09:34     CHINA SOUTH AIR<01055> - 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 SOUTHERN AIRLINES COMPANY LIMITED                                   
    (a joint stock limited company incorporated in the People's Republic of   
    China with limited liability)(Stock Code: 1055)                           
                                                                              
    MAJOR TRANSACTION                                                         
                                                                              
    The Directors of the Company hereby announce that the Board had           
    approved by written resolutions the Airbus Aircraft Acquisition           
    Agreement, pursuant to which the Company entered into the Airbus          
    Aircraft Acquisition Agreement with Airbus and SAIETC for the purpose     
    of acquiring five A380 aircraft from Airbus on April 21, 2005. SAIETC     
    is wholly owned by CSAHC, the controlling shareholder of the Company      
    holding approximately 50.30% equity interest in the Company. SAIETC is    
    therefore a connected person of the Company under the Listing Rules.      
                                                                              
    The Directors believe that the acquisition of the Airbus Aircraft will    
    further improve the operating capacity of the Company, enhance its        
    abilities to provide premium services to its customers, and raise its     
    ability to compete significantly in the industry. Therefore, the          
    Directors believe that the terms of the Airbus Acquisition Agreement      
    are fair and reasonable and in the interests of the shareholders of the   
    Company as a whole.                                                       
                                                                              
    As the relevant percentage ratio for the Transaction with regards to      
    the Consideration Test under Rule 14.07 of the Listing Rules is above     
    25%, but less than 100%, the Transaction constitutes a major              
    transaction under the Listing Rules and is therefore subject to           
    approval by the Company's shareholders under Rule 14.40 of the Listing    
    Rules. No consideration is payable under the Airbus Aircraft              
    Acquisition Agreement by the Company to SAIETC.                           
                                                                              
    CSAHC and its associates are required to abstain from voting in respect   
    of the proposed resolution to approve the Transaction. The Transaction    
    is also required to be disclosed pursuant to the relevant rules and       
    regulations of the Shanghai Stock Exchange.                               
                                                                              
    The Company will send a circular containing the information required      
    under the Listing Rules in relation to the Transaction within 21 days     
    after the publication of this announcement. A notice to shareholders of   
    the Company convening a general meeting of the shareholders to approve,   
    among other things, the Transaction will be dispatched to the             
    shareholders of the Company as soon as practicable.                       
                                                                              
    THE AIRBUS AIRCRAFT ACQUISITION AGREEMENT                                 
                                                                              
    The Board hereby announces that pursuant to article 111 of the articles   
    of association of the Company, the Board considered and approved by way   
    of written resolutions the following resolutions:                         
                                                                              
    (a)  the purchase of five A380 aircraft from Airbus;                      
                                                                              
    (b)  the execution of the Airbus Aircraft Acquisition Agreement to        
    purchase the five A380 aircraft; and                                      
                                                                              
    (c)  the authorization of Liu Shao Yong, chairman of the Board, to        
    execute the Airbus Aircraft Acquisition for and on behalf of the          
    Company.                                                                  
                                                                              
    All 15 Directors participated in considering and approving the written    
    resolutions. The format and procedure for passing the resolutions was     
    in accordance with the Company Laws of the People's Republic of China     
    and the Company's articles of association.                                
                                                                              
    On April 21, 2005, the Company entered into the Airbus Aircraft           
    Acquisition Agreement with Airbus and SAIETC for the purpose of           
    acquiring five A380 aircraft from Airbus.                                 
                                                                              
    Date                                                                      
                                                                              
    April 21, 2005.                                                           
                                                                              
    Parties                                                                   
                                                                              
    (i)  The Company, as the purchaser. The principal business activity of    
    the Company is that of civil aviation.                                    
                                                                              
    (ii)  Southern Airlines (Group) Import and Export Trading Company as      
    the import agent. The principal business activity of SAIETC is that of