations to the statutory reserve fund of at least 10%
of the after-tax profit, until the fund reaches 50% of the Company's
registered capital (for the purpose of calculating transfers to reserves,
profit after taxation would be the amount determined under CASs). The
transfers to reserves should be made before any distribution of dividends to
shareholders. The statutory reserve fund can be used to offset previous years'
losses, if any, and part of the statutory reserve fund can be capitalised as
the Company's share capital provided that the amount of such reserve remaining
after the capitalisation shall not be less than 25% of the share capital of
the Company; and
(iii) allocations to the discretionary reserve fund approved by
the shareholders.
40. CAPITAL AND RESERVES (continued)
(a) Movements in components of equity (continued)
The above reserves cannot be used for purposes other than those for which they
are created and are not distributable as cash dividends. As at 31 December
2025, in accordance with the PRC Company Law, amount of approximately
RMB11,527 million (2024: RMB11,527 million) standing to the credit of the
Company's reserve funds, as determined in accordance with CASs, were available
for distribution by way of future capitalisation issue. In addition, the
Company had accumulated losses of approximately RMB31,531 million as at 31
December 2025 (2024: RMB28,596 million), as determined in accordance with
CASs.
(b) Share capital
The number of shares of the Company and their nominal values as at 31 December
2025 and 31 December 2024 are as follows:
Number of Nominal Number of Nominal
shares
value
shares
value
2025
2025
2024
2024
RMB'000 RMB'000
Registered, issued and fully paid:
H shares of RMB1.00 each:
- Tradable 4,562,683,364 4,562,683 4,562,683,364 4,562,683
- Trade-restricted (Note 1) 392,927,308 392,927 392,927,308 392,927
A shares of RMB1.00 each:
- Tradable 11,638,109,474 11,638,109 11,638,109,474 11,638,109
- Tradable-restricted (Note 2) 854,700,854 854,701 854,700,854 854,701
17,448,421,000 17,448,421 17,448,421,000 17,448,421
All shares rank equally with regard to the Company's residual assets.
Note 1: On 7 February 2024, the Company issued 392,927,308 new H shares to
China National Aviation Corporation (Group) Limited ("CNACG", a wholly-owned
subsidiary of CNAHC) at the price of HKD5.09 per share with par value of RMB1.
Total proceeds of the issuance were HKD2,000 million and the net proceeds were
RMB1,816 million, after deducting issue cost of RMB1 million (excluding
value-added tax), of which RMB393 million were recognised as issued capital
and RMB1,423 million were recognised as capital reserve. Upon completion of
the issuance, the new H shares are subject to a lock-up period of 36 months.
Note 2: On 17 July 2024, 614,525,150 A share subscribed by CNAHC were released
from restriction.
On 19 November 2024, the Company issued 854,700,854 new A shares to CNAHC at
the price of RMB7.02 per share with par value of RMB1. Total proceeds of the
issuance were RMB6,000 million and the net proceeds were RMB5,996 million,
after deducting issuance cost of RMB4 million (excluding value-added tax), of
which RMB855 million were recognised as issued capital and RMB5,141 million
were recognised as capital reserve. Upon completion of the issuance, the new A
shares are subject to a lock-up period of 36 months.
40. CAPITAL AND RESERVES (continued)
(c) Capital management
The primary objectives of the Group's capital management are to safeguard the
Group's ability to continue as a going concern and to maintain healthy capital
ratios in order to support its business and maximise shareholders' value.
The Group manages its capital structure and makes adjustments to it in light
of changes in economic conditions. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. No changes were made in the
objectives, policies, or processes for managing capital during the years ended
31 December 2025 and 2024.
The Group monitors capital structure by reference to the gearing ratio, which
represents total liabilities divided by total assets. The gearing ratio as at
the end of the reporting periods was as follows:
2025 2024
RMB'000 RMB'000
Total liabilities 303,815,731 304,824,203
Total assets 343,010,455 345,750,173
Gearing ratio 88.57% 88.16%
CNAF is subject to capital adequacy requirements imposed by the regulators,
there was no non-compliance of capital requirements as at 31 December 2025
(2024: Nil).
41. OTHER EVENTS
Pursuant to the restructuring of CNAHC in preparation for the listing of the
Company's H shares on the HKSE and the LSE, the Company entered into a
restructuring agreement (the "Restructuring Agreement") with CNAHC and CNACG
on 20 November 2004. According to the Restructuring Agreement, except for
liabilities constituting or arising out of or relating to business undertaken
by the Company after the restructuring, no liabilities would be assumed by the
Company and the Company would not be liable, whether severally, or jointly and
severally, for debts and obligations incurred prior to the restructuring by
CNAHC and CNACG. The Company has also undertaken to indemnify CNAHC and CNACG
against any damage suffered or incurred by CNAHC and CNACG as a result of any
breach by the Company of any provision of the Restructuring Agreement.
42. COMMITMENTS
(a) Capital commitments
The Group had the following amounts of contractual commitments for the
acquisition and construction of property, plant and equipment as at the end of
the reporting period:
2025 2024
RMB'000 RMB'000
Contracted for but not provided in the 108,917,299 95,175,219
consolidated financial statements
(b) Investment commitments
The Group had the following amount of investment commitments as at the end of
the reporting period:
2025 2024
RMB'000 RMB'000
Contracted, but not provided for:
- investment commitment to joint ventures 237,222 312,695
In 2022, the Company entered into an agreement with a joint venture as its 50%
shareholder, with an investment commitment of USD95 million. As at 31 December
2025, the Company has invested USD61.25 million (2024: USD55 million) and
committed to further invest USD33.75 million (2024: USD40 million) in the
future.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS
a. Financial risk management objectives and policies
Details of financial instruments are disclosed in the respective notes. The
risks associated with these financial instruments include market risks
(interest rate risk and foreign currency risk), credit risk, and liquidity
risk. The policies on how to mitigate these risks are set out below. The
management manages and monitors these exposures to ensure appropriate measures
are implemented on a timely and effective manner.
Market risk
(i) Interest rate risk
The Group is exposed to fair value interest rate risk which arises from fixed
rate lease liabilities, fixed rate bank loans and other borrowings (see Notes
34 and 35 for details), fixed rate corporate bonds, loans to related parties
include in other current assets.
In addition, the Group is exposed to cash flow interest rate risk which arises
from floating rate bank loans and other borrowings, lease liabilities,
restricted bank deposits, bank balances, debt instruments at amortised cost
and loans to related parties include in other current assets. The Group's
exposures to interest rates on financial liabilities are detailed in the
liquidity risk management section of this note.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to
interest rates for bank balances, restricted bank deposits, floating rate
loans to related parties include in other current assets, floating rate bank
loans and other borrowings and floating rate lease liabilities at the end of
the reporting period. The analysis is prepared assuming the financial
instruments outstanding at the end of reporting period were outstanding for
the whole year. A 50 basis points increase or decrease in interest rate are
used which represent management's assessment of the reasonably possible
changes in interest rates.
If interest rates had been 50 basis points (2024: 50 basis points)
higher/lower with all other variables held constant, the Group's post-tax loss
for the year ended 31 December 2025 would increase/decrease and equity as at
31 December 2025 would decrease/increase by approximately RMB375 million
(2024: RMB336 million) taking into account the capitalisation of borrowing
costs.
In management's opinion, the sensitivity analysis is unrepresentative of the
inherent interest rate risk as exposure at the end of the reporting period
does not reflect the exposure during the year.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Market risk (continued)
(ii) Currency risk
The Group's exposure to currency risk is attributable to cash and cash
equivalents, accounts receivable, deposits and other receivables, accounts
payable, other payables, lease liabilities and interest-bearing borrowings
which are denominated in the currencies other than the functional currency of
the relevant group entities. The management manages and monitors this exposure
to ensure appropriate measures are implemented on a timely and effective
manner.
The carrying amounts of the Group's major foreign currency denominated
monetary assets and monetary liabilities other than the functional currency of
the relevant group entities at the end of the reporting period are as follows:
Assets Liabilities
2025 2024 2025 2024
RMB'000 RMB'000 RMB'000 RMB'000
USD 8,029,558 8,626,870 26,683,340 32,300,488
EURO 179,997 119,132 1,878,141 1,841,172
HKD 45,667 45,929 230,660 230,341
JPY 36,499 59,065 727,186 1,085,962
Sensitivity analysis
The sensitivity analysis below has been determined based on a 1% (2024: 1%)
increase/decrease in functional currency of respective group entities against
USD. 1% (2024: 1%) is the sensitivity rate used and represents management's
assessment of the reasonably possible change in exchange rate. The sensitivity
analysis includes only outstanding USD denominated monetary items and adjusts
their translation at the end of the reporting period for a 1% (2024: 1%)
change in foreign currency rates. A positive number below indicates a decrease
in the Group's post-tax loss, where functional currency of respective group
entities had strengthened 1% (2024: 1%) against USD. For a 1% (2024: 1%)
weakening of functional currency of respective group entities against USD,
there would be an equal and opposite impact on the post-tax loss for the year.
Decrease in the Group's post-tax loss/increase in the Group'sequity
2025 2024
RMB'000 RMB'000
- if RMB strengthens against USD 139,903 177,552
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Credit risk and impairment assessment
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the Group. At the end
of the reporting period, the Group's maximum exposure is arising from the
carrying amount of the respective recognised financial assets as stated in the
consolidated statement of financial position.
Accounts receivable of the Group mainly include receivables of transportation
service fee on the passenger aircraft cargo business, receivables of aircraft
overhaul and maintenance services, and receivables from BSP agents (a clearing
system between airlines and sales agents organised by the International Air
Transportation Association). The balance due from above customers respectively
amounted to approximately RMB923 million or 25% of accounts receivable, RMB340
million or 9% of accounts receivable, and RMB323 million or 9% of accounts
receivable, respectively, as at 31 December 2025 (2024: RMB869 million or 23%
of accounts receivable, RMB405 million or 10% of accounts receivable and
RMB350 million or 9% of accounts receivable respectively). The credit risk
exposure to above customers and the remaining accounts receivable balance are
monitored by the Group on an ongoing basis. In addition, the Group performs
impairment assessment under ECL model on accounts receivable individually or
based on provision matrix.
In the opinion of management, the Group has no significant credit risk with
above customers as the Group maintains long-term and stable business
relationships with the customers with healthy repayment history.
The credit risk on bank deposits is limited because the counterparties are
banks and financial institutions with good reputation.
Other than the above-mentioned concentration of credit risk, the Group does
not have any other significant concentration of credit risk associated with
financial assets.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Credit risk and impairment assessment (continued)
The tables below detail the credit risk exposures of the Group's financial
assets, which are subject to ECL assessment:
Gross carrying amount
Note External 12m or 2025 2024
credit rating
lifetime ECL
RMB'000 RMB'000
Financial assets at FVTOCI
Investments in listed bonds 25 AAA 12m ECL 1,093,435 1,426,851
Debt instruments at FVTOCI 31 AAA 12m ECL 1,005,616 49,862
Financial assets at amortised costs
Accounts receivable 28 N/A Lifetime ECL 3,722,179
(provision matrix)
3,528,630
Credit-impaired 118,264 112,804
3,646,894 3,834,983
Deposits and other receivables 29 N/A 12m ECL 2,589,550 3,167,790
Lifetime ECL 353,375 353,675
(not credit-impaired)
Credit-impaired 673,156 671,905
3,616,081 4,193,370
Bills receivable N/A 12m ECL 12,516 7,785
Deposits for aircraft under leases N/A 12m ECL 488,745 526,004
Restricted bank deposits 30 N/A 12m ECL 1,564,056 1,428,429
Cash and cash equivalents 30 N/A 12m ECL 14,295,268 21,037,479
Debt instruments at amortised cost 31 N/A 12m ECL - 500,000
Loans to related parties 31 N/A 12m ECL 45,029 288,223
Other non-current assets N/A 12m ECL 301,339 315,936
For accounts receivable, the Group has applied the simplified approach in IFRS
9 to measure the loss allowance at lifetime ECL. Except for debtors which are
credit-impaired, the Group determines the ECL on these items by using a
provision matrix. The following table provides information about the exposure
to credit risk for accounts receivable which are assessed based on provision
matrix as at 31 December 2025. Debtors with credit-impaired with gross
carrying amounts of RMB118 million as at 31 December 2025 (2024: RMB113
million) were assessed individually.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Credit risk and impairment assessment (continued)
For deposits and other receivables, deposits for aircraft under leases,
restricted bank deposits, cash and cash equivalents, financial assets included
in other current assets and other non-current assets, the Group measures the
loss allowance equal to 12m ECL, unless when these has been a significant
increase in credit risk since initial recognition, the Group recognises
lifetime ECL.
Gross carrying amount of accounts receivable using a provision matrix
2025 2024
Customer group Loss rate Accounts receivable Loss rate Accounts receivable
RMB'000 RMB'000
Ground service receivable 1% 43,426 1% 54,591
Overseas BSP agents 1% 143,241 1% 124,738
Others 0.1% - 4% 3,341,963 0.05% - 4% 3,542,850
3,528,630 3,722,179
The estimated loss rates are estimated based on historical loss rates of the
debtors and are adjusted for forward-looking information that is available
without undue cost or effort.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Gross carrying amount of accounts receivable using a provision matrix
(continued)
The following table shows the movements in lifetime ECL that has been
recognised for accounts receivable under the simplified approach.
Lifetime ECL Lifetime ECL Total
(not credit-impaired)
(credit-
impaired)
RMB'000 RMB'000 RMB'000
As at 1 January 2024 43,613 131,506 175,119
Transfer to credit-impaired (101) 101 -
Impairment losses recognised 8,390 4,476 12,866
Impairment losses reversed - (8,866) (8,866)
Write-offs - (14,457) (14,457)
Exchange adjustments 25 44 69
As at 31 December 2024 51,927 112,804 164,731
Transfer to credit-impaired (3,788) 3,788 -
Impairment losses recognised 378 10,802 11,180
Impairment losses reversed - (5,990) (5,990)
Write-offs - (3,074) (3,074)
Exchange adjustments (44) (66) (110)
As at 31 December 2025 48,473 118,264 166,737
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Gross carrying amount of accounts receivable using a provision matrix
(continued)
The following table shows reconciliation of loss allowances that has been
recognised for deposits and other receivables.
12m ECL Lifetime ECL (not credit-impaired) Lifetime ECL Total
(credit-impaired)
RMB'000 RMB'000 RMB'000 RMB'000
As at 1 January 2024 23,749 27,700 740,186 791,635
Impairment losses recognised 22,674 7 711 23,392
Impairment losses reversed - (1,981) (40,371) (42,352)
Write-offs - - (28,621) (28,621)
Exchange adjustments 4 - - 4
As at 31 December 2024 46,427 25,726 671,905 744,058
Impairment losses recognised (11,610) - 1,251 (10,359)
Impairment losses reversed (719) (1,507) - (2,226)
Write-offs - - - -
Exchange adjustments (6) - - (6)
As at 31 December 2025 34,092 24,219 673,156 731,467
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a
level of cash and cash equivalents as well as undrawn banking facilities
deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors
the utilisation of bank borrowings to ensure compliance with loan covenants.
The liquidity of the Group is primarily dependent on its ability to maintain
adequate cash inflows from operations to meet its financial obligations as and
when they fall due, and its ability to obtain external financing to meet its
committed future capital expenditure. With regard to its future capital
commitments and other financing requirements, the Company has already obtained
banking facilities with several PRC banks of up to an aggregate amount of
RMB290,511 million as at 31 December 2025 (2024: RMB232,246 million), of which
an amount of approximately RMB80,546 million was utilised (2024: RMB144,106
million).
The Directors had carried out a detailed review of the cash flow forecast of
the Group for the year ended 31 December 2026. Based on such forecast, the
Directors had determined that adequate liquidity existed to finance the
working capital and capital expenditure requirements of the Group. In
preparing the cash flow forecast, the Directors had considered historical cash
requirements of the Group as well as other key factors, including the
availability of the above-mentioned loans financing which may impact the
operations of the Group. The Directors are of the opinion that the assumptions
and sensitivities which are included in the cash flow forecast are reasonable.
However, these are subject to inherent limitations and uncertainties and some
or all of these assumptions may not be realised.
The following tables detail the Group's remaining contractual maturities for
its non-derivative financial liabilities. The tables have been drawn up based
on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group can be required to pay. The maturity dates for other
non-derivative financial liabilities are based on the agreed repayment dates.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
a. Financial risk management objectives and policies (continued)
Liquidity risk (continued)
The table includes both interest and principal cash flows. To the extent that
interest flows are floating rate, the undiscounted amount is derived from
interest rate at the end of the reporting period.
Repayable After 1 year but After 2 years but within 5 years After 5 years Total Carrying
amount
on demand or within 2 years undiscounted
within 1 year
cash flows
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
At 31 December 2025
Accounts payable 18,716,316 - - - 18,716,316 18,716,316
Bills payable 1,507,384 - - - 1,507,384 1,500,000
Dividends payable 103,367 - - - 103,367 103,367
Other payables 11,457,926 - - - 11,457,926 11,442,780
Interest-bearing borrowings 47,825,067 53,813,189 49,607,338 398,335 151,643,929 147,818,613
Lease liabilities 19,278,082 15,423,059 30,631,665 19,226,743 84,559,549 79,000,924
Long-term payables - 306 - - 306 300
98,888,142 69,236,554 80,239,003 19,625,078 267,988,777 258,582,300
Repayable on After 1 year but After 2 years but After 5 years Total Carrying
amount
demand or within 2 years within 5 years undiscounted
within 1 year
cash flows
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
At 31 December 2024
Accounts payable 18,869,784 - - - 18,869,784 18,869,784
Dividends payable 98,000 - - - 98,000 98,000
Other payables 8,819,894 - - - 8,819,894 8,819,894
Interest-bearing borrowings 77,491,875 32,237,324 50,916,386 4,944,738 165,590,323 159,381,665
Lease liabilities 19,536,185 16,251,571 31,277,456 16,181,484 83,246,696 76,598,841
Long-term payables - 3,063 - - 3,063 3,000
124,815,738 48,491,958 82,193,842 21,126,222 276,627,760 263,771,184
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
b. Fair value hierarchy
Fair value measurements for financial instruments measured at fair value on a
recurring basis
The following table presents the fair value of the Group's financial
instruments measured at the end of the reporting period on a recurring basis,
categorised into the three-level fair value hierarchy as defined in IFRS 13
Fair value measurement. The level into which a fair value measurement is
classified is determined with reference to the observability and significance
of the inputs used in the valuation technique as follows:
•
Level 1 fair value measurements are based on quoted prices (unadjusted) in
active market for identical assets or liabilities;
•
Level 2 fair value measurements are those derived from inputs other than
quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices); and
•
Level 3 fair value measurements are those derived from valuation techniques
that include inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Fair value at Fair value measurements
31 December
as at 31 December 2025 categorised into
2025
Level 1 Level 2 Level 3
RMB'000 RMB'000 RMB'000 RMB'000
Financial assets at FVTPL 151,633 151,633 - -
Equity instruments at FVTOCI 1,924,573 - - 1,924,573
Debt instruments at FVTOCI (including instruments at FVTOCI included in other 2,099,051 - 2,099,051 -
current assets)
Total financial assets at fair value 4,175,257 151,633 2,099,051 1,924,573
Fair value at Fair value measurements
31 December
as at 31 December 2024 categorised into
2024
Level 1 Level 2 Level 3
RMB'000 RMB'000 RMB'000 RMB'000
Financial assets at FVTPL 37,559 37,559 - -
Equity instruments at FVTOCI 1,791,273 - - 1,791,273
Debt instruments at FVTOCI (including debt instruments at FVTOCI included in 1,476,713 - 1,476,713 -
other current assets)
Total financial assets at fair value 3,305,545 37,559 1,476,713 1,791,273
During the year ended 31 December 2025 and 2024, there were no transfers
between Level 1 and Level 2, or transfers into or out of Level 3. The Group's
policy is to recognise transfers between levels of fair value hierarchy as at
the end of the reporting period in which they occur.
43. FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL
INSTRUMENTS (continued)
b. Fair value hierarchy (continued)
Fair value measurements for financial instruments measured at fair value on a
recurring basis (continued)
Valuation techniques and inputs used in fair value measurements
The financial instruments classified within Level 2 of the fair value
hierarchy are debt investments, the fair value is of which was estimated based
on the publicly available indicative price.
As at 31 December 2025, the fair value of the equity interest in unlisted
securities of a listed company amounting to approximately RMB212 million (as
at 31 December 2024: RMB254 million) was estimated by reference to the quoted
prices in an active market with an adjustment of discount for lack of
marketability.
As at 31 December 2025, the fair value of unlisted equity instruments at
FVTOCI amounting to approximately RMB1,713 million (as at 31 December 2024:
RMB1,537 million) have been estimated using a market-based valuation
technique, which is derived by reference to observable valuation measures for
comparable companies, and with the main adjustment of discount for lack of
marketability.
The changes in Level 3 financial assets are analysed below:
2025 2024
RMB'000 RMB'000
As at 1 January 1,791,273 1,547,986
Purchase 184,080 360,000
Change in fair value recognised in other comprehensive income (50,780) (79,126)
Disposal - (37,587)
As at 31 December 1,924,573 1,791,273
Fair values of financial assets and liabilities carried at other than fair
value
Except as detailed in the following table, the Directors consider that the
carrying amounts of financial assets and financial liabilities measured at
amortised cost in these consolidated financial statements approximate their
fair values.
Carrying amounts Fair values
As at As at As at As at
31 December 31 December 31 December 31 December
2025 2024 2025 2024
RMB'000 RMB'000 RMB'000 RMB'000
Financial liabilities
- corporate bonds (fixed rate) 32,283,815 15,416,838 32,025,738 15,283,291
The fair value measurement of corporate bonds falls into level 2 of the fair
value hierarchy.
44. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING
ACTIVITIES
The table below details major changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be, classified in the Group's consolidated statement of
cash flows as cash flows from financing activities.
Borrowings Corporate bonds and short-term commercial papers Lease liabilities
Note 35 Note 35 Note 34 Total
RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 2024 140,630,492 11,400,907 82,229,316 234,260,715
Financing cash flows 333,718 7,000,000 (19,121,281) (11,787,563)
Foreign exchange translation (7,711) - 407,687 399,976
New leases entered/lease modified - - 13,132,106 13,132,106
Reduction upon completion/early termination of lease - - (48,987) (48,987)
(Decrease)/increase in accrued interest (2,519) 26,778 - 24,259
At 31 December 2024 140,953,980 18,427,685 76,598,841 235,980,506
Financing cash flows (36,459,365) 24,800,000 (19,002,842) (30,662,207)
Foreign exchange translation 12,073 - (470,956) (458,883)
New leases entered/lease modified - - 22,163,063 22,163,063
Reduction upon completion/early termination of lease - - (287,182) (287,182)
(Decrease)/increase in accrued interest (23,310) 107,550 - 84,240
At 31 December 2025 104,483,378 43,335,235 79,000,924 226,819,537
45. RELATED PARTY TRANSACTIONS
(a) During the year, the Group had the following significant
transactions with (i) CNAHC, its subsidiaries (other than the Group), joint
ventures and associates (collectively, the "CNAHC Group"); (ii) its joint
ventures; and (iii) its associates:
(i) Transactions with related parties
2025 2024
RMB'000 RMB'000
Service provided to the CNAHC Group
Transportation service fees on the passenger aircraft cargo business 7,194,413 6,848,921
Aircraft maintenance income 430,677 494,195
Government charter flight services 489,837 471,564
Ground services income 204,754 170,999
Transfer of pilots income 232,169 168,180
Land and buildings rental income 178,254 148,904
Air catering, onboard supplies and aircraft parts income 60,362 62,994
Aviation communication expenses 21,460 21,460
Income from advertising media business 14,908 13,429
Sales commission income 9,423 10,918
Trademark licensing income 9,320 9,320
Others 228,587 203,305
9,074,164 8,624,189
Service provided by the CNAHC Group
Air catering and onboard supplies charges 1,742,755 1,580,584
Airport ground services, take-off, landing and 1,249,817 1,521,068
depot expenses
Aviation communication expenses 872,041 815,724
Other procurement and maintenance 776,397 736,800
Interest expenses 162,189 367,305
Management fees 376,090 367,017
Media advertisement expenses 174,785 161,501
Repair and maintenance costs 80,012 74,321
Expense relating to short-term leases and 80,374 25,499
leases of low-value assets
Construction management expenses 31,860 10,846
Sales commission expenses - 620
Others 21,112 41,525
5,567,432 5,702,810
45. RELATED PARTY TRANSACTIONS (continued)
(a) During the year, the Group had the following significant
transactions with (i) CNAHC, its subsidiaries (other than the Group), joint
ventures and associates (collectively, the "CNAHC Group"); (ii) its joint
ventures; and (iii) its associates: (continued)
(i) Transactions with related parties (continued)
2025 2024
RMB'000 RMB'000
Asset transfers with CNAHC Group:
Sales of aircraft and aircraft engine 451,066 209,172
Loans to the CNAHC Group by CNAF:
(Repayments)/advances of loans (243,000) 23,000
Interest income 4,950 9,231
Deposits from the CNAHC Group received by CNAF:
Increase/(decrease) in deposits received 3,265,504 (2,158,891)
Interest expenses 77,221 74,373
As a lessee with CNAHC Group:
Additions to right-of-use assets and 9,878,974 2,083,035
lease liabilities on new leases
Lease payments paid 2,696,337 2,703,407
Interest on lease liabilities 323,788 489,490
Service provided to joint ventures and associates
Aircraft maintenance income 238,298 195,187
Ground services income 37,881 53,177
Frequent-flyer programme expenses 6,787 4,805
Air catering, onboard supplies and aircraft parts income 4,456 4,034
Rental income 1,290 2,586
Sales commission income 440 469
Others 752 1,508
289,904 261,766
45. RELATED PARTY TRANSACTIONS (continued)
(a) During the year, the Group had the following significant
transactions with (i) CNAHC, its subsidiaries (other than the Group), joint
ventures and associates (collectively, the "CNAHC Group"); (ii) its joint
ventures; and (iii) its associates: (continued)
(i) Transactions with related parties (continued)
2025 2024
RMB'000 RMB'000
Service provided by joint ventures and associates
Repair and maintenance costs 4,643,491 3,632,375
Airport ground services, take-off, landing and 752,788 442,520
depot expenses
Other procurement and maintenance 44,598 69,844
Air catering and onboard supplies charges 54,823 29,019
Aviation communication expenses 4,419 4,306
Expense relating to short-term leases and 3,734 4,040
leases of low value assets
Frequent-flyer programme expenses 5,530 2,697
Sales commission expenses 375 401
5,509,758 4,185,202
Deposits from joint ventures and
associates received by CNAF:
Increase/(decrease) in deposits received 49,677 (38,449)
Interest expenses 574 524
As a lessee with joint ventures and associates:
Additions to right-of-use assets and 7,031 1,268
lease liabilities on new leases
The Directors are of the opinion that the above transactions were conducted in
the ordinary course of business of the Group.
45. RELATED PARTY TRANSACTIONS (continued)
(a) During the year, the Group had the following significant
transactions with (i) CNAHC, its subsidiaries (other than the Group), joint
ventures and associates (collectively, the "CNAHC Group"); (ii) its joint
ventures; and (iii) its associates: (continued)
(ii) Balances with related parties
2025 2024
RMB'000 RMB'000
Outstanding balances with related parties*
Amount due from the ultimate holding company 170,854 152,422
Amounts due from associates 38,996 48,660
Amounts due from joint ventures 8,937 8,717
Amounts due from other related companies 1,274,035 1,295,098
Amount due to the ultimate holding company 10,635 6,515
Amounts due to associates 51,302 64,354
Amounts due to joint ventures 484,168 985,757
Amounts due to other related companies 21,322,968 16,040,882
* Outstanding balances with related parties exclude
borrowing balances with related parties and outstanding balances between CNAF
and related parties.
Except for lease liabilities, the above outstanding balances with related
parties are unsecured, interest-free and repayable within one year or have no
fixed terms of repayment.
2025 2024
RMB'000 RMB'000
Outstanding borrowing balances with related parties:
Interest-bearing borrowings:
- Due to the ultimate holding company 6,900,000 10,792,957
- Due to other related companies 1,695,844 -
45. RELATED PARTY TRANSACTIONS (continued)
(a) During the year, the Group had the following significant
transactions with (i) CNAHC, its subsidiaries (other than the Group), joint
ventures and associates (collectively, the "CNAHC Group"); (ii) its joint
ventures; and (iii) its associates: (continued)
(ii) Balances with related parties (continued)
2025 2024
RMB'000 RMB'000
Outstanding balances between CNAF and related parties:
(1) Outstanding balances between CNAF
and CNAHC Group
Loans granted 45,000 288,000
Deposits received 8,144,677 4,879,173
Interest payable to related parties 15,104 11,815
Interest receivable from related parties 29 223
(2) Outstanding balances between CNAF
and joint ventures and associates of the Group
Deposits received 53,164 3,487
Interest payable to related parties 42 27
The outstanding balances between CNAF and related parties represent loans to
related parties or deposits received by CNAF from related parties. The
applicable interest rates are determined in accordance with the prevailing
borrowing rates/deposit saving rates published by The People's Bank of China.
(b) An analysis of the compensation of key management personnel of the
Group is as follows:
2025 2024
RMB'000 RMB'000
Short-term employee benefits 8,360 12,328
Retirement benefits 1,000 1,289
Total emoluments for key management personnel 9,360 13,617
45. RELATED PARTY TRANSACTIONS (continued)
(c) Transactions with other government-related entities in the PRC
The Company is ultimately controlled by the PRC government and the Group
operates in an economic environment currently predominated by entities
controlled, jointly controlled or significantly influenced by the PRC
government ("government-related entities").
Apart from above transactions with CNAHC Group, the Group has collectively,
but not individually significant transactions with other government-related
entities, which include but are not limited to the following:
• Rendering and receiving services
• Sales and purchases of goods, properties, and other assets
• Lease of assets
• Depositing and borrowing money
• Use of public utilities
The transactions between the Group and other government-related entities are
conducted in the ordinary course of the Group's business within normal
business operations. The Group has established its approval process for
providing of services, purchase of products, properties and services, purchase
of lease service and its financing policy for borrowing. Such approval
processes and financing policy do not depend on whether the counterparties are
government-related entities or not.
46. INFORMATION ABOUT THE STATEMENT OF FINANCIAL POSITION OF THE
COMPANY
31 December 31 December
2025 2024
RMB'000 RMB'000
Non-current assets
Property, plant and equipment 92,404,472 87,574,992
Right-of-use assets 78,011,720 75,905,599
Intangible assets 10,067 11,015
Interests in subsidiaries 29,397,602 26,786,865
Interests in associates 135,448 240,945
Interests in joint ventures 2,415,940 2,178,847
Advance payments for aircraft and flight equipment 11,986,190 14,475,009
Deposits for aircraft under leases 243,960 344,063
Equity instruments at fair value through other comprehensive income 214,053 206,742
Deferred tax assets 7,055,869 7,908,297
Other non-current assets 803,654 649,361
222,678,975 216,281,735
Current assets
Inventories 65,084 49,485
Accounts receivable 2,258,034 2,378,402
Prepayments, deposits and other receivables 3,465,015 3,576,092
Financial assets at FVTPL - 2,559
Restricted bank deposits 31,073 30,963
Cash and cash equivalents 4,236,105 8,774,956
Assets held for sale - 94,829
Other current assets 2,860,229 2,446,893
12,915,540 17,354,179
Total assets 235,594,515 233,635,914
46. INFORMATION ABOUT THE STATEMENT OF FINANCIAL POSITION OF THE
COMPANY (continued)
31 December 31 December
2025 2024
RMB'000 RMB'000
Current liabilities
Air traffic liabilities (9,111,637) (8,549,886)
Accounts payable (11,833,230) (11,816,709)
Bills payable (1,500,000) -
Other payables and accruals (6,459,758) (6,908,676)
Lease liabilities (10,558,042) (10,288,671)
Interest-bearing borrowings (37,720,003) (52,657,077)
Provision for return condition checks (544,443) (56,862)
Advance (178,455) -
Contract liabilities (971,572) (563,310)
(78,877,140) (90,841,191)
Net current liabilities (65,961,600) (73,487,012)
Total assets less current liabilities 156,717,375 142,794,723
Non-current liabilities
Lease liabilities (37,551,796) (34,995,009)
Interest-bearing borrowings (62,931,755) (49,720,579)
Provision for return condition checks (6,983,234) (6,172,879)
Provision for early retirement benefit obligations (262) (359)
Contract liabilities (2,869,195) (2,559,301)
Deferred income (120,155) (153,424)
(110,456,397) (93,601,551)
NET ASSETS 46,260,978 49,193,172
CAPITAL AND RESERVES
Issued capital 17,448,421 17,448,421
Reserves 28,812,557 31,744,751
TOTAL EQUITY 46,260,978 49,193,172
47. SUBSEQUENT EVENTS
The Company plans to issue A-shares to specific targets, CNAHC and China
National Aviation Capital Holding Co., Ltd. ("CNAC Holding"), with expected
gross proceeds of not more than RMB20,000 million (inclusive). This issuance
has been reviewed by the Shanghai Stock Exchange and has received approval for
registration from the China Securities Regulatory Commission ("CSRC"). The
board of directors of the Company will handle the relevant matters related to
this private placement within the specified period, in accordance with
applicable laws and regulations, the requirements of the CSRC's approval
documents, and the authorization of the Company's shareholders' meeting.
48. POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND
INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31 DECEMBER
2025
Up to the date of issue of these financial statements, the IASB has issued a
number of new or amended standards, which are not yet effective for the year
ended 31 December 2025 and which have not been adopted in these financial
statements. These developments include the following which may be relevant to
the Group.
Effective for accounting
periods beginning on or after
Amendments to IFRS 9, Financial instruments and IFRS 7, Financial instruments: 1 January 2026
disclosures - Contracts referencing nature-dependent electricity
Amendments to IFRS 9, Financial instruments and IFRS 7, Financial instruments: 1 January 2026
disclosures - Classification and measurement of financial instruments
Annual improvements to IFRS Accounting Standards - Volume 11 1 January 2026
IFRS 18, Presentation and disclosure in financial statements 1 January 2027
IFRS 19, Subsidiaries without public accountability: disclosures 1 January 2027
The Group is in the process of making an assessment of what the impact of
these developments is expected to be in the period of initial application. So
far it has concluded that the adoption of them is unlikely to have a
significant impact on the consolidated financial statements except for the
following:
IFRS 18, Presentation and disclosure in financial statements
IFRS 18 will replace IAS 1 Presentation of financial statements and aims to
improve the transparency and comparability of information about an entity's
financial statements. IFRS 18 is effective for annual reporting periods
beginning on or after 1 January 2027 and is to be applied retrospectively.
Among other changes, under IFRS 18, entities are required to classify all
income and expenses into five categories in the statement of profit or loss,
namely the operating, investing, financing, discontinued operations and income
tax categories. Entities are also required to provide specific disclosures
about management-defined performance measures in a single note in the
financial statements.
The Group does not plan to early adopt IFRS 18 and is still in the process of
assessing the impact of the adoption.
Supplementary Information
EFFECTS OF DIFFERENCES BETWEEN IFRS ACCOUNTING STANDARDS AND CASs
The effects of differences between the consolidated financial statements of
the Group prepared under IFRS Accounting Standards and CASs are as follows:
2025 2024
Note RMB'000 RMB'000
Net loss attributable to shareholders of the Company under CASs (1,770,393) (237,305)
Deferred taxation (i) 5,849 (1,582)
Differences in value of fixed assets and certain non-current assets (ii) (23,399) 6,330
Net loss attributable to shareholders of the Company under IFRS Accounting (1,787,943) (232,557)
Standards
31 December 31 December
2025 2024
Note RMB'000 RMB'000
Equity attributable to shareholders of the Company under CASs 42,551,575 45,147,411
Deferred taxation (i) 57,485 51,636
Differences in value of fixed assets and certain non-current assets (ii) (234,193) (210,794)
Unrealised profit on share transactions with an associate (iii) 139,919 139,919
Equity attributable to shareholders of the Company under IFRS Accounting 42,514,786 45,128,172
Standards
Notes:
(i) The differences in deferred taxation were mainly caused by
the differences under IFRS Accounting Standards and CASs as explained below.
(ii) The differences in the value of fixed assets and certain
non-current assets mainly consist of the following: in accordance with the
accounting policies under IFRS Accounting Standards, all assets are recorded
at historical cost. Therefore, the revaluation surplus or deficit (and the
related depreciation/amortisation or impairment) recorded under CASs should be
reversed in the financial statements prepared under IFRS Accounting Standards.
(iii) The difference was related to unrealised profit on disposal
of certain equity interests in an investee to an associate and is expected to
be eliminated when the Group's interest in associate is disposed of.
Glossary of Technical Terms
Capacity
available tonne kilometres or ATK(s) the number of tonnes of capacity available for transportation multiplied by
the kilometres flown
available seat kilometres or ASK(s) the number of seats available for sale multiplied by the kilometres flown
available freight tonne kilometres or AFTK(s) the number of tonnes of capacity available for the carriage of cargo and mail
multiplied by the kilometres flown
Traffic
Passenger traffic measured in RPK, unless otherwise specified
Revenue passenger kilometres/RPK (s) the number of revenue passengers carried multiplied by the kilometres flown
Cargo and mail traffic measured in RFTK, unless otherwise specified
Revenue freight tonne kilometres/RFTK (s) the revenue cargo and mail load in tonnes multiplied by the kilometres flown
Revenue tonne kilometres/RTK (s) the revenue load (passenger and cargo) in tonnes multiplied by the kilometres
flown
Efficiency
Overall load factor RTK expressed as a percentage of ATK
Passenger load factor RPK expressed as a percentage of ASK
Cargo and mail load factor RFTK expressed as a percentage of AFTK
Block hours the total time from the removal of wheel chocks before the aircraft begins to
move until the placement of wheel chocks after the aircraft has landed and
come to a complete stop
Yield
Passenger yield/yield per RPK revenues from passenger operations divided by RPKs
Cargo yield/yield per RFTK revenues from cargo operations divided by RFTKs
Definitions
In this annual report, unless the context otherwise requires, the following
expressions have the following meanings:
"Airbus" Airbus S.A.S.
"Air China Cargo" Air China Cargo Co., Ltd., a non-wholly owned subsidiary of CNAHC
"Air China Inner Mongolia" Air China Inner Mongolia Co., Ltd., a non-wholly owned subsidiary of the
Company
"Air Macau" Air Macau Company Limited, a non-wholly owned subsidiary of the Company
"Ameco" Aircraft Maintenance and Engineering Corporation, a non-wholly owned
subsidiary of the Company
"Articles of Association" the articles of association of the Company, as amended from time to time
"A Share(s)" ordinary share(s) in the share capital of the Company, with a nominal value of
RMB1.00 each, which are subscribed for and traded in Renminbi and are listed
on the Shanghai Stock Exchange
"Beijing Airlines" Beijing Airlines Company Limited, a non-wholly owned subsidiary of the Company
"Beijing Leasing Company" CNAC Beijing Financial Leasing Co., Ltd.
"Beijing Air Catering" Beijing Air Catering Co., Ltd., a subsidiary of CNAHC
"Board" the board of directors of the Company
"Boeing" The Boeing Company
"CAAC" Civil Aviation Administration of China
"Capital Holding" China National Aviation Capital Holding Co., Ltd., a wholly-owned subsidiary
of CNAHC
"Cathay Pacific" Cathay Pacific Airways Limited, an associate of the Company
"CBIRC" China Banking and Insurance Regulatory Commission
"CNACD" China National Aviation Construction and Development Company, a wholly-owned
subsidiary of CNAHC
"CNACD Group" CNACD and the corporation or other entities in which CNACD holds 30% or more
equity interests or voting rights at the general meeting or the majority
directors of which are controlled, directly or indirectly, by CNACD
"CNACG" China National Aviation Corporation (Group) Limited, a wholly-owned subsidiary
of CNAHC
"CNACG Group" CNACG and its subsidiaries
"CNAF" China National Aviation Finance Co., Ltd., a non-wholly owned subsidiary of
the Company
"CNAHC" China National Aviation Holding Corporation Limited
"CNAHC Group" CNAHC and its subsidiaries
"CNAC Holding" China National Aviation Capital Holding Co., Ltd.
"COMAC" Commercial Aircraft Corporation of China, Ltd.
"CNAMC" China National Aviation Media Co., Ltd, a wholly-owned subsidiary of CNAHC
"Company", "We", or Air China Limited, a company incorporated in the PRC, whose H Shares are
"Air China" listed on the Hong Kong Stock Exchange as its primary listing venue and on the
Official List of the UK Listing Authority as its secondary listing venue, and
whose A Shares are listed on the Shanghai Stock Exchange
"CSRC" China Securities Regulatory Commission
"Dalian Airlines" Dalian Airlines Company Limited, a non-wholly owned subsidiary of the Company
"Director(s)" the director(s) of the Company
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China
"Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited
"H Share(s)" ordinary share(s) in the share capital of the Company, with a nominal value of
RMB1.00 each, which are listed on the Hong Kong Stock Exchange as primary
listing venue and have been admitted into the Official List of the UK Listing
Authority as secondary listing venue
"IFRS Accounting Standards" IFRS Accounting Standards as issued by the International Accounting Standards
Board (IASB)
"Kunming Airlines" Kunming Airlines Company Limited, a subsidiary of Shenzhen Airlines
"Listing Rules" The Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited
"NAFMII" National Association of Financial Market Institutional Investors
"Reporting Period" from 1 January 2025 to 31 December 2025
"Date of this Annual Report" 26 March 2026
"RMB" Renminbi, the lawful currency of the PRC
"SASAC" State-owned Assets Supervision and Administration Commission of the State
Council
"SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
"Shandong Airlines" Shandong Airlines Co., Ltd., a non-wholly owned subsidiary of the Company
"Shandong Aviation Group Corporation" Shandong Aviation Group Company Limited, a non-wholly owned subsidiary of the
Company
"Shenzhen Airlines" Shenzhen Airlines Company Limited, a non-wholly owned subsidiary of the
Company
"Supervisor(s)" the former supervisor(s) of the Company (the Company has abolished the
supervisory committee system on 24 June 2025)
"Supervisory Committee" the former supervisory committee of the Company (the Company has abolished the
supervisory committee system on 24 June 2025)
"Sichuan Airlines" Sichuan Airlines Co., Ltd.
"USD" United States dollars, the lawful currency of the United States
Any discrepancies in the numerical figures shown in this annual report are due
to rounding.
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. END FR IRMFTMTBTMRF
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