Air China and Cathay Pacific Airways Consolidate Cargo Businesses

BEIJING, May 11, 2011 - Air China and Cathay Pacific Airways have announced the consolidation of
their cargo businesses in a Beijing ceremony to launch the new Air China
Cargo.

(Logo: photos.prnewswire.com/prnh/20080625/CNW017LOGO )

Air China will hold 51% of the shares and Cathay Pacific will
hold 25% of the shares and 24% of economic interests in Air China Cargo. Air
China Cargo's Board of Directors has four Air China members and three Cathay
Pacific members. After the consolidation, Air China Cargo's fleet will
include 12 B747-400 aircraft. The airline's operation center will be based in
Shanghai.

The consolidation of Air China and Cathay Pacific's cargo
businesses is part of the two airlines' long-term cooperation strategy. This
latest collaboration will increase fleet development and strengthen the
market position of both airlines. The operation center in Shanghai will
satisfy the market demands of the Yangtze River Delta, which makes up
two-thirds of Air China's service area. The cooperation will help Air China
Cargo reach all-round global development.

Graham Norris of Ogilvy PR Worldwide, graham.norris at ogilvy.com, for Air China