About China Eastern Airlines Corporation

China Eastern Airlines Corporation Limited engages in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The company is one of the three largest air carriers in China in terms of several indicators, including number of passengers carried, ATK (available tonne-kilometers) and ASK (available seat kilometers) in 2021. The company is an important domestic airline based in and serving Shanghai, which is considered to be the international financial and shipping center of China. The primary focus of the company’s business is the operation of civil aviation, including the provision of passenger, cargo, mail delivery, tour operations and other extended transportation services. The company operates most of its flights through its three hubs located in eastern, northwestern and southwestern China, namely Shanghai, Xi’an and Kunming, respectively. The company has steadily fostered the construction of a flight system for these core hubs by introducing new flight destinations and increasing the frequency of certain flights, thereby enhancing its transfer and connection capability in these hub markets. With the commencement of operation of Beijing Daxing International Airport in 2019, Beijing Daxing International Airport also becomes one of the company’s core hubs. The company’s domestic routes contributed approximately 93.5% of its total passenger revenues in 2021. The company’s most heavily traveled domestic routes generally link Shanghai to the large commercial and business centers of China, such as Beijing, Guangzhou and Shenzhen. The company’s flight routes include all provincial capital cities in China and specifically designated cities. As of December 31, 2021, the company served a route network that covers 1,036 destinations in 170 countries through SkyTeam Airlines Alliance (SkyTeam), an international airlines alliance. Passenger Operations In 2019, the company introduced a total of 44 aircraft of major models and one aircraft retired. With the introduction of new aircraft, such as A350-900, B787-9 and A320NEO, its fleet age structure has remained young. The company has intensified its comprehensive cooperation with strategic partners and core partners to improve the capacity of international routes and enhance the quality of cooperation. For the core markets of Shanghai and Beijing, leveraging on the operation of the satellite terminal S1 of Shanghai Pudong International Airport (the Satellite Terminal S1 of Pudong) and Beijing Daxing International Airport, the company worked with SkyTeam Airline Alliance members and other important partners to carry out the plan for route network optimization connection, as well as the development of ground service procedure and standards, explore ground operating cooperation opportunities, design passenger travel plan portfolio products and continue to expand the scope of code-sharing. For the North American market, the company and Delta Air Lines started to operate in the same terminal in Satellite Terminal S1 of Pudong and recorded increase in revenue from cooperation. For the European market, the company has expanded joint operation routes with Air France-KLM Group (Air France-KLM) by adding new routes from Kunming and Wuhan to Paris, and intensified the cooperation in the aspects, such as transfer mode of connected flights, corporate clients and joint sales. For the Australian market, the company’s in-depth cooperation with Qantas Airways Limited in the areas of code-sharing, allocation of flight capacity, joint marketing, resources sharing and personnel exchange has driven the growth in mutual sales revenue from cooperation. For the Asia Pacific market, the company continued to facilitate the anti-monopoly approval procedures for the joint co-operation with Japan Airlines and deepened the cooperation in the areas of route network and flight capacity sharing with Japan Airlines to strengthen its market position in Japan routes. In 2019, the company has focused on the core hubs of Beijing and Shanghai, and the regional hubs, such as Xi’an and Kunming to continuously optimize its route network layout and flight capacity allocation so as to strengthen the its market share and influence. In 2020, the company introduced a total of 13 aircraft of major models and a total of 11 aircraft retired. With the introduction of new aircraft, such as A350-900, B787-9 and A320NEO, its fleet age structure still continues to remain young. As of December 31, 2020, the company operated a fleet of 734 aircraft, which included 725 passenger aircraft and nine business aircraft held under trust. In 2020, the company has closely followed the situation of the COVID-19 pandemic and market changes to dynamically adjust the deployment of transportation capacity. In 2021, the company introduced a total of 33 aircraft of major models and a total of six aircraft retired. With the introduction of new aircraft, such as A350-900, B787-9 and A320NEO, its fleet age structure continues to remain young. As of December 31, 2021, the company operated a fleet of 758 aircraft, which included 752 passenger aircraft and six business aircraft. Cargo and Mail Operations The company also provides air cargo and mail services. China Cargo Airlines Co., Limited has exclusive operation to independently operate and manage our passenger aircraft cargo business. Competition Domestic: The company’s principal competitors in the domestic market are China Southern (China Southern Airlines Company Limited) and Air China (Air China Limited), which also provide transportation services on some of its routes, principally routes originating from the major air transportation hubs in China, such as Shanghai, Guangzhou and Beijing. In addition, the company is facing increasing competition from certain low-cost carriers, such as Spring Airlines, in the domestic market. Spring Airlines competes with the company, as it operates daily domestic routes to certain destinations, such as Harbin, Shenyang, Guangzhou, Xiamen Airlines, Sanya, Kunming and Chongqing Airlines Company Limited, which are covered in its domestic routes. Regional: The primary competitors on the company’s Hong Kong routes were Cathay Pacific Airways (Cathay) and HongKong Airlines. Cathay and HongKong Airlines compete with the company on several of these routes, particularly the Shanghai- Hong Kong route. The company competes with China Airlines, China Southern and Eva Air on its route connecting mainland cities and Taiwan. The company competes with Air Macau on the Shanghai Pudong-Macau route. Air Macau’s routes also provide an alternative to the company’s Hong Kong routes for passengers traveling between Taiwan and mainland China. International: The company competes with Air China, China Southern and many other well-established foreign carriers on its international routes. Joint Ventures The company has a joint venture with Honeywell International Inc. (Honeywell) in Shanghai for performing maintenance and repairs on aircraft wheel assemblies and brakes. Since October 1997, the company operated a maintenance hangar at Hongqiao International Airport, which has the capacity to house two wide-body aircraft. The company and Rockwell Collins International Inc. of the United States has also co-established Collins Aviation Maintenance Service Shanghai Limited, which primarily engages in the provision of repair and maintenance services for avionics and aircraft in-flight entertainment facilities in China. The company and Rockwell Collins International Inc. hold 35% and 65%, respectively, of the equity interests in the joint venture. Moreover, in November 2002, the company, jointly with Aircraft Engineering Investment Limited, established Shanghai Eastern Aircraft Maintenance Limited, in which it holds 60% of the equity interests, to provide supplemental avionics and other maintenance services to it. STA, which was established in 2004 by the company and Singapore Technologies Aerospace Ltd. under a joint venture agreement dated March 10, 2003, also provides it with aircraft maintenance, repair and overhaul services. In 2014, the company established Eastern Airlines Technology Co. Ltd. (Eastern Technology), a wholly-owned subsidiary specializing in aircraft maintenance. Since 2016, the company’s customer base continued to expand, other airlines, such as Singapore Airlines, AirAsia, Royal Brunei Airlines, Macau Airlines, Delta Air Lines, Asiana Airlines, Hong Kong Airlines, Malaysia Airlines, Air Busan, British Airways and Egypt Air became customers of Eastern Technology. Ground Facilities and Services The center of the company’s operations is Shanghai, one of China’s principal air transportation hubs. The company’s Shanghai operations are based at Hongqiao International Airport and Pudong International Airport. In addition, the company started its operation in Beijing Daxing International Airport following its commencement of operation in September 2019. The company also operates from various other domestic airports. The company has its own ground services and other operational services, such as aircraft cleaning and refueling and the handling of passengers and cargo for its operations at Hongqiao International Airport and Pudong International Airport. The company also provides ground services for many other airlines that operate to and from Hongqiao International Airport and Pudong International Airport. In-flight meals and other catering services for the company’s Shanghai-originated flights are provided primarily by Shanghai Eastern Air Catering Limited Liability Company, a joint venture company affiliated with China Eastern Air Holding Company (CEA Holding). The company generally contracts with local catering companies for flights originating from other airports. In 2021, the company launched its ground facilities and services in Chengdu Tianfu International Airport and relocated its facilities and services from Shandong Liuting Airport to Shandong Jiaodong Airport. Additionally, the company provided unaccompanied elderly passenger with guidance service and set up the caring service team in several airports in China in 2021. Marketing and Sales Passenger Operations In August 2003, the company upgraded and rebranded its frequent flyer program to Eastern Miles and introduced a series of new services, including among others, instant registration of membership and mileage, online registration of mileage, and accumulation of mileage on expenses at certain hotels, restaurants and other service providers that are its strategic partners. The company’s domestic and international flights together with the high-speed railway products at Shanghai Hongqiao International Airport and Shanghai Pudong International Airport, have formed an air-rail two-way transportation product, which has helped it broaden its customer resources. Ticket Booking Systems In addition to the company’s domestic sales agents located in various cities in mainland China, Hong Kong, Macau and Taiwan, it maintains overseas sales or representative offices worldwide, including North American locations, such as Honolulu, Los Angeles, New York, San Francisco and Vancouver; European and Middle Eastern locations, such as Frankfurt, Hamburg, London, Moscow, Paris, Rome, Madrid, Brussels and Munich; the Asia-Pacific locations, such as Seoul, Tokyo, Osaka, Nagoya, Fukuoka, Hiroshima, Sapporo, Niigata, Fukushima, Okinawa, Shizuoka, Kanazawa, Toyama, Nagasaki, Kagoshima, Okayama, Matsuyama, Singapore, Bangkok, Phuket, New Delhi, Kolkata, Kuala Lumpur, Ho Chi Minh, Bali, Dubai, Dhaka, Phnom Penh, Siem Reap, Vientiane, Yangon, Mandalay, Kathmandu and Maldives; and Australian locations, such as Melbourne and Sydney. SkyTeam Alliance The company officially joined SkyTeam Airlines Alliance, an international airlines alliance and frequent flyer mileage program that includes international carriers, such as among others, Delta Air Lines, Alitalia, Air France and KLM, on June 21, 2011, and has continued expand its code-sharing programs with SkyTeam members on more routes. By connecting to the route networks of other SkyTeam member airlines, the company was able to offer its passengers seamless transit to 44 destinations in 15 countries under a single plane ticket with direct luggage services as of December 31, 2021. Passengers may also enjoy the comfort of more than 790 VIP airport lounges of SkyTeam around the world. 1,036 domestic and foreign destinations in 170 countries were covered through extensive global cooperation of 19 member airlines. Patents and Trademarks The company owns or has obtained licenses to use various domestic and foreign patents, patent applications and trademarks related to its business. The company owns various trademarks related to its business. The most important trademark is the service trademark of China Eastern Airlines Corporation Limited. All of the company’s trademarks are registered in China. Environmental Regulation The company is subject to a number of environmental laws and regulations issued by regulatory authorities in China, including the Environment Protection Law of the PRC, the Prevention and Control of Noise Pollution Law of the PRC, the Environmental Protection Tax Law of the PRC, Implementing Regulations of Environmental Protection Tax Law of the People’s Republic of China (PRC) and Implementation Opinions on Further Promoting the Green Development of Civil Aviation. History China Eastern Airlines Corporation Limited was founded in 1988. The company was incorporated under the laws of the PRC in 1995.