China Southern Airlines Company Limited Records 200% Operating Profit Increase in 1999; Remains China's Largest Airline; 21st Consecutive Year.

Business Editors/Travel Writers

GUANGZHOU, China--(BUSINESS WIRE)--April 28, 2000

China Southern Airlines (NYSE:ZNH) (HKSE:1055), the largest airline in The People's Republic of China ("China Southern" or the "company") announced its annual results for the year ended December 31, 1999.

During the period under review, operating revenue was approximately RMB 13 billion, an increase of 12.2% over the same period last year. Profit attributable to shareholders was over RMB 82 million and profits per share was RMB 2 cents.

China Southern and its subsidiaries are one of the largest airline companies in China. During the period under review, China Southern continued to rank first among all Chinese airlines in terms of passengers carried, number of weekly scheduled flights, flying hours, number of routes and size of air fleet.

Yan Zhi Qing, vice chairman of the board of directors and president, said, "A number of factors contributed to the Group's significant rebound in operating profit. These include accelerated recovery of Asian economies, restriction on airfare discounts by CAAC, continued growth in cargo capacity, particularly in international markets, the Group's adoption of effective cost control policy and positive response for our frequent flyer program.

"In 1999, the Group maintained a dominant position in the domestic market, both in terms of passengers carried and cargo carried. The Group accounted for approximately 25% and 23%, respectively, in total passengers and cargo carried on domestic routes.

"The Group recorded encouraging results in other areas as well. Our overall RPK and overall RTK recorded 2.3% and 4.6% growth, respectively.

"Looking ahead, the Group believes that the continued recovery of Asian economies, the increased business opportunities resulting from the expansion in the western part of China, the ban by CAAC on airfare discounts, and CAAC's policy of encouraging joint flight operations, will be beneficial to the Group's business."

Yan concluded, "The Group will focus on two major strategies, namely, focus on yield and margin and further improve management quality. The Group will adjust capacity to an appropriate extent, adopt effective cost control policy and increase cargo capacity particularly in the international market so as to increase its yield and margin. The Group will also continue to maintain its market leader position, put safety first, ensure service quality, and develop system-wide optimization and e-commerce. The above measures will help the Group to maintain its leading position and give returns to its shareholders."

Ranked No. 1 in passengers carried in China for the past 21 years, China Southern Airlines (www.cs-air.com/en) connects more than 80 cities around the globe. Major business and vacation destinations served in China include: Beijing, Chengdu, Guangzhou, Guilin, Hong Kong, Kunming, Shanghai, Shenzhen and Wuhan, as well as international service, including: Amsterdam, Bangkok, Hanoi, Ho Chi Minh City, Kuala Lumpur, Jakarta, Los Angeles, Osaka, Penang, Phnom Penh, Seoul and Singapore.

                                1999             1998         Change
                            RMB 'million     RMB 'million       (%)
Operating Revenue

Flight                         12,825.1         11,559.0       +11.0
Others                            474.6            290.4       +63.5
Total                          13,299.7         11,849.4       +12.2

Operating Profit                1,849.9            590.0      +213.5

Profit (loss) attributable
  to shareholders                  82.4           (514.6)     +116.0

Basic earnings (loss)
  per share                 RMB 2 cents    (RMB 15 cents)     +116.0