Circ re. A Share Issue

Air China Ld
02 November 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ACTION

If you are in doubt as to any aspect of this circular, you should consult
your stockbroker or other registered dealer in securities, bank manager,
solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Air China Limited, you
should at once hand this circular and the accompanying form of proxy and the
notice of attendance to the purchaser or the transferee or to the bank,
stockbroker or other agent through whom the sale or transfer was effected
for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this circular, 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 circular.


                         AIR CHINA LIMITED

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

PROPOSED OFFERING OF ADDITIONAL A SHARES

It is important to note that the purpose of distributing this circular is to
provide the shareholders of Air China Limited (the 'Company') with
information on the proposed issue of additional A Shares by the Company, so
that the shareholders of the Company may make an informed decision on voting
in respect of certain resolution(s) to be tabled at the extraordinary general
meeting of the Company. This circular does not constitute, or form part of,
an offer or invitation, or solicitation or inducement of an offer, to
subscribe for or purchase any of the A Shares or other securities of the
Company, nor is this circular calculated to invite offers for any shares or
other securities of the Company.

A letter from the Board is set out on pages 3 to 9 of this circular.

This circular also contains the notice convening the extraordinary general
meeting of the Company which is to be held at the Conference Room, Air China
Building, 36 Xiaoyun Road, Chaoyang District, Beijing, China at 1:30 p.m. on
17 December 2007.

If you intend to appoint a proxy to attend the EGM, you are required to
complete and return the accompanying proxy form in accordance with the
instructions printed thereon. For holders of H Shares, the proxy form should
be returned to Computershare Hong Kong Investor Services Limited not less
than 24 hours before the time appointed for the meetings or any adjourned
meetings thereof. Completion and return of the form of proxy will not
preclude you from attending and voting in person at the meeting or at any
adjourned meeting should you so wish. In such event, the instrument
appointing a proxy shall be deemed to be revoked.

For holders of H Shares, if you intend to attend the EGM in person or by
proxy, you are required to complete and return the notice of attendance to
Computershare Hong Kong Investor Services Limited on or before 27 November
2007.

2 November 2007


CONTENTS                                                   Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . .  1
Letter from the Board
A. Introduction . . . . . . . . . . . . . . . . . . . . .    3
B. The Proposed Offering . . . . .. . . . . . . . . . . .    4
C. The EGM . . . . . . . . . . . . . . . . . . . . . . . .   8
D. Procedures for Demanding a Poll . . . . . . . . . . . .   9
E. Recommendation     . . .  . . . . . . . . . . . . . . .   9
Notice of EGM . . . .  . . . . . . . . . . . . . . . . . .  10
Appendix I      -  Feasibility of Proposed Investment 
                   Projects to Be Funded by the Proceeds 
                   from the Offering . . . . . . . . . . .  14
Appendix II     -  Report from the Board on Use of Proceeds
                   from Previous Issue of Shares . . . . .  16
Appendix III    -  Report from Ernst & Young Hua Ming on the
                   Use of Proceeds from Previous Issue of
                   Shares . . . . . . . . . . . . .         21

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