Stmnt re Investment Proposal

Air China Ld
22 January 2008

                               AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's Republic of China
                            with limited liability)                             
                               (Stock Code: 753)                                

                        Overseas Regulatory Announcement                        

 Announcement on CNACG's proposal in respect of investment in China Eastern  
 Airlines and formation of a strategic partnership with China Eastern Airlines  
 
This announcement is made pursuant to Rule 13.09 (2) of the Rules Governing the 
Listing of Securities on The Stock Exchange of Hong Kong Limited.                                           

Air China Limited (the 'Company' ) received Proposal in respect of Investment
in China Eastern Airlines Corporation Limited ('China Eastern Airlines' ) and
Formation of a Strategic Partnership with China Eastern Airlines (the 
'Proposal' ) from one of its substantial shareholders, China National Aviation
Corporation (Group) Limited ('CNACG' ), on 18 January 2008.

After issuing an announcement on the 7 January 2008 edition of the South China
Morning Post and the Hong Kong Economics Times, CNACG submitted the Proposal to
the board of directors of China Eastern Airlines on 18 January 2008, which
contemplates that CNACG and/or relevant parties it represents (collectively, the
'CNACG Parties' ), and China Eastern Air Holding Company will jointly
subscribe for the 2,984,850,000 H Shares to be issued by China Eastern Airlines
at a price of not less than HK$5 per H share. The Proposal further suggests
that, notwithstanding whether or when the abovementioned proposal on the share
subscription will be implemented, the CNACG Parties will endeavour to procure
the cooperation between the Company and China Eastern Airlines in three areas,
including: (1) cooperating with China Eastern Airlines to establish an aviation
hub operation system in Shanghai with China Eastern Airlines being the principal
part; (2) integrating the cargo business of the Company and China Eastern
Airlines; and (3) carrying out comprehensive cooperation between the Company and
China Eastern Airlines.

CNACG, as one of our shareholders, may submit to the board of directors of the
Company proposals that are conducive to the development of the Company. The
Company will seriously consider and actively respond to the proposal in respect
of the business cooperation between the Company and

China Eastern Airlines as suggested by the Proposal. With the development of the
Proposal, the Company would obtain the relevant approvals and make disclosure
accordingly pursuant to applicable laws and regulations. However, at present,
the Company has not made any decision in connection with the proposal or
suggestion by CNACG.

 

                                                   By order of the Board

                                                   Huang Bin     Li Man Kit
                                                   Joint Company Secretaries

Beijing, the PRC
21 January 2008

As at the date of this announcement, the Directors of the Company are 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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