09:51     CNAC<01110> - Announcement (4)                                      

    Wet Lease Agreement constitutes a continuing                              
    connected transaction for the Company under the                           
    Listing Rules and since its annual consideration                          
    exceeds the amount allowed by the de minimus rule                         
    under Rule 14A.33(3) of the Listing Rules but is less                     
    than 2.5% of each of the percentage ratios (as defined                    
    in the Listing Rules) (other than the profits ratio                       
    (as defined in the Listing Rules)), it is subject to                      
    reporting and announcement requirements under Rule                        
    14A.34 of the Listing Rules.                                              
                                                                              
    The Company's failure to issue a public announcement                      
    concerning the continuing connected transaction has                       
    constituted a breach of Rule 14A.34 of the Listing                        
    Rules. The transaction contemplated under the Wet                         
    Lease Agreement will be subject to the annual review                      
    requirement and the reporting requirement under Rules                     
    14A.37 to 14A.41 and Rules 14A.45 and 14A.46 of the                       
    Listing Rules.                                                            
                                                                              
    The Stock Exchange has indicated to the Company that                      
    it reserves the rights to take appropriate action                         
    against the Company and the Directors in respect of                       
    such breach of the Listing Rules.                                         
                                                                              
    DEFINITIONS                                                               
    "Air China"     Air China Limited, a joint stock limited                  
    company incorporated under the laws of the PRC with                       
    limited liability, whose H shares are listed on the                       
    Stock Exchange                                                            
                                                                              
    "Air Macau"     Air Macau Company Limited, a company                      
    incorporated under the laws of Macau with limited                         
    liability and a 51% indirectly owned subsidiary of                        
    the Company                                                               
                                                                              
    "Aircraft"      the Airbus A319-100 aircraft with                         
    Macanese registration mark B-MAO                                          
                                                                              
    "Board" the board of Directors                                            
                                                                              
    "Company"       China National Aviation Company Limited,                  
    a company incorporated under the laws of Hong Kong                        
    with limited liability, whose shares are listed on                        
    the Stock Exchange                                                        
                                                                              
    "Directors"     the directors of the Company                              
                                                                              
    "Dragonair"     Hong Kong Dragon Airlines Limited, an                     
    airline operator incorporated in Hong Kong with                           
    limited liability and a 43.29% owned associated                           
    company of the Company                                                    
                                                                              
    "Group" the Company and its subsidiaries                                  
                                                                              
    "Hong Kong"     the Hong Kong Special Administrative                      
    Region of the PRC                                                         
                                                                              
    "Listing Rules" The Rules Governing the Listing of                        
    Securities on the Stock Exchange                                          
                                                                              
    "Macau" the Macau Special Administrative Region of                        
    the PRC                                                                   
                                                                              
    "PRC"   The People's Republic of China                                    
                                                                              
    "Stock Exchange"        The Stock Exchange of Hong Kong                   
    Limited                                                                   
                                                                              
    "Wet Lease Agreement"   the aircraft wet lease                            
    agreement dated 15 March, 2005 between Air Macau and                      
    Air China pursuant to which Air Macau agreed to lease                     
    the Aircraft to Air China on a wet lease basis