Financial Performance - The company reported a total revenue of RMB 52.90 billion for the year ended December 31, 2022, a decrease from RMB 74.53 billion in the previous year, representing a decline of approximately 29.1%[2] - The net loss attributable to shareholders for the year was RMB 38.62 billion, compared to a net loss of RMB 16.64 billion in the previous year, indicating an increase in losses of approximately 131.5%[3] - The operating loss for the year was RMB 35.44 billion, significantly higher than the operating loss of RMB 16.86 billion in the prior year, reflecting a deterioration in operational performance[2] - The company recorded a pre-tax loss of RMB 45.88 billion for the year, compared to a pre-tax loss of RMB 21.83 billion in the previous year, indicating a worsening financial position[2] - The basic and diluted loss per share for the year was RMB 281.16, compared to RMB 121.12 in the previous year, reflecting a significant increase in loss per share[2] - The company reported a net asset value of RMB 21,528,228 thousand, a substantial decline from RMB 65,831,111 thousand in 2021[6] - The company reported a pre-tax loss of RMB 45.88 billion under International Financial Reporting Standards for the year ended December 31, 2022, compared to a loss of RMB 21.83 billion in 2021, representing an increase in losses of approximately 109.8%[14] - The company reported a negative distributable profit for the year 2022, and thus will not proceed with profit distribution[81] Assets and Liabilities - Total assets as of December 31, 2022, amounted to RMB 294.98 billion, a decrease from RMB 298.38 billion in the previous year, representing a decline of approximately 1.3%[4] - The company’s non-current assets totaled RMB 272.73 billion as of December 31, 2022, compared to RMB 267.98 billion in the previous year, showing an increase of approximately 1.8%[4] - The net current liabilities as of December 31, 2022, were approximately RMB 70.24 billion, compared to RMB 61.22 billion in 2021, indicating a significant increase in liabilities[6] - The total liabilities increased to RMB 273,451,149 thousand in 2022 from RMB 232,550,079 thousand in 2021[31] - The total equity attributable to shareholders decreased to RMB 23,609,134 thousand in 2022 from RMB 61,402,519 thousand in 2021[31] Cash Flow and Financing - The company’s cash and cash equivalents stood at RMB 10.61 billion as of December 31, 2022, down from RMB 15.93 billion in the previous year, representing a decrease of approximately 33.0%[4] - The company generated cash inflows from operating activities, which are crucial for meeting its debt repayment and capital expenditure needs[6] - The company had unused bank credit facilities amounting to RMB 110.94 billion as of December 31, 2022, which supports its ability to meet debt obligations[6] - The net cash outflow from operating activities was RMB 23.34 billion, a significant decline from a net inflow of RMB 7.13 billion in the same period last year[70] Revenue Breakdown - Revenue from customer contracts in the aviation operations segment was RMB 50,002,426 thousand, down 29.5% from RMB 70,997,080 thousand in the previous year[10] - Passenger transport revenue recognized upon service provision amounted to RMB 50.29 billion for the year ended December 31, 2022, a decrease from RMB 71.28 billion in 2021, reflecting a decline of approximately 29.4%[14] - The company reported a 30.32% decrease in air transport revenue to RMB 48.381 billion, down RMB 21.049 billion year-on-year[49] - Passenger revenue in mainland China decreased by 39.35% to RMB 32.74 billion, accounting for 85.48% of total passenger revenue[53] - Total cargo and mail transportation revenue decreased by RMB 1.03 billion to RMB 10.08 billion, a decline of 9.26% year-on-year[56] Operational Metrics - Available seat kilometers (ASK) decreased by 36.89% to 96,212.39 million from 152,444.53 million year-on-year[33] - Passenger traffic (measured in revenue passenger kilometers) fell by 42.31% to 60,354.57 million from 104,625.58 million year-on-year[34] - The number of flights operated decreased by 36.41% to 363,886 from 572,264 year-on-year[34] - The average aircraft age in the fleet is 8.59 years, with a total of 762 aircraft as of December 31, 2022[36] - The operating cost per available seat kilometer increased by 52.24% to RMB 0.9533 from RMB 0.6262 year-on-year[34] Strategic Initiatives - The company plans to continue focusing on expanding its aviation operations and enhancing service offerings to improve revenue streams[9] - The company is committed to maintaining sufficient cash flow and external financing to support its ongoing operations and strategic initiatives[6] - The company is focused on maximizing revenue, marginal contribution, and profit, aiming for operational efficiency and stability in its business fundamentals[42] - The company has implemented a digital transformation strategy to enhance data asset management and improve data security management[39] - The company is committed to green and low-carbon development, with a "dual carbon" action plan in place to improve environmental governance capabilities[39] Governance and Compliance - The board of directors has undergone a restructuring to improve governance quality and decision-making processes[40] - The company has adopted a code of conduct that is not less stringent than the Standard Code of Conduct[80] - The company’s 2022 annual performance has been reviewed by the Audit and Risk Management Committee of the Board[87] Future Outlook - The company provided a future outlook with a revenue guidance of RMB 1.2 billion for the next fiscal year, representing a growth of 20%[92] - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by 2025[92] - The focus for 2023 includes enhancing safety standards, ensuring production recovery, and promoting innovation and reform[71] - The Chinese civil aviation market is expected to continue its recovery, driven by business travel and tourism demand[74]

Financial Performance - Operating revenue for the third quarter was RMB 18,135,912 thousand, a decrease of 8.37% compared to the same period last year[3] - Net profit attributable to shareholders was a loss of RMB 8,668,358 thousand, with a year-to-date loss of RMB 28,103,264 thousand, reflecting a significant decline[3] - Total operating revenue for the first three quarters of 2022 was RMB 42,088,565, a decrease of 26.7% compared to RMB 57,457,425 in the same period of 2021[18] - Net profit for the first three quarters of 2022 was a loss of RMB 32,412,286, compared to a loss of RMB 11,796,418 in the same period of 2021, indicating a significant decline in profitability[19] - The company reported a basic earnings per share of -2.05 in 2022, compared to -0.75 in 2021, reflecting worsening financial performance[20] Cash Flow and Liquidity - The net cash flow from operating activities for the year-to-date period was RMB -4,895,560 thousand, representing a decrease of 148.23% compared to the previous year[3] - Operating cash flow for the first three quarters of 2022 was -4,895,560 thousand RMB, a significant decrease from 10,151,293 thousand RMB in the same period of 2021[22] - The total cash inflow from operating activities was 52,309,212 thousand RMB, down from 67,996,587 thousand RMB in the same period of 2021[22] - Cash and cash equivalents were reported at RMB 14,577,834 thousand, down from RMB 16,709,664 thousand, indicating a decrease of about 13%[13] - Cash and cash equivalents at the end of Q3 2022 totaled 13,775,693 thousand RMB, down from 8,768,175 thousand RMB in Q3 2021[24] Assets and Liabilities - Total assets at the end of the reporting period were RMB 296,940,407 thousand, a slight decrease of 0.49% from the previous year[4] - Current assets decreased to RMB 26,767,559 thousand from RMB 30,396,728 thousand year-over-year, reflecting a decline of approximately 12%[13] - Total liabilities increased to RMB 261,604,740 as of September 30, 2022, up from RMB 232,550,079 at the end of 2021, marking a rise of 12.5%[18] - Non-current liabilities totaled RMB 171,036,657 as of September 30, 2022, compared to RMB 141,134,355 at the end of 2021, an increase of 21.2%[18] - The company's total equity decreased to RMB 35,335,667 as of September 30, 2022, down from RMB 65,865,073 at the end of 2021, a decline of 46.5%[18] Shareholder Structure - The total number of ordinary shareholders at the end of the reporting period was 103,621[8] - The largest shareholder, China National Aviation Holding Company, holds 40.98% of the shares, with a total of 5,952,236,697 shares[8] - The company holds 51.70% of its shares directly and indirectly through its major shareholders, indicating a strong control over its equity structure[9] - The company is actively monitoring its shareholder structure, with significant holdings from major stakeholders such as China National Aviation Holding Company and Cathay Pacific Airways[9] Operational Challenges - The company is facing challenges due to the impact of the pandemic and rising fuel prices, affecting its financial performance[7] - The cash flow from operating activities is a critical area for future performance, with a focus on improving liquidity and managing short-term debts[12] - The company is committed to enhancing its financial health by managing its liabilities and optimizing its asset portfolio[12] Investment and Expenses - Research and development expenses rose to RMB 126,195 in the first three quarters of 2022, up from RMB 92,814 in the same period of 2021, an increase of 36%[18] - Total operating costs increased to RMB 76,941,159 in 2022 from RMB 73,584,421 in 2021, representing an increase of 4.5%[18] - The company reported a significant increase in long-term borrowings to RMB 55,862,186 as of September 30, 2022, compared to RMB 43,620,468 at the end of 2021, an increase of 28.1%[18] Other Financial Metrics - Non-operating income from government subsidies amounted to RMB 157,727 thousand for the reporting period[5] - The weighted average return on net assets was -22.21%, a decrease of 17.14 percentage points compared to the previous year[3] - Other comprehensive income after tax for the first three quarters of 2022 was RMB 1,883,524, compared to RMB 702,188 in 2021, indicating an improvement[19] - The impact of exchange rate changes on cash and cash equivalents was a positive 39,950 thousand RMB in 2022, contrasting with a negative impact of -26,438 thousand RMB in 2021[24]

Financial Performance - For the six months ending June 30, 2022, Air China reported operating revenue of RMB 23,952,653, a decrease of 36.5% compared to RMB 37,663,803 for the same period in 2021[8]. - The company experienced a significant operating loss of RMB (16,972,714) for the first half of 2022, compared to an operating loss of RMB (6,042,612) in the prior year, indicating a deterioration in financial performance[8]. - The net loss attributable to shareholders for the six months was RMB (19,436,846), which is a substantial increase from RMB (6,781,429) in the same period of 2021, reflecting ongoing challenges[8]. - EBITDA for the first half of 2022 was reported at RMB (6,514,396), a decline from a positive EBITDA of RMB 4,289,009 in the previous year[8]. - The return on equity for shareholders was reported at (45.32)%, a significant drop from (9.10)% in the previous year, highlighting the impact of losses on shareholder value[8]. - The company’s equity attributable to shareholders decreased to RMB 42,889,048 from RMB 61,368,557, reflecting the adverse effects of the financial losses[10]. - The company reported a significant increase in other comprehensive income for the period, totaling RMB 984,012 thousand compared to RMB 648,496 thousand in the previous year[96]. - The company incurred a loss of RMB 19.44 billion for the six months ended June 30, 2022, compared to a loss of RMB 6.78 billion in the same period in 2021, representing an increase in losses of approximately 187.5%[100]. Assets and Liabilities - Total assets as of June 30, 2022, stood at RMB 299,295,794, slightly up from RMB 298,381,190 at the end of 2021, indicating stability in asset management[10]. - Total liabilities increased to RMB 254,694,816 from RMB 232,550,079, suggesting a rise in financial obligations[10]. - The group’s total liabilities amounted to RMB 166.66 billion, an increase from RMB 140.93 billion as of December 31, 2021, representing a growth of approximately 18.3%[99]. - The company’s total equity attributable to shareholders decreased to RMB 42.89 billion as of June 30, 2022, down from RMB 61.37 billion at the end of 2021, reflecting a decline of approximately 30.0%[99]. - The group reported a net current liability of approximately RMB 55.58 billion as of June 30, 2022, with unused bank credit facilities amounting to RMB 126.29 billion, ensuring sufficient liquidity for debt repayment and capital expenditures[105]. Operational Metrics - Available seat kilometers (ASK) decreased by 46.32% to 44,282.01 million from 82,499.92 million year-on-year[12]. - Passenger load factor dropped by 10.19 percentage points to 60.42% compared to 70.61% in the previous year[13]. - Revenue passenger kilometers (RPK) increased by 54.07% to 26,756.90 million from 58,252.60 million year-on-year[12]. - Total passenger numbers decreased by 55.00% to 17,373.04 thousand from 38,610.67 thousand year-on-year[12]. - The fleet size reached 748 aircraft with an average age of 8.39 years, after introducing 16 new aircraft and retiring 14 during the reporting period[14]. - The operating cost per available seat kilometer increased by 71.64% to RMB 0.9569 compared to RMB 0.5575 in the previous year[13]. - Cargo and mail carried decreased by 18.98% to 486,513.58 tons from 600,504.45 tons year-on-year[12]. Strategic Initiatives - Air China continues to focus on its strategic direction of hub network development and cost leadership, aiming to enhance service quality despite current financial challenges[3]. - The company is committed to innovation and expansion, with ongoing efforts in fleet development and market penetration to improve future performance[3]. - The company plans to introduce 36 new aircraft and retire 46 aircraft over the next two years[16]. - The company is actively responding to market volatility risks by deepening supply-side structural reforms and adapting to the new development stage[55]. - The company is planning to acquire control of Shandong Airlines Group and has made progress in negotiations for equity transfer and capital increase[90]. - The company is proceeding with a non-public offering of A-shares, targeting up to 35 specific investors, including AVIC Group, with a minimum subscription amount of 5.5 billion RMB[93]. Market and Competitive Landscape - The competitive landscape is evolving with opportunities for mergers and consolidations in the industry, which may enhance industry concentration[58]. - The expansion of China's high-speed rail network is expected to change the economic geography and create a competitive relationship between high-speed rail and civil aviation[59]. - Future outlook indicates a focus on expanding market presence and enhancing operational efficiency to recover from the financial impacts of the pandemic[102]. - Market expansion strategies are being implemented to capture a larger share of the aviation market[190]. Shareholder Information - China Aviation Group Company holds 5,952,236,697 A shares, representing 40.98% of the total issued shares[66]. - Cathay Pacific Airways holds 2,633,725,455 H shares, accounting for 18.13% of the total issued shares[68]. - The total number of shareholders is 106,297, with 3,013 being H share registered shareholders[68]. - The shares held by China Aviation Group Company are subject to a freeze, totaling 127,445,536 shares[71]. - The shares held by China Aviation Limited are also subject to a freeze, totaling 36,454,464 shares[71]. Corporate Governance and Compliance - The company has complied with the Corporate Governance Code, except for the provision B.2.2 regarding the rotation of directors every three years, which was postponed due to incomplete nominations[74]. - The company has adopted a behavior code that is not less stringent than the Standard Code as per the listing rules, and all directors and supervisors have adhered to this code during the reporting period[75]. - The company has established a carbon peak and carbon neutrality leadership group to promote green development and has implemented various initiatives to reduce plastic waste and carbon emissions[77]. Debt and Financing - The group has obtained bank credit facilities totaling RMB 193.689 billion, of which approximately RMB 67.399 billion has been utilized, sufficient to meet liquidity and future capital expenditure commitments[54]. - The company issued six debt financing instruments, with total amounts of 10.17 billion RMB, 10.17 billion RMB, 20.26 billion RMB, 10.09 billion RMB, 20.52 billion RMB, and 15.14 billion RMB respectively[82]. - The interest rates for the issued bonds range from 2.43% to 3.2%[82]. - The company did not declare an interim dividend for the six months ending June 30, 2022[87].

Financial Performance - Operating revenue for the first quarter was RMB 12,917,577, a decrease of 11.41% compared to the same period last year[3] - Net profit attributable to shareholders was a loss of RMB 8,899,923, with a basic earnings per share of -0.65 yuan[3] - Net profit for Q1 2022 was a loss of CNY 9,871,659 thousand, compared to a loss of CNY 6,947,050 thousand in Q1 2021, reflecting a worsening of 42.5%[21] - The total comprehensive income for Q1 2022 was a loss of CNY 10,009,745 thousand, compared to a loss of CNY 6,864,345 thousand in Q1 2021[22] - The company reported a total operating cost of CNY 23,144,688 thousand for Q1 2022, slightly up from CNY 23,098,558 thousand in Q1 2021[19] - The basic earnings per share for Q1 2022 was CNY -0.65, compared to CNY -0.45 in Q1 2021[22] Cash Flow - Net cash flow from operating activities was -RMB 7,658,829, indicating significant cash outflow[3] - The net cash flow from operating activities for Q1 2022 was a negative CNY 7,658,829 thousand, compared to a negative CNY 1,254,296 thousand in Q1 2021, indicating a significant decline in cash flow[24] - The company incurred a total of CNY 6,550,937 thousand in cash payments to employees during Q1 2022, which is comparable to CNY 6,584,075 thousand in Q1 2021[24] - The company experienced a net increase in cash inflows from operating activities of CNY 15,871,521 thousand in Q1 2022, compared to CNY 16,009,589 thousand in Q1 2021[24] - The company reported a significant increase in other cash payments related to operating activities, totaling CNY 7,261,889 thousand in Q1 2022, compared to CNY 1,825,572 thousand in Q1 2021[24] - In Q1 2022, the net cash flow from investment activities was -1,900,020, a significant decrease compared to 143,326 in Q1 2021[25] - Cash inflow from financing activities in Q1 2022 totaled 20,779,966, up from 14,841,024 in Q1 2021, indicating a growth of approximately 39.5%[25] - The cash outflow from financing activities increased to 15,936,311 in Q1 2022 from 10,400,150 in Q1 2021, representing a rise of about 53.5%[25] - The ending cash and cash equivalents balance for Q1 2022 was 11,211,826, compared to 9,191,568 in Q1 2021, reflecting an increase of approximately 22%[26] - Cash received from bond issuance in Q1 2022 was 5,750,000, significantly higher than 700,000 in Q1 2021[25] - Cash received from borrowings in Q1 2022 was 15,029,966, compared to 13,650,876 in Q1 2021, showing an increase of about 10%[25] - The cash flow from investment activities saw a total inflow of 362,721 in Q1 2022, down from 762,565 in Q1 2021, indicating a decline of approximately 52.4%[25] - The net cash flow from financing activities for Q1 2022 was 4,843,655, slightly up from 4,440,874 in Q1 2021[25] - The impact of exchange rate changes on cash and cash equivalents in Q1 2022 was -7,693, contrasting with a positive impact of 23,666 in Q1 2021[26] - The cash received from other investment-related activities in Q1 2022 was 76,675, compared to 31,118 in Q1 2021, marking an increase of approximately 146%[25] Assets and Liabilities - Total assets at the end of the reporting period were RMB 293,138,034, down 1.77% from the previous year[4] - The total liabilities as of March 31, 2022, were RMB 237,282,706 thousand, an increase from RMB 232,550,079 thousand on December 31, 2021[16] - The company's cash and cash equivalents decreased to RMB 11,953,983 thousand from RMB 16,709,664 thousand, reflecting a decline of 28.5%[14] - Long-term borrowings increased to RMB 48,114,323 thousand as of March 31, 2022, compared to RMB 43,620,468 thousand at the end of 2021, representing an increase of 11.4%[16] - The total non-current assets were RMB 144,352,918 thousand as of March 31, 2022, up from RMB 141,134,355 thousand at the end of 2021[16] - The company's inventory increased to RMB 2,611,116 thousand from RMB 2,050,282 thousand, marking a rise of 27.3%[14] - The company reported a significant decrease in accounts receivable, which fell to RMB 1,565,549 thousand from RMB 2,991,037 thousand, a decline of 47.5%[14] - The company’s total current liabilities were RMB 92,929,788 thousand as of March 31, 2022, compared to RMB 91,415,724 thousand at the end of 2021[16] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 111,662, including 3,022 H-share registered shareholders[8] - Major shareholder China National Aviation Holding Company holds 40.98% of shares, totaling 5,952,236,697 shares[9] - The company’s major shareholder, China National Aviation Holding Company, holds a total of 51.70% of the shares directly and indirectly[10] Government Support - The company received government subsidies amounting to RMB 73,932, which are closely related to normal business operations[6] Challenges - The company faced challenges due to the domestic pandemic and rising fuel prices, impacting profitability[7]

Financial Performance - In 2021, the company's operating revenue was RMB 74.53 billion, a decrease from RMB 136.18 billion in 2019, reflecting a significant impact from the pandemic[37]. - The company reported a net loss attributable to shareholders of RMB 16.64 billion in 2021, compared to a profit of RMB 6.42 billion in 2019, indicating ongoing financial challenges[37]. - The total operating revenue for the company reached RMB 378.20 billion, reflecting a year-on-year change of -7.24%[78]. - The net profit attributable to shareholders was a loss of RMB 50.80 billion, compared to a loss of RMB 190.04 billion in the same period last year[78]. - The total assets as of December 31, 2021, were RMB 298.38 billion, an increase from RMB 284.03 billion in 2019, showing growth in asset base despite losses[39]. - The total liabilities increased to RMB 232.55 billion in 2021 from RMB 200.26 billion in 2019, indicating a rise in financial obligations[39]. - Operating expenses rose to RMB 95.465 billion, a 12.27% increase from RMB 85.030 billion in the previous year[91]. - Fuel costs increased by RMB 5.886 billion, primarily due to rising fuel prices and consumption[92]. Operational Highlights - In 2021, Air China operated 16,000 cargo flights and transported 641 tons of COVID-19 vaccines through its cold chain logistics service[29]. - Passenger traffic reached 69.05 million in 2021, a slight increase of 0.52% compared to 68.69 million in the previous year, suggesting a recovery in demand[42]. - The total number of flights increased to 572,264, up 3.79% from the previous year[44]. - The company achieved a total of 1.59 million safe flight hours, transporting 69.05 million passengers[53]. - The company completed significant transportation tasks for major events, including the Tokyo Olympics and the Beijing Winter Olympics[53]. - The group executed 16,000 cargo flights during the reporting period, transporting 641 tons of COVID-19 vaccines through its cold chain logistics system[54]. Strategic Initiatives - The company plans to enhance its service quality and digital transformation, including the implementation of remote self-check-in and in-flight Wi-Fi across its fleet[31]. - The company is focused on optimizing its debt structure and cash flow management to mitigate risks and improve operational efficiency[31]. - The company aims to ensure flight safety as its top priority, implementing a long-term safety management mechanism and completing significant transportation tasks for major events[28]. - The company is committed to high-quality development, continuously improving service quality and compliance management[28]. - The company has a vision of being a "globally leading airline" and focuses on a hub network, cargo and passenger services, cost leadership, and brand strategy[3]. Customer Engagement - Air China integrates its frequent flyer programs under the "Phoenix Miles" brand, enhancing customer loyalty[3]. - The number of Phoenix Miles members exceeded 72.07 million, with frequent flyer contributions accounting for 56.8% of passenger revenue, an increase of 4.5 percentage points year-on-year[70]. - The self-service check-in rate remained stable at 75%, and the online customer service accuracy rate was maintained at a high level of 80%[59]. - The company introduced new products such as the "Red Tour" themed meals and an elderly-friendly version of its app to improve customer experience[59]. Governance and Management - The board of directors consists of eight members, with four being independent non-executive directors as of the latest report date[115]. - The company emphasizes compliance with corporate governance codes and actively reviews its governance policies and practices[117]. - The company has established a policy for board diversity, which is monitored by the management and remuneration committee[125]. - The audit and risk management committee is composed of independent non-executive directors, ensuring oversight of financial reporting and internal controls[131]. - The company has confirmed the independence of its independent non-executive directors in accordance with listing rules[130]. Market Position and Future Outlook - The company is committed to strengthening its market position in both domestic and international routes, leveraging its unique geographical advantages[70]. - Future performance guidance indicates a cautious outlook due to market volatility and competitive pressures[81]. - The company anticipates continued growth in China's aviation demand, supported by a large domestic market and ongoing economic recovery[82]. - The company plans to expand its market presence and enhance operational efficiency through strategic initiatives[80]. Risk Management - The company has established a clear organizational structure for risk management responsibilities, ensuring effective monitoring of significant risks[159]. - The audit committee's responsibilities include reviewing financial information, internal controls, and risk management systems[132]. - The company conducts at least one annual review of the risk management and internal control systems, reporting to the board after audit committee review[158].

Fleet and Operations - Air China has a total fleet of 707 aircraft with an average age of 7.74 years, operating 674 passenger routes, including 48 international routes and 620 domestic routes[4]. - The company executed 216 charter flights for epidemic prevention, transporting 31,000 passengers, and organized 154 customized flights for resuming work and school, carrying 18,000 passengers[9]. - The company executed 13,120 passenger cargo flights, implementing a "passenger aircraft cargo" operation model to enhance cargo capacity[11]. - The fleet introduced 14 new aircraft, including 2 A350s and 8 A320NEOs[37]. - The company plans to introduce 59 new aircraft in 2021, with a focus on Airbus and Boeing models[39]. - The company operates 674 passenger routes, including 48 international routes, 6 regional routes, and 620 domestic routes, covering 28 countries and regions with 147 cities[57]. Financial Performance - In 2020, the company's operating revenue was RMB 69.50 billion, a significant decrease from RMB 136.18 billion in 2019, reflecting a decline of 48.92%[31]. - The company reported an operating loss of RMB 11.17 billion in 2020, compared to an operating profit of RMB 14.64 billion in 2019[31]. - The total assets as of December 31, 2020, were RMB 284.03 billion, down from RMB 294.21 billion in 2019, indicating a decrease of 3.99%[32]. - The total liabilities increased to RMB 200.26 billion in 2020 from RMB 192.88 billion in 2019, representing an increase of 3.66%[32]. - The passenger traffic decreased to 68.69 million in 2020, down 40.28% from 115.01 million in 2019[35]. - The company reported a total operating revenue of RMB 69.504 billion, a decrease of RMB 66.677 billion or 48.96% year-on-year[73]. - The airline transportation revenue was RMB 64.280 billion, down RMB 65.977 billion or 50.65% year-on-year[73]. Market and Strategic Goals - Air China aims to enhance its competitive strength and customer experience, with a strategic goal of being among the world's leading airlines[3]. - The company has a strong focus on market expansion and strategic partnerships, including significant stakes in other airlines[3]. - The company plans to enhance its market expansion and product development strategies in response to the challenges faced in 2020[31]. - The Chinese aviation market is expected to continue recovering, driven by domestic demand and infrastructure expansion during the 14th Five-Year Plan[70]. - The company anticipates intensified competition in the domestic market as airlines shift focus from international to domestic routes[71]. Customer Experience and Innovation - The total number of Phoenix Miles members reached 68.1766 million, making it the longest-standing frequent flyer program in China[3]. - By the end of 2020, the company had covered 117 stations with electronic boarding pass services, significantly improving passenger convenience[19]. - The company completed 112 iterations of its mobile app and added over 1,970 new features to improve customer experience[45]. - The company has launched a passenger carbon emissions calculator on its app and website, enhancing its carbon emission management system[51]. - The company is focusing on enhancing operational efficiency and passenger experience at its Beijing hub, including the implementation of facial recognition technology for boarding[55]. Safety and Risk Management - The company is committed to high-quality development and has strengthened safety management and risk control measures in its operations[9]. - The company achieved a flight safety record of 1.55 million hours and transported 68.69 million passengers safely in 2020[30]. - The company has strengthened its risk management framework, conducting 31 internal audits and 31 risk control training sessions throughout the year[52]. - The company has established a comprehensive epidemic prevention network, ensuring the safety of employees and the continuity of important international routes[9]. Environmental and Social Responsibility - The company completed the first carbon emission monitoring plan in civil aviation, marking a significant step in environmental management[19]. - The company invested RMB 56.28 million in purchasing agricultural products from poverty-stricken areas and helped sell RMB 10.73 million worth of products[49]. - The company made charitable donations totaling RMB 95.28 million during the reporting period[174]. - The company has a fleet of 653 new energy vehicles and has built 195 charging piles as part of its green operations initiative[50]. Governance and Compliance - The company is committed to maintaining and improving governance standards to enhance accountability and transparency, thereby increasing long-term returns for shareholders[101]. - The board of directors consists of eight members, with four being independent non-executive directors, actively participating in company affairs[108]. - The company has adopted a board diversity policy since September 2013, considering various factors such as professional experience, cultural background, and industry knowledge to achieve diversity[115]. - The company has established compliance procedures to ensure adherence to applicable laws and regulations, particularly those significantly impacting its main business[177]. Shareholder Relations - The company has established various communication channels with shareholders, including annual reports and performance briefings[134]. - The company has actively communicated with shareholders, especially minority shareholders, to gather their opinions and concerns[153]. - The company will hold its annual general meeting on May 25, 2021, with H-share holders required to submit transfer documents by April 23, 2021[154]. Related Party Transactions - The group has entered into several related party transaction agreements, complying with the disclosure requirements of the listing rules[178]. - The ongoing related party transactions include air cargo sales agreements with subsidiaries of AVIC Group, determined based on equal voluntary principles[184]. - Independent non-executive directors confirmed that all continuous related party transactions were conducted under normal business terms and in the overall interest of shareholders[192].

[Cover and Company Profile](index=1&type=section&id=Cover%20and%20Company%20Profile) [Company Profile](index=2&type=section&id=Company%20Profile) Air China, the sole flag carrier of China and a Star Alliance member, is headquartered in Beijing, operating 676 aircraft and serving 1,317 destinations in 193 countries, with stakes in Shenzhen Airlines, Air Macau, and Cathay Pacific - Air China is the sole flag carrier of China, headquartered in Beijing[3](index=3&type=chunk) - As of the reporting period, the group operates a total of **676 passenger aircraft** (including business jets), possessing the largest wide-body fleet in China[3](index=3&type=chunk) - Through Star Alliance, the route network covers **1,317 destinations in 193 countries**[3](index=3&type=chunk) [Financial and Operational Summary](index=5&type=section&id=Financial%20and%20Operational%20Summary) [Financial Data Summary](index=5&type=section&id=Financial%20Data%20Summary) In H1 2019, group revenue increased by 1.67% to RMB 65.31 billion, but net profit attributable to shareholders decreased by 9.55% to RMB 3.14 billion due to various factors, while EBITDA significantly grew by 24.72% primarily due to new leasing standards, which also led to a substantial increase in total assets and liabilities Financial Indicators (RMB billions) | Indicator (RMB billions) | H1 2019 | H1 2018 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 65.313 | 64.242 | 1.67% | | Operating Profit | 6.742 | 6.641 | 1.52% | | Profit Before Tax | 4.505 | 5.006 | (10.01%) | | Profit Attributable to Equity Holders of the Company | 3.144 | 3.476 | (9.55%) | | EBITDA | 17.045 | 13.667 | 24.72% | | Earnings Per Share Attributable to Equity Holders of the Company (RMB) | 0.2289 | 0.2531 | (9.56%) | Balance Sheet Indicators (RMB billions) | Indicator (RMB billions) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | 285.454 | 243.657 | | Total Liabilities | 188.487 | 143.159 | | Equity Attributable to Equity Holders of the Company | 89.609 | 93.157 | - Effective January 1, 2019, the Group adopted International Financial Reporting Standard 16 (New Leasing Standard), adjusting financial statement items without restating comparative data[9](index=9&type=chunk) [Business Operations Data Summary](index=6&type=section&id=Business%20Operations%20Data%20Summary) In H1 2019, group passenger capacity (ASK) increased by 5.93%, RPK by 6.60%, and load factor by 0.51 percentage points to 80.99%, while cargo data adjusted due to Air China Cargo's deconsolidation showed a 2.17% decrease in belly-hold cargo RTK and a 2.43 percentage point drop in load factor, with improved aircraft daily utilization Passenger Indicators (Millions) | Passenger Indicator | Jan-Jun 2019 | Jan-Jun 2018 | Change | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (Millions) | 141,728.21 | 133,799.77 | 5.93% | | Revenue Passenger Kilometers (Millions) | 114,784.17 | 107,679.81 | 6.60% | | Passenger Load Factor | 80.99% | 80.48% | +0.51 percentage points | | Number of Passengers (Thousands) | 56,483.19 | 53,752.20 | 5.08% | Cargo Indicators (Millions) | Cargo Indicator | Jan-Jun 2019 | Jan-Jun 2018 | Change | | :--- | :--- | :--- | :--- | | Available Freight Ton Kilometers (Millions) | 5,534.23 | 5,349.36 | 3.46% | | Revenue Freight Ton Kilometers (Millions) | 2,333.48 | 2,385.29 | (2.17%) | | Cargo and Mail Load Factor | 42.16% | 44.59% | (2.43 percentage points) | - Revenue per Revenue Passenger Kilometer was **RMB 0.5214**, a **1.29% decrease** year-on-year[11](index=11&type=chunk) - Effective January 2019, due to the completion of Air China Cargo's equity transfer, operational data only includes belly-hold cargo data, with prior period data adjusted for comparability[11](index=11&type=chunk) [Business Overview](index=8&type=section&id=Business%20Overview) [Fleet Development](index=8&type=section&id=Fleet%20Development) During the reporting period, the Group introduced 19 aircraft and retired 12, resulting in a fleet of 676 aircraft with an average age of 6.81 years, primarily Airbus and Boeing series, with plans for continued new aircraft introductions in the next three years - As of June 30, 2019, the Group operated a total of **676 aircraft**, with an average age of **6.81 years**[15](index=15&type=chunk)[16](index=16&type=chunk) Fleet Composition | Aircraft Type Series | Total as of June 30, 2019 | Average Age (Years) | | :--- | :--- | :--- | | Airbus Series | 342 | 7.10 | | Boeing Series | 329 | 6.50 | | Business Jets | 5 | 6.90 | | **Total** | **676** | **6.81** | - Future introduction plans include Airbus, Boeing, and COMAC series aircraft, with an estimated **55, 93, and 42 aircraft** to be introduced in **2019, 2020, and 2021**, respectively[17](index=17&type=chunk) [Hub Network](index=9&type=section&id=Hub%20Network) The company maintains its 'Four-Corner Diamond' hub network strategy centered on Beijing, while developing Chengdu, Shanghai, and Shenzhen as gateways, actively expanding its route network by opening and optimizing international and domestic routes in response to the 'Belt and Road' initiative, operating 766 passenger routes to 190 cities in 41 countries and regions as of the period end - Adhering to the 'Four-Corner Diamond' hub network strategy centered in Beijing, actively promoting related renovation and construction projects at Beijing Capital International Airport[18](index=18&type=chunk) - The number of connecting passengers at the Beijing hub increased by **11%** year-on-year[18](index=18&type=chunk) - As of the reporting period, the Group operates **766 passenger routes**, serving **190 cities**, and through Star Alliance partnerships, services extend to **1,317 destinations in 193 countries**[18](index=18&type=chunk) [Brand and Marketing](index=10&type=section&id=Brand%20and%20Marketing) The company improved aircraft daily utilization by 0.15 hours, increasing profit by nearly RMB 400 million, with first/business class revenue up 4.3% and ancillary service revenue up 73%, while mobile sales were strong with APP revenue reaching RMB 3.59 billion, and 'PhoenixMiles' members totaled 60.09 million, contributing 6.3% more revenue - Aircraft daily utilization increased by **0.15 hours**, leading to efficiency improvements and structured profit increase of nearly **RMB 400 million**[19](index=19&type=chunk) - First/business class revenue increased by **4.3%** year-on-year, and ancillary service product revenue grew by **73%** to **RMB 160 million**[19](index=19&type=chunk) - 'PhoenixMiles' members totaled **60.09 million**, contributing **6.3%** more revenue, with the company's APP users reaching **9.37 million**, generating **RMB 3.59 billion** in sales revenue[19](index=19&type=chunk) [Products and Services](index=10&type=section&id=Products%20and%20Services) The company is committed to enhancing passenger experience, benchmarking Star Alliance service standards, and continuously advancing digitalization projects, optimizing and upgrading in-flight products such as seats, entertainment systems, and catering, and progressing with in-flight WIFI modifications, having released 75 product service standards as of the reporting period - Benchmarking Star Alliance service standards, advancing digitalization and baggage hub center projects[20](index=20&type=chunk) - In the first half of the year, **10 aircraft**, including A320 and B777, underwent in-flight WIFI modifications[20](index=20&type=chunk)[21](index=21&type=chunk) [Synergy and Cooperation](index=11&type=section&id=Synergy%20and%20Cooperation) The company deepened strategic synergy with its member airlines and strengthened joint ventures with international partners, making progress with Lufthansa and Air Canada joint ventures, while enhancing cooperation with United Airlines and Air New Zealand, currently engaging in code-sharing with 36 airlines - Deepened joint venture cooperation with Lufthansa and fully launched joint venture cooperation with Air Canada[22](index=22&type=chunk) - Engaged in code-sharing cooperation with **19 Star Alliance members** and a total of **36 airlines**[22](index=22&type=chunk) [Safety Operations and Future Outlook](index=11&type=section&id=Safety%20Operations%20and%20Future%20Outlook) During the reporting period, the company maintained its safety baseline, achieving 1.1292 million safe flight hours, actively addressing challenges like the B737MAX grounding to ensure operational safety, and plans to uphold high-quality development in the second half, further strengthening safety management, optimizing the hub network, and enhancing service quality to build a world-class air transport group - During the reporting period, the company achieved **1.1292 million safe flight hours** and nearly **410,000 safe take-offs and landings**[23](index=23&type=chunk) - Looking ahead, the Group will continue to pursue steady progress, strengthen risk control and profitability, optimize its hub network and production organization, and enhance service quality[24](index=24&type=chunk) [Performance of Major Subsidiaries and Associates](index=12&type=section&id=Performance%20of%20Major%20Subsidiaries%20and%20Associates) This section details the operating performance of Air China's major subsidiaries and associates, with Shenzhen Airlines contributing significant revenue and profit despite a year-on-year profit decline, Air Macau showing revenue growth but reduced profit, Cathay Pacific's performance significantly improving from loss to profit, providing investment income to Air China, and Shandong Airlines turning from profit to loss [Shenzhen Airlines](index=12&type=section&id=Shenzhen%20Airlines) Shenzhen Airlines (including Kunming Airlines) achieved operating revenue of **RMB 15.61 billion**, a 3.70% year-on-year increase, but profit attributable to shareholders decreased by 11.57% to **RMB 466 million**, with a load factor of 81.12%, down 0.86 percentage points year-on-year Indicators (RMB millions) | Indicator | Amount (RMB millions) | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | 15610 | +3.70% | | Profit Attributable to Shareholders | 466 | -11.57% | [Air Macau](index=13&type=section&id=Air%20Macau) Air Macau achieved operating revenue of **RMB 1.853 billion**, a 12.85% year-on-year increase, but after-tax profit was **RMB 71 million**, a decrease of RMB 45 million year-on-year, driven by strong passenger demand with passenger traffic up 17.90% Indicators (RMB millions) | Indicator | Amount (RMB millions) | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | 1853 | +12.85% | | Profit After Tax | 71 | -45 million | [Cathay Pacific](index=15&type=section&id=Cathay%20Pacific) Cathay Pacific (Air China's 29.99% stake) significantly improved its performance, achieving operating revenue of **RMB 47.011 billion**, a 5.50% year-on-year increase, and profit attributable to shareholders reached **RMB 1.183 billion**, compared to a loss of RMB 221 million in the same period last year Indicators (RMB billions) | Indicator | Amount (RMB billions) | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | 47.011 | +5.50% | | Profit Attributable to Shareholders | 1.183 | Loss of 0.221 billion in prior period | [Shandong Airlines](index=16&type=section&id=Shandong%20Airlines) Shandong Airlines achieved operating revenue of **RMB 8.989 billion**, a 2.98% year-on-year increase, but recorded a loss attributable to shareholders of **RMB 27 million**, compared to a profit of RMB 204 million in the same period last year Indicators (RMB millions) | Indicator | Amount (RMB millions) | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | 8989 | +2.98% | | Loss Attributable to Shareholders | 27 | Profit of 204 million in prior period | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Profitability Analysis](index=17&type=section&id=Profitability%20Analysis) During the reporting period, the Group's operating profit slightly increased by 1.52% to RMB 6.742 billion, driven by a 1.67% revenue growth primarily from passenger business, while cargo revenue significantly decreased due to Air China Cargo's deconsolidation, operating expenses increased by 1.56% with stable fuel costs but higher landing fees and staff costs, exchange losses significantly reduced, interest expenses increased due to new leasing standards, and profit from associates significantly increased due to Cathay Pacific's turnaround - In H1 2019, the Group recorded an operating profit of **RMB 6.742 billion**, a **1.52% increase** year-on-year[39](index=39&type=chunk) - Profit from associates was **RMB 146 million**, an increase of **RMB 69 million** year-on-year, primarily due to recognizing an investment gain of **RMB 199 million** from Cathay Pacific (compared to a loss of RMB 157 million in the prior period)[59](index=59&type=chunk) [Operating Revenue](index=17&type=section&id=Operating%20Revenue) Total group revenue increased by 1.67% to RMB 65.313 billion, with passenger revenue growing 5.20% to RMB 59.851 billion driven by increased capacity and load factor, while cargo and mail revenue decreased by 44.23% due to Air China Cargo's deconsolidation, and China mainland revenue accounted for the largest share at 65.03% Revenue Type (RMB billions) | Revenue Type (RMB billions) | H1 2019 | Y-o-Y Change | | :--- | :--- | :--- | | Air Transportation Revenue | 62.681 | +1.15% | | Other Operating Revenue | 2.632 | +15.79% | | **Total Operating Revenue** | **65.313** | **+1.67%** | - Passenger revenue increased by **5.20%**, primarily driven by increased capacity input (**+5.93%**) and higher load factor (**+0.51 percentage points**), partially offset by a decrease in yield (**-1.29%**)[43](index=43&type=chunk)[44](index=44&type=chunk) - Excluding the impact of Air China Cargo's deconsolidation, cargo and mail transportation revenue decreased by **RMB 67 million** year-on-year, mainly due to a decline in load factor[48](index=48&type=chunk) [Operating Expenses](index=20&type=section&id=Operating%20Expenses) Group operating expenses increased by 1.56% to RMB 60.502 billion, with aviation fuel costs being the largest component (29.11%) but remaining largely stable year-on-year, while landing and parking fees and staff costs increased due to business expansion, and aircraft maintenance, repair, and overhaul costs decreased by 15.50% year-on-year due to the adoption of new leasing standards Expense Items (RMB billions) | Expense Item (RMB billions) | H1 2019 | Proportion | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Aviation Fuel Costs | 17.615 | 29.11% | +0.19% | | Staff Costs | 11.761 | 19.44% | +1.42% | | Depreciation, Amortization and Lease Expenses | 10.863 | 17.96% | +3.17% | | Landing and Parking Fees | 8.055 | 13.31% | +9.29% | | Aircraft Maintenance, Repair and Overhaul Costs | 2.886 | 4.77% | -15.50% | | **Total Operating Expenses** | **60.502** | **100.00%** | **+1.56%** | [Asset and Debt Structure Analysis](index=22&type=section&id=Asset%20and%20Debt%20Structure%20Analysis) Due to the new leasing standards, the Group's total assets and liabilities significantly increased at the beginning of the year, reaching RMB 285.454 billion and RMB 188.487 billion respectively as of the reporting period, with a debt-to-asset ratio of 66.03%, slightly down from the beginning of the year but remaining at a reasonable level, while the proportion of RMB-denominated interest-bearing debt increased to 54.63% and USD-denominated debt decreased to 44.19%, indicating optimization of debt currency structure, with capital expenditures primarily for aircraft and engine investments - The adoption of new leasing standards led to a **RMB 36.717 billion** increase in total assets on January 1, 2019, with total assets reaching **RMB 285.454 billion** as of the reporting period[60](index=60&type=chunk) - Capital expenditures during the reporting period totaled **RMB 9.667 billion**, of which **RMB 8.965 billion** was for aircraft and engine investments[62](index=62&type=chunk) - As of the reporting period, the debt-to-asset ratio was **66.03%**, a **0.30 percentage point decrease** from **66.33%** at the beginning of the year (after adopting the new standard)[68](index=68&type=chunk) Interest-Bearing Debt Currency Structure | Interest-Bearing Debt Currency Structure | Proportion as of June 30, 2019 | Proportion as of Jan 1, 2019 | | :--- | :--- | :--- | | USD | 44.19% | 48.43% | | RMB | 54.63% | 50.28% | | Other | 1.18% | 1.29% | [Liquidity and Funding Sources](index=24&type=section&id=Liquidity%20and%20Funding%20Sources) During the reporting period, the Group's net cash inflow from operating activities was RMB 13.075 billion, an 11.64% year-on-year increase, primarily due to operating lease payments being reclassified to financing activities under the new leasing standards, while net cash outflow from investing activities significantly decreased and net cash outflow from financing activities increased, with the company possessing sufficient bank credit lines to meet liquidity and capital expenditure needs Cash Flow (RMB billions) | Cash Flow (RMB billions) | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 13.075 | 11.712 | | Net Cash Outflow from Investing Activities | (3.456) | (8.451) | | Net Cash (Outflow)/Inflow from Financing Activities | (8.703) | 0.120 | - The company has secured a total credit line of **RMB 131.216 billion** from multiple domestic banks, of which approximately **RMB 18.183 billion** has been utilized[69](index=69&type=chunk) [Risk Analysis](index=24&type=section&id=Risk%20Analysis) The Group faces multiple risks, including macroeconomic fluctuations, oil price volatility, and exchange rate fluctuations, with high sensitivity to oil prices and exchange rates, where a 1% depreciation of RMB against USD would reduce net profit by RMB 480 million, while operational risks include intensified industry competition, high-speed rail substitution, and 'de-hubbing' challenges from the development of international routes in second-tier cities - Oil price risk: A **5% increase or decrease** in average aviation fuel prices would result in an approximate **RMB 881 million** change in the Group's aviation fuel costs[71](index=71&type=chunk) - Exchange rate risk: If the RMB depreciates by **1%** against the USD, the Group's net profit and shareholders' equity would decrease by approximately **RMB 480 million**[72](index=72&type=chunk) - Competition risk: Facing 'de-hubbing' challenges from joint ventures of large network airlines, expansion of domestic medium-sized airlines, diversion by high-speed rail networks, and the development of long-haul routes in second-tier cities[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Shareholders and Governance](index=26&type=section&id=Shareholders%20and%20Governance) [Major Shareholder Holdings](index=26&type=section&id=Major%20Shareholder%20Holdings) As of the reporting period, China National Aviation Holding Corporation (CNAHC) is the controlling shareholder, holding a total of 51.70% of the company's shares directly and indirectly, with Cathay Pacific as the second largest shareholder holding 18.13% of H shares, and a total of 159,245 shareholders - Controlling shareholder CNAHC, through direct holdings and indirect holdings via its wholly-owned subsidiary CNAH Limited, collectively holds **51.70%** of the Company's shares[78](index=78&type=chunk)[82](index=82&type=chunk) Major Shareholders | Major Shareholder | Shareholding Proportion | Share Class | | :--- | :--- | :--- | | China National Aviation Holding Corporation (Total) | 51.70% | A Share & H Share | | Cathay Pacific Airways Limited | 18.13% | H Share | | HKSCC Nominees Limited | 11.62% | H Share | | China National Aviation Corporation (Group) Limited | 10.72% | A Share & H Share | [Corporate Governance and Other Information](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Information) During the reporting period, the company complied with the Corporate Governance Code and Model Code, prioritizing environmental protection through fleet optimization, fuel-saving measures, and promoting 'oil-to-electricity' conversions for energy conservation and emission reduction, with the report disclosing the use of proceeds from the 2017 non-public A-share offering, mostly for aircraft purchases and working capital, and the Board of Directors decided not to declare an interim dividend for H1 2019 - The company has consistently complied with the code provisions of Appendix 14 'Corporate Governance Code' of the Listing Rules during the reporting period[85](index=85&type=chunk) - The company actively promoted energy conservation and environmental protection, achieving **6,609.9 tons of fuel savings** and **20,821.2 tons of CO2 emission reduction** through various fuel-saving measures during the reporting period[86](index=86&type=chunk) - The Board of Directors decided not to declare an interim dividend for the six months ended June 30, 2019[92](index=92&type=chunk) - Subsequent event: On July 11, 2019, the company entered into an agreement with Airbus for the purchase of **20 A350-900 aircraft**[95](index=95&type=chunk) [Condensed Consolidated Financial Statements](index=33&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Review Report](index=33&type=section&id=Review%20Report) Deloitte Touche Tohmatsu, the auditor, reviewed the interim condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements, and based on the review, found no matters that caused them to believe the financial statements were not prepared in all material respects in accordance with International Accounting Standard 34 - Auditor's conclusion: No matters were noted that caused the auditor to believe the condensed consolidated financial statements were not prepared in all material respects in accordance with International Accounting Standard 34[98](index=98&type=chunk) [Key Financial Statement Items](index=34&type=section&id=Key%20Financial%20Statement%20Items) This section includes the condensed consolidated statement of profit or loss, statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows for the six months ended June 30, 2019, showing a profit of RMB 3.500 billion for the period, profit attributable to shareholders of RMB 3.144 billion, total assets of RMB 285.454 billion, total equity of RMB 96.968 billion, and net cash inflow from operating activities of RMB 13.075 billion Condensed Consolidated Statement of Profit or Loss (RMB thousands) | Condensed Consolidated Statement of Profit or Loss (RMB thousands) | For the six months ended June 30, 2019 | | :--- | :--- | | Revenue | 65,313,087 | | Operating Profit | 6,742,370 | | Profit Before Tax | 4,505,149 | | Profit for the Period | 3,500,354 | | Profit Attributable to Equity Holders of the Company | 3,144,219 | Condensed Consolidated Statement of Financial Position (RMB thousands) | Condensed Consolidated Statement of Financial Position (RMB thousands) | June 30, 2019 | | :--- | :--- | | Non-current Assets | 259,867,100 | | Current Assets | 25,587,332 | | **Total Assets** | **285,454,432** | | Current Liabilities | 77,790,795 | | Non-current Liabilities | 110,695,764 | | **Total Liabilities** | **188,486,559** | | **Total Equity** | **96,967,873** | [Summary of Notes to Financial Statements](index=41&type=section&id=Summary%20of%20Notes%20to%20Financial%20Statements) The notes to the financial statements detail accounting policies, segment information, key financial item breakdowns, commitments and contingent liabilities, and related party transactions, with the most significant change being the first-time adoption of IFRS 16 'Leases' from January 1, 2019, which significantly impacted the company's asset, liability, and expense structure [Note 3: Significant Accounting Policies (Impact of IFRS 16)](index=41&type=section&id=Note%203%3A%20Significant%20Accounting%20Policies%20(Impact%20of%20IFRS%2016)) The Group first adopted IFRS 16 'Leases' from January 1, 2019, choosing the simplified transition method without restating comparative data, resulting in the recognition of **RMB 108.88 billion** in right-of-use assets and **RMB 93.549 billion** in lease liabilities on January 1, 2019, and a negative impact of **RMB 5.105 billion** on opening retained earnings, significantly altering the company's balance sheet structure - The Group first adopted IFRS 16 on January 1, 2019, using the modified retrospective approach without restating comparative data[112](index=112&type=chunk)[125](index=125&type=chunk) - As of January 1, 2019, the Group recognized **RMB 93.549 billion** in lease liabilities and **RMB 108.88 billion** in right-of-use assets[125](index=125&type=chunk) - The initial application of IFRS 16 resulted in a **RMB 5.105 billion** decrease in retained earnings as of January 1, 2019[135](index=135&type=chunk) [Note 4B: Segment Information](index=51&type=section&id=Note%204B%3A%20Segment%20Information) The Group's operating segments are primarily categorized into 'Air Transportation Operations' and 'Other' businesses, with 'Air Transportation Operations' being the absolute core, contributing the vast majority of revenue and profit, and China mainland being the largest revenue source geographically, accounting for 65.03% of total revenue Segment (H1 2019) | Segment (H1 2019) | External Revenue (RMB billions) | Profit Before Tax (RMB billions) | | :--- | :--- | :--- | | Air Transportation Operations | 64.129 | 4.354 | | Other | 1.184 | 0.416 | [Note 12: Interests in Associates](index=57&type=section&id=Note%2012%3A%20Interests%20in%20Associates) As of the reporting period, interests in associates totaled **RMB 14.369 billion**, with the investment in Cathay Pacific having a carrying value of **RMB 12.225 billion**, and Cathay Pacific achieving revenue of **RMB 47.011 billion** and net profit of **RMB 1.183 billion** during this reporting period - As of June 30, 2019, the carrying value of the investment in Cathay Pacific was **RMB 12.225 billion**[159](index=159&type=chunk) [Note 21: Commitments](index=66&type=section&id=Note%2021%3A%20Commitments) As of the reporting period, the Group had total contracted but unprovided capital commitments of **RMB 29.677 billion**, primarily for the purchase of aircraft and related equipment, in addition to **RMB 59 million** in investment commitments - Total capital commitments amounted to **RMB 29.677 billion**, of which **RMB 26.963 billion** was for aircraft and aviation equipment[184](index=184&type=chunk) [Note 22: Related Party Transactions](index=67&type=section&id=Note%2022%3A%20Related%20Party%20Transactions) The Group engages in extensive related party transactions with its controlling shareholder CNAHC and its subsidiaries, associates, and joint ventures, including service provision and procurement, leasing, and financial services, with significant transaction volumes with CNAHC during the reporting period, such as procurement of airport ground services and in-flight catering, and CNAHC also provides guarantees for some of the company's bonds - The Group has significant transactions with CNAHC and its related parties across various areas, including sales, procurement, leasing, and financial services[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - As of June 30, 2019, CNAHC provided guarantees for the Company's corporate bonds totaling **RMB 6.5 billion**[198](index=198&type=chunk)