THIRD QUARTERLY REPORT 2019

Unit: RMB'000
Gains or losses on disposal of non-current assets	26,933	22,936
Government subsidies recorded in the income statement for the current period (excluding those closely related to the Company's normal business and continuously entitled to in fixed amounts or quotas in accordance with the requirements of the state policy)	127,234	219,477
Gains or losses from changes in fair value of financial assets/liabilities held for trading and derivative financial assets/liabilities and investment gains from disposal of financial assets/liabilities held for trading and derivative financial assets/liabilities and other debt investments (except for hedging activities related to the Company's normal operating business)	237	2,263
Reversal of provision for impairment of receivables and contract asset which are individually tested for impairment	28	12,832
Gains or losses arising from disposal of long-term equity investments	-415	-415
Other non-operating income and expenses not covered above	-7,994	112,723
Effect of non-controlling shareholders' interests (after taxation)	-19,252	-74,073
Effect of income tax	-35,497	-90,444


Total	91,274	205,299

Companies

Air China Ltd. (AIRC)

UK 100

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Name of absent director	Position of absent director	Reason(s) for absence	Name of proxy

Cai Jianjiang	Chairman	Business engagement	Song Zhiyong
Cao Jianxiong	Director	Business engagement	Song Zhiyong
John Robert Slosar	Director	Business engagement	Stanley Hui Hon-chung

Unit: RMB'000
	At the end of the Reporting Period	At the end of the previous year	Increase/decrease at the end of the Reporting Period as compared to the end of the previous year
			(%)

Total assets	289,007,619	243,716,006	18.58
Net assets attributable to shareholders of the listed company	93,849,422	93,216,239	0.68

Net cash flows from operating activities	30,103,490	24,614,813	22.30

	For the period from the beginning of the year to the end of the Reporting Period (January to September)	For the corresponding period of the previous year (January to September)	Increase/ decrease as compared to the corresponding period of the previous year
			(%)

Revenue	103,077,172	102,880,095	0.19
Net profit attributable to shareholders of the listed company	6,762,090	6,937,408	-2.53
Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses	6,556,791	6,526,228	0.47
Weighted average return on net assets (%)	7.45	7.68	Decreased by 0.23 ppt
Basic earnings per share (RMB per share)	0.49	0.51	-3.92
Diluted earnings per share (RMB per share)	N/A	N/A	N/A

	Unit: share
Total number of shareholders (account)	170,901
Particulars of the top 10 shareholders
Name of shareholder (full name)	Number of shares held as at the end of the Period	Share holding percentage	Number of shares held subject to selling restrictions	Shares pledged or frozen		Nature of shareholder
Name of shareholder (full name)	Number of shares held as at the end of the Period	Share holding percentage	Number of shares held subject to selling restrictions	Status	Number	Nature of shareholder
		(%)

China National Aviation Holding Corporation Limited	5,952,236,697	40.98	513,478,818	Frozen	127,445,536	State-owned legal person
Cathay Pacific Airways Limited	2,633,725,455	18.13	0	Nil	0	Foreign legal person
HKSCC NOMINEES LIMITED	1,687,942,428	11.62	0	Nil	0	Foreign legal person
China National Aviation Corporation (Group) Limited	1,556,334,920	10.72	0	Frozen	36,454,464	Foreign legal person
China National Aviation Fuel Group Corporation	466,583,102	3.21	0	Nil	0	State-owned legal person
China Securities Finance Corporation Limited	311,302,365	2.14	0	Nil	0	State-owned legal person
Zhongyuan Equity Investment Management Co., Ltd.	118,455,985	0.82	0	Unknown	118,100,185	State-owned legal person
Hong Kong Securities Clearing Company Ltd.	47,135,304	0.32	0	Nil	0	Foreign legal person
China Merchants Bank Co., Ltd. - Bosera CSI Central-SOEs' Structural Reform ETF	32,733,505	0.23	0	Nil	0	Others
The Industrial and Commercial Bank of China -Dong Fang Hong China Strengthen Balanced Mix Securities Investment Fund	31,220,730	0.21	0	Nil	0	Others

Particulars of the top 10 shareholders not subject to selling restrictions
Name of shareholder	Number of tradable shares held not subject to selling restrictions	Class and number of shares
Name of shareholder		Class	Number

China National Aviation Holding Corporation Limited	5,438,757,879	RMB ordinary shares	5,438,757,879
Cathay Pacific Airways Limited	2,633,725,455	Overseas listed foreign shares	2,633,725,455
HKSCC NOMINEES LIMITED	1,687,942,428	Overseas listed foreign shares	1,687,942,428
China National Aviation Corporation (Group) Limited	1,556,334,920	RMB ordinary shares	1,332,482,920
China National Aviation Corporation (Group) Limited	1,556,334,920	Overseas listed foreign shares	223,852,000
China National Aviation Fuel Group Corporation	466,583,102	RMB ordinary shares	466,583,102
China Securities Finance Corporation Limited	311,302,365	RMB ordinary shares	311,302,365
Zhongyuan Equity Investment Management Co., Ltd.	118,455,985	RMB ordinary shares	118,455,985
Hong Kong Securities Clearing Company Ltd.	47,135,304	RMB ordinary shares	47,135,304
China Merchants Bank Co., Ltd. - Bosera CSI Central-SOEs' Structural Reform ETF	32,733,505	RMB ordinary shares	32,733,505
The Industrial and Commercial Bank of China -Dong Fang Hong China Strengthen Balanced Mix Securities Investment Fund	31,220,730	RMB ordinary shares	31,220,730
Explanation on connected relationship or action in concert among the above shareholders	China National Aviation Corporation (Group) Limited is a wholly-owned subsidiary of China National Aviation Holding Corporation Limited. Accordingly, China National Aviation Holding Corporation Limited is directly and indirectly interested in 51.70% of the shares of the Company.
Explanation of holders of preference shares with restored voting rights and number of shares held	Nil

Unit: RMB'000
Items	Amounts for the Period (July to September)	Amounts for the period from the beginning of the year to the end of the Reporting Period (January to September)

Gains or losses on disposal of non-current assets	26,933	22,936
Government subsidies recorded in the income statement for the current period (excluding those closely related to the Company's normal business and continuously entitled to in fixed amounts or quotas in accordance with the requirements of the state policy)	127,234	219,477
Gains or losses from changes in fair value of financial assets/liabilities held for trading and derivative financial assets/liabilities and investment gains from disposal of financial assets/liabilities held for trading and derivative financial assets/liabilities and other debt investments (except for hedging activities related to the Company's normal operating business)	237	2,263
Reversal of provision for impairment of receivables and contract asset which are individually tested for impairment	28	12,832
Gains or losses arising from disposal of long-term equity investments	-415	-415
Other non-operating income and expenses not covered above	-7,994	112,723
Effect of non-controlling shareholders' interests (after taxation)	-19,252	-74,073
Effect of income tax	-35,497	-90,444


Total	91,274	205,299

Unit: RMB'000
Items in consolidated balance sheet	30 September 2019	31 December 2018	Percentage of Change	Reasons for Change
			(%)

Accounts receivable	7,210,743	5,373,972	34.18	Mainly due to the increase in revenue and the impact of differences in settlement periods.
Inventories	2,510,288	1,877,494	33.70	Mainly due to the increase in aircraft expendables and work-in-progress.
Other current assets	3,000,032	4,446,630	-32.53	Mainly due to the decrease in other financial assets held by subsidiaries of the Company.
Short-term bonds payable	8,097,564	3,467,482	133.53	Mainly due to the issuance of ultra-short-term commercial papers by the Group.
Long-term loans	1,467,852	3,185,481	-53.92	Mainly because the new borrowings were less than the repaid borrowings during the Period.
Other comprehensive income	-24,836	-962,968	97.42	Mainly due to the increase in exchange difference on translation of financial statements in foreign currency during the Period.

Items in consolidated income statement	From the beginning of the year to the end of the Reporting Period (January to September)	From the beginning of the previous year to the end of the previous reporting period (January to September)	Percentage of Change	Reasons for Change
			(%)

Impairment losses in respect of credit	-9,598	-285,129	96.63	Mainly due to the decrease in the reversal of impairment loss of credit during the Period as compared with the same period of the previous year.

Items in consolidated cash flow statement	The first three quarters of 2019 (January to September)	The first three quarters of 2018 (January to September)	Percentage of Change	Reasons for Change
			(%)

Other cash received relating to operating activities	7,687,329	5,017,851	53.20	Mainly due to the year-on-year increase in deposits received by a subsidiary of the Group during the Period.
Cash received from investment income	388,877	250,081	55.50	Mainly due to the year-on-year increase in dividends received from joint ventures and associates during the Period.
Net cash proceeds from disposal of fixed assets and intangible assets	608,842	367,240	65.79	Mainly due to the year-on-year increase in disposal of assets during the Period.
Cash received from issue of debentures	13,004,875	6,100,000	113.19	Due to the year-on-year increase in issuance of debentures during the Period.
Cash received from borrowings	12,900,489	27,706,042	-53.44	Due to the year-on-year decrease in new borrowings during the Period.
Cash paid for repayment of borrowings	20,436,792	30,496,786	-32.99	Due to the year-on-year decrease in repayment of borrowings during the Period.
Cash paid for repayment of debentures	9,405,725	5,500,000	71.01	Due to the year-on-year increase in repayment of debentures during the Period.
Cash paid for leases	10,954,543	5,791,932	89.13	Mainly due to the impact of adopting the New Lease Standard during the Period.

Company name	Air China Limited
Legal representative	Mr. Cai Jianjiang
Date	30 October 2019

	Unit: RMB'000 (Unaudited)
	Items		Balance at the end of the Period		Balance at the end of the previous year

	CURRENT ASSETS:
	Cash and bank		8,253,213		7,807,572
	Provisions on payables
	Contributions made
	Financial assets held-for-trading
	Financial assets at FVTPL
	Derivative financial assets
	Bills receivable		586		403
	Accounts receivable		7,210,743		5,373,972
	Receivables financing
	Prepayments		884,996		1,188,879
	Premium receivable
	Receivables on reinsurance
	Provisions for reinsurance contracts
	Other receivables		2,769,387		3,031,157
	Including: Interest receivable
	Dividend receivable
	Purchase of financial assets resold
	Inventories		2,510,288		1,877,494
	Contract assets
	Held-for-sale assets
	Non-current assets due within a year
	Other current assets		3,000,032		4,446,630
	Total current assets		24,629,245		23,726,107

	NON-CURRENT ASSETS:
	Loans and advances
	Debt investments
	Available-for-sale financial assets
	Other debt investments		1,255,492		1,040,419
	Held-to-maturity investments
	Long-term receivables		1,163,439		1,142,235
	Long-term equity investments		16,704,978		16,540,888
	Investments in other equity instruments		216,194		270,114
	Other non-current financial assets
	Investment properties		165,442		170,942
	Fixed assets		88,390,543		160,402,819
	Construction in progress		36,690,972		32,179,581
	Biological assets for production
	Oil and gas assets
	Right-of-use assets		110,174,679
	Intangible assets		3,744,113		3,759,144
	Development expenses
	Goodwill		1,102,185		1,102,185
	Long-term deferred expenses		491,899		606,105
	Deferred tax assets		4,278,438		2,775,467
	Other non-current assets
	Total non-current assets		264,378,374		219,989,899
	Total assets		289,007,619		243,716,006

	CURRENT LIABILITIES:
	Short-term loans		13,025,394		17,561,546
	Short-term financing bonds payable		8,097,564		3,467,482
	Borrowings from central bank
	Contributions received
	Financial liabilities held-for-trading
	Financial liabilities at fair value through profit or loss
	Derivative financial liabilities
	Bills payable
	Accounts payables		17,228,493		16,174,121
	Domestic air traffic liabilities		2,565,289		3,238,429
	International air traffic liabilities		5,696,925		5,647,845

Receipts in advance
Contract liabilities		1,598,631		1,301,518
Sale of financial assets repurchased
Deposits from clients and placements from other banks
Brokerage payable
Underwriting fees payable
Employee compensations payable		2,710,013		2,806,901
Taxes payable		1,181,370		1,428,926
Other payables		8,818,557		7,162,819
Including: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable on reinsurance
Held-for-sale liabilities
Non-current liabilities due within a year		14,458,349		13,441,489
Other current liabilities
Total current liabilities		75,380,585		72,231,076

NON-CURRENT LIABILITIES:
Reserves on insurance contracts
Long-term loans		1,467,852		3,185,481
Debentures payable		15,398,383		12,400,000
Including: Preference shares
Perpetual bonds
Lease liabilities		83,061,964
Long-term payables		4,655,925		4,208,771
Defined benefit obligations		257,136		263,862
Accrued liabilities		2,896,585		431,705
Deferred income		480,940		647,973
Deferred tax liabilities		661,123		879,372
Obligations under finance leases				45,848,095
Other non-current liabilities		3,037,580		3,062,739
Total non-current liabilities		111,917,488		70,927,998
Total liabilities		187,298,073		143,159,074


	OWNERS' EQUITY (OR SHAREHOLDERS' EQUITY)
	Paid-up capital (or share capital)		14,524,815		14,524,815
	Other equity instruments
	Including: Preference shares
	Perpetual bonds
	Capital reserve		26,270,841		26,270,841
	Less: Treasury shares
	Other comprehensive income		-24,836		-962,968
	Special reserves
	Surplus reserves		10,488,923		10,409,470
	General risk provisions		93,188		93,188
	Retained earnings		42,496,491		42,880,893
	Total owners' equity (or shareholders' equity) attributable to equity shareholders of the Company		93,849,422		93,216,239
	Non-controlling interests		7,860,124		7,340,693
	Total owners' equity (or shareholders' equity)		101,709,546		100,556,932
	Total liabilities and owners' equity (or shareholders' equity)		289,007,619		243,716,006

	Unit: RMB'000 (Unaudited)
	Items		Balance at the end of the Period		Balance at the end of the previous year

	CURRENT ASSETS:
	Cash and bank		2,457,352		7,179,671
	Financial assets held-for-trading
	Financial assets at FVTPL
	Derivative financial assets
	Bills receivable
	Accounts receivable		6,213,330		4,399,059
	Receivables financing
	Prepayments		536,770		787,964
	Other receivables		2,144,333		1,612,383
	Including: Interest receivable
	Dividend receivable
	Inventories		97,152		90,329
	Contract assets
	Held-for-sale assets
	Non-current assets due within a year
	Other current assets		1,925,917		1,986,693
	Total current assets		13,374,854		16,056,099

	NON-CURRENT ASSETS:
	Debt investments
	Available-for-sale financial assets
	Other debt investments
	Held-to-maturity investments
	Long-term receivables		1,023,205		477,016
	Long-term equity investments		25,912,008		24,707,500
	Investments in other equity instruments		22,783		22,783
	Other non-current financial assets
	Investment properties
	Fixed assets		63,685,101		114,433,435
	Construction in progress		24,377,865		21,300,211
	Biological assets for production
	Oil and gas assets
	Right-of-use assets		77,642,496

Intangible assets		2,632,199		2,687,038
Development expenses
Goodwill
Long-term deferred expenses		283,114		294,316
Deferred tax assets		3,682,478		2,340,262
Other non-current assets
Total non-current assets		199,261,249		166,262,561
Total assets		212,636,103		182,318,660

CURRENT LIABILITIES:
Short-term loans		9,789,130		7,988,814
Financial liabilities held-for-trading
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Bills payable
Accounts payable		13,767,720		12,793,179
Domestic air traffic liabilities		1,945,937		2,297,562
International air traffic liabilities		5,221,319		5,111,873
Receipts in advance
Contract liabilities		793,067		767,900
Employee compensations payable		815,298		1,166,450
Taxes payable		949,162		1,112,465
Other payables		8,378,880		8,310,250
Including: Interest payable
Dividend payable
Held-for-sale liabilities
Non-current liabilities due within a year		9,893,417		10,432,216
Other current liabilities
Total current liabilities		51,553,930		49,980,709


	NON-CURRENT LIABILITIES:
	Long-term loans		705,065		1,523,388
	Debentures payable		10,500,000		10,500,000
	Including: Preference shares
	Perpetual bonds
	Lease liabilities		58,884,447
	Long-term payables		2,254,822		2,175,079
	Obligations under finance leases				30,729,202
	Defined benefit obligations
	Accrued liabilities		1,931,360		88,705
	Deferred income		350,876		371,494
	Deferred tax liabilities
	Other non-current liabilities		2,752,966		2,654,793
	Total non-current liabilities		77,379,536		48,042,661
	Total liabilities		128,933,466		98,023,370

	OWNERS' EQUITY (OR SHAREHOLDERS' EQUITY)
	Paid-up capital (or share capital)		14,524,815		14,524,815
	Other equity instruments
	Including: Preference shares
	Perpetual bonds
	Capital reserve		30,618,680		30,618,680
	Less: Treasury shares
	Other comprehensive income		345,642		206,238
	Special reserves
	Surplus reserves		10,451,817		10,372,364
	Retained earnings		27,761,683		28,573,193
	Total owners' equity (or shareholders' equity)		83,702,637		84,295,290
	Total liabilities and owners' equity (or shareholders' equity)		212,636,103		182,318,660

Unit: RMB'000 (Unaudited)
Items	Amounts for the period from the beginning of the year to the end of the Reporting Period (January- September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January- September)

I. Cash flows from operating activities:
Cash received from sales of goods and provision of services	105,359,920	107,714,571
Net increase in deposits from clients and placements from banks
Net increase in borrowings from central bank
Net increase in borrowings from other financial institutions
Cash received from premiums of original insurance contracts
Net cash receipt from reinsurance operations
Net increase in reserve of the insured and investment
Cash received from interest, fees and commission
Net increase in contributions received
Net increase in cash from repurchase operations
Net cash receipt from securities trading as agent
Refund of taxes and levies	55,456	90,838
Other cash received relating to operating activities	7,687,329	5,017,851
Subtotal of cash inflows of operating activities	113,102,705	112,823,260
Cash paid for goods purchased and services received	55,037,672	59,752,837
Net increase in loans and advances to clients
Net increase in deposits in central bank and other banks
Cash paid in respect of claims under original insurance contracts
Net increase in contributions made
Cash paid for interest, fees and commissions
Cash paid for bonus paid on insurance policy
Cash paid to or on behalf of employees	18,176,175	17,185,580
Taxes and levies paid	4,628,178	5,636,907
Other cash paid relating to operating activities	5,157,190	5,633,123
Subtotal of cash outflows from operating activities	82,999,215	88,208,447
Net cash flows from operating activities	30,103,490	24,614,813

II. Cash flows from investing activities:
Cash received from sale and redemption of investments		275,897
Recovery of the secured bank deposits	188,681	7,477
Cash received from investment income	388,877	250,081
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets	608,842	367,240
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to investing activities	162,544	150,454
Subtotal of cash inflows from investing activities	1,348,944	1,051,149
Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets	10,696,300	10,020,140
Cash paid for investments	204,325	178,904
Net increase in secured loans
Net cash payments for acquisition of subsidiaries and other business units
Other cash paid relating to investing activities	1,201	177,632
Subtotal of cash outflows from investing activities	10,901,826	10,376,676
Net cash flows from investing activities	-9,552,882	-9,325,527

III. Cash flows from financing activities:
Cash received from capital injection	400,000
Including: Cash received from capital injection of minority shareholders in subsidiaries	400,000
Cash received from borrowings	12,900,489	27,706,042
Cash received from issue of debentures	13,004,875	6,100,000
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	26,305,364	33,806,042
Cash paid for repayment of borrowings	20,436,792	30,496,786
Cash paid for repayment of debentures	9,405,725	5,500,000
Cash paid for distribution of dividends, profits or payment of interest expenses	5,307,924	4,403,925
Including: Dividends and profits paid to minority shareholders by subsidiaries	193,058	185,043
Cash paid for leases	10,954,543	5,791,932
Other cash paid relating to financing activities
Subtotal of cash outflows from financing activities	46,104,984	46,192,643
Net cash flows from financing activities	-19,799,620	-12,386,601

IV. Effect of exchange rate changes on cash and cash equivalents	85,696	107,569

V. Net increase in cash and cash equivalents	836,684	3,010,254
Add: Balance of cash and cash equivalents as at the beginning of the period	6,763,183	5,562,907

VI. Balance of cash and cash equivalents as at the end of the period	7,599,867	8,573,161