The Company announces that it has made a preliminary estimation (based on unaudited financial data for the period from 01-Jan-08 to 30-Sep-08 prepared according to the PRC Accounting Standards) that it is expected to record a loss for the period from 01-Jan-08 to 30-Sep-08.

1. Estimated results for the period from 1 January to 30 September 2008

The Company has made a preliminary estimation based on the financial data for the period from 1 January to 30 September 2008 prepared according to the PRC Accounting Standards and estimates that a loss will be incurred for the period from 1 January to 30 September 2008. The financial data for the period from 1 January to 30 September 2008 has not been audited by certified auditors. Detailed financial information will be disclosed in the third quarterly report of 2008 of the Company.

2. Reasons for the expected loss for the period from 1 January to 30 September 2008

The factors causing a general shrinking demand and significant slowdown in revenue growth for the aviation industry include (i) the adverse effects of the Sichuan earthquake; (ii) the market fluctuations during the Olympic Games; and (iii) the adverse impact brought about by the global financial crisis. Further, the Company experienced substantial increase in its jet fuel cost as compared with the same period last year due to highly fluctuating oil price. Concurrently, the recent dramatic fall in crude oil prices in the international market led to a negative valuation on the fair value of the Company's fuel hedging contracts as on 30 September 2008 (the fair value of the fuel hedging contracts is subject to further changes in crude oil prices and the international financial market situation).