#1China Airlines 2022 2nd Investor Conference Dec.09.'22 1**7! Ho Seh Bo G'day! 13#7! 안녕하세요 こんにちは สวัสดี CHINA AIRLINES AM- Xin chào Hello! Hi! Hoi! Hello!#2Safe Harbor Notice ✈ The information disclosed in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a whole. The Company is not responsible for updating or making adjustments to the contents of this presentation to reflect the actual needs of the market, the latest policies or the ongoing changes of the economics. ✈ This information disclosed here only represents the outlooks based upon the available data for the current time and does not indicate or ensure the actual performance in the future. Neither should the data be taken as the full statement of the future development of the company nor the industrial phenomena. For the convenience of readers, this presentation has been translated into English from an original Chinese version. If there is any conflict between these two versions any misinterpretation in place, information in the Chinese version shall prevail. CHINA AIRLINES 2#3Agenda ✈ 2022Q1-Q3 Operating Performance 1. Operating results 2. Revenue & Cost breakdown 3. Financial risk management ✈ Operation Overview & Market Outlook 1. Pax & Cargo performance 2. Business outlook 3. Pax & Cargo strategies 4. Fleet planning 5. Sustainable development CHINA AIRLINES 3#4CHINA AIRLINES 2022Q1-Q3 Operating Results AM-#52022 Q1-Q3 Financial Results (NTD 100 Million) 2021Q1-Q3 2022 Q1-Q3 Differences YOY Operating revenue Passenger revenue 45.69 122.81 77.12 +168.79% Cargo revenue 813.10 928.08 114.98 +14.14% Other operating revenue 57.96 66.94 8.98 +15.49% Net Operating Income 47.22 42.49 -4.73 -10.02% Net Income After Tax 10.98 31.42 20.44 +186.16% Net Income Attributable to 15.55 36.18 20.63 +132.67% Owners of the company Earnings Per Share (TWD) 0.28 0.60 0.32 CHINA AIRLINES Based on consolidated financial report 5#6Revenue breakdown and comparison ✈ By 2022Q3, Cargo revenue is still the main part of operating revenue (80%), while the proportion of passenger revenue has increased to 20%. ✈ Compared with last year, the revenue of 2022Q3 is lower than that of 2021 Q4, 6% higher than 2021Q3 and 2% higher than 2022Q2. NTD 100 Million 180 160 ■CGO Rev Monthly revenue NTD 100 Million Quarterly revenue PAX Rev ■Other Operating Rev 500 400 454 353 346 352 300 140 331 200 261 276 120 100 100 80 60 40 2021Q1 20 20 0 1 2 3 4 5 6 7 8 9 Q3 Q4 2022Q1 20 Q3 2022 CHINA AIRLINES Based on individual financial report 60#7Cost breakdown and comparison 2022 Q1-Q3 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fuel 40% 18% 14% 14% 9% 3% Rental Depr. . Airport & OTH Labor Maintenance & Amortization ground Sales & handling passenger service 16% 17% 11% 4% 2021 Q1-Q3 28% 22% CHINA AIRLINES Based on individual financial report 7#8Fuel cost analysis Unit 2021 Q1-Q3 2022 Q1-Q3 YOY Jet fuel(MOPS) USD/BBL 70.75 129.79 83.45% Fuel Consumption 10K BBL 1,059.95 1,004.17 -5.26% Fuel Cost TWD 100 million 223.27 395.30 77.05% Hedging gain TWD 100 million (0.02) (1.12) Total fuel cost TWD 100 million 223.25 394.18 76.56% CHINA AIRLINES Based on individual financial report 8#9Stable financial structure 80% 70% Debt ratio 73.81% 73.91% || 79.48% 78.64% 200% 74.53% 150% 73.80% Current ratio 161.25% 106.30% 98.8% 100% 86.7% 78.6% 67.9% 50% 60% 0% 2017 2018 2019 2020 2021 2022Q3 2017 2018 2019 2020 2021 2022Q3 CHINA AIRLINES Based on consolidated financial report 9#10Financial risk management ✈ CAL's hedging of fuel, exchange rates and interests rates etc., are based on the decisions made by the risk committee of Board of Directors. ✈ Exchange rates Natural hedge is applied in order to reduce influences made by currency fluctuation. ✈ Interest rates: Issue fixed-rate corporate bonds and trade derivative product such as IRS to reduce the risk of rates rising in the future. CHINA AIRLINES 10 10#11CHINA AIRLINES AM- Operation Overview & Market Outlook#122022Q1-Q3 Passenger operational results 6666666666 Currency: TWD Passenger revenue 9.06 billion YOY(+ 251.3%) Revenue passenger 588 '000 (+327.5%) CHINA AIRLINES Passenger revenue distribution by region Available seat kilometer (ASK) 7.69 billion (+172.0%) Average load factor 34.4 % (+16.83 ppt) Pax yield $ 3.42 (-$1.77) North East Asia, 6% Hong Kong, 2% Oceanic, 8% China, 11% Europe, 19% North America, 31% South East Asia, 24% Based on individual financial report 12#13Passenger operating performance ✈ Taiwan reopened for transit passenger starting from June 15, 2022, and adopted 7-day self-initiated prevention policy for arrivals from October 13, 2022. ✈ The number of passenger has been increasing significantly since June. 2022/01-10 Passenger Revenue and Load Factor 0+7 50% 27.3 45% Passenger Number 30 25 20 15 110 10 Open for Transit PAX 17.0 4.6 4.8 4.5 4.9 4.9 5 9.1 40% 20.8 20.0 35% 30% 25% 20% 15% 58,632 10% 5% 0% Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 PAX rev( NT$100M) -Load factor CHINA AIRLINES 109,221 148,557 142,922 || 200,366 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Based on individual financial report 13#142022Q1-Q3 Cargo operational results 100 100 100 100 100 100 100 100 100 100 Currency: TWD Cargo revenue 92.51 billion Available Freight Ton Kilometer(AFTK) 6.24 billion (-14.8 %) YoY(+ 14.1 %) Average load factor Carried tonnes 715'000 (-7.7%) 77.8 % (+ 2.4 ppt) Cargo yield $ 19.04 (+$ 4.37) Cargo revenue distribution by region Oceanic Hong Kong North East Asia 6% China, 6% Europe, 11% 3% 1% 0 South East Asia, 15% North America, 57% CHINA AIRLINES Based on individual financial report 14#15Cargo operating performance ✈ Affected by the overall economic environment, the demand of freight market is getting weak gradually. ✈ From January to October 2022, the average Load factor has maintained 78%, and the yield of Q3 has slowed down. Compared with the same period of last year, it is relatively stable. ✈ From January to October 2022, the accumulated cargo revenue has exceeded NT$10 billion. 140 120 100 80 60 40 20 2022/01-10 Cargo Revenue and Load Factor Cargo Yield(YOY%) 84% Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 ICGO rev( NT$100M) -Load factor CHINA AIRLINES H Aug-22 Sep-22 Oct-22 82% 80% 78% 15.62 14.75 13.51 76% 74% 72% 70% 68% 36% 21.36 39% 18.74 20.10 17% 18.29 2021 Q1 02 Q3 Q4 2022 Q1 02 03 Based on individual financial report 15#16Air passenger recovery continues ASK/RPK (YOY% change 20% versus 2018 ) International passenger traffic (YOY% change versus 2019 > 0% -20% -40% -60% -80% -100% 2019 2020 2021 CHINA AIRLINES Regional pax recovery (2019=100)2020-2025 PLF% 100% World 2024 80% PLF North America Europe 2024 2023 60% Middle East ASK 40% 2024 Asia Pacific 2025 20% Africa RPK Latin America & 2025 Caribb. 0% 2022 2024 Source: IATA 16#17Recovery continues as passenger demand remains strong million/person 13.5 12 10.5 Taoyuan International Airport Passenger Volume Arrival/Departure/Transit 9 -44% 7.5 10 6 4.5 3 vs 2019 levels -89% -96% -98% -98% -98%-98% -98% -98% -98% -99% ✈ 06/15 3+4 quarantine / weekly cap of arrivals 25,000 ✈ 07/07 weekly cap of arrivals increased to 40,000 ✈08/15 0822 remove requirement that inbound passengers should provide COVID-19 PCR test result / weekly cap of arrivals increased to 50,000 ✈ 09/12 reinstate visa-exempt entry for US, Canada, New Zealand, Australia, countries in Europe, and diplomatic allies ✈ 09/29 weekly cap of arrivals increased to 60,000 ✈ 10/13 lifted the quarantine requirement for all arrivals 0+7/ weekly cap of arrivals 150,000 ✈ 12/01 weekly cap of arrivals increased to 200,000 1.5 0 -1.5 2019 Q1 2019 2019 2019 2020 2020 2020 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2021 2021 Q4 Q1 Q2 Q3 2021 2022 Q4 Q1 2022 2022 Q2 Q3 ✈ 12/10 remove weekly arrival cap 2019 2020 2021 48.68 million 7.43 million 0.9 million 2022E 4.0~4.5 million 2023F 20~30 million CHINA AIRLINES SOURCE: Taoyuan International Airport 17#18Air cargo tracks near pre-COVID levels International air cargo International CTKs September 2022 (% ch vs the same month in 2019) (YoY% change versus 2018 ) (YoY% change versus 2019 ) ACTK/CTK CLF Asia 20% 100% CTK 20% Pacific Africa 17.8% Latin Middle North East Europe America America Industry 10% 80% CLF 12.3% 0% 10% 60% -10% -20% ACTK 40% 0% -30% -1.8% 20% -4.6% -3.7% -40% -10% -7.0% -50% 0% -13.1% 2019 2020 2021 2022 -20% CHINA AIRLINES Source: IATA 18#19Operating challenges Economic Factors Inflation, Interest Rates, and Exchange Rates Oil prices extremely high GDP / Manufacturing PMI index Sustainable development $ Geopolitics Airspaces closure Russia-Ukraine crisis Service Disruptions Coronavirus variant Unforeseen circumstances Staff shortage CHINA AIRLINES Supply chain issues US-China chip war SOURCE: 19#20Operation strategy Passenger ✈ Introduce new A321neo aircraft ✈ Develop potential routes in Southeast Asia ex: CEB, CNX, DAD, ✈ Increase flights between Southeast Asia and Europe / US to target the transit passenger and encourage effective network ✈ Deepen the member loyalty ✈ Provide customized charter flights/services ㄨ Cargo ✈ Introduce 777F new freighter ✈ Cultivate the market, develop potential goods and grasp industrial changes ✈ Fully plan cargo capacity and network, and strengthen Taiwan's position as a transshipment hub ✈ Strive for chartered flights and medium/ long-term customized services CHINA AIRLINES 20 20#21The next generation fleets ready for post-pandemic boom ****INNARLINES Boeing 787-9 x16 Entry Into Service Year End Year End Aircraft Type 2022 2023 777-300ER 10 10 A350-900 14 14 2024 A330-300 20 19 737-800 12 10 A321neo 10 12 Passenger Jets 66 65 747-400F 17 56 16 CARGO 777F 5 7 Freighters 22 23 Boeing 777F x10 In-Service Fleet 88 88 CHINA AIRLINES 2025 2026 Airbus A321neo x 25 21 24#22Sustainability performance and recognition ✈ The only Taiwanese airline selected for DJSI Emerging Markets for six consecutive years and ranked in 2nd place among the world's airlines. The only Taiwanese airline selected for Sustainability Yearbook for five consecutive years and awarded "Silver Class" in 2021. ✈ Set the goal of sustainable aviation fuel and net zero carbon emissions Sustainability Yearbook 5 Consecutive Years 2017 - 2021 GCSA Award 4 Consecutive Years 2019-2022 TCSA Award 9 Consecutive Years 2014-2022 CHINA AIRLINES Dow Jones Sustainability Indices 6 Consecutive Years 2016-2021 FTSE TIP TIT FTSE4Good Index Series 7 Consecutive Years 2016-2022 FTSE4Good TIP Taiwan ESG Index 4 Consecutive Years 2018-2022 Taiwan HC 100/Taiwan EMP 99 6 Consecutive Years 2017-2022 22 22#23Thank you CHINA AIRLINES AM-