09:37     CNAC<01110> - Announcement (2)                                      

    The total fixed rent payment under the Wet Lease                          
    Agreement and the Wet Lease Extension Agreement will                      
    amount to US$4,331,000 (equivalent to approximately                       
    HK$33,781,800).                                                           
                                                                              
    The fixed monthly payment covers the provision of the                     
    Aircraft, the cockpit crew and the maintenance crew                       
    and Aircraft related insurance.                                           
                                                                              
    Air China is also required to pay a monthly                               
    maintenance hourly payment for each block hour flown                      
    at US$470 (equivalent to approximately HK$3,666) per                      
    block hour. It is anticipated that the total maximum                      
    maintenance hourly payment under the Wet Lease                            
    Agreement and the Wet Lease Extension Agreement will                      
    amount to US$1,692,000 (equivalent to approximately                       
    HK$13,197,600).                                                           
                                                                              
    The lease payments have been arrived at after arm's                       
    length negotiation between the parties taking into                        
    consideration the prevailing market level of rent                         
    payable for the wet leases of Airbus A319-100 and the                     
    provision of services under the Wet Lease Agreement                       
    (as extended by the Wet Lease Extension Agreement).                       
                                                                              
    Other costs:    Air China shall be responsible for                        
    other costs incurred in connection with the operation                     
    of the Aircraft (e.g., landing and navigation fees,                       
    airport and aircraft handling fees, fuel).                                
                                                                              
    Other compensation:     Air Macau shall pay Air China the                 
    amount of US$11,373 (equivalent to approximately                          
    HK$88,709) per day when there is no operation of the                      
    Aircraft due to Air Macau's mechanic breakdown or                         
    other flight crew-related causes calculated at the                        
    end of the lease term, provided that such situation                       
    exceed 10 operating days for the entire lease term.                       
                                                                              
    Proposed Cap                                                              
                                                                              
    Based on the terms of the Wet Lease Agreement and the                     
    Wet Lease Extension Agreement and assuming that the                       
    Aircraft will fly the number of block hours according                     
    to the flight schedule under the Wet Lease Agreement                      
    and the Wet Lease Extension Agreement together with                       
    any delay that may occur, the Directors propose that                      
    the maximum aggregate annual value contemplated under                     
    the Wet Lease Agreement and the Wet Lease Extension                       
    Agreement shall be US$6,023,000 (equivalent to                            
    approximately HK$46,979,400).                                             
                                                                              
    Reasons for and benefits of the Wet Lease Extension                       
    Agreement                                                                 
                                                                              
    The Directors consider it to be in the interest of                        
    Air Macau to enter into the Wet Lease Extension                           
    Agreement as the lease payments to be received by Air                     
    Macau under the Wet Lease Extension Agreement will                        
    generate a steady stream of income for Air Macau.                         
    Furthermore, the entering into of the Wet Lease                           
    Extension Agreement will enable Air Macau to enhance                      
    its aircraft utilisation.                                                 
                                                                              
    The Directors, including the independent                                  
    non-executive Directors, are of the view that the                         
    terms of the Wet Lease Extension Agreement are fair                       
    and reasonable and in the interest of the shareholders                    
    of the Company as a whole.                                                
                                                                              
    INFORMATION ON THE GROUP