REG - Air China Ld - DISCLOSEABLE TRANSACTION PURCHASE OF AIRCRAFT

Air ChinaAnnouncement

31/12/2025 10:00

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RNS Number : 3030N  Air China Ld  31 December 2025

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.

 

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China
with limited liability)

(Stock Code: 00753)

 

DISCLOSEABLE TRANSACTION PURCHASE OF AIRCRAFT

 

 On 30 December 2025, the Company and AIE entered into the Air China Aircraft
 Purchase Agreement with Airbus Company, pursuant to which the Company has
 agreed to purchase 60 Airbus A320NEO series aircraft from Airbus Company.

 As the highest applicable percentage ratio under Rule 14.07 of the Listing
 Rules for the Transaction is above 5% but less than 25%, the Transaction
 constitutes a discloseable transaction of the Company under Chapter 14 of the
 Listing Rules, and is therefore subject to the reporting and announcement
 requirements under Chapter 14 of the Listing Rules.

 

BACKGROUND

 

On 30 December 2025, the Company and AIE entered into the Air China Aircraft
Purchase Agreement with Airbus Company, pursuant to which the Company has
agreed to purchase 60 Airbus A320NEO series aircraft from Airbus Company.

 

AIR CHINA AIRCRAFT PURCHASE AGREEMENT

 

Date:

 

30 December 2025

 

Parties:

 

(a)     The Company, as the purchaser, the principal business activities
of which are air passenger, air cargo and airline-related services;

(b)     AIE, as the import agent for the Company; and

 

(c)     Airbus S.A.S., as the vendor, whose principal business activity is
aircraft manufacturing. Airbus S.A.S. is a subsidiary of Airbus SE, the
principal business activities of which are designing, manufacturing and
delivering aerospace products, services and solutions to customers on a
worldwide scale, and is listed on the European stock exchanges in Paris,
Frankfurt am Main, Madrid, Barcelona, Valencia and Bilbao.

 

To the best of the Directors' knowledge, information and belief, having made
all reasonable enquiries, Airbus Company and its ultimate beneficial owner(s)
are third parties independent of the Company and connected persons (as defined
under the Listing Rules) of the Company.

 

Aircraft to be acquired:

 

60 Airbus A320NEO series aircraft

 

Consideration:

 

The aircraft list price comprises the airframe price, optional features price
and engine price.

 

The list price of the Airbus Aircraft to be acquired by the Company, in
aggregate, is approximately US$9.53 billion (price quoted as at January 2024)
(equivalent to approximately HK$74.1 billion at an exchange rate of US$1 =
HK$7.78).

 

Airbus Company has granted to the Company considerable price concessions with
regard to the Airbus Aircraft. These concessions will take the form of credit
memoranda which may be used by the Company towards the final price payment of
the Airbus Aircraft to be acquired by the Company or may be used for the
purpose of purchasing goods and services from Airbus Company. Such credit
memoranda were determined after arm's length negotiations between the parties
and as a result, the actual consideration for the Air China Aircraft Purchase
is lower than the aircraft list price mentioned above.

 

The Air China Aircraft Purchase was negotiated and entered into in accordance
with customary business practice. The Directors confirm that the extent of the
price concessions granted to the Company in the Air China Aircraft Purchase is
comparable with the price concessions that the Company had obtained in the
previous aircraft purchase entered into between the Company and Airbus
Company. The Company believes that there is no material impact of the price
concessions obtained in the Air China Aircraft Purchase on the unit operating
cost of the Company's fleet. It is normal business practice of the global
airline industry to disclose the aircraft list price, instead of the actual
price, for aircraft acquisitions. Disclosure of the actual consideration will
result in the loss of the considerable price concessions and hence a
significant negative impact on the Group's cost for the Air China Aircraft
Purchase and will therefore not be in the interest of the Company and the
Shareholders as a whole.

Accordingly, the Company has applied to the Stock Exchange and the Stock
Exchange has granted such waiver from strict compliance of Rule 14.58(4) of
the Listing Rules in respect of disclosure of the actual consideration of the
Air China Aircraft Purchase.

 

Payment, source of funding and delivery terms:

 

The aggregate consideration for the Air China Aircraft Purchase is payable by
cash in instalments. The Air China Aircraft Purchase will be funded through
self-owned cash, commercial bank loans and other financing methods of the
Company. The Company is expecting to take delivery of the 60 Airbus A320NEO
series aircraft in stages from 2028 to 2032. The Air China Aircraft Purchase
is expected to have no material impact on the cash flow and operation of the
Company.

 

REASONS FOR AND BENEFITS OF THE TRANSACTION

 

The Transaction is in line with the development plan of the Company and the
market demand, which is conducive to the Group's optimization of fleet
structure and long-term supplement of fleet capacity. The Transaction will
expand the fleet capacity of the Group, which is expected to increase the
fleet capacity of the Group by approximately 6.5%, based on the number of
available tonne kilometers of the Group as at 31 December 2024 without taking
into account the potential adjustments to the fleet such as aircraft
withdrawal due to market condition and aircraft aging. The new aircraft will
be delivered in stages from 2028 to 2032, with some aimed at meeting the
renewal needs due to the withdrawal of aging aircraft from the fleet. The
actual net increase in fleet capacity will be maintained within a manageable
range.

 

The Directors believe that the Transaction is conducted in the ordinary and
usual course of business of the Company on normal commercial terms and the
terms of the Air China Aircraft Purchase Agreement are fair and reasonable and
in the interests of the Company and the Shareholders as a whole.

 

LISTING RULES IMPLICATIONS

 

As the highest applicable percentage ratio under Rule 14.07 of the Listing
Rules for the Transaction is above 5% but less than 25%, the Transaction
constitutes a discloseable transaction of the Company under Chapter 14 of the
Listing Rules, and is therefore subject to the reporting and announcement
requirements under Chapter 14 of the Listing Rules.

 

As the A shares of the Company are listed on the Shanghai Stock Exchange, the
Transaction is subject to the approval of the shareholders' meeting of the
Company in accordance with the requirements of the Rules Governing the Listing
of Stocks on Shanghai Stock Exchange.

 

The Transaction is also subject to the state approval.

DEFINITION

In this announcement, unless the context otherwise requires, the following
expressions shall have the following respective meanings:

 

 "AIE"                                           Air China Import and Export Co., Ltd. (國航進出口有限公司), a company
                                                 incorporated in the PRC with limited liability and a

                                                 wholly-owned subsidiary of the Company
 "Air China Aircraft Purchase" or "Transaction"  the purchase of 60 Airbus A320NEO series aircraft by the Company pursuant to
                                                 the Air China Aircraft Purchase Agreement
 "Air China Aircraft Purchase Agreement"         the agreement dated 30 December 2025 entered into among the Company, AIE and
                                                 Airbus Company, pursuant to which the Company has agreed to purchase and
                                                 Airbus Company has agreed to sell 60 Airbus A320NEO series aircraft
 "Airbus Aircraft"                               the 60 Airbus A320NEO series aircraft to be acquired by the Company
 "Airbus Company"                                Airbus S.A.S., a company incorporated in Toulouse, France
 "Board"                                         the board of directors of the Company
 "Company"                                       Air China Limited, a company incorporated in the PRC, whose H Shares are
                                                 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
 "Director(s)"                                   the director(s) of the Company
 "Group"                                         the Company and its subsidiaries
 "HK$"                                           Hong Kong dollars, the lawful currency of Hong Kong
 "Hong Kong"                                     Hong Kong Special Administrative Region of the PRC
 "Listing Rules"                                 The Rules Governing the Listing of Securities on The Stock Exchange of Hong
                                                 Kong Limited
 "Shareholder(s)"                                the shareholders of the Company
 "Stock Exchange"                                The Stock Exchange of Hong Kong Limited

  "US$"                                          United States dollars, the lawful currency of the United States

 

   By Order of the Board

    Air China Limited

    Xiao Feng

   Company Secretary

 

Beijing, the PRC, 30 December 2025

 

As at the date of this announcement, the directors of the Company are Mr. Liu
Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao
Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao
Chunlei*.

 

*Independent non-executive director of the Company

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