THE COMAC AIRCRAFT PURCHASE AGREEMENT

The principal terms of the COMAC Aircraft Purchase Agreement are set out as follows:

Date

26 April 2024

Parties

(a)     the Company, as the purchaser, the principal business activities of which are air passenger, air cargo and airline-related services; and

(b)     COMAC, as the vendor, one of the principal business activities of which is civil aircraft manufacturing.

As at the date of this announcement, COMAC is owned as to 49.80% by the SASAC of the State Council, 20.92% by Shanghai Guosheng (Group) Co., Ltd. (上海國盛（集團）有限公司), which is directly wholly-owned by Shanghai SASAC, and the remaining 29.28% of the shareholdings are

owned by multiple shareholders, each holding less than 10% in COMAC. To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, COMAC and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons (as defined under the Listing Rules).

Aircraft to be acquired

100 C919 aircraft (Extended-ranged Version)

Consideration

The aircraft basic price comprises the airframe price, add-on features price and engine price.

According to the latest price catalogue provided by COMAC, the basic price of the COMAC Aircraft to be acquired by the Company, in aggregate, is approximately US$10,800 million (equivalent to approximately HK$84,240 million at an exchange rate of US$1 = HK$7.80).

COMAC has granted to the Company considerable price concessions with regard to the COMAC Aircraft. Such price concessions were determined after arm's length negotiations between the parties and as a result, the actual consideration for the COMAC Aircraft Purchase is lower than the aircraft basic price mentioned above.

The COMAC Aircraft Purchase Agreement was negotiated and entered into in accordance with customary business practice. The Directors confirm that the extent of the price concessions granted to the Company in the COMAC Aircraft Purchase is fair and reasonable and comparable with the price concessions provided under the previous similar transactions. The Company believes that there is no material impact of the price concessions obtained in the COMAC Aircraft Purchase on the unit operating cost of the Group's fleet. It is normal business practice of the global airline industry to disclose the aircraft basic price, instead of the actual price, for aircraft acquisitions. Disclosure of the actual consideration will result in the loss of the considerable price concessions and hence a significant negative impact on the Group's cost for the COMAC Aircraft Purchase and will therefore not be in the interests of the Company and the Shareholders as a whole.