Discloseable Transaction

Air China Ld
11 July 2007

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)



                           DISCLOSEABLE TRANSACTION:

                   PURCHASE OF 23 AIRBUS 320-SERIES AIRCRAFT


On 10 July 2007 the Company and AIE entered into the Airbus Aircraft 
Purchase Agreement with Airbus Company, pursuant to which the Company 
has agreed to purchase 23 Airbus 320-series aircraft from Airbus Company.


The Transaction constitutes a discloseable transaction of the Company 
under the Listing Rules. The Company shall, pursuant to the Listing 
Rules, dispatch a circular containing the information required under 
the Listing Rules in relation to the Transaction within 21 days after 
the publication of this announcement.

AIRBUS AIRCRAFT PURCHASE AGREEMENT

On 10 July 2007 the Company and AIE entered into the Airbus Aircraft 
Purchase Agreement with Airbus Company, pursuant to which the Company 
has agreed to purchase 23 Airbus 320-series aircraft from Airbus Company. 
The Airbus Aircraft Purchase Agreement was entered into pursuant to a 
framework agreement entered into between Airbus Company and the China 
Aviation Supplies Import and Export Group Corporation on 26 October 
2006 (the 2006 Framework Agreement).

The details of the Transaction are summarized as follows:

Date of the Transaction:

10 July 2007

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 for the Company; and



(iii)   Airbus Company, as the vendor, one of whose principal 
business activity is aircraft manufacturing.



The Company confirms that, to the best of the Directors' knowledge, 
information and belief having made all reasonable enquiry, Airbus Company 
and each of the ultimate beneficial owner of Airbus Company are third 
parties independent of the Company and its connected persons (as defined in 
the Listing Rules).



Aircraft to be acquired:



Airbus Aircraft, i.e. 23 Airbus 320-series aircraft



Consideration:



The aircraft basic price comprises the airframe price, optional features 
prices and engine price. The aircraft basic price of the Airbus Aircraft in 
aggregate is approximately US$1,406 million (HK$10,981 million). The 
aircraft price is subject to price escalation by applying a formula. 
Airbus Company has granted to the Company significant price concessions with 
regard to the Airbus Aircraft. These will take the form of credit 
memoranda which may be used by the Company towards the purchase of the 
Airbus Aircraft, goods and services or may be used towards the final price 
payment of the Airbus Aircraft. Such credit memoranda were determined 
after arm's length negotiations between the parties and as a
result, the actual consideration for the Airbus Aircraft is lower 
than the aircraft basic price mentioned above.

The Transaction was negotiated and entered into in accordance 
with customary business practice. The directors of the Company confirm 
that the extent of the price concessions granted to the Company in 
the Transaction is comparable with the price concessions that the 
Company had obtained in the previous aircraft purchase entered into 
between the Company and Airbus Company on 14 June 2006.
The Company believes that there is no material impact of the 
price concessions obtained in the Transaction on the unit operating 
cost of the Company's fleet. It is normal business practice of the 
global airline industry to disclose the aircraft basic price, instead 
of the actual price, for aircraft acquisitions. Disclosure of the 
actual consideration will result in the loss of the significant price 
concessions and hence a significant negative impact on the
Company's cost for the Transaction and will therefore not be in the 
interest of the Company and the shareholders as a whole. The Company 
has applied to the Stock Exchange for a waiver from strict compliance of 
Rule 14.58(4) of the Listing Rules in respect of disclosure of the 
actual consideration of the Airbus Aircraft.

As the relevant percentage ratio under Rule 14.07 of the Listing Rules 
for the Transaction is above 5% but less than 25%, the Transaction 
constitutes a discloseable transaction and is therefore not 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 Company is expecting to take 
delivery of the Airbus Aircraft in stages from January 2009 to 
December 2012.

Source of funding:

The Transaction will be funded through cash generated from the 
Company's business operations, commercial bank loans and other 
financing instruments of the Company.

REASONS FOR AND BENEFITS OF THE TRANSACTION

The Airbus Aircraft will expand the fleet capacity of the Company 
and will principally reinforce Chengdu's position as a regional 
transportation hub and increase frequency of flights, departing 
originally from Chengdu, of a number of key domestic flight courses. The 
Company expects the Airbus Aircraft will deliver more cost-efficient 
performance and provide more comfortable services to passengers.

Although the Airbus Aircraft was purchased with other aircrafts under 
a package acquisition plan, which is coordinated by the NDRC, the 
decision to purchase the Airbus Aircraft was made independently by the 
Company. The negotiations under the acquisition plan were done as a 
package to increase bargaining power.

The Directors believe that the terms of the Transaction are fair and 
reasonable and in the interests of the shareholders of the Company 
as a whole.

FURTHER INFORMATION

The Company shall, pursuant to the Listing Rules, dispatch a 
circular containing the information required under the Listing Rules 
in relation to the Transaction within 21 days after the publication of 
this announcement.

DEFINITION

In this announcement, unless the context otherwise requires, the 
following terms shall have the following meanings:

'AIE'          Air China Group Import and Export Trading Co., a
               company incorporated in the People's Republic of China and 
               a wholly-owned subsidiary of the Company

'Airbus       23 Airbus 320-series aircraft, which includes Airbus
Aircraft'     319, Airbus 320 and Airbus 321, to be purchased by the Company 
              pursuant to the Airbus Aircraft Purchase Agreement

'Airbus       the aircraft purchase agreement dated 10 July 2007
Aircraft      pursuant to which the Company has agreed to purchase
Purchase      and Airbus Company has agreed to sell the Airbus Aircraft
Agreement'    

'Airbus       Airbus S. A. S., a company incorporated in Toulouse, France
Company'      

'Company'     Air China Limited, a company incorporated in the
              People's Republic of China with primary listing on The 
              Stock Exchange of Hong Kong Limited and secondary listing 
              on the Official List of the UK Listing Authority

'Director(s)' the director(s) of the Company

'Hong Kong    The Stock Exchange of Hong Kong Limited
Stock            
Exchange'

'Listing      The Rules Governing the Listing of Securities on The
Rules'        Stock Exchange of Hong Kong Limited

'NDRC'        the National Development and Reform Commission of the
              People's Republic of China

'Transaction' the acquisition by the Company of the Airbus Aircraft
              pursuant to the Airbus Aircraft Purchase Agreement



                             By order of the Board
                               Air China Limited
                             Huang Bin   Li Man Kit
                           Joint Company Secretaries

Beijing, 10 July 2007

As at the date of this announcement, the Directors of the Company are 
Messrs Li Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, 
Christopher Dale Pratt, Chen Nan Lok Philip, Ma Xulun, Cai Jianjiang, 
Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan*, Zhang Ke* and Jia Kang*.

* Independent non-executive Director of the Company



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