TIDMAIRC
RNS Number : 3708I
Air China Ld
01 April 2020
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AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's
Republic of China with limited liability)
(Stock Code: 00753)
2019 ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
-- During the Reporting Period, the Group recorded a revenue of
RMB136,181 million with profit before tax of RMB9,120 million. The
net profit attributable to equity shareholders of the Company was
RMB6,420 million.
-- The Board recommends the payment of a cash dividend of
RMB0.4442 (including tax) for every ten shares for the year 2019,
totaling approximately RMB645 million based on the current total
issued shares of 14,524,815,185 shares of the Company.
2019 ANNUAL RESULTS
The Board hereby announces the audited consolidated financial
results of the Group for the year ended 31 December 2019 together
with the corresponding comparative figures for the year ended 31
December 2018 as follows:
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2019
2019 2018
Notes RMB'000 RMB'000
Revenue 3 136,180,690 136,774,403
Other income and gains 5 4,059,190 4,108,700
140,239,880 140,883,103
Operating expenses
Jet fuel costs (35,965,239) (38,481,303)
Employee compensation costs (25,473,898) (24,450,250)
Depreciation and amortisation (21,279,084) (14,503,676)
Take-off, landing and depot charges (16,440,081) (15,354,941)
Aircraft maintenance, repair and overhaul
costs (6,119,539) (6,612,844)
Air catering charges (4,026,090) (3,787,134)
Aircraft and engine lease expenses (966,227) (7,165,554)
Other lease expenses (565,160) (1,117,478)
Other flight operation expenses (8,193,008) (9,419,344)
Selling and marketing expenses (4,684,722) (4,373,023)
General and administrative expenses (1,844,232) (1,535,617)
Net impairment (losses)/gains under expected
credit
loss model (40,682 ) 264,392
(125,597,962 (126,536,772
) )
Profit from operations 6 14,641,918 14,346,331
Finance income 163,185 172,564
Finance costs 7 (4,948,928) (2,914,097)
Share of results of associates 215,532 526,570
Share of results of joint ventures 259,727 222,226
(2,376,577
Exchange loss, net (1,211,171 ) )
Profit before taxation 9,120,263 9,977,017
(1,762,146
Income tax expense 8 (1,856,499 ) )
Profit for the year 7,263,764 8,214,871
================================ ======================
Attributable to:
- Equity shareholders of the Company 6,420,294 7,350,661
- Non-controlling interests 843,470 864,210
Profit for the year 7,263,764 8,214,871
Earnings per share
- Basic and diluted 9 RMB46.74 cents RMB53.52 cents
================================ ======================
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 31 DECEMBER 2019
2019 2018
RMB'000 RMB'000
Profit for the year 7,263,764 8,214,871
Other comprehensive income (expense)
Items that will not be reclassified to profit or loss:
- Fair value gains/(losses) on investments in equity
instruments
at fair value through other comprehensive income
- Income tax relating to items that will not
be reclassified to 3,842 (31,921)
profit or loss (59) 7,980
- Remeasurement of net defined benefit liability (3,905) (16,840)
- Share of other comprehensive income/(expense)
of associates 441,862 (73,364 )
Items that may be reclassified subsequently to profit or
loss:
- Fair value gains on investments in debt instruments
measured
at fair value through other comprehensive income 3,551 18,878
- Impairment loss on investments in debt instruments
measured
at fair value through other comprehensive income 8,096 6,827
- Income tax relating to items that may be reclassified
subsequently to profit or loss (2,912) (6,415)
- Share of other comprehensive income of associates 23,272 10,425
- Exchange differences on translation of foreign
operations 495,324 999,423
Other comprehensive income for the year (net of
tax) 969,071 914,993
Total comprehensive income for the year 8,232,835 9,129,864
=================== =================
Attributable to:
- Equity shareholders of the Company 7,370,539 8,279,120
- Non-controlling interests 862,296 850,744
Total comprehensive income for the year 8,232,835 9,129,864
=================== =================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2019
31 December 31 December
2019 2018
Notes RMB'000 RMB'000
Non-current assets
Property, plant and equipment 102,158,432 171,662,659
Right-of-use assets 119,376,500 -
Lease prepayments - 2,599,058
Investment properties 637,986 650,786
Intangible assets 36,610 36,913
Goodwill 1,099,975 1,099,975
Interests in associates 14,647,561 15,253,744
Interests in joint ventures 1,543,509 1,427,063
Advance payments for aircraft and flight
equipment 22,413,867 21,303,650
Deposits for aircraft under leases 636,671 613,346
Equity instruments at fair value through
other
comprehensive income 253,113 268,071
Debt instruments at fair value through
other
comprehensive income 1,688,451 1,040,419
Deferred tax assets 4,352,452 2,840,321
Other non-current assets 544,390 1,134,996
269,389,517 219,931,001
Current assets
Inventories 2,098,673 1,877,494
Accounts receivable 11 5,997,690 5,373,972
Bills receivable 362 403
Prepayments, deposits and other receivables 3,724,468 4,220,036
Restricted bank deposits 728,385 1,044,389
Cash and cash equivalents 8,935,282 6,763,183
Other current assets 3,331,996 4,446,630
24,816,856 23,726,107
Total assets 294,206,373 243,657,108
31 December 31 December
2019 2018
Notes RMB'000 RMB'000
Current liabilities
Air traffic liabilities (9,980,300) (8,886,274)
Accounts payable 12 (16,578,153) (14,726,428)
Other payables and accruals (11,977,447) (10,833,540)
Current taxation (938,732) (1,023,938)
Lease liabilities/obligations under finance
leases (13,861,503) (7,125,586)
Interest-bearing bank loans and other
borrowings (22,729,991) (27,194,901)
Provision for return condition checks (869,651) (1,447,693)
(1,301,518
Contract liabilities (1,037,031 ) )
(77,972,808 (72,539,878
) )
(53,155,952 (48,813,771
Net current liabilities ) )
Total assets less current liabilities 216,233,565 171,117,230
Non-current liabilities
Lease liabilities/obligations under finance
leases (86,586,353) (45,848,095)
Interest-bearing bank loans and other
borrowings (16,598,965) (15,585,481)
Provision for return condition checks (7,538,095) (4,174,398)
Provision for early retirement benefit
obligations (1,989) (3,105)
Long-term payables (115,190) (154,171)
Contract liabilities (2,670,910) (3,062,739)
Defined benefit obligations (249,933) (263,862)
Deferred income (521,227) (647,973)
Deferred tax liabilities (621,440 ) (879,372 )
(114,904,102 (70,619,196
) )
NET ASSETS 101,329,463 100,498,034
======================== ========================
CAPITAL AND RESERVES
Issued capital 14,524,815 14,524,815
Treasury shares (3,047,564) (3,047,564)
Reserves 81,981,426 81,680,090
Total equity attributable to equity shareholders
of
the Company 93,458,677 93,157,341
Non-controlling interests 7,870,786 7,340,693
TOTAL EQUITY 101,329,463 100,498,034
======================== ========================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
1. BASIS OF PREPARATION
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") issued by the International Accounting Standards Board
("IASB"). In addition, the consolidated financial statements
include applicable disclosures required by the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited
("Listing Rules") and by the Hong Kong Companies Ordinance
("Companies Ordinance").
The consolidated financial statements have been prepared on the
historical cost basis, except for certain financial instruments
that are measured at fair values. Historical cost is generally
based on the fair value of the consideration given in exchange for
goods and services.
As at 31 December 2019, the Group's current liabilities exceeded
its current assets by approximately RMB53,156 million. The
liquidity of the Group is primarily dependent on its ability to
maintain adequate cash inflows from operations and sufficient
financing to meet its financial obligations as and when they fall
due. Considering the Company's sources of liquidity and the
unutilised bank facilities of RMB109,437 million as at 31 December
2019, the Directors believe that adequate funding is available to
fulfil the Group's debt obligations and capital expenditure
requirements when preparing the consolidated financial statements
for the year ended 31 December 2019. Accordingly, the consolidated
financial statements have been prepared on a basis that the Group
will be able to continue as a going concern.
2. APPLICATION OF NEW AND AMMENTS TO IFRSs
New and Amendments to IFRSs that are mandatorily effective for
the current year
The Group has applied the following new and amendments to IFRSs
issued by the IASB for the first time in the current year:
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement
Amendments to IAS 28 Long-term Interests in Associates and Joint
Ventures
Amendments to IFRSs Annual Improvements to IFRS Standards
2015-2017 Cycle
Except as described below, the application of the new and
amendments to IFRSs in the current year has had no material impact
on the Group's financial positions and performance for the current
and prior years and/or on the disclosures set out in these
consolidated financial statements.
IFRS 16 Leases
The Group has applied IFRS 16 for the first time in the current
year. IFRS 16 superseded IAS 17 Leases
("IAS 17"), and the related interpretations.
Definition of a lease
The Group has elected the practical expedient to apply IFRS 16
to contracts that were previously identified as leases applying IAS
17 and IFRIC 4 Determining whether an Arrangement contains a Lease
and not apply this standard to contracts that were not previously
identified as containing a lease. Therefore, the Group has not
reassessed contracts which already existed prior to the date of
initial application.
For contracts entered into or modified on or after 1 January
2019, the Group applies the definition of a lease in accordance
with the requirements set out in IFRS 16 in assessing whether a
contract contains a lease.
As a lessee
The Group has applied IFRS 16 retrospectively with the
cumulative effect recognised at the date of initial application, 1
January 2019.
When applying the modified retrospective approach under IFRS 16
at transition, the Group applied the following practical expedients
to leases previously classified as operating leases under IAS 17,
on lease- by-lease basis, to the extent relevant to the respective
lease contracts:
i. relied on the assessment of whether leases are onerous by
applying IAS 37 Provisions, Contingent Liabilities and Contingent
Assets as an alternative of impairment review;
ii. elected not to recognise right-of-use assets and lease
liabilities for leases with lease term ends within 12 months of the
date of initial application;
iii. excluded initial direct costs from measuring the
right-of-use assets at the date of initial application;
iv. applied a single discount rate to a portfolio of leases with
a similar remaining terms for similar class of underlying assets in
similar economic environment; and
v. used hindsight based on facts and circumstances as at date of
initial application in determining the lease term for the Group's
leases with extension and termination options.
When recognising the lease liabilities for leases previously
classified as operating leases, the Group has applied incremental
borrowing rates of the relevant group entities at the date of
initial application. The weighted average incremental borrowing
rates applied by the relevant group entities range from 3.90% to
4.89%.
At 1 January
2019
Note RMB'000
Operating lease commitments disclosed as at
31 December 2018 51,395,439
Less: Value-added tax 6,067,742
Operating lease commitments without value-added
tax 45,327,697
Lease liabilities discounted at relevant incremental
borrowing rates 41,209,140
Less: Recognition exemption - short-term leases 633,655
Recognition exemption - low value assets 205
Lease liabilities relating to operating leases recognised
upon
application of IFRS 16 40,575,280
Add: Obligations under finance leases recognised at 31
December
2018 (d) 52,973,681
Lease liabilities as at 1 January
2019 93,548,961
==================
Analysed as Current 12,224,913
Non-current 81,324,048
93,548,961
==================
The carrying amount of right-of-use assets as at 1 January 2019
comprises the following:
Right-of-use
assets
Notes RMB'000
Right-of-use assets relating to operating leases recognised
upon
application of IFRS 16 (a)
34,107,831
Reclassified from prepayments for rental expense
559,580
Reclassified from other non-current assets and deferred income
in
respect of sale and operating leaseback transactions (b)
(52,522)
Recognition of provisions in respect of final check costs
2,377,798
Reclassified from lease prepayments (c)
2,599,058
Amounts included in property, plant and equipment under IAS
17
- Assets previously under finance leases (d)
69,288,713
108,880,458
Notes:
(a) Upon application of IFRS 16, right-of-use assets of
RMB34,108 million were recognised relating to operating leases
under IAS 17. The associated right-of-use assets for aircraft and
engines leases were measured on a retrospective basis as if IFRS 16
had been applied since the commencement date but discounted using
the lessee's incremental borrowing rate at the date of initial
application. Other right-of-use assets were measured at the amount
equal to the lease liabilities, adjusted by the amount of any
prepaid or accrued lease payments relating to that lease recognised
as at 31 December 2018 as described below. Any difference at the
date of initial application is recognised in the opening retained
earnings and comparative information has not been restated.
(b) Right-of-use assets were adjusted by the deferred income of
RMB147 million and other non-current assets of RMB94 million
respectively in respect of sale and operating leaseback
transactions applying IAS 17 immediately before the date of initial
application of IFRS 16.
(c) Upfront payments for leasehold lands in the PRC were
classified as lease prepayments as at 31 December 2018. Upon
application of IFRS 16, lease prepayments amounting to RMB2,599
million were reclassified to right-of-use assets.
(d) In relation to assets previously obtained under finance
leases, the Group re-categorised the carrying amount of the
relevant assets which were still under leases as at 1 January 2019
amounting to RMB69,289 million as right-of-use assets. In addition,
the Group reclassified the obligations under finance leases of
RMB7,126 million and RMB45,848 million to lease liabilities as
current and non- current liabilities respectively at 1 January
2019.
As a lessor
In accordance with the transitional provisions in IFRS 16, the
Group is not required to make any adjustment on transition for
leases in which the Group is a lessor but account for these leases
in accordance with IFRS 16 from the date of initial application and
comparative information has not been restated.
Sales and leaseback transactions
The Group acts as a seller-lessee
In accordance with the transition provisions of IFRS 16, sale
and leaseback transactions entered into before the date of initial
application were not reassessed. Upon application of IFRS 16, the
Group applies the requirements of IFRS 15 to assess whether sales
and leaseback transaction constitutes a sale.
The following table summarises the impact of transition to IFRS
16 on retained earnings at 1 January 2019.
Impact of adopting
IFRS 16 at
1 January 2019
RMB'000
Retained earnings
Recognition of right-of-use assets relating to operating
leases
34,107,831
Recognition of lease liabilities relating to operating
leases
(40,575,280)
The impact arising from initial application of IFRS 16 by
associates
(1,175,623)
Impact before tax
(7,643,072)
Tax effects
1,553,393
Reserve funds
456,307
Non-controlling interests
528,826
Impact at 1 January 2019
(5,104,546)
The following adjustments were made to the amounts recognised in
the consolidated statement of financial position at 1 January 2019.
Line items that were not affected by the changes have not been
included.
Carrying amounts
previously reported Carrying amounts
at under IFRS
31 December 2018 Adjustments 16 at 1 January
2019
Notes RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and equipment (d) 171,662,659 (69,288,713) 102,373,946
Right-of-use assets - 108,880,458 108,880,458
Lease prepayments (c) 2,599,058 (2,599,058) -
Interests in associates 15,253,744 (1,175,623) 14,078,121
Deferred tax assets 2,840,321 1,553,393 4,393,714
Other non-current assets (b) 1,134,996 (93,994) 1,041,002
Current assets
Prepayments, deposits and
other receivables 4,220,036 (559,580) 3,660,456
Total assets 243,657,108 36,716,883 280,373,991
Current liabilities
Lease liabilities - (12,224,913) (12,224,913)
Obligations under finance
leases (d) (7,125,586) 7,125,586 -
Net current liabilities (48,813,771) (5,658,907) (54,472,678)
Total assets less current
liabilities 171,117,230 31,617,556 202,734,786
Non-current liabilities
Lease liabilities - (81,324,048) (81,324,048)
Obligations under finance
leases (d) (45,848,095) 45,848,095 -
Deferred income (b) (647,973) 146,516 (501,457)
Provision for return condition
checks (4,174,398) (2,377,798) (6,552,196)
NET ASSETS 100,498,034 (6,089,679) 94,408,355
CAPITAL AND RESERVES
Reserves 81,680,090 (5,560,853) 76,119,237
Non-controlling interests 7,340,693 (528,826) 6,811,867
TOTAL EQUITY 100,498,034 (6,089,679) 94,408,355
New and amendments to IFRSs in issue but not yet effective
The Group has not early applied the following new and amendments
to IFRSs that have been issued but are not yet effective:
IFRS 17 Insurance Contracts 1
Amendments to IFRS 3 Definition of a Business 2
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor
and its Associate or Joint Venture 3
Amendments to IAS 1 Classification of Liabilities as Current or
Non-current 5
Amendments to IAS 1 and IAS 8 Definition of Material 4
Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform 4
1 Effective for annual periods beginning on or after 1 January 2021.
2 Effective for business combination and asset acquisitions for
which the acquisition date is on or after the beginning of the
first annual period beginning on or after 1 January 2020.
3 Effective for annual periods beginning on or after a date to be determined.
4 Effective for annual periods beginning on or after 1 January 2020.
5 Effective for annual periods beginning on or after 1 January 2022.
In addition to the above new and amendments to IFRSs, a revised
Conceptual Framework for Financial Reporting was issued in 2018.
Its consequential amendments, the Amendments to References to the
Conceptual Framework in IFRS Standards, will be effective for
annual periods beginning on or after 1 January 2020.
The Directors anticipate that the application of all new and
amendments to IFRSs that have been issued but are not yet effective
will have no material impact on the consolidated financial
statements in the foreseeable future.
3. REVENUE
2019 2018
RMB'000 RMB'000
Revenue from contracts with customers
135,898,971 136,537,210
Rental income (included in revenue of airline operations
segment)
281,719 237,193
Total revenue
136,180,690 136,774,403
Disaggregation of revenue from contracts with customers
Segments 2019
2018
Airline operations Other operations Airline operations Other operations
RMB'000 RMB'000
RMB'000 RMB'000
Type of goods or services
Airline operations
Passenger 124,524,583 - 120,429,994 -
Cargo and mail 5,732,160 - 11,405,573 -
Ground service income 753,272 - 980,542 -
Others 2,078,460 - 2,122,542 -
133,088,475 - 134,938,651 -
Other operations
Aircraft
engineering
income - 2,491,912 - 1,405,590
Import and
export service
income - 41,599 - 83,896
Others - 276,985 - 109,073
- 2,810,496 - 1,598,559
Total 133,088,475 2,810,496 134,938,651 1,598,559
======================== ======================== ========================
Geographical markets
Mainland China 85,907,957 2,810,496 84,685,095 1,598,559
Hong Kong, Special
Administrative
Region ("SAR"),
Macau SAR
and Taiwan, China 5,911,532 - 6,029,445 -
Europe 13,374,965 - 14,865,700 -
North America 8,821,998 - 11,806,117 -
Japan and Korea 8,592,855 - 7,607,451 -
Asia Pacific and
others 10,479,168 - 9,944,843 -
Total 133,088,475 2,810,496 134,938,651 1,598,559
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 RMB2,304 million (2018:
RMB1,701 million) which was included in contract liabilities in
relation to frequent-flyer programme at the beginning of the
year.
Cargo and mail revenue is recognised when transportation
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.
4. SEGMENT INFORMATION
The Group's operating businesses are structured and managed
separately, according to the nature of their operations and the
services they provide. 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, import and export services and other
airline-related services.
Intersegment sales and transfers are transacted with reference
to the selling prices used for sales made to third parties at the
then prevailing market prices.
Operating segments
The following tables present the Group's consolidated revenue
and profit before taxation regarding the Group's operating segments
in accordance with the Accounting Standards for Business
Enterprises of the PRC ("CASs") for the years ended 31 December
2019 and 2018 and the reconciliations of reportable segment revenue
and profit before taxation to the Group's consolidated amounts
under IFRSs:
Year ended 31 December
2019
Airline Other
operations operations Elimination Total
RMB'000 RMB'000 RMB'000 RMB'000
Revenue
Sales to external
customers 133,370,194 2,810,496 - 136,180,690
(8,147,109
Intersegment sales 147,968 7,999,141 ) -
Revenue for reportable
segments under CASs and
IFRSs 133,518,162 10,809,637 (8,147,109) 136,180,690
======================== =============== =====================
Segment profit before
taxation
Profit before taxation
for reportable
segments
under CASs 8,425,964 899,234 (220,559) 9,104,639
======================== ========================= ===============
Effect of differences between IFRSs
and CASs 15,624
Profit before taxation for the year
under IFRSs 9,120,263
Year ended 31 December
2018
Airline Other
operations operations Elimination Total
RMB'000 RMB'000 RMB'000 RMB'000
Revenue
Sales to external
customers 135,175,844 1,598,559 - 136,774,403
(7,512,445
Intersegment sales 269,463 7,242,982 ) -
Revenue for
reportable
segments under CASs
and
IFRSs 135,445,307 8,841,541 (7,512,445) 136,774,403
====================== ======================== ================= =====================
Segment profit
before taxation
Profit before
taxation
for reportable
segments
under CASs 9,408,692 597,120 (47,907) 9,957,905
====================== ======================== =================
Effect of differences between IFRSs
and CASs 19,112
Profit before taxation for the year
under IFRSs 9,977,017
The following tables present the segment assets, liabilities and
other information of the Group's operating segments under CASs as
at 31 December 2019 and 2018 and the reconciliations of reportable
segment assets, liabilities and other information to the Group's
consolidated amounts under IFRSs:
Airline Other
operations operations Elimination Total
RMB'000 RMB'000 RMB'000 RMB'000
Segment assets
Total assets for reportable segments as at 31 December 2019
under
CASs 286,516,534 25,238,859 (17,501,840) 294,253,553
Effect of differences between IFRSs
(47,180
and CASs )
Total assets under IFRSs 294,206,373
=================
Total assets for reportable
segments as at 31 December
2018 under CASs 236,739,437 22,396,863 (15,420,294) 243,716,006
Effect of differences between IFRSs
and CASs (58,898)
Total assets under IFRSs 243,657,108
Airline Other
operations operations Elimination Total
RMB'000 RMB'000 RMB'000 RMB'000
Segment liabilities
Total liabilities for reportable segments as at 31 December
2019
under CASs and IFRSs 194,202,329 15,917,668 (17,243,087)
192,876,910
Total liabilities for reportable segments as at 31 December
2018
under CASs and IFRSs 144,807,641 13,576,780 (15,225,347)
143,159,074
Year ended 31 December 2019
Airline Other
Effect of
operations operations Elimination
Total differences Amounts
between IFRSs under IFRSs
and CASs
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Other segment information
Share of results
of
associates and
joint
ventures 143,914 331,345 - 475,259 - 475,259
Impairment losses
recognised/
(reversed) on
financial
assets 42,615 (6,555) 4,622 40,682 - 40,682
Impairment losses
recognised/
(reversed) on
non-financial
assets 2,041 (4,846) - (2,805) - (2,805)
Depreciation and
amortisation 20,991,268 337,462 (32,152) 21,296,578 (17,494) 21,279,084
Finance income 210,028 120,098 (166,941) 163,185 - 163,185
Finance costs 5,105,887 88,478 (245,437) 4,948,928 - 4,948,928
Income tax expense 1,726,798 148,744 (22,949) 1,852,593 3,906 1,856,499
Interests in
associates
and joint
ventures 14,327,393 1,776,946 (53,188) 16,051,151 139,919 16,191,070
Additions to
non-current
assets 34,636,914 281,948 - 34,918,862 - 34,918,862
=============== =============== =========== ============== ================= ============
Year ended 31
December
2018
Effect
of differences
between
Airline Other IFRSs and Amounts
operations operations Elimination Total CASs under
IFRSs
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Other segment
information
Share of results of
associates and joint
ventures 472,676 276,120 - 748,796 - 748,796
Impairment losses
(reversed)/
recognised on
financial
assets (269,618) 49,857 (44,631) (264,392) - (264,392)
Impairment losses
recognised
on non-
financial assets 631 12,758 - 13,389 - 13,389
Depreciation and
amortisation 14,242,781 298,751 (14,579) 14,526,953 (23,277) 14,503,676
Finance income 221,360 150,020 (198,816) 172,564 - 172,564
Finance costs 3,079,036 58,268 (223,207) 2,914,097 - 2,914,097
Income tax expense 1,650,556 123,252 (16,440) 1,757,368 4,778 1,762,146
Interests in
associates
and joint
ventures 14,964,461 1,576,427 - 16,540,888 139,919 16,680,807
Additions to
non-current
assets 34,109,509 188,996 - 34,298,505 - 34,298,505
Geographical information
The following table presents the Group's consolidated revenue
under IFRSs by geographical location for the years ended 31
December 2019 and 2018, respectively:
Year ended 31
December
2019 Hong Kong
SAR,
Macau
Mainland SAR and North Japan Asia
Taiwan, and Pacific
China China Europe America Korea and others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Sales to external
customers
and total
revenue
89,000,172 5,911,532 13,374,965 8,821,998 8,592,855 10,479,168 136,180,690
===================== =============== ============ ============ =========== ============ =============
Year ended 31
December
2018
Hong Kong
SAR, Macau
SAR and
Mainland Taiwan, North Japan Asia
and Pacific
China China Europe America Korea and others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Sales to external
customers
and total
revenue
86,520,847 6,029,445 14,865,700 11,806,117 7,607,451 9,944,843 136,774,403
===================== =============== ============ ============ =========== ============ =============
In determining the Group's geographical information, revenue is
attributed to the segments based on the origin or destination of
each flight. Assets, which consist principally of aircraft and
ground equipment, supporting the Group's worldwide transportation
network, are mainly registered/located in Mainland China. According
to the business demand, the Group needs to flexibly allocate
different aircraft to match the need of the route network. An
analysis of the assets of the Group by geographical distribution
has therefore not been included.
There was no revenue from transactions with a single customer
amounting to 10% or more of the Group's revenue during the year
ended 31 December 2019 (2018: Nil).
5. OTHER INCOME AND GAINS
2019 2018
RMB'000 RMB'000
Co-operation routes income and subsidy income 3,643,407 3,133,872
12,550 7,418
Dividend income (Loss)/gain on disposal of
- Interests in associates - 163,184
- Interests in joint ventures (414) -
- Subsidiaries - 405,543
- Property, plant and equipment 65,319 20,593
Gain on derecognition of land use rights
Gain on disposal of non-current assets held 52,798
for sale - - 59,893
Net gain arising on financial assets measured
at fair value through profit or loss - 60
Others 285,530 318,137
4,059,190 4,108,700
==============================
6. PROFIT FROM OPERATIONS
The Group's profit from operations is arrived
at
after charging/(crediting):
2019 2018
RMB'000 RMB'000
Depreciation of property, plant and equipment 9,704,731 14,357,683
Depreciation of right-of-use assets 11,548,619 -
Depreciation of investment properties 25,692 32,912
Amortisation of intangible assets 42 38,803
Amortisation of lease prepayments - 74,278
Impairment losses recognised on property, plant
and equipment - 16
Impairment losses (reversed)/recognised on
inventories (2,805) 13,373
Auditors' remuneration:
- Audit related services 17,923 18,315
- Other services - 525
========================= ==============================
7. FINANCE COSTS
2019 2018
RMB'000 RMB'000
Interest on interest-bearing bank loans and
other borrowings 1,581,534 2,104,602
Interest on lease liabilities/ obligations
under finance leases 3,897,514 1,437,361
Imputed interest expenses on defined benefit
obligations 8,880 10,822
5,487,928 3,552,785
Less: Interest capitalised (539,000 ) (638,688 )
4,948,928 2,914,097
The interest capitalisation rates during the year ranged from
3.14% to 4.75% (2018: 2.67% to 4.75%) per annum relating to the
costs of related borrowings during the year.
8. INCOME TAX EXPENSE
2019 2018
RMB'000 RMB'000
Current income tax:
- Mainland China 2,047,335 2,341,423
- Hong Kong SAR and Macau SAR, China 23,227 23,664
Under/(over)-provision in respect of
prior years 5,182 (13,444)
Deferred tax (219,245 ) (589,497 )
1,856,499 1,762,146
On 21 March 2018, the Hong Kong Legislative Council passed The
Inland Revenue (Amendment) (No.7) Bill 2017 (the "Bill") which
introduced the two-tiered profits tax rates regime. The Bill was
signed into law on 28 March 2018 and was gazetted on the following
day. Under the two-tiered profits tax rates regime, the first HK$2
million of profits of the qualifying group entity will be taxed at
8.25% and profits above HK$2 million will be taxed at 16.5%. The
profits of group entities not qualifying for the two-tiered profits
tax rates regime will continue to be taxed at a flat rate of
16.5%.
Accordingly, starting from the prior year, the Hong Kong SAR
profits tax is calculated at 8.25% on the first HK$2 million of the
estimated assessable profits and at 16.5% on the estimated
assessable profits above HK$2 million.
Under the relevant Corporate Income Tax Law and regulations in
the PRC, except for two branches and two subsidiaries which are
taxed at a preferential rate of 15% (2018: 15%), all group
companies located in Mainland China are subject to a corporate
income tax rate of 25% (2018: 25%) during the year. Subsidiaries in
Hong Kong SAR, China are taxed at corporate income tax rates of
8.25% and 16.5% (2018: 8.25% and 16.5%) and subsidiaries in Macau
SAR, China are taxed at corporate income tax rate of 12% (2018:
12%).
In respect of majority of the Group's overseas airline
activities, the Group has either obtained exemptions from overseas
taxation pursuant to the bilateral aviation agreements between the
overseas governments and the PRC government, or has sustained tax
losses in these overseas jurisdictions. Accordingly, no provision
for overseas tax has been made for overseas airlines activities in
the current and prior years.
The taxation for the year can be reconciled to the profit before
taxation per consolidated statement of profit or loss as
follows:
2019 2018
RMB'000 RMB'000
Profit before taxation
9,120,263 9,977,017
Tax at the applicable tax rate of 25%
2,280,066 2,494,254
Preferential tax rates on income of group entities
(113,980) (136,952)
Tax effect of share of profits less losses of associates and
joint
ventures (118,815) (187,199)
Tax effect of non-deductible expenses
100,099 65,086
Tax effect of non-taxable income
(30,749) (255,466)
Deductible temporary differences and tax losses not
recognised
613 15,847
Utilisation of tax losses not recognised in prior years
(18,180) (106,952)
Utilisation of deductible temporary differences not recognised
in
prior years (247,737) (113,028)
Under/(over)-provision in respect of prior years
5,182 (13,444)
Taxation for the year 1,856,499 1,762,146
9. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share
attributable to equity shareholders of the Company is based on the
following data:
2019 2018
RMB'000 RMB'000
Earnings
Earnings for the purpose of basic and diluted 6,420,294 7,350,661
earnings per share
=================== ===================
2019 2018
'000 '000
Number of shares
Number of ordinary shares for the purpose of
basic and diluted earnings per share 13,734,961 13,734,961
=================== ===================
The number of ordinary shares for the purpose of basic and
diluted earnings per share is calculated based on the number of
ordinary shares in issue during the year, as adjusted to reflect
the number of treasury shares held by Cathay Pacific through
reciprocal shareholding
The Group had no potential dilutive ordinary shares in issue
during both years.
10. DIVIDS
Dividends for the shareholders of ordinary shares of the Company
recognised as distribution during the year:
2019 2018
RMB'000 RMB'000
Final dividend in respect of the previous financial year,
approved during the current year, of RMB1.0328 per ten shares
(including
tax) (2018: RMB1.1497 per ten shares (including tax))
1,500,123 1,669,918
Subsequent to the end of the reporting period, final dividend in
respect of the year ended 31 December 2019 of RMB0.4442 per ten
ordinary shares (approximately RMB645 million in aggregate for
ordinary shares) has been proposed by the Directors and is subject
to approval by the shareholders at the forthcoming annual general
meeting.
11. ACCOUNTS RECEIVABLE
2019 2018
RMB'000 RMB'000
Accounts receivable 6,242,241 5,590,112
Less: Allowance for expected credit
losses (244,551 ) (216,140 )
5,997,690 5,373,972
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:
2019 2018
RMB'000 RMB'000
Within 30 days 2,589,150 2,548,148
31 to 60 days 789,472 696,437
61 to 90 days 452,542 514,171
Over 90 days 2,166,526 1,615,216
5,997,690 5,373,972
12. ACCOUNTS PAYABLE
The ageing analysis of the accounts payable as at the end of the
reporting period was as follows:
2019 2018
RMB'000 RMB'000
Within 30 days 7,760,994 7,587,233
31 to 60 days 1,599,072 1,440,778
61 to 90 days 1,201,101 1,063,182
Over 90 days 6,016,986 4,635,235
16,578,153 14,726,428
The accounts payable are non-interest-bearing and have normal
credit terms up to 90 days.
CONSOLIDATED BALANCE SHEET
At 31 December 2019
(Prepared under the Accounting Standards for Business
Enterprises of the PRC)
31 December 31 December
ASSETS 2019 2018
RMB'000 RMB'000
Current assets
Cash and bank 9,663,667 7,807,572
Bills receivable 362 403
Accounts receivable 5,997,690 5,373,972
Other receivables 3,245,439 3,031,157
Prepayments 479,029 1,188,879
Inventories 2,098,673 1,877,494
Other current assets 3,331,996 4,446,630
Total current assets 24,816,856 23,726,107
Non-current assets
Debt instruments at fair value through other
comprehensive income 1,688,451 1,040,419
Long-term receivables 814,507 1,142,235
Long-term equity investments 16,051,151 16,540,888
Equity instruments at fair value through other
comprehensive income 255,156 270,114
Investment properties 151,443 170,942
Fixed assets 88,890,118 160,402,819
Right-of-use assets 116,827,217 -
Construction in progress 35,276,017 32,179,581
Intangible assets 3,722,394 3,759,144
Goodwill 1,102,185 1,102,185
Long-term deferred expenses 366,554 606,105
Deferred tax assets 4,291,504 2,775,467
Total non-current assets 269,436,697 219,989,899
Total assets 294,253,553 243,716,006
31 December 31 December
LIABILITIES AND SHAREHOLDERS' EQUITY 2019 2018
RMB'000 RMB'000
Current liabilities
Short-term loans 13,566,403 17,561,546
Short-term bonds payable 7,381,933 3,467,482
Accounts payable 17,307,980 16,174,121
Domestic air traffic liabilities 3,706,816 3,238,429
International air traffic liabilities 6,273,484 5,647,845
Contract liabilities 1,037,031 1,301,518
Employee compensations payable 3,196,108 2,806,901
Taxes payable 1,255,056 1,428,926
Other payables 9,031,542 7,162,819
Non-current liabilities repayable within one year 14,873,364 13,441,489
Total current liabilities 77,629,717 72,231,076
Non-current liabilities
Long-term loans 1,200,430 3,185,481
Corporate bonds 15,398,535 12,400,000
Long-term payables 4,971,572 4,208,771
Lease liabilities/ obligations under finance leases 86,586,353 45,848,095
Defined benefit obligations 249,933 263,862
Accrued liabilities 3,026,793 431,705
Deferred income 521,227 647,973
Deferred tax liabilities 621,440 879,372
Other non-current liabilities 2,670,910 3,062,739
Total non-current liabilities 115,247,193 70,927,998
Total liabilities 192,876,910 143,159,074
====================
Shareholders' equity
Issued capital 14,524,815 14,524,815
Capital reserve 26,270,841 26,270,841
Other comprehensive income (14,562) (962,968)
Reserve funds 11,026,605 10,409,470
Retained earnings 41,587,530 42,880,893
General reserve 110,628 93,188
Equity attributable to shareholders of the Company 93,505,857 93,216,239
Non-controlling interests 7,870,786 7,340,693
Total shareholders' equity 101,376,643 100,556,932
Total liabilities and shareholders' equity 294,253,553 243,716,006
==================== ====================
EFFECTS OF DIFFERENCES BETWEEN IFRSs AND CASs
The effects of differences between the consolidated financial
statements of the Group prepared under IFRSs and CASs are as
follows:
2019 2018
RMB'000 RMB'000
Net profit attributable to shareholders of
the Company under
CASs 6,408,576 7,336,327
Deferred taxation (3,906) (4,778)
Differences in value of fixed assets and other
non-current assets 15,624 19,112
Net profit attributable to shareholders of
the Company under IFRSs 6,420,294 7,350,661
31 December 31 December
2019 2018
RMB'000 RMB'000
Equity attributable to shareholders of the
Company under CASs 93,505,857 93,216,239
Deferred taxation 60,948 64,854
Differences in value of fixed assets and other
non-current assets (248,047) (263,671)
Unrealised profit of the disposal of Hong Kong
Dragon Airlines Limited 139,919 139,919
Equity attributable to shareholders of the
Company under IFRSs 93,458,677 93,157,341
SUMMARY OF OPERATING DATA
The following is the operating data summary of the Company,
Shenzhen Airlines (including Kunming Airlines), Air Macau, Beijing
Airlines, Dalian Airlines and Air China Inner Mongolia.
Current Previous Increase/
period period (decrease)
Capacity
Load factor
Passenger load factor (RPK/ASK) 81.02% 80.60% 0.42 ppt
International 79.22% 77.69% 1.53 ppt
Mainland China 82.42% 82.49% (0.07 ppt)
Hong Kong SAR, Macau SAR and Taiwan,
China 77.53% 80.43% (2.90 ppt)
Cargo and mail load factor (RFTK/AFTK) 43.63% 46.29% (2.66 ppt)
International 48.68% 52.62% (3.93 ppt)
Mainland China 36.84% 37.30% (0.46 ppt)
Hong Kong SAR, Macau SAR and Taiwan,
China 28.20% 35.43% (7.23 ppt)
Overall load factor (RTK/ATK) 68.70% 69.25% (0.55 ppt)
Daily utilisation of aircraft (block
hours per day per aircraft) 9.72 9.53 0.19 hour
Yield
Yield per RPK (RMB) 0.5340 0.5461 (2.22%)
International 0.4303 0.4376 (1.67%)
Mainland China 0.5902 0.6028 (2.09%)
Hong Kong SAR, Macau SAR and Taiwan,
China 0.6813 0.6998 (2.64%)
Yield per RFTK (RMB) 1.1995 1.2818 (6.42%)
International 1.2689 1.3590 (6.63%)
Mainland China 0.9778 1.0148 (3.65%)
Hong Kong SAR, Macau SAR and Taiwan,
China 2.9382 3.0139 (2.51%)
Unit cost
Operating cost per ASK (RMB) 0.4364 0.4460 (2.15%)
Operating cost per ATK (RMB) 3.4021 3.4481 (1.33%)
Note: As at 28 December 2018, the Company completed the relevant
matters in relation to the transfer of 51% equity interest in Air
China Cargo to China National Aviation Capital Holding Co., Ltd.,
and since then the Company ceased to hold any equity interest in
Air China Cargo. Thus, from January 2019, the periodic reports of
the Company no longer contained fleet information of Air China
Cargo and the operating data would only include freight data of the
bellyhold space of passenger aircraft. Also, the freight data,
yield and unit cost of the previous period would no longer contain
Air China Cargo's freight data of its freighters, and shall be
adjusted to a comparable basis.
Fleet Information
During the year of 2019, the Group introduced a total of 48
aircraft, including four A350, one A330- 300, two B737-8MAX, four
B737-800, thirty A320NEO and seven A321NEO, among which one was
bought with our own funds, 27 were introduced under finance leases
and 20 were introduced under operating leases. On the other hand,
the Group phased out 18 aircraft, including twelve B737-800, four
A320 and two A319.
As at the end of 2019, the Group had a total of 699 passenger
aircraft including business jets, with an average age of 6.96
years. Among the aircraft set out above, the Company operated a
fleet of 426 aircraft in total, with an average age of 7.25 years.
The Company introduced 29 aircraft and phased out 12 aircraft,
among which two were sold to Air Macau, two were sold to Dalian
Airlines and two were sold to Air China Inner Mongolia.
Details of the fleet of the Group are set out in the table
below:
Finance
Operating
Average
Sub-total Self-owned leases leases age (year)
Passenger aircraft 694 285 207 202 6.96
Airbus 365 141 115 109 7.06
A319 43 32 6 5 12.40
A320/A321 247 81 91 75 6.22
A330 65 28 8 29 7.65
A350 10 0 10 0 1.04
Boeing 329 144 92 93 6.84
B737 277 120 72 85 7.03
B747 10 8 2 0 10.47
B777 28 4 18 6 5.71
B787 14 12 0 2 2.86
Business jets 5 1 0 4 7.41
Total 699 286 207 206 6.96
Introduction Plan Phase-out Plan
Passenger aircraft 2020 2021 2022 2020 2021 2022
Airbus 34 41 8 3 1 5
A319 - - - 2 - 3
A320/A321 29 34 - 1 1 2
A350 5 7 8 - - -
Boeing - - - 1 - 5
B737 - - - 1 - 5
COMAC 3 6 8 - - -
ARJ21 3 6 8 - - -
Total 37 47 16 4 1 10
Note: Please refer to the actual operation for the introduction
and phase-out of the Group's fleet in the future.
2019 REVIEW
2019 was a crucial year for completing the building of a
moderately prosperous society in all respects. Under the guidance
of Xi Jinping Thought on Socialism with Chinese Characteristics for
a New Era, the Group faithfully fulfilled its political and social
responsibilities as a central enterprise. In doing so, the Group
earnestly studied and implemented the important instructions of
General Secretary Xi Jinping, resolutely carried out the decisions
and arrangements of the Central Committee of the Party and the
State Council, and adhered to new development philosophy and
requirements of high-quality development. With a commitment to
becoming a world's leading enterprise, the Group capitalized on
opportunities and surmounted difficulties to maintain safe and
stable operation and improved its service quality on a continuous
basis. Thus, the Group stayed at the forefront of the industry in
terms of operating performance with strengthened competitive
advantages. At the same time, positive and stable development was
sustained in all aspects and new progress in high-quality
development was achieved.
In 2019, the Group's revenue amounted to RMB136,181 million with
a profit before tax of RMB9,120 million. Net profit attributable to
equity shareholders of the Company was RMB6,420 million. The Group
recorded 2.285 million accident-free flight hours, representing a
year-on-year increase of 4.12%; traffic measured by RTK reached
25,364 million tonne kilometres, representing a year-on-year
increase of 3.50%; 115 million passengers were carried,
representing a year-on-year increase of 4.81%; the volume of cargo
and mail carried amounted to 1,434.2 thousand tonnes, down by 1.83%
on a year- on-year basis.
The Group stayed committed to the overarching principle of
pursuing progress while ensuring stability. Amidst the increasingly
complicated operating environment, the Group continued to push
forward and deepen its reform and enhanced its growth momentum
steadily, industry leading operating result was thus maintained.
The Group continued to optimise the operation of the entire fleet
in order to eliminate the impact of insufficient capacity, and
continued to align its investments closely with market demand,
thereby improving its resource utilization efficiency. Focusing
consistently on the establishment of world-class hubs, the Group
has delivered satisfactory results in the quick-profiting projects
with solid progress achieved in network expansion. The Group
continued to strengthen its marketing control capacity and deepen
the transformation of its business model while reinforcing the
refined management of yield and enhancing its competitive edges in
marketing quality. In advancing its premium brand strategy, the
Group has enhanced the synergy of its service provision with a
focus on flight punctuality management, which significantly
improved the quality of its operation and services. Meticulous
arrangements have been made for the first flight and commencement
of operation at Daxing Airport, ensuring safe and smooth operation
in the two airports in Beijing. In response to the "Belt and Road"
Initiative, the Group newly launched 9 international and regional
routes such as Beijing-Nice, Shanghai-London and Hangzhou-Rome, and
continued to extend the breadth and frequency of the route network
of Beijing Hub. The Group also pushed forward the digital
transformation and formed a leadership role in experience-oriented
services. The Group has garnered 63.5953 million "Phoenix Miles"
members, with a 5% year-on-year increase in revenue contributed by
frequent fliers; while the number of mobile client users and the
relevant sales revenue exceeded 10 million and RMB10 billion,
respectively. The Group has devoted greater efforts in brand
communication, and participated in the second China International
Import Expo and supported the organization of Beijing Winter
Olympic Games and International Horticultural Exhibition. The Group
also carried out joint marketing and promotion, thereby
significantly enhancing the brand recognition and influence of the
Company.
The Group forged ahead in the three critical battles and
achieved positive progress. Owing to the Group's full devotion to
poverty alleviation, Sonid Right Banner, an aid recipient county,
has been lifted from poverty, while Zhaoping county has attained
its annual target for poverty alleviation. The Group was rated
"Excellent", the highest grade, in the assessment of its targeted
poverty alleviation work by the central government for two
consecutive years. To actively prevent and control material risks,
the Group enhanced its capability in risk compliance management,
reinforced the foundation for system management and further
promoted the development of its internal audit system. The
construction of rule of law progressed smoothly. Law-based
corporate governance and compliant operation became the general
consensus among all staff members. With a commitment to winning the
Blue Sky Defense War, the Group optimized its energy-saving and
environmental protection management system, and propelled the
implementation of energy-saving and emission reduction projects.
The Company won the 10th China Environmental Award, and was
distinguished as an exemplary company in the special industry
inspection.
With a focus on tasks in relation to the state-owned enterprise
reform, the Group implemented the
requirements under the "two principles that must be consistently
adhered to" ( ) to
facilitate the incorporation of the guidance of the Communist
Party into its corporate governance and step up the efforts in the
regulated development of the Board, with a view to ensuring the
coordinated operation, scientific decision-making and stable
development of various governance bodies. The Board of the Company
was once again honoured with the "Best Board of Directors" award of
the 15th Golden Round Table Award of the Board of Directors of
Chinese Listed Companies, and won the "Best Listed Company in terms
of Corporate Governance" and "Listed Company with Best Investment
Value" awards from the 9th Golden Bauhinia Awards for Hong Kong and
China Securities.
In response to the successive outbreak of novel coronavirus
pneumonia pandemic in various regions at the beginning of 2020, the
Group spared no effort in prevention and control of the pandemic in
the bid to maximize the protection of health and safety of its
passengers and employees. The Group earnestly performed its social
responsibilities at the same time to contribute to this battle
against the pandemic. The Group also strived to minimize the impact
of the pandemic by adjusting its capacity structure, optimizing
yield management, strengthening cost control, and placing more
emphasis on risk management and control. We believe that, under the
leadership of the Central Committee of the Party and with the
nationwide endeavors of the public on a united front, we will
surely be able to triumph over this battle of containing the
pandemic.
The year of 2020 is the finale year for the 13th Five-year Plan,
as well as a critical year for completing the building of a
moderately prosperous society in all respects and achieving the
first centenary goal. Faced with the missions, risks and challenges
posed by the current situation, the Group will unite more closely
around the Central Committee of the Party with President Xi Jinping
at the core, and make concerted and aggressively excelling efforts
to drive the modernization of its governance system and capability.
The Group will also leverage its remarkable operation performance
to lay a solid foundation for establishing itself as a top-tier
global aviation transportation group, and make greater
contributions to the great accomplishment of completing the
building of a moderately prosperous society in all respects.
BUSINESS OVERVIEW
In 2019, the Group recorded a revenue of RMB136,181 million, a
profit before tax of RMB9,120 million and a net profit attributable
to equity shareholders of the Company of RMB6,420 million. The
competitiveness of our core business was consolidated and improved.
We have steadily expanded the fleet investment scale, strengthened
the restructuring of operation resources, continuously enhanced the
capacity input, diligently exploited the potential of production
and insisted on "optimising the operation of the entire fleet", and
continued to enhance aircraft utilization efficiency. By insisting
on new development concepts and focusing on high quality
development, the Company continuously improved the operating
quality, strengthened the refined cost management, and continued to
maintain its leading advantages in the industry.
In 2019, the Group's ASKs and RPKs reached 287,788 million and
233,176 million, representing a year-on-year increase of 5.19% and
5.74%, respectively. The passenger load factor was 81.02%,
representing a year-on-year increase of 0.42 ppt. The Group's AFTKs
and RFTKs reached 10,952 million and 4,779 million, representing a
year-on-year increase of 2.25% and a year-on-year decrease of
3.61%, respectively. The Group's cargo and mail load factor was
43.63%, representing a year-on- year decrease of 2.66 ppt.
Safe Operation
-- We are well aware that safety responsibility is also a kind
of political responsibility, and the guarantee for safe flight
underlies the foundation of the Group's original aspiration and
mission. We further promoted the implementation of 30 measures
aiming at ensuring sustainable and safe development by firmly
establishing the concept of safe development and holding the bottom
line of safety.
-- The Company devoted greater efforts in the development of
systems and mechanisms in order to reinforce the foundation of its
safe development. We have optimized the security risk management
and control mechanism by promoting the development of a three-level
risk management and control system. We have also improved the
flight training system through the adoption of the new Flight
Standard Operating Procedure Manual (SOP), thereby consolidating
our business foundation on a continuous basis. A new system for AGS
flight quality supervision has been applied to further enhance the
management and control capability over the operation process.
Moreover, the Company optimized the aircraft maintenance system by
promoting the integration of maintenance quality management system
and improving the preventive maintenance services. AMECO was
awarded the maintenance license issued by the Civil Aviation
Administration of China after the reform of "integrating
certificates into one". Meanwhile, the Company also optimized the
operational system by enhancing the function of its system
operation control (SOC) system more rapidly, and by facilitating
the upgrade of dynamic management model and flight dispatch and
release model in an orderly manner.
--
-- During the Reporting Period, the Group recorded 2.285 million
safe flight hours, representing a year-on-year increase of 4.12%.
1,454.24 million safe flight kilometres were recorded, representing
a year-on-year increase of 4.87%; 115 million passengers were
transported safely, representing a year-on-year increase of 4.81%.
The Company had successfully safeguarded the provision of important
transportation services involved in various events such as the
second "Belt and Road" Forum for International Cooperation, Beijing
International Horticultural Exhibition, Conference on Dialogue of
Asian Civilizations and the celebration of the
70th anniversary of the founding of the People's Republic of China.
Hub Network
-- The Company's principal base is located at Beijing Capital
International Airport, also known as "the first gateway to China",
which has a unique and prime location advantage. During the
Reporting Period, we actively promoted the renovation project for
Terminal 3 and other construction projects including the fourth
runway and the landside integrated transportation hub, with a view
to establishing Beijing Capital International Airport as a
world-class hub with unwavering efforts.
-- Beijing World-class Hub newly launched international and
domestic routes such as Beijing-Phnom Penh, Beijing-Nice,
Beijing-Kashi and Beijing-Changzhi. Flight frequencies of
Beijing-Shanghai, Beijing-Guangzhou and other routes were
increased. The total OD connected by Beijing Hub increased to 6,332
and the number of persons who has received interlining services
provided by the hub increased by 7% year-on-year. The all entrusted
baggage through check services business covered 96% of total
passengers who transit to China from the abroad via Beijing. Travel
products for 144-hour visa-free transit in Beijing and the "Transit
in Beijing" product package have been launched; and the number of
product line under the joint transport product combining flight and
ground transportation had increased to 33.
-- Chengdu International Hub newly launched
Chengdu-Bazhong-Shanghai, Chengdu-Wuyishan and other routes.
Currently, there is a total of 39 navigation points for transiting
to overseas countries via Chengdu. Various measures including
priority security check channels for transit were launched, which
led to a year-on-year increase of 6% in the number of transit
passengers.
Leveraging the opportunities arising from the development of
Chengdu New Tianfu International Airport ( ), the Company has
formulated plans for operation and route network for "two airports
in one city", striving towards its development goal of becoming a
top-tier aviation
hub in the world.
-- The Company newly launched international and regional routes
such as Shanghai-London, Hangzhou-Rome, Tianjin-Osaka,
Yinchuan-Hong Kong, Chongqing-Tokyo, Chongqing-Okinawa,
Hohhot-Ulaanbaatar and Wenzhou-Bangkok, as well as domestic routes
such as Hohhot- Shenyang, Chongqing-Changchun, Zhengzhou-Yinchuan
and Guiyang-Fuzhou.
--
-- As at the end of the Reporting Period, the Company, Shenzhen
Airlines (including Kunming Airlines), Air Macau, Beijing Airlines,
Dalian Airlines and Air China Inner Mongolia operated a total of
770 passenger routes, including 137 international routes, 27
regional routes and 606 domestic routes. The Company's passenger
routes reached 43 countries and regions and 187 cities, including
65 international cities, 3 regions and 119 domestic cities. Through
cooperation with members of Star Alliance, the Company has further
expanded its service coverage to 1,317 destinations in 195
countries and regions.
-- In 2020, the Company intends to launch new international and
domestic routes such as Chongqing- San Francisco, Hangzhou-Tokyo,
Beijing-Yan'an and Shanghai (Pudong)-Shenyang.
Products and Services
-- The Company upheld the doctrine of offering sincere services
and focused on the goal of building a "world-class model
enterprise". During the Reporting Period, the Company further
deepened the "three orientations" in terms of values, customers and
issues, and implementing the "three comprehensive strategies" of
global benchmarking, full-process governance and full- chain
capacity. Refined measures such as raising the standards of service
systems, improving the quality of hardware regarding service
provision, upgrading soft services and products and developing
professional service teams were implemented.
-- From governance of business to governance of systems: With a
commitment to keep abreast of global standards, the Company has
comprehensively improved the quality of its three "principal
products". The standards for allocation of aircraft seats and
entertainment systems were released, striving to strengthen the
management on its principal in-flight products throughout the
product lifecycle at the system level. The Company also released
the "General Rules for Standard System
of Products and Services at Touchpoints throughout the Whole
Process ( )" with 106 standards for whole process product and
service and the "Manual of Standards for Products and Services at
Touchpoints throughout the Whole Process ( )", signifying the
completion of the establishment of whole process
product standard system.
-- The Company has enhanced its internal and external
synergistic coordination as well as management and control over
various key aspects with a focus on flight punctuality management.
The flight punctuality rate of the Company reached 81.83%.
-- The renovation of old lounges and construction of new lounges
have commenced and the lounge at Hangzhou airport was put into
trial operation. Leveraging the resources of CNAHC, the Company has
established a global catering supply management center and a
cultural and entertainment brand under Air China, thereby improving
the quality of its catering and aircraft entertainment in an
all-rounded manner.
--
-- Beijing Hub has realized a new smart service model of
"self-service-oriented, manual assisted" by setting up a
"Self-service Area" for domestic routes, which was equipped with 40
self-service baggage check-in devices and facial recognition-based
self-boarding devices. It has also promoted the "paperless"
convenient travel service in full swing by putting into service the
QR code e-boarding pass clearance service in 105 cities within
China. Moreover, the first international route adopting "paperless"
travel services was launched, i.e. the Beijing-Australia route.
-- The Company has enriched the functions of Air China APP by
launching various new functions, such as Air China's wallet and
credit payment ( ), non-voluntary self-service flight-ticket
changing, air-rail and air-bus interline operations, cross-platform
ticket sales between
Air China and Shenzhen Airlines, and irregular flight services,
which have integrated the whole service chain of and increased the
scenarios through which services are provided on the APP.
-- The Company has provided whole process training with full
coverage to its service team to facilitate the improvement of their
professionalism through mediums such as positional and vocational
skill system and vocational skills contests.
Sales and Marketing
-- The Company continued to explore potentials of its core
resources. Adhering to the general guidelines of optimizing the
operation of the entire fleet, we have strengthened the management
over fleet value and established fixed flight cycle. Under the
combined effects of various factors such as capacity shortage,
sluggish international (regional) markets and major events, the
daily utilisation of aircraft reached 9.72 hours, representing a
year-on-year growth of 0.19 hours.
-- The Company has strengthened the refined management of yield
and optimized the pricing management system. Sales revenue recorded
a year-on-year growth of 2.1%, while the revenue from its premium
cabins services saw a 2.4% year-on-year increase. We strenuously
promoted the Phase 2 business model transformation project and
realized scenario-based payment services based on frequent fliers'
credit points. To keep pace with the rapid upgrade of e-commerce
platforms and websites, we also carried out over 30 iterative
developments with over 1,900 improved and new functions, boosting
the number of registered users of Air China APP to over 10 million
with sales revenue exceeding RMB10 billion, representing a
year-on-year growth of 39%.
--
-- The Company launched paid upgrade product at departure gates
at 52 domestic airports and 16 international airports, and
introduced products such as the Premium Economy Class for in-
flight upgrade of economy class on the new A350 aircraft. We have
also expanded the sales channel of paid seat selection and prepaid
luggage. The number of persons who has received our travelling
products and services increased by 52.4% year-on-year. During the
Reporting Period, the accumulated sales revenue contributed by
aviation-related income from ancillary products amounted to RMB360
million, representing a year-on-year increase of 57%, and the
revenue generated from upgrade product, paid seat selection and
prepaid luggage recorded a year-on-year growth of 103%, 21% and
33%, respectively.
-- The Company has accelerated the application of innovative
marketing and further promoted the transformation of its business
models. New segments such as commission-based collaboration,
attributable tenants and mileage payment were added to the loyalty
point platform. Mileage payment business was introduced to 1,155
tenants or duty-free shops, marking continuous expansion of Air
China's travel ecosystem.
-- "Phoenix Miles" won the "Best Quality Frequent-flyer Program
( )" award from Xinhua Net. As at the end of the Reporting Period,
the total number of "Phoenix Miles"
members amounted to 63.5953 million. With the all-round upgrade
of services offered to the frequent fliers, customer loyalty and
stickiness also increased remarkably, leading to a year-on- year
growth of 5% in the revenue contributed by frequent fliers.
Brand Value
-- Air China positioned its brand as "professional and reliable
with both international quality and Chinese temperament". By virtue
of the immense historical heritage, we strive to create perfect
travel experience and help passengers to stay 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 innovative and excelling
efforts.
--
-- The Company fulfilled its social and political
responsibilities by participating in an array of activities,
including the exhibition hall featuring "Wings of Dream ( )" of
Beijing International Horticultural Exhibition, the Beijing 2022
Winter Olympic Games, the 2nd China International
Import Expo and the maiden flight of Beijing Daxing
International Airport. The new version of "Panda" inflight safety
instructions video was launched in an effort to reinforce a younger
brand image of Air China. The brand culture was communicated and
well-received by the public, which contributed to the enhancement
of the Company's brand value. The brand communication project of
Air China titled "Landing with Dreams" and the cultural innovation
work in relation to the brand's IP image "Panda" have received a
number of domestic and international awards, including the "2018
Brand Innovation Achievement of Chinese Enterprises - Innovative
Brand
Culture and Innovative Brand Communication Award (2018 )" from
China Association for Quality, the 10th Tiger Roar Award - Silver
Prize ( 10 ), the "Excellent Chinese Global Brand Award ( )" for
the thematic activity of "China Home ( )" at Cannes Lions
International Festival of Creativity, the "Best VR/AR" of 2019 Asia
Pacific PR Award ( VR/AR ), and nomination for the "Best Enterprise
Brand Communication on the Global Award List" by the PR Week ( )
for 2019.
-- Air China ranked 21st in the list of "Top 500 Most Valuable
Chinese Brands 2019" released at the "16th World Brand Convention"
of World Brand Lab with a brand value of RMB167.876 billion, which
is the highest ranking among civil aviation companies in China. Air
China also
ranked 281st among global brands in the "The World's 500 Most
Influential Brands ( 500 ) released by World Brand Lab, up by 6
rankings as compared with last year, and
was the only Chinese civil aviation company on the list.
Meanwhile, Air China received the "China No.1 Brand Award for Year
2019 (Aviation Services Industry) (2019 NO.1 ( )" and a special
award named "2019 Cultural Brand Award (2019 )".
Three Critical Battles
-- Leveraging the resources of CNAHC, the Company shouldered its
corporate social responsibilities by implementing the "8+2"
designated poverty alleviation plan. During the Reporting Period,
the Company provided nil-consideration supporting funds of over
RMB38.51 million to the designated poverty alleviation regions and
carried out various supporting projects such as infrastructure
construction as well as poverty alleviation through industry,
education, health and ecological protection. Special surveys and
researches for poverty alleviation have been conducted with poverty
alleviation cadres being assigned to these projects. The Company
also encouraged its staff to participate in poverty alleviation
through consumption. The amount of product purchased for the
purpose of poverty alleviation amounted to RMB45.37 million, and
the assisted sales of poverty alleviation-related products amounted
to RMB4.93 million. Meanwhile, the Company introduced 12 partners
in relation to poverty alleviation and commenced collaborative
poverty alleviation work in various fields. We helped nurture over
1,000 talents for the poverty-stricken regions and recruited an
aggregate of 62 staff members from the poverty alleviation regions.
The voluntary supporting education activity of "Air China Class"
had been carried out with over 200 volunteers giving a total of
over 1,300 class hours, and the trial program of poverty
alleviation through aesthetic education has been implemented.
During the Reporting Period, Sonid Right Banner, Xilingol League,
Inner Mongolia Autonomous Region, an aid recipient county, has been
lifted from the status as a national-level poverty-stricken county,
while Zhaoping county, Hezhou City, Guangxi Zhuang Autonomous
Region has attained its annual target for poverty alleviation.
-- The Company has enhanced its capability in risk compliance
management, reinforced the foundation for system management and
issued the relevant requirements on comprehensive risk management
of the Company. The "Year for Enhancement of Compliance Management"
activity was carried out, pursuant to which regular management on
statutory self-inspection has been achieved. We have accelerated
the development of the compliance management system with increased
efforts put in compliance training. The rule of law construction of
Air China progressed smoothly with law-based corporate governance
and compliant operation becoming the general consensus among all
staff members. We also further promoted the development of the
internal control and audit system and completed 107 internal audit
items. Moreover, the Company has enhanced the level of operation
management and its risk prevention capability on a continuous basis
with a view to actively preventing, controlling and eliminating
major operational risks.
--
-- Adhering to the development concept of "green operation for
sustainable development", the Company is fully committed to winning
the Blue Sky Defense War. To this end, the Company has optimized
its energy-saving and environmental protection management system by
issuing the "Implementation Rules for Energy Saving, Environmental
Protection, Education and Training (
). It has also propelled the "fuel to electricity" project
for
vehicles within the airports by introducing 97 electric commuter
buses, increasing the number of electric vehicles owned by the
Company to over 200. Moreover, the Company has commenced the
upgrade and transformation of its carbon emission system, through
which it has strengthened the monitoring and analysis of carbon
emission-related data. Besides, the Company actively participated
in promotional activities for environmental protection and
charitable purposes. On
5 June, the World Environment Day, we organized a flight event
under the theme of "Joining Hands to Build a Green Environment (
)". The Company won the 10th China Environmental Award, as the
first aviation company awarded with such honour.
Innovation and Digitalization
-- The Company has continuously uplifted its information
technology level and accelerated the application of innovative
management. We have completed the top-level design for digital
transformation with constantly improved self-development capability
and increased effort in the development of the information security
and protection system. The "Lounge Service Management System" has
been launched and put into service at 33 self-operated lounges at
12 airports across the country, while the "Luggage Service
Information System" developed by the Ground Service Department of
the Company has received the "QIC-V Grade Technological Achievement
Award
(QIC-V )", the top award of the National Quality Innovation
Competition ( ). Furthermore, the "Human Resources Information
System Application Project"
and the "Wing of Air China", which is both the corporate mobile
application platform and the standard APP for staff members,
received the First Prize and Second Prize at the 17th Innovative
Achievements in the Management Modernisation of National Transport
Enterprises Award respectively. The Company also put great efforts
in aligning with the digitalization strategy of the Star Alliance
and received the Star Alliance CEO Award in the field of
digitalization and passenger experience.
-- The Company has stepped up its efforts in the development of
innovative management systems and mechanisms. The Company has
commenced its innovation laboratory work in full swing by setting
up 2 company-level innovation laboratories and 7 laboratories for
special fields. The Company published Administration Measures for
Innovation Laboratories/Engineering Technology Centers
( / ) and promoted the development of talent, incentive
and procurement mechanisms to ensure quality and efficient
operation of laboratory work. The Company has pushed forward the
cooperation mechanism for innovation studio projects and integrated
flight safety assurance, improving service quality, facilitating
the enhancement of effectiveness and inspiring designated poverty
alleviation. In this regard, 10 innovation laboratories and 30
innovation studios have been set up, among which, the "Innovation
Laboratory for QAR Data Application" was awarded the title of
"Labor Model Innovation Studio for High-skilled
Talents of Chinese Civil Aviation Companies ( )".
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 IFRSs and are designed to assist the readers in
further understanding the information provided in this announcement
so as to better understanding the financial conditions and results
of operations of the Group as a whole.
Revenue
During the Reporting Period, the Group's revenue was RMB136,181
million, representing a decrease of RMB593 million or 0.43% as
compared with last year. Among which, air traffic revenue was
RMB130,257 million, representing a decrease of RMB1,579 million or
1.20% as compared with last year; other operating revenue was
RMB5,924 million, representing a year-on-year increase of RMB986
million or 19.97%.
Revenue Contributed by Geographical Segments
2019 2018
(in RMB'000) Amount Percentage Amount Percentage Change
Mainland China 89,000,172 65.35% 86,520,847 63.26% 2.87%
Hong Kong SAR, Macau
SAR and
Taiwan, China 5,911,532 4.34% 6,029,445 4.41% (1.96%)
Europe 13,374,965 9.82% 14,865,700 10.87% (10.03%)
North America 8,821,998 6.48% 11,806,117 8.63% (25.28%)
Japan and Korea 8,592,855 6.31% 7,607,451 5.56% 12.95%
Asia Pacific and others 10,479,168 7.70% 9,944,843 7.27% 5.37%
Total 136,180,690 100.00% 136,774,403 100.00% (0.43% )
Air Passenger Revenue
During the Reporting Period, the Group recorded an air passenger
revenue of RMB124,525 million, representing an increase of RMB4,095
million over the previous year. Among the air passenger revenue,
the increase of capacity contributed an increase of RMB6,245
million to the revenue, and the increase of passenger load factor
led to an increase of RMB662 million to the revenue, while the
decrease of passenger yield resulted in a decrease in revenue of
RMB2,812 million. The Group's capacity, passenger load factor and
yield per RPK in 2019 are as follows:
2019 2018 Change
ASK (million) 287,787.61 273,600.29 5.19%
Increased by 0.42
Passenger load factor (%) 81.02 80.60 ppt
Yield per RPK (RMB) 0.5340 0.5461 (2.22%)
Air Passenger Revenue Contributed by Geographical Segments
2019 2018
(in RMB'000) Amount Percentage Amount Percentage Change
Mainland China 81,555,227 65.49% 79,627,346 66.12% 2.42%
Hong Kong SAR, Macau
SAR and
Taiwan, China 5,698,251 4.58% 5,622,473 4.67% 1.35%
Europe 12,007,281 9.64% 11,064,799 9.19% 8.52%
North America 7,917,567 6.36% 8,069,082 6.70% (1.88%)
Japan and Korea 7,817,141 6.28% 6,854,749 5.69% 14.04%
Asia Pacific and others 9,529,116 7.65% 9,191,545 7.63% 3.67%
Total 124,524,583 100.00% 120,429,994 100.00% 3.40%
Air Cargo and Mail Revenue
During the Reporting Period, the Group's air cargo and mail
revenue was RMB5,732 million, representing a decrease of RMB5,673
million as compared with last year. Excluding the impact of
deconsolidation of Air China Cargo, air cargo and mail revenue
decreased by RMB623 million year-on-year, among which the increase
of capacity contributed an increase of RMB143 million to the
revenue, while the decrease of cargo and mail load factor resulted
in a decrease in revenue of RMB373 million, and the decrease of
yield of cargo and mail resulted in a decrease of RMB393 million to
the revenue. The capacity, cargo and mail load factor and yield per
RFTK in 2019 are as follows:
2019 2018 Change
Available freight tonne kilometres
(million) 10,951.75 10,710.56 2.25%
Decreased by 2.66
Cargo and mail load factor (%) 43.63 46.29 ppt
Yield per RFTK (RMB) 1.1995 1.2818 (6.42%)
Note: Data of year 2018 in the above table excluded the freight
transportation data of freighters of Air China Cargo.
Air Cargo and Mail Revenue Contributed by Geographical
Segments
2019 2018
(in RMB'000) Amount Percentage Amount Percentage Change
Mainland China 1,520,998 26.53% 1,954,665 17.14% (22.19%)
Hong Kong SAR,
Macau
SAR and
Taiwan, China 213,281 3.72% 406,972 3.57% (47.59%)
Europe 1,367,684 23.86% 3,800,901 33.33% (64.02%)
North America 904,431 15.78% 3,737,035 32.76% (75.80%)
Japan and Korea 775,714 13.53% 752,702 6.60% 3.06%
Asia Pacific and
others 950,052 16.58% 753,298 6.60% 26.12%
(49.74%
Total 5,732,160 100.00% 11,405,573 100.00% )
Operating Expenses
During the Reporting Period, the Group's operating expenses were
RMB125,598 million, representing a decrease of 0.74% from
RMB126,537 million in the same period last year. The breakdown of
the operating expenses is set out below:
2019 2018
(in RMB'000) Amount Percentage Amount Percentage Change
Jet fuel costs 35,965,239 28.64% 38,481,303 30.41% (6.54%)
Take-off, landing and depot
charges 16,440,081 13.09% 15,354,941 12.13% 7.07%
Depreciation, amortisation
and aircraft and
engine lease expenses 22,245,311 17.71% 21,669,230 17.12% 2.66%
Aircraft maintenance, repair
and overhaul
costs 6,119,539 4.87% 6,612,844 5.23% (7.46%)
Employee compensation costs 25,473,898 20.28% 24,450,250 19.32% 4.19%
Air catering charges 4,026,090 3.21% 3,787,134 2.99% 6.31%
Selling and marketing expenses 4,684,722 3.73% 4,373,023 3.46% 7.13%
General and administrative
expenses 1,844,232 1.47% 1,535,617 1.21% 20.10%
(14.34%
Others 8,798,850 7.00% 10,272,430 8.13% )
(0.74%
Total 125,597,962 100.00% 126,536,772 100.00% )
Jet fuel costs decreased by RMB2,516 million on a year-on-year
basis, mainly due to the combined effect of the increase in the
consumption and the decrease in prices of jet fuel.
Take-off, landing and depot charges increased by RMB1,085
million on a year-on-year basis, mainly due to an increase in the
number of take-offs and landings.
Depreciation, amortisation and aircraft and engine lease
expenses increased by RMB576 million on a year-on-year basis,
mainly due to the increase in the number of self-owned and leased
aircraft.
Aircraft maintenance, repair and overhaul costs decreased by
RMB493 million on a year-on-year basis, mainly due to the
implementation of the IFRS 16 Leases during the Reporting
Period.
Employee compensation costs increased by RMB1,024 million on a
year-on-year basis, mainly due to the impact of the expansion of
operation scale and the increase in the number of employees.
Air catering charges increased by RMB239 million on a
year-on-year basis, mainly due to the increase in the number of
passengers.
Sales and marketing expenses increased by RMB312 million on a
year-on-year basis, mainly due to the impact of the deconsolidation
of Air China Cargo and the increase in booking fees resulting from
the increase in the number of passengers during the Reporting
Period.
Other operating expenses mainly included contributions to the
civil aviation development fund and ordinary expenses arising from
the core air traffic business not specifically mentioned above,
which decreased by 14.34% on a year-on-year basis. The decrease was
mainly due to effect of the policy regarding 50% reduction of the
collection of civil aviation development fund implemented since 1
July 2019.
Finance Income, Finance Costs and Net Exchange Loss
During the Reporting Period, the Group recorded a finance income
of RMB163 million, representing a year-on-year decrease of RMB10
million or 5.44%; and incurred finance costs (excluding the
capitalised portion) of RMB4,949 million, representing a
year-on-year increase of RMB2,035 million, which is mainly
attributable to the impact of the implementation of the IFRS 16
Leases. During the Reporting Period, the Group recorded a net
exchange loss of RMB1,211 million, representing a year-on-year
decrease of RMB1,166 million.
Share of Results of Associates and Joint Ventures
During the Reporting Period, the Group's share of results of its
associates and joint ventures was a profit of RMB475 million,
representing a year-on-year decrease of RMB274 million. Among
which, during the Reporting Period, the Group recognized a gain on
investment of Cathay Pacific of RMB67 million, representing a
year-on-year decrease of RMB135 million; and recognized a loss on
investment of Tibet Airlines of RMB119 million, while the gain on
investment was RMB79 million for the same period last year.
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 a result of the implementation of the IFRS 16 Leases, the
Group recorded a total assets of RMB280,374 million as at 1 January
2019, representing an increase of RMB36,717 million from that as at
31 December 2018. As at the end of the Reporting Period, the total
assets of the Group was RMB294,206 million, representing an
increase of 4.93% from that as at 1 January 2019, among which
current assets accounted for RMB24,817 million or 8.44% of the
total assets, while non-current assets accounted for RMB269,389
million or 91.56% of the total assets.
Among the current assets, cash and cash equivalents were
RMB8,935 million, accounting for 36.00% of the current assets and
representing an increase of 32.12% from that as at 1 January
2019.
Among the non-current assets, the net book value of property,
plant and equipment and right-of-use assets as at the end of the
Reporting Period amounted to RMB221,535 million, accounting for
82.24% of the non-current assets and representing an increase of
4.87% from that as at 1 January 2019.
Asset Mortgage
As at the end of the Reporting Period, the Group, pursuant to
certain bank loans and finance leasing agreements, had mortgaged
certain aircraft and premises with an aggregated net book value of
approximately RMB81,724 million (RMB85,514 million as at 31
December 2018) and land use rights with net book value of
approximately RMB27 million (RMB28 million as at 31 December 2018).
In addition, as at the end of the Reporting Period, the Group had
restricted bank deposits of approximately RMB728 million
(approximately RMB1,044 million as at 31 December 2018), which were
mainly reserves deposited in the People's Bank of China.
Capital Expenditure
During the Reporting Period, the Group's capital expenditure
amounted to a total of RMB25,855 million, of which the total
investment in aircraft was RMB19,875 million, mainly including
procurement of aircraft and engines, aircraft modifications, flight
simulators, etc. Other capital expenditure investment amounted to
RMB5,980 million, mainly including infrastructure construction, IT
system construction, ground equipment procurement and cash
component of the long-term investments.
Equity Investment
As at the end of the Reporting Period, the Group's equity
investment in its associates amounted to RMB14,648 million,
representing an increase of 4.05% from the beginning of 2019. Among
this, the balance of the equity investment of the Group in Cathay
Pacific, Shandong Aviation Group Corporation and Shandong Airlines
amounted to RMB12,337 million, RMB1,155 million and RMB619 million,
respectively, with such companies recording profits of RMB1,498
million, RMB375 million and RMB361 million, respectively during the
Reporting Period.
As at the end of the Reporting Period, the Group's equity
investment in its joint ventures was RMB1,544 million, representing
an increase of 8.16% from that as at 1 January 2019, mainly due to
the recognized gain on investment from the joint ventures during
the Reporting Period.
Debt Structure Analysis
As a result of the implementation of the IFRS 16 Leases, the
Group recorded total liabilities of RMB185,966 million as at 1
January 2019, representing an increase of RMB42,807 million from
those as at 31 December 2018. As at the end of the Reporting
Period, the Group's total liabilities were RMB192,877 million,
representing an increase of 3.72% from that as at 1 January 2019.
Among them, current liabilities amounted to RMB77,973 million,
accounting for 40.43% of the total liabilities; and non-current
liabilities amounted to RMB114,904 million, accounting for 59.57%
of the total liabilities.
Among the current liabilities, interest-bearing debts (including
bank loans and other borrowings, corporate bonds and lease
liabilities) amounted to RMB36,591 million, representing a decrease
of 7.17% from that as at 1 January 2019, which is mainly
attributable to the decrease in working capital loans of the
Group.
Among the non-current liabilities, interest-bearing debts
(including bank loans and other borrowings, corporate bonds and
lease liabilities) amounted to RMB103,185 million, representing an
increase of 6.48% from that as at 1 January 2019.
Details of interest-bearing debts of the Group categorized by
currency are set out below:
31 December 2019 1 January 2019
(in RMB'000) Amount Percentage Amount Percentage Change
US dollars 60,356,994 43.18% 66,022,894 48.43% (8.58%)
RMB 77,029,395 55.11% 68,549,101 50.28% 12.37%
Others 2,390,421 1.71% 1,757,348 1.29% 36.02%
Total 139,776,810 100.00% 136,329,343 100.00% 2.53%
============ ========== ============ ========== =======
Capital Commitments
The Group's capital commitments, which mainly consisted of the
payables in the next few years for purchasing certain aircraft and
related equipment, decreased by 6.74% from RMB39,269 million as at
31 December 2018 to RMB36,621 million as at the end of the
Reporting Period. The Group's investment commitments, which was
mainly used in the investment agreements entered into, amounted to
RMB24 million as at the end of the Reporting Period, representing a
decrease of RMB35 million from RMB59 million as at 31 December
2018.
Capital Expenditure Plan and Relevant Financing Plan for
Aircraft and Related Equipment for the Coming Three Years
The Group has set the total budgeted capital expenditure for
aircraft and related equipment at RMB88,898 million, of which
RMB30,116 million, RMB29,473 million and RMB29,309 million have
been allocated to the years of 2020, 2021 and 2022, respectively.
The Group intends to satisfy the capital expenditure requirement by
means such as internal funds or debt financing.
Gearing Ratio
As a result of the implementation of the IFRS 16 Leases by the
Group since 1 January 2019, the gearing ratio (total liabilities
divided by total assets) increased by 7.58 percentage points to
66.33% at the beginning of the year from that as at 31 December
2018. As at the end of the Reporting Period, the Group's gearing
ratio (total liabilities divided by total assets) was 65.56%,
representing a decrease of
0.77 percentage points from that as at 1 January 2019. High
gearing ratio is common among aviation enterprises, and the current
gearing ratio of the Group is at a relatively reasonable level.
Taking into account the Group's profitability and the market
environment where it operates, its long-term insolvency risk is
within controllable range.
Working Capital and its Sources
As at the end of the Reporting Period, the Group's net current
liabilities (current liabilities minus current assets) were
RMB53,156 million, representing a decrease of RMB1,317 million from
that as at 1 January 2019. Based on the structure of current assets
and current liabilities, the current ratio (current assets divided
by current liabilities) was 0.32, representing an increase from
0.30 as at 1 January 2019.
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 RMB33,599 million, representing an increase of
17.14% from RMB28,683 million for the corresponding period last
year, which is mainly due to the reduction of cost and the
classification of paid operating lease expenses in financing
activities after the implementation of the IFRS 16 Leases during
the Reporting Period. Net cash outflow from investment activities
was RMB11,967 million, representing an increase of 33.71% from
RMB8,950 million for the corresponding period of 2018, mainly due
to the year-on-year increase in the cash payment of advances and
remaining balances for aircraft during the Reporting Period and the
change in the scope of consolidation. Net cash outflow from
financing activities amounted to RMB19,510 million, representing an
increase of 4.63% from RMB18,647 million for the corresponding
period of 2018, mainly due to the improved efficiency of funds use,
the optimised debt structure and the impact of the implementation
of the IFRS 16 Leases by the Group. The Company has obtained bank
facilities of a total of RMB137,148 million granted by several
banks in the PRC, of which approximately RMB27,711 million has been
utilised, sufficient to meet our demand on working capital and
future capital commitments.
OPERATIONAL PLAN
The Company has established its operational focuses of 2020,
including (1) strengthening operation safety to consolidate the
foundation of quality development; (2) enhancing competitiveness
and innovation to build organic impetus for quality development;
(3) scientifically planning top-level design to draw a picture of
quality development; and (4) continuously improving Party building
to serve as a strong guarantee for quality development.
OUTLOOK FOR FUTURE
The implementation of national strategies will change the
spatial pattern of the existing aviation market
The seven national strategies, namely the "Belt and Road"
initiative, the Ecological Protection and High- quality Development
strategy of Yellow River Basin, the Yangtze River Economic Belt
development strategy, the Yangtze River Delta Integration plan, the
"Beijing-Tianjin-Hebei" Integration plan, the Plan for Xiong'an New
Area and Guangdong-Hong Kong-Macau Greater Bay Area will strengthen
regional links and coordination, and as a result, change the
existing landscape of the aviation market. The "Belt and Road"
initiative will promote China's economic and trade exchanges and
cooperation with Southeast Asia and Europe, not only strengthening
the international hub status of Shanghai and Guangzhou, but also
providing development opportunities for airports in domestic
second-tier cities. The Ecological Protection and High-quality
Development strategy of Yellow River Basin will promote the
economic development and optimization of industrial structure of
the nine provinces and regions along the Yellow River, which will
present development opportunities for the aviation industry. The
Yangtze River Economic Belt and Yangtze River Delta Integration
plan will speed up the formation of the aviation network with
Shanghai international aviation hub and regional aviation hub as
the core. The strategy of coordinated development of
Beijing-Tianjin-Hebei and the Plan for Xiong'an New Area will
significantly enhance the international competitiveness of Beijing
aviation hub, and the hub function will be further strengthened,
which will promote the regional development of Tianjin and Hebei.
The Guangdong-Hong Kong-Macau Greater Bay Area strategy will deepen
the cooperation between the Mainland and Hong Kong and Macao, and
promote the construction of international hubs of Hong Kong,
Guangzhou and Shenzhen. The construction of airport groups serving
the three major urban agglomerations received increasing attention
from the State, and the pattern of "two airports in one city" in
Beijing, Shanghai, Chengdu and other major cities has taken or is
taking shape.
With the rapid growth of air passenger transport market in
China, market structure will undergo huge changes
In 2020, it is expected that there will be no change in the
fundamentals of the Chinese economy, and the basic trend of steady
growth and positive long-term outlook of the economy will remain
unchanged. China's aviation market demand will remain strong in the
long run, and the market potential is huge. The trend of changes in
market structure will continue. The Civil Aviation Administration
of China published Certain Policies and Measures on Controlling the
Total Traffic and Adjusting Flight Structure to Improve the
Punctuality Rate of Flights, aiming at strictly controlling the
airport capacity and optimizing the allocation of time resources.
In the central and western regions, most airports have not been
affected by this policy and can still maintain relatively high
growth. In the long run, business travel and holiday tours continue
to be drivers of the development of the aviation industry, and air
travel will become increasingly individualized and popularized.
Affected by the relaxation on policies of overseas study,
immigration, visa and other factors, the growth in outbound
passenger traffic will outpace that in domestic passenger
traffic.
With the continuous evolution of global aviation competition and
cooperation, China's aviation market competition is becoming
increasingly fierce
From the perspective of global market, new changes have occurred
to the mode of competition. European and American airlines have
basically completed their consolidation process, and their
competitiveness has significantly improved. The bilateral and
multilateral alliances of large network carriers are increasing,
and the minority equity investment strategy established a global
partnership that goes beyond the existing aviation alliance
framework and code sharing model.
From the perspective of China's international market, the rapid
expansion of transport capacity in recent years has gradually
caused an oversupply. The Company, China Eastern Airlines
Corporation Limited and China Southern Airlines Company Limited
slowed down in introducing wide-body aircraft. However, domestic
second-tier cities continued to open international medium- and
long-haul routes, which will intensify the competition in terms of
international long-haul routes. In the future, the international
air traffic rights will be expanded but continue to be scarce.
Europe and the United States transit markets face serious
diversion. North American routes are confronted the competition
from Seoul, Tokyo, Hong Kong and other hubs, and European routes
face the diversion of Middle East carriers.
From the perspective of China's domestic market, private
airlines generally show a rising trend and present increasingly
fierce competition. When the market access in the early stage was
relaxed, regional airlines shoot up in succession, and the wave of
low-cost airlines is gradually rising, which will further intensify
the fierce competition in the domestic market and reduce the yield
level. Meanwhile, the impact from high-speed rail transportation
for medium- and short-haul routes is manifested not only in the
primary diversion by newly opened lines, secondary diversion will
emerge through network operation, overall speed-up, frequency
increase, and extended operation time of existing routes. In 2020,
as affected by the novel coronavirus pneumonia pandemic, there will
be a sharp short-term decline of the number of domestic and
international passengers. Under the influence of such
uncontrollable factor, it is estimated that the development of the
aviation market will be affected within a certain period.
SHARE CAPITAL STRUCTURE
As at the end of the Reporting Period, the Company had a total
share capital of RMB14,524,815,185, divided into 14,524,815,185
shares of RMB1.00 each. The following table sets out the share
capital structure of the Company as at the end of the Reporting
Period:
Category of shares
Number of
shares
Percentage of the total share
capital
A Shares 9,962,131,821 68.59%
H Shares 4,562,683,364 31.41%
Total 14,524,815,185 100.00%
PURCHASES, SALES OR REDEMPTION OF LISTED SECURITIES
During the Reporting Period, neither the Company nor any of its
subsidiaries purchased, sold or redeemed any of the listed
securities (the term "securities" has the meaning ascribed to it
under Paragraph 1 of Appendix 16 to the Listing Rules) of the
Company.
CORPORATE GOVERNANCE
Compliance with the Corporate Governance Code
The Company has complied with the code provisions of the
Corporate Governance Code as set out in Appendix 14 to the Listing
Rules throughout the Reporting Period.
Compliance with the Model Code
The Company has adopted and formulated a code of conduct on
terms no less stringent than the required standards of the Model
Code. After making specific enquiries, the Company confirmed that
each Director and each Supervisor have complied with the required
standards of the Model Code and the Company's code of conduct
throughout the Reporting Period.
SUBSEQUENT EVENTS
On 17 January 2020, the Company received the Approval Document
Zheng Jian Xu Ke [2020] No. 60 from the China Securities Regulatory
Commission ( ) (the "CSRC") (the "CSRC's Approval"), which approved
the Company's public issue of corporate bonds with an aggregate
nominal value of no more than RMB16,000,000,000 (the "Corporate
Bonds") to qualified investors. The Corporate Bonds will be issued
in tranches, with the first tranche to be issued within 12 months
from the date of approval of the issue by the CSRC (8 January 2020)
and the other tranches to be issued within 24 months from the date
of approval of the issue by the CSRC. The CSRC's Approval is valid
for 24 months commencing from the date of approval of the issue by
the CSRC. For details, please refer to the announcement of the
Company dated 17 January 2020.
On 21 January 2020, the Board resolved to propose to appoint Mr.
Feng Gang as a non-executive director of the Company. The proposed
appointment is subject to the approval by shareholders of the
Company at the general meeting of the Company. On the same date,
Mr. Liu Deheng resigned as an independent non-executive director of
the Company, the chairman and a member of the Audit and Risk
Control Committee of the Board and a member of the Strategy and
Investment Committee of the Board due to his age. For details,
please refer to the announcements of the Company dated 21 January
2020 and 23 January 2020.
In early 2020, the outbreak of the novel coronavirus pneumonia
pandemic impacted the aviation industry adversely and loss may be
incurred inevitably in the short term. Air passenger travel within
Mainland China has decreased during and after Spring Festival.
Global travel restriction has also reduced the demand for
international routes. The Company spared no effort in prevention
and control of the pandemic in a bid to maximize the protection of
health and safety of its passengers and employees. The Company
earnestly performed its social responsibilities at the same time to
contribute to this battle against the pandemic. The Company also
strived to minimize the impact of the pandemic by optimizing the
capacity resources distribution, enhancing yield management,
strengthening cost control and enhancing risk management.
DIVIDS
In accordance with the relevant requirements of the China
Securities Regulatory Commission 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's expressly stipulated
in the Articles of Association that in the case that the
distributable profits (representing the profit after tax after
making up for the losses and making contributions to the common
reserve fund in accordance with the provisions of the Articles of
Association as well as deductions otherwise approved by the
relevant national authorities) 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. The applicable
distributable profits represent the distributable profits in the
financial statement of the parent company prepared in accordance
with applicable domestic and overseas accounting standards,
whichever is lower. The Company's profit distribution plan should
be reviewed by independent non-executive Directors and the Board
shall bring about a resolution which shall be then submitted to the
general meeting for consideration. The Company should actively
communicate with shareholders, especially minority shareholders
through various means (including online voting and inviting
minority shareholders to attend the meetings) to fully understand
the opinions and needs of minority shareholders and timely answer
the questions of their concerns. Please refer to Article 195,
Article 196 and Article 197 of the Articles of Association for
details of the principles and policies of dividend distribution of
the Company.
In accordance with above-mentioned policies and based on the
actual circumstances of the Company, the Board recommends the
appropriation of 10% and 10% of profit after tax realized in the
financial statement of the parent company prepared in accordance
with the Chinese accounting standards to statutory surplus reserve
and discretionary surplus reserve, respectively, and the payment of
cash dividend amounting to approximately RMB645 million which is
15% of the distributable profits for the current period, i.e.
RMB0.4442 (including tax) for every ten shares based on the current
total number of 14,524,815,185 issued shares of the Company for the
year 2019.
The proposed payment of the final dividends is subject to
shareholders' approval at the annual general meeting to be held on
26 May 2020 (the "AGM"). Dividends payable to the Company's
shareholders shall be denominated and declared in RMB. Dividends
payable to the holders of A Shares and the holders of H Shares who
are mainland investors investing in H Shares through Shanghai-Hong
Kong Stock Connect and Shenzhen-Hong Kong Stock Connect shall be
paid in RMB while dividends payable to the other holders of H
Shares shall be paid in Hong Kong dollars. The amount of Hong Kong
dollars payable shall be calculated on the basis of the average of
the middle price of the exchange rate of RMB against Hong Kong
dollars as announced by the People's Bank of China for the calendar
week prior to the declaration of the final dividends (if approved)
at the AGM.
The Company proposed to pay the aforesaid final dividends on 16
July 2020. For H Shares of the Company, the dividends shall be paid
to H-Share shareholders whose names appear on the register of
members of the Company on 6 June 2020. For A Shares, the dividends
will be paid to A-Share shareholders whose names appear on the
register of members of the Company according to the record of the
Shanghai Branch of China Securities Depository and Clearing
Corporation Limited after the closing of trading hours of the
Shanghai Stock Exchange on
15 July 2020, and the ex-dividend date of A Shares will be 16 July 2020.
CLOSURE OF REGISTER OF MEMBERS
The register of members of H Shares will be closed from Sunday,
26 April 2020 to Tuesday, 26 May 2020, both days inclusive, during
which period no transfer of H Shares will be effected. In order to
be entitled to attend and vote 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 for registration not later than 4:30 p.m.
on Friday, 24 April 2020. The holders of H Shares whose names
appear on the register of shareholders of the Company on Sunday, 26
April 2020 will be entitled to attend the AGM.
The register of members of H Shares will be closed from Monday,
1 June 2020 to Saturday, 6 June 2020, both days inclusive, during
which period no transfer of H Shares will be effected. In order to
qualify for the final dividend, 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 for registration not later than 4:30 p.m. on
Friday, 29 May 2020. The holders of H Shares whose names appear on
the register of shareholders of the Company on Saturday, 6 June
2020 will be qualified for the final dividend.
ANNUAL REPORT
The annual report for the year ended 31 December 2019 containing
all information required by Appendix 16 to the Listing Rules will
be dispatched to Shareholders and will be published on the website
of the Hong Kong Stock Exchange (www.hkexnews.hk) as well as the
website of the Company (www. airchina.com.cn) in due course.
FORWARD-LOOKING STATEMENT
The Company would like to remind the readers of this
announcement that the airline operations are substantially
influenced by global political and economic developments.
Accidental and unexpected incidents may have material impacts on
our operations or the industry as a whole. This 2019 annual results
announcement of the Company contains, inter alia, certain
forward-looking statements, such as forward-looking statements on
the global and Chinese economies and aviation markets. Such
forward- looking statements are subject to some uncertainties and
risks.
AUDIT AND RISK CONTROL COMMITTEE
The 2019 annual results of the Company have been reviewed by the
audit and risk control committee of the Board.
GLOSSARY OF TECHNICAL TERMS
Capacity Measurements
"available tonne kilometres" or "ATK(s)"
"available seat kilometres" or "ASK(s)"
"available freight tonne kilometres" or "AFTK(s)"
Traffic Measurements
the number of tonnes of capacity available for transportation
multiplied by the kilometres flown
the number of seats available for sale multiplied by the
kilometres flown
the number of tonnes of capacity available for the carriage of
cargo and mail multiplied by the kilometres flown
"passenger traffic" measured in RPK, unless otherwise specified
"revenue
"revenue passenger kilometres" or "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" or "RFTK(s)"
"revenue tonne kilometres" or "RTK(s)"
Load Factors
the revenue cargo and mail load in tonnes multiplied by the
kilometres flown
the revenue load (passenger and cargo) in tonnes multiplied by
the kilometres flown
"passenger load factor" RPK expressed as a percentage of ASK
"cargo and mail load factor"
RFTK expressed as a percentage of AFTK "overall load factor" RTK expressed as a percentage of ATK
"Block hours" each whole and/or partial hour elapsing from the
moment the chocks are removed from the wheels of the aircraft for
flights until the chocks are next again returned to the wheels of
the aircraft
Yield Measurements
"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 announcement, unless the context otherwise requires, the
following terms shall have the following meanings:
"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
"Articles of Association" the Articles of Association of the Company
"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 listed on Shanghai Stock
Exchange
"Beijing Airlines" Beijing Airlines Company Limited, a
non-wholly owned subsidiary
of the Company
"Board" the board of directors of the Company
"Cathay Pacific" Cathay Pacific Airways Limited, an associate of
the Company "CNAHC" China National Aviation Holding Corporation
Limited "Company" or "Air China" 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
"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 Stock Exchange" The Stock Exchange of Hong Kong Limited
"H Share(s)" overseas-listed foreign invested 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)
"International Financial Reporting Standards" or "IFRSs"
International Financial Reporting Standards
"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
"Model Code" the Model Code for Securities Transaction by
Directors of Listed Issuers as set out in Appendix 10 to the
Listing Rules
"Reporting Period" from 1 January 2019 to 31 December 2019
"RMB" Renminbi, the lawful currency of the PRC
"Shandong Airlines" Shandong Airlines Co., Ltd., a non-wholly
owned subsidiary of
Shandong Aviation Group Corporation
"Shandong Aviation Group Corporation" Shandong Aviation Group
Company Limited, an associate of the Company
"Shareholders" the shareholders of the Company
"Shenzhen Airlines" Shenzhen Airlines Company Limited, a
non-wholly owned subsidiary of the Company
"US dollars" United States dollars, the lawful currency of the
United States
By Order of the Board
Air China Limited
Zhou Feng Tam Shuit Mui
Joint Company Secretaries
Beijing, the PRC, 31 March 2020
As at the date of this announcement, the directors of the
Company are Mr. Cai Jianjiang, Mr. Song Zhiyong, Mr. Patrick Healy,
Mr. Xue Yasong, Mr. Wang Xiaokang*, Mr. Stanley Hui Hon-chung* and
Mr. Li Dajin*.
* Independent non-executive director of the Company
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UASNRRSUSRRR
(END) Dow Jones Newswires
April 01, 2020 03:41 ET (07:41 GMT)
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