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Press Release
AIR CHINA AND SHANGHAI AIRLINES JOIN STAR ALLIANCE
Market presence in China strengthened
Network growth and Dual-Chinese-Hub Strategy
More Frequent Flyer Benefits

Beijing, CHINA - December 12th, 2007 - Air China Limited (hereinafter “Air China”) and Shanghai Airlines, today formally joined Star Alliance at a ceremony held in the new Terminal Three at Beijing Capital International Airport. With the addition of the two Chinese airlines, Star Alliance now has 19 member carriers operating 17,000 daily flights to 897 destinations in 160 countries, offering international travellers more choice than any other airline alliance.

On domestic routes alone, Air China and Shanghai Airlines have added more than 40 new destinations to the Star Alliance network, thereby bringing alliance benefits to many more travellers.

“China is one the fastest growing aviation markets in the world and as of today, with Air China and Shanghai Airlines now formally Star Alliance member airlines, we offer an unrivalled network of flight connections to, from, and within this market for international travellers”, said Jaan Albrecht, CEO Star Alliance.

Air China is China’s national flag carrier and sole designated passenger airline partner of the 2008 Beijing Olympic Games. Air China was listed on the Hong Kong Stock Exchange and the London Stock Exchange on December 15, 2004. Its operational head office is in Beijing, the capital of the Peoples Republic of China (PRC) and an important aviation hub for domestic and international flights. It also provides airline-related services, including aircraft maintenance, ground services and in-flight catering services in Beijing, Chengdu and other locations through its own business units and joint ventures.

Air China Chairman Mr. Li Jiaxiang said: “This is a historical moment. The world’s fastest growing, and largest airline alliance - Star Alliance - has arrived in the world’s fastest growing, and largest country - China. By becoming a member of Star Alliance China’s premier airline, Air China, is set to undergo many years of strategic co-operation with a large group of the world’s leading airlines.”

Shanghai Airlines is China’s first commercial airline with multiple investments. It was the first Chinese airline to list on the stock exchange and issued A Shares in 2001.

Shanghai Airlines Chairman Mr. Zhou Chi said: “We are very excited that Shanghai Airlines can from now on serve as a bridge between China and the world via its Shanghai hub by joining Star Alliance. Star Alliance can broaden its network to cover China. Shanghai Airlines can expand its network to reach more points around the world and deliver higher quality services and more rewards to its customers. By joining Star Alliance we believe Shanghai Airlines has a brighter future ahead of it.”

 

DUAL HUB STRATEGY FOR CHINA
In order to provide better interconnectivity between international flights and domestic destinations in China, Air China, Shanghai Airlines and the other Star Alliance member carriers serving China, are currently working on improving the two main hub Airports Beijing and Shanghai-Pudong.

In Beijing, Terminal 3 is scheduled to open in March 2008 and will be the new home for all Star Alliance member carriers serving the Chinese Capital.

At Shanghai-Pudong, Terminal 2 will also open in March 2008 and will permit all Star Alliance member airlines with flights to thriving metropolis to operate from the same terminal.

 

FREQUENT FLYER BENEFITS
By joining Star Alliance, Air China and Shanghai Airlines will be able to provide added benefits to their frequent flyers.

Participants in Air China’s PhoenixMiles and Shanghai Airlines’ Crane Club Frequent Flyer Programmes (FFP) will now be able to collect and redeem miles on all other Star Alliance member carriers. In addition, miles collected on flights operated by Star Alliance member airlines will count towards achieving either Air China Platinum, Gold or Silver Status or Crane Club Gold or Silver in Shanghai Airlines’ FFP.

Customers who are enrolled in the other member carrier FFPs can now collect and redeem miles on Air China and Shanghai Airlines flights, increasing the attractiveness of all member carrier FFPs.

 

FARE PRODUCTS
Air China and Shanghai Airlines are now also participating and selling the 11 Star Alliance Fare Products. Included in these is the popular round the world fare, which has now more flight options for customers to choose from, as it now includes the routes served by the two Chinese member carriers. Additionally, both carriers can now be included in itineraries of the Star Alliance Circle Asia and Circle Pacific fares. Moreover, Air China and Shanghai Airlines are now also part of the dedicated conventions and meetings product, Star Alliance Conventions Plus.



About Air China:
Air China is the national flag carrier of China and a leading provider of air passenger, air cargo and airline-related services in China. Its operational head office is in Beijing, the capital of the PRC and an important aviation hub for domestic and international flights. It also provides airline-related services, including aircraft maintenance, ground services and in-flight catering services in Beijing, Chengdu and other locations through its own business units and joint ventures. Air China was listed on the Hong Kong Stock Exchange and the London Stock Exchange on December 15, 2004 under codes 0753 and AIRC respectively. On July 2, 2006, Air China issued its American Depositary Receipt (ADR) listing in New York under the code AIRYY. On August 18, 2006, Air China's A share was listed on the Shanghai Stock Exchange under code 601111. Air China was designated on August 4, 2004 as the sole passenger airline partner of the Beijing Olympic Games; As at 30 June 2007, Air China’s flights are connecting 26 countries and regions over the globe, including 39 international cities and 1 region; 19,334 employees; fleet 212. Hubs: Beijing, Chengdu.
 
About Shanghai Airlines:
As a Shanghai-based carrier, Shanghai Airlines takes “safety first, customer priority, quality service and excellence orientation” as its business and corporate philosophy. Shanghai Airlines has inaugurated over 140 domestic routes, 11 international and regional routes. The regional and international network is integrated with domestic trunk and feeder lines. In accordance with its plan to build-up the Pudong hub, Shanghai Airlines will improve its domestic flight network and plans to commence long-haul flights to Europe and America to built easier connections. Shanghai Airlines is building its fleet numbers up to 100 aircraft from its current fleet of 59 by 2010. The Boeing 787 Dreamliner is expected to join Shanghai Airlines in 2008. In 2004, SAL was accredited by IATA with IOSA certification becoming the first Chinese airline to achieve this honour. SAL has also won numerous awards, including top honor for airline safety performance in China aviation, first rank amongst airlines in the “China Aviation Customer Satisfaction Annual Survey” and first prize for flight punctuality in China.
Total revenue, USD 1 billion; countries served 8; airports served 71 [60 domestic and 11 international] passengers, 7.48 million; employees 5460; fleet 59. Hub: Shanghai.
 
About Star Alliance:
The Star Alliance network was established in 1997 as the first truly global airline alliance to offer customers worldwide reach and a smooth travel experience. Star Alliance was voted Best Airline Alliance by Business Traveller Magazine in 2003, 2006 and 2007 and by Skytrax in 2003, 2005 and 2007. The members are Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, THAI, United and US Airways. Regional member carriers Adria Airways (Slovenia), Blue1 (Finland) and Croatia Airlines enhance the global network. EgyptAir and Turkish Airlines have been accepted as future members and are expected to join Star Alliance soon. Overall, the Star Alliance network offers more than 17,000 daily flights to 897 destinations in 160 countries.
 
For further information please contact:
Air China, Ms. Rao Xinyu, General Manager Investor Relations, Tel: +86-13-910391619

Shanghai Airlines:
Mr. Wang Wan Long, Tel: +86-13-901885862 or Mr. Zhao Wei, Tel: +86-13-564869096

Star Alliance Press Office
Tel: +49 69 96375 183
Fax: +49 69 96375 683
Email: mediarelations@staralliance.com
www.staralliance.com