Annual Report 2013 二零一三年年報 Air China Is the Only National Flag Carrier of China and a Member of Star Alliance, the World’S Largest Airline Alliance
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2013 ReportAnnual Annual Report 2013 二零一三年年報 Air China is the only national flag carrier of China and a member of Star Alliance, the world’s largest airline alliance. It is also the only Chinese civil aviation enterprise listed in “The World’s 500 Most Influential Brands”. Air China is headquartered in Beijing, the capital of China, with two increasingly important hubs in Shanghai and Chengdu. With Star Alliance, our network covered 1,328 destinations in 195 countries as at 31 December 2013. Air China is dedicated to provide passengers with safe, convenient, comfortable and personalised services. Air China is actively implementing the strategic objectives of ranking among the top in terms of global competitiveness, continuously strengthening our development potentials, providing our customers with a unique and excellent experience and realising sustainable growth to create value for all related parties. In addition, Air China also holds direct or indirect interests in the following airlines: Air China Cargo Co., Ltd, Shenzhen Airlines Company Limited, Air Macau Company Limited, Beijing Airlines Company Limited, Dalian Airlines Company Limited, Air China Inner Mongolia Company Limited, Cathay Pacific Airways Limited, Shandong Airlines Co., Ltd. and Tibet Airlines Company Limited. Air China Limited • Annual Report 2013 Contents 2 Corporate Information 3 Summary of Financial Information 5 Summary of Operating Data 7 Chairman’s Statement 9 Business Overview 16 Management’s Discussion and Analysis of Financial Position and Operating Results 24 Corporate Governance Report 37 Report of the Directors 54 Profile of Directors, Supervisors and Senior Management Financial Statements prepared under International Financial Reporting Standards 61 – Independent Auditors’ Report 63 – Consolidated Statement of Profit or Loss 64 – Consolidated Statement of Profit or Loss and Other Comprehensive Income 65 – Consolidated Statement of Financial Position 67 – Statement of Financial Position 69 – Consolidated Statement of Changes in Equity 70 – Consolidated Cash Flow Statement 71 – Notes to the Financial Statements Financial Statements prepared under the Accounting Standards for Business Enterprises of the PRC 163 – Consolidated Income Statement 164 – Consolidated Balance Sheet 166 Supplementary Information 167 Glossary of Technical Terms 168 Definitions 1 Air China Limited • Annual Report 2013 Corporate Information REGISTERED CHINESE NAME LEGAL REPRESENTATIVE OF THE 中國國際航空股份有限公司 COMPANY Cai Jianjiang ENGLISH NAME Air China Limited JOINT COMPANY SECRETARIES Rao Xinyu REGISTERED OFFICE Tam Shuit Mui Blue Sky Mansion 28 Tianzhu Road AUTHORISED REPRESENTATIVES Airport Industrial Zone Cai Jianjiang Shunyi District Tam Shuit Mui Beijing China LEGAL ADVISERS TO THE COMPANY Haiwen & Partners (as to PRC Law) PRINCIPAL PLACE OF BUSINESS IN HONG Sullivan & Cromwell (as to Hong Kong and English Law) KONG 5th Floor, CNAC House INTERNATIONAL AUDITORS 12 Tung Fai Road KPMG Hong Kong International Airport Hong Kong H SHARE REGISTRAR AND TRANSFER OFFICE WEBSITE ADDRESS Computershare Hong Kong Investor Services Limited www.airchina.com.cn Rooms 1712-1716, 17th Floor Hopewell Centre DIRECTORS 183 Queen’s Road East Cai Jianjiang Wanchai Wang Yinxiang Hong Kong Cao Jianxiong Sun Yude LISTING VENUES Ian Sai Cheung Shiu Hong Kong, London and Shanghai Fan Cheng Fu Yang Yang Yuzhong Pan Xiaojiang Simon To Chi Keung SUPERVISORS Li Qinglin He Chaofan Zhou Feng Xiao Yanjun Shen Zhen 2 Air China Limited • Annual Report 2013 Summary of Financial Information (RMB’000) 2013 2012 2011 2010 2009 (Restated) (Restated) (Restated) (Restated) Turnover 98,180,790 99,472,780 95,820,643 80,402,846 50,813,455 Profit from operations 4,118,064 8,409,000 6,948,560 10,560,951 5,477,063 Profit before taxation 4,518,093 6,909,353 10,202,609 14,611,950 5,045,756 Profit after taxation (including profit attributable to non-controlling interests) 3,614,961 5,302,151 7,961,576 12,147,259 4,804,343 Profit attributable to non-controlling interests 351,319 486,394 420,754 246,709 (51,183) Profit attributable to equity shareholders of the Company 3,263,642 4,815,757 7,540,822 11,900,550 4,855,526 EBITDA(1) 15,141,290 18,815,128 16,421,288 19,490,106 12,620,891 EBITDAR(2) 20,062,145 22,977,006 21,021,753 23,573,805 15,680,765 Earnings per share attributable to equity shareholders of the Company (RMB) 0.27 0.40 0.62 1.02 0.41 Return on equity attributable to equity shareholders of the Company (%) 6.07 9.64 16.32 28.79 20.30 (1) EBITDA represents earnings before finance revenue, finance costs, enterprise income taxes, share of profits less losses of associates, share of profits less losses of joint ventures, depreciation and amortisation as computed under the IFRSs. (2) EBITDAR represents EBITDA before deducting operating lease expenses on aircraft and engines as well as other operating lease expenses. Turnover (RMB’000) 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 2009 2010 2011 2012 2013 3 Air China Limited • Annual Report 2013 Summary of Financial Information (RMB’000) 31 December 31 December 31 December 31 December 31 December 2013 2012 2011 2010 2009 (Restated) (Restated) (Restated) (Restated) Total assets 205,083,287 185,283,484 172,798,298 155,626,350 106,954,386 Total liabilities 147,537,099 131,971,243 123,831,701 114,238,430 82,996,844 Non-controlling interests 3,788,803 3,367,991 2,763,503 46,695 38,571 Equity attributable to equity shareholders of the Company 53,757,385 49,944,250 46,203,094 41,341,225 23,918,971 Equity attributable to equity shareholders of the Company per share (RMB) 4.11 3.87 3.58 3.21 1.95 (RMB’000) 250,000,000 Total assets 200,000,000 Total liabilities 150,000,000 100,000,000 Equity attributable 50,000,000 to equity shareholders of the Company 0 2009 2010 2011 2012 2013 4 Air China Limited • Annual Report 2013 Summary of Operating Data The following is the operating data summary of the Company, Air China Cargo, Shenzhen Airlines (including Kunming Airlines), Air Macau and Dalian Airlines. 2013 2012 Change Traffic RPK (in millions) 141,967.95 129,773.32 9.40% International 41,513.50 37,536.36 10.60% Domestic 94,340.75 86,588.77 8.95% Hong Kong, Macau and Taiwan 6,113.70 5,648.18 8.24% RFTK (in millions) 5,015.33 5,006.72 0.17% International 3,496.03 3,509.12 (0.37%) Domestic 1,423.31 1,385.93 2.70% Hong Kong, Macau and Taiwan 95.99 111.67 (14.05%) Passengers carried (in thousands) 77,676.86 72,415.84 7.27% International 7,822.33 7,391.22 5.83% Domestic 65,955.83 61,430.80 7.37% Hong Kong, Macau and Taiwan 3,898.70 3,593.81 8.48% Cargo and mail carried (tonnes) 1,456,787.68 1,460,939.24 (0.28%) Kilometres flown (in millions) 980.32 916.03 7.02% Block hours (in thousands) 1,568.95 1,462.41 7.29% Number of flights 537,478 511,735 5.03% International 53,409 51,647 3.41% Domestic 451,676 429,455 5.17% Hong Kong, Macau and Taiwan 32,393 30,633 5.75% RTK (in millions) 17,651.07 16,574.09 6.50% Capacity ASK (in millions) 175,676.68 161,382.14 8.86% International 51,889.85 47,263.58 9.79% Domestic 115,402.44 106,397.05 8.46% Hong Kong, Macau and Taiwan 8,384.39 7,721.52 8.58% AFTK (in millions) 8,663.97 8,465.78 2.34% International 5,587.89 5,535.55 0.95% Domestic 2,804.84 2,652.12 5.76% Hong Kong, Macau and Taiwan 271.24 278.11 (2.47%) ATK (in millions) 24,509.97 23,020.94 6.47% 5 Air China Limited • Annual Report 2013 Summary of Operating Data 2013 2012 Change Load factor Passenger load factor (RPK/ASK) 80.81% 80.41% 0.40 ppts International 80.00% 79.42% 0.58 ppts Domestic 81.75% 81.38% 0.37 ppts Hong Kong, Macau and Taiwan 72.92% 73.15% (0.23 ppts) Cargo and mail load factor (RFTK/AFTK) 57.89% 59.14% (1.25 ppts) International 62.56% 63.39% (0.83 ppts) Domestic 50.74% 52.26% (1.51 ppts) Hong Kong, Macau and Taiwan 35.39% 40.15% (4.77 ppts) Overall Load Factor (RTKs expressed as a percentage of ATKs) 72.02% 72.00% 0.02 ppts Daily utilization of aircraft (block hours per day per aircraft) 9.57 9.61 (0.04 hour) Yield Yield per RPK (RMB) 0.61 0.67 (8.96%) International 0.54 0.57 (5.26%) Domestic 0.63 0.70 (10.00%) Hong Kong, Macau and Taiwan 0.85 0.87 (2.30%) Yield per RFTK (RMB) 1.57 1.68 (6.55%) International 1.65 1.75 (5.71%) Domestic 1.26 1.35 (6.67%) Hong Kong, Macau and Taiwan 3.10 3.74 (17.11%) Unit cost Operating cost per ASK (RMB) 0.54 0.56 (3.57%) Operating cost per ATK (RMB) 3.84 3.96 (3.03%) 6 Air China Limited • Annual Report 2013 Chairman’s Statement we rationally deployed wide-body aircraft on major routes and routes where we enjoyed competitive advantage, and increased our capacity in central and western routes so as to ensure that our quality resources were fully utilised. At the same time, we further improved our sales and marketing models with new business platform and marketing techniques, launched a brand new customer relationship management system to segmentise customer needs, and continued to optimise our distribution channels, thereby increasing our traffic volume as we increased our capacity considerably.