Air China Limited Announces 2004 Annual Results; Company Achieves Best Performance in History and Optimizes Capital Structure; Operating Revenue Increased by 36.0% to RMB 33.52 Billion.

HONG KONG -- --Operating Income Increased by 96.4% to RMB 4.49 Billion

--Basic Earnings Per Share Were RMB 36 Cents

Air China Limited ("Air China" or "the Company") (HKEX: 753; LSE: AIRC) today announced its financial results for the twelve months ended 31 December 2004.

During the year, Air China's operating revenue increased by 36.0% to RMB 33.52 billion. Operating income increased from RMB 2.28 billion in 2003 to RMB 4.49 billion in 2004, an increase of 96.4%. Net income increased by 1391.3% from RMB 160 million in 2003 to RMB 2.39 billion in 2004. Basic earnings per share increased to RMB 36 cents in 2004 from RMB 2.5 cents in 2003.

In 2004, the Company had the best performance in its history as measured by all operating indicators. Total traffic turnover (RTK) was 6.75 billion tonne kilometers, an increase of 29.8% compared to 2003. Overall capacity (ATK) reached 10.68 billion tonne kilometers, an increase of 24.3% over 2003. The load factor reached 63.2%, an increase of 2.7 percentage points, and the daily utilization of aircrafts averaged 10.2 hours per day, an increase of 1.5 hours per day compared to 2003.

Passenger traffic, in terms of number of passenger carried, reached 24.50 million in 2004, an increase of 35.7%. Passenger capacity measured in available seat kilometers (ASK) increased 27.9% to 64.90 billion. Revenue-passenger-kilometers (RPK) increased by 39.0% to 46.64 billion. Additionally, Air China's performance improved significantly in the international, domestic and Hong Kong/Macau markets. Internationally, capacity (ASK) increased by 41.5% from 2003, reaching 27.90 billion while traffic (RPK) increased by 53.8% to 19.6 billion. The passenger load factor for international and domestic flights reached a record level, exceeding 70%, and increased by 6.4 percentage points for Hong Kong/Macau.

Cargo capacity (AFTK) increased by 20.2% to 4.84 billion tonne kilometers and cargo traffic (RFTK) increased 17.0% to 2.58 billion tonne kilometers.

Mr. Li Jiaxiang, Chairman of Air China, said, "2004 was a year in which we achieved several milestones as we restructured the Company, streamlined our organizational structure and successfully listed our shares in Hong Kong and London. We also continued to execute our development strategies by strengthening the Beijing hub, implementing cost control measures, increasing efficiency, broadening sales and marketing channels, enhancing service quality and improving internal management in order to realize rapid growth."

Air China was listed on the Hong Kong and London stock exchanges on 15 December 2004, raising a total of US$1.24 billion, or approximately RMB 10.2 billion in capital. As a result, by 31 December 2004, the Company's total share capital exceeded RMB 16 billion and its debt-to-equity ratio had been reduced to 73.54%.

At the time of the IPO, Cathay Pacific acquired 10% of Air China's equity as a strategic investor. This not only provides a platform for cooperation between the companies across various business and operating segments, but also creates opportunities for network connections between Hong Kong and Beijing. The cooperation between the two companies is also expected to help Air China improve operating efficiency and management.

Looking forward, Air China expects the Chinese economy to continue to grow at a rapid pace and, as a result, demand for air traffic will increase rapidly over the next three years with an anticipated growth rate of 13% to 15% annually. We expect international demand to grow faster than domestic and demand for cargo traffic to grow faster than passenger traffic. However, the Company also faces challenges such as increasing competition and high jet fuel costs. Mr. Li Jiaxiang concluded, "In 2005, the Company will further enhance its core competitiveness and strengthen its brand recognition to maintain steady and sustainable growth. Our goal is to establish Air China as the most valued and most profitable airline in China and one of the most recognized airlines worldwide. We believe we will be able to compete with the best airlines in the world."

About Air China:

Air China Limited (Air China) is the national flag carrier of China and a leading provider of air passenger, air cargo and airline-related services in China. It is primarily based in Beijing with its operational center and extensive route network serving major Chinese cities and international destinations. It has the largest share of air transportation business (as measured by total traffic volume) for the Beijing Capital International Airport. It also provides airline-related services, including aircraft maintenance, ground services and in-flight catering services in Beijing, Chengdu, Hong Kong and other locations through its own business units and joint ventures. As of 31 December 2004, it operated a fleet of 151 aircraft, serving 72 domestic and 36 international and regional destinations. Air China was listed on the Hong Kong Stock Exchange and the London Stock Exchange on 15 December 2004 under codes 0753 and AIRC respectively. On 4 August 2004, Air China was designated as the sole official airline partner of the Beijing Olympic Games.

Notice: Air China will announce its 2004 annual results on 12 April 2005 and the announcement will be published in South China Morning Post and Hong Kong Economic Times on Wednesday, 13 April 2005. An archived webcast to discuss Air China's results will be posted on Wednesday, 13 April 2005 on the Company's website at www.airchina.com.cn

Disclaimer:

This press release contains projections and forward-looking statements that reflect the company's current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur that projections will be achieved, or that the company's assumptions are correct. Actual results may differ materially from those projected.