09:37     CNAC<01110> - 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 howsoever arising from or in                      
    reliance upon the whole or any part of the contents                       
    of this announcement.                                                     
                                                                              
    *                                                                         
    CHINA NATIONAL AVIATION COMPANY LIMITED                                   
    (incorporated in Hong Kong with limited liability)                        
    (Stock Code: 1110)                                                        
                                                                              
    CONTINUING CONNECTED TRANSACTION                                          
                                                                              
    Further to the Announcement, the Board wishes to                          
    announce that on 13 April, 2005, Air Macau entered                        
    into the Wet Lease Extension Agreement with Air China                     
    pursuant to which Air Macau agreed to extend the wet                      
    lease of the Aircraft to Air China for a further six                      
    month period from 20 April 2005 to 19 October 2005                        
    at the monthly fixed rent of US$358,500 (equivalent                       
    to approximately HK$2,796,300). 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).                              
                                                                              
    Air Macau is indirectly owned as to 51% by the Company,                   
    which in turn is owned as to approximately 69% by Air                     
    China. Since Air China is a substantial shareholder                       
    of the Company, the transaction under the Wet Lease                       
    Agreement and the Wet Lease Extension Agreement                           
    constitutes a continuing connected transaction for                        
    the Company under Chapter 14A of the Listing Rules                        
    and is subject to reporting and announcement                              
    requirements.                                                             
                                                                              
    WET LEASE EXTENSION AGREEMENT                                             
                                                                              
    Further to the Announcement, the Board wishes to                          
    announce that Air Macau entered into the Wet Lease                        
    Extension Agreement with Air China on 13 April 2005,                      
    pursuant to which Air Macau agreed to extend the wet                      
    lease of the Aircraft to Air China. Set out below are                     
    the principal terms of the Wet Lease Extension                            
    Agreement.                                                                
                                                                              
    Principal Terms of the Wet Lease Extension Agreement                      
                                                                              
    Date:   13 April, 2005                                                    
                                                                              
    Parties:        Air Macau, as lessor                                      
    Air China, as lessee                                                      
                                                                              
    Subject matter: Wet lease of one Airbus A319-100                          
    aircraft with Macanese registration mark B-MAO. Air                       
    Macau shall be responsible for the operation and                          
    maintenance of the Aircraft during the lease term.                        
                                                                              
    Lease term:     6 months, from 20 April 2005 to 19 October                
    2005                                                                      
                                                                              
    Lease payments: The lease payments comprise the                           
    monthly fixed rental payment and the monthly                              
    maintenance hourly payment.                                               
                                                                              
    The monthly fixed rental payment of US$358,500                            
    (equivalent to approximately HK$2,796,300) per month                      
    is payable by Air China in two installments.