Air China: Management discussion of Feb-2011 operating data

While there was a drop in international and domestic traffic month-over-month, there was a slight rise in regional traffic. In terms of the cargo business, both Revenue Freighter Tonne Kilometres (RFTK) and freighter tonnage carried showed various degrees of month-over-month and year-over-year decline in all markets.

Passenger capacity, measured in Available Seat Kilometers (ASK), grew 5.2% year-over-year. Passenger traffic, measured by Revenue Passenger Kilometers (RPK), rose by 5.7%. Capacity on international routes increased by 12.4% year-over-year, with RPK rising by 4.1%. Capacity on domestic routes increased by 1.3%, while RPK rose 6.9% compared with the same period in last year. Capacity on regional routes and RPK both increased by 2.0%. The passenger load factor was 79.4%, up 0.4 percentage points year-over-year. The passenger load factor for domestic routes increased by 4.3 percentage points year-over-year and regional routes remained flat, but international routes saw a 6.1 percentage point decline in load factor.

Cargo capacity, measured in Available Freighter Tonne Kilometers (AFTK), decreased by 5.8% year-over-year in February. Revenue Freighter Tonne Kilometers (RFTK) and freighter tonnage carried decreased by 15.8% and 12.1%, respectively, compared with February 2010. The cargo load factor declined to 47.1% in February, a decrease of 5.6 percentage points year-over-year.

During the month, Air China purchased a total of 252,000 tonnes of jet fuel at an average price of RMB6,425 per tonne, a year-over-year increase of 19%. The average jet fuel purchase price at international airports was RMB6,139 per tonne, and the average purchase price of jet fuel for international flights at the top six Chinese airports was RMB6,323 per tonne, representing 27% and 20% year-over-year increases, respectively. The average jet fuel purchase price for domestic flights was RMB6,560 per tonne, an increase of 16% compared with February last year.

From 20 February, the domestic jet fuel price rose by RMB350 per tonne.

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

During the month, the company added one B330-343, one A320-232 passenger plane and one business jet under custody. As of end-February, Air China operated a fleet of 287 aircraft.

*Please note that Shenzhen Airlines and Air Macau are excluded from the above figures.