PURCHASE OF 20 A330-200 AIRCRAFT

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)


                        PURCHASE OF 20 A330-200 AIRCRAFT

                                MAJOR TRANSACTION



The Company hereby announces that on 26 January 2005 the Company and AIE entered
into  an A330-200 Purchase Agreement with Airbus for the acquisition of 20 A330-
200 aircraft from Airbus.

CNAHC,  which  currently directly owns approximately 51.16% of the total  issued
share capital of the Company, has approved the Transaction.  CNAHC does not have
any interest in the Transaction other than as a shareholder of the Company.

The Transaction constitutes a major transaction of the Company under the Listing
Rules.




AIRCRAFT PURCHASE AGREEMENT

On  26  January  2005  the  Company and AIE entered into  an  A330-200  Purchase
Agreement  with Airbus, pursuant to which the Company has agreed to purchase  20
A330-200  aircraft from Airbus.  In addition, the Board of the  Company  on  the
same   date  has  approved  such  acquisition.  However,  pursuant  to   Chinese
regulations  the  Transaction is conditional upon Chinese  government  approval,
which is not obtained yet.

The details of the Transaction are summarized as follows:

Date of the Transaction:

26 January 2005

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; and

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

The  Company confirms that, to the best of the Directors' knowledge, information
and  belief having made all reasonable enquiry, Airbus and each of the  ultimate
beneficial  owner  of  Airbus are independent third parties  and  not  connected
persons (as defined in the Listing Rules) of the Company.

Aircraft to be Acquired:

20 A330-200 aircraft

Consideration:



According  to the information provided by Airbus, the market price, as contained
in  the  catalog  provided to the Company by Airbus, of the Airbus  Aircraft  in
aggregation  is  around  US$2.86 billion.  The aggregate consideration  for  the
Airbus  Aircraft which is determined after arm's length negotiation between  the
parties, is lower than the market price as contained in that Airbus catalog.

As  the  relevant consideration percentage ratio under Rule 14.07 of the Listing
Rules  for  the  Transaction is above 25% but less than  100%,  the  Transaction
constitutes  a  major transaction and is therefore 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 Airbus Aircraft are expected to be delivered in stages
to the Company from mid 2006 to end 2008.

Source of Funding:

The  Transaction  will be funded through cash from the Company's  operation  and
commercial  bank loans.   No proceeds from the Company's recent global  offering
will be used to finance this Transaction.


REASONS FOR AND BENEFITS OF THE TRANSACTION

The  Airbus Aircraft will expand the fleet capacity of the Company and they will
principally serve the routes to international destinations in Europe, Australia,
North  America and certain key domestic destinations such as Lhasa.   The Airbus
Aircraft are expected to replace certain aircraft in the existing fleet  of  the
Company and will be able to provide more comfortable services to the passengers.

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

CNAHC  currently  directly owns approximately 51.16% of the total  issued  share
capital  of  the Company.  Each of CNAHC and its associates (as defined  in  the
Listing  Rules) does not have any interest in the Transaction other  than  as  a
shareholder of the Company (where applicable).  No shareholder of the Company is
required to abstain from voting if the Company were to convene a general meeting
for  the approval of the Transaction.  CNAHC has approved the Transaction by way
of  a written approval pursuant to Rule 14.44 of the Listing Rules.  The Company
shall, pursuant to the Listing Rules, 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.

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"                 Airbus S.A.S., a company incorporated in Toulouse, France
"Airbus Aircraft"        20 A330-200 aircraft to be purchased by the Company
                         pursuant to the A330-200 Purchase Agreement
"A330-200 Purchase Agreement "    the aircraft acquisition agreement dated 26
                         January 2005 pursuant to which the Company has agreed to acquire
                         and Airbus has agreed to sell the Airbus Aircraft
"Board"                  the board of directors of the Company
"Company"                Air China Limited, a company incorporated 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
"CNAHC"                  China National Aviation Holding Company, a company incorporated
                         in the People's Republic of China
"Director(s)"            the director(s) of the Company
"Listing Rules"          The Rules Governing the Listing of Securities on the Stock
                         Exchange of Hong Kong Limited
"Transaction"            the acquisition by the Company of the Airbus Aircraft pursuant to
                         the A330-200 Purchase Agreement







                                              By order of the Board
                                                Air China Limited
                                                   Li Jiaxiang
                                                     Chairman
Beijing, 26 January 2005
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Ma Xulun, Cai Jianjiang, Fan
Cheng, Hu Hung Lick, Henry, Wu Zhipan and Zhang Ke.