09:30     AIR CHINA<00753> - Announcement (1)                                 

    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, makes no representation as to its      
    accuracy or completeness and expressly disclaims any liability            
    whatsoever for any loss whatsoever arising from or in reliance upon       
    the whole or any part of the contents of this announcement.               
                                                                              
    AIR CHINA LIMITED                                                         
    (a joint stock limited company incorporated in the People's Republic      
    of China with limited liability)                                          
    (Stock Code: 753)                                                         
                                                                              
    PURCHASE OF 20 A330-200 AIRCRAFT                                          
    MAJOR TRANSACTION                                                         
                                                                              
    The Company hereby announces that on 26 January 2005 the Company and      
    AIE entered into an A330-200 Purchase Agreement with Airbus for the       
    acquisition of 20 A330-200 aircraft from Airbus.                          
                                                                              
    CNAHC, which currently directly owns approximately 51.16% of the total    
    issued share capital of the Company, has approved the Transaction.        
    CNAHC does not have any interest in the Transaction other than as a       
    shareholder of the Company.                                               
                                                                              
    The Transaction constitutes a major transaction of the Company under      
    the Listing Rules.                                                        
                                                                              
    AIRCRAFT PURCHASE AGREEMENT                                               
                                                                              
    On 26 January 2005 the Company and AIE entered into an A330-200 Purchase  
    Agreement with Airbus, pursuant to which the Company has agreed to        
    purchase 20 A330-200 aircraft from Airbus. In addition, the Board of      
    the Company on the same date has approved such acquisition. However,      
    pursuant to Chinese regulations the Transaction is conditional upon       
    Chinese government approval, which is not obtained yet.                   
                                                                              
    The details of the Transaction are summarized as follows:                 
                                                                              
    Date of the Transaction:                                                  
                                                                              
    26 January 2005                                                           
                                                                              
    Parties to the Transaction:                                               
                                                                              
    (i)     the Company, as the purchaser, the principal business activity of 
    which is air passenger, air cargo and airline-related services;           
     (ii)   AIE, as the import agent; and                                     
    (iii)   Airbus, as the vendor, the principal business activity of which   
    is aircraft manufacturing.                                                
                                                                              
    The Company confirms that, to the best of the Directors' knowledge,       
    information and belief having made all reasonable enquiry, Airbus and     
    each of the ultimate beneficial owner of Airbus are independent third     
    parties and not connected persons (as defined in the Listing Rules)       
    of the Company.                                                           
                                                                              
    Aircraft to be Acquired:                                                  
                                                                              
    20 A330-200 aircraft                                                      
                                                                              
    Consideration:                                                            
                                                                              
    According to the information provided by Airbus, the market price, as     
    contained in the catalog provided to the Company by Airbus, of the        
    Airbus Aircraft in aggregation is around US$2.86 billion.  The            
    aggregate consideration for the Airbus Aircraft which is determined       
    after arm's length negotiation between the parties, is lower than the     
    market price as contained in that Airbus catalog.                         
                                                                              
    As the relevant consideration percentage ratio under Rule 14.07 of the    
    Listing Rules for the Transaction is above 25% but less than 100%, the    
    Transaction constitutes a major transaction and is therefore subject      
    to approval by the Company's shareholders under the Listing Rules.        
                                                                              
    Payment and Delivery Terms:                                               
                                                                              
    The aggregate consideration for the acquisition of Airbus Aircraft is     
    payable by cash in instalments.  The Airbus Aircraft are expected to      
    be delivered in stages to the Company from mid 2006 to end 2008.          
                                                                              
    Source of Funding:                                                        
                                                                              
    The Transaction will be funded through cash from the Company's            
    operation and commercial bank loans. No proceeds from the Company's       
    recent global offering will be used to finance this Transaction.          
                                                                              
    REASONS FOR AND BENEFITS OF THE TRANSACTION                               
                                                                              
    The Airbus Aircraft will expand the fleet capacity of the Company and     
    they will principally serve the routes to international destinations