Air China: Management discussion of Nov-2010 operating data

Although this resulted in an across-the-board decline in passenger traffic on a month-over-month basis, there was still growth on a year-over-year basis. Apart from regional routes, cargo & mail traffic and freighter tonnage carried for international and domestic routes continued to show solid year-over-year growth, with a particularly strong performance on international routes. On a month-over-month basis, stronger growth was recorded.

Passenger capacity, measured in Available Seat Kilometers (ASK), grew 12.1% year-over-year. Passenger traffic, measured by Revenue Passenger Kilometers (RPK), rose by 8.5%. Capacity on international routes grew by 17.5% year-over-year, primarily due to an increase in the frequency of flights on American, European and Australian routes, with RPK increasing by 7.2%. Capacity on domestic routes rose by 8.5%, while RPK rose 9% in the same period. Capacity on regional routes increased by 16.6%, with RPK growing 15.5%. The passenger load factor was 76.8%, down 2.5 percentage points year-over-year. The passenger load factor for domestic routes increased by 0.4 percentage points, and international and domestic routes dropped by 7.1 and 0.7 points, respectively. (Please note that Shenzhen Airlines and Air Macau are not included in these figures.)

Cargo capacity, measured in Available Freighter Tonne Kilometers (AFTK), rose by 14.1% year-over-year in November. Revenue Freighter Tonne Kilometers (RFTK) and Freighter tonnage carried increased by 22.3% and 13.5%, respectively, compared with the same month in 2009. The cargo load factor improved to 64.6% in November, an increase of 4.3 percentage points year-over-year.

During the month, Air China purchased a total of 293,100 tonnes of jet fuel at an average price of RMB5,814 per tonne, a year-over-year increase of 12%. The average jet fuel purchase price at international airports was RMB5,360 per tonne, and the average purchase price of jet fuel for international flights at the top six Chinese airports was RMB5,576 per tonne, representing 13% and 14% year-over-year increases, respectively. The average jet fuel purchase price for domestic flights was RMB6,148 per tonne, an increase of 11% compared with November last year.

In November, the company made the following adjustments to jet fuel surcharges:

During the month, the company added one A321-200 and one B747-400F aircraft. As of end-November, Air China operated a fleet of 282 aircraft.