#1China Airlines 2022 1st Investor Conference Jun.10.'22 920 1-18716 CHINA AIRLINES CARGO CHINA AIRLINES EAM- 堅持不懈的乘載承諾 Non-Stop Flying Your Cargo#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 Operating Performance 1. Operating results 2. Revenue & Cost breakdown ✈ Market Outlook 1. Business outlook 2. Pax & Cargo strategies 3. Financial risk management 4. Pax & Cargo performance 3. Fleet planning 4. Sustainable development CHINA AIRLINES 3#4CHINA AIRLINES 2022Q1 Operating Results EAM-#52022Q1 Financial Results (NTD 100 Million) 2021.Q1 2022.Q1 Differences YOY Operating revenue 278.28 372.33 94.05 33.80% Passenger revenue 19.75 21.85 2.1 10.63% Cargo revenue 240.25 327.79 87.54 36.44% Other operating revenue 18.28 22.69 4.41 24.12% Net Operating Income(Loss) -4.69 36.36 41.05 Net Income(Loss) After Tax -12.17 28.11 40.28 Net Income(Loss) Attributable to -10.19 30.72 40.91 Owners of the company Earnings(Loss) Per Share (TWD) -0.19 0.52 0.71 CHINA AIRLINES Based on consolidated financial report 5#6Enhancing financial structure ratios 80% Debt ratio 73.09% 73.44% 70% 78.97% 77.94% Current ratio 200% 150% 72.64% 70.30% 100% 77.81% 69.06% 50% 91.40% 161.71% 155.53% 60.28% Hit 2018 2019 2020 2021 2022Q1 60% 0% 2017 2018 2019 2020 2021 2022Q1 2017 CHINA AIRLINES Based on individual financial report 6#7585 50 100 150 Revenue breakdown and comparison ✈ In 2022Q1, over 90% of income is contributed by cargo revenue is the major income during the pandemic period. ✈ Compared with the quarters of the last year, 2022Q1 total operating revenue is lower than the final quarter but higher than the first 3 quarters. Monthly revenue ■Other operating rev. NTD 100 million Quarterly revenue ■PAX rev. 500 ■CGO rev. 400 300 2021 200 2021 Q4, 2022 2021 2021 453.54 Q3, Q1, Q1, Q2, 330.54 353.47 100 261.13 276.20 Ill 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 CHINA AIRLINES 2021 2022 Based on individual financial report 7#8Cost breakdown and comparison 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2022Q1 34% Fuel 2021FY 29% CHINA AIRLINES 19% 18% 14% 9% 4% Rental Depr. . Labor Maintenance & Amortization Airport & ground handling OTH Sales & passenger service 20% 18% 17% 10% 4% Based on individual financial report 8#9Fuel cost analysis Unit 2021Q1 2022Q1 YOY Jet fuel(MOPS) USD/BBL 63.44 112.74 77.72% Fuel Consumption 10K BBL 343.75 352.35 2.50% TWD Fuel Cost Hedging gain/loss 65.52 105.14 60.47% 100 million TWD 100 million 0 (0.43) TWD Total fuel cost 65.52 104.71 59.81% 100 million CHINA AIRLINES 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#112022Q1 Passenger performance 6666666666 Available seat kilometer Currency: TWD (ASK) Passenger revenue 1.3 Average load factor 1.58 billion (+17.2%) Passenger revenue distribution by region Hong Kong, 2% Europe, 10% North East Asia, 2% China, 26% billion (YOY+8.1%) Revenue passenger 60.5000 (-12.8%) 16.1 % Pax yield (-3.5 ppt) $5.48 Oceanic, 11% South East Asia, 24% CHINA AIRLINES (-$0.25) North America, 25% Based on individual financial report 11#122022Q1 Cargo performance 100 100 100 Too Too '00 '00 '00 100 100 Currency: TWD Cargo revenue 32.7 billion (YOY+36.5%) Carried tonnes Available Freight Ton Kilometer(AFTK) 2.23 billion (-4.2%) Average load factor 78.2% (+2.7 ppt) Cargo revenue distribution by region Oceanic 4% North East Asia 5% China, 6% Europe, 9% Hong Kong 3% North America, 60% 240.9% '000 Cargo yield (-2.8%) CHINA AIRLINES $18.74 (+$5.2) South East Asia, 13% Based on individual financial report 12#13Market Outlook CHINA AIRLINES EAM-#14Overall business environment ✈ Pax market following by the border restriction ease, international RPK has recovered to 50% compared with pre-covid level. ✈ Cargo market: cargo capacity is still below 2019 level due to the Omicron outbreak leading to lockdown in China and the Ukraine-Russia conflict threat further weaken global supply chains, making, growth trend turned negative in March for the first time for the past year. % ch vs the same month in 2019 20% International Pax market trend change% with 2019 100% 20% 10% 0% Load 80% -20% factor (RHS 0% 60% -10% -40% ASK (LHS) 40% -20% Load factor % ch vs the same month in 2019 International Cargo market trend change% with 2019 100% FTK (LHS) 80% Load factortR 60% CTK (LHS) 40% -60% -30% 20% 20% -80% RPK(LHS) -40% -100% 0% -50% 2020 2021 2022 2020 2021 0% 2022 CHINA AIRLINES IATA Economics 14#15keep them from international Re-opening border is boosting pax market recovery ✈ US & EU have started re-opening of borders, which stimulates pax demand; however, some Asia Pacific key markets remain closed which may slow down recovery and connectivity. 120% Europe, 2024 Asia Pacific 2025 Middle 97% East, 2025 110% North America, 2023 2019 level 100% 90% 84% World restriction level 80% 70% 68% 60% 50% 40% 40% No Yes 30% with exceptions 2021 2022 2023 2024 2025 CHINA AIRLINES Source IATA Economics 15#16TPE airport pax volume is bottomed out TPE airport international trend 2022 5 137,896 2020 4 34,618 Reopened Countries 0 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 2020 2021 2022 CHINA AIRLINES Taiwan entry policies ✈ Open borders to foreign business travelers, foreign student spouses and minors, Southeast workers to Taiwan. ✈ Replace on-arrival PCR test with saliva test. ✈ Reopening by different steps. Source: TPE airport statistics16#17China lockdown and Ukraine-Russia conflict weaken global supply chain strain, but air rate is still in historical high Asia pacific supply and demand(change% with 2019) Demand decreased in Mar.2022 USD/kg 2022/2021 average air rete $6 ✈ ✈ Air cargo growth starts to slowdown 15% ✈ West coast workers negotiation 10% 5% 2019 level $5 $4 2022 2021 $3 -5.4% $2 -16.0% $1 0% -5% -10% -15% -20% -25% Capacity shortage -30% Jan Mar May Jul Sep Nov Jan Mar 2021 2022 CHINA AIRLINES $0 40 W1 W5 W10 W15 W20 Sources: IATA - Freightos 17#18Taiwan is one of major air cargo transit demand markets in Asia Pacific Top 10 Demand Markets Total and YoY % growth April 2021 - March 2022 TPE airport cargo volume growth % with 2019 пл China East China South Japan South Korea Taiwan China North Vietnam Thailand Singapore Australia 60% ▲ 5% 50% ▲ 7% 40% ▲ 22% 30% ▲ 18% ▲ 21% ▲ 8% 20% 10% A ▲ 20% ▲ 23% ▲ 14% 0% -10% -20% ▲ 12% CHINA AIRLINES 2019 level 1 4 10 1 4 7 10 4 2020 2021 2022 資料來源:桃機公司、Seabury、本公司整理 18#19Business planning & strategies Well-prepared for reopening PAX market ✈ Increase customer preference by deploying the A321neo on regional routes ✈ Expand route network, according to recovery in demand ✈ Integration of passenger and freighter capacity along with continued optimization of schedules and connections ✈ Respond timely to the market demand Minimize loss of operation by stabilizing operation and seek out new market High efficiency freight introduction and stable cargo income Deploying the 777F, through operational efficiency to improve profitability ✈ Strengthen handling for pharmaceutical cold-chain logistics, secure business opportunities ✈ Take advantage of the cargo fleet to provide differentiated services Flexible operations responding to the market volatility, provide reliable and customized services Increase profit through the utilization of belly cargo space and freighter business CHINA AIRLINES 19#20Fleet planning Fleet type 2022.05 2022.12 Remark 777-300ER 10 10 Wide body A350-900 14 14 A330-300 22 21 Phase out*1 Narrow 737-800 12 12 body A321neo 6 10 Total pax aircraft 64 67 747-400F 18 18 Freighters 777F 4 5 introduction*4 Net increase 3 pax aircraft introduction*1 Net increase 1 Total freighter aircraft 22 23 FTR aircraft Total operating aircraft 86 90 CHINA AIRLINES 20 20#21Launch environmentally friendly flight ✈ China Airlines participated in "The Sustainable Flight Challenge" (TSFC) issued by SkyTeam on 5/4, selecting flight CI-753 from Taipei to Singapore as the sustainability demonstration flight. ✈ With ECO as the core concept, we take care of every details including flight plan based on fuel saving, ground handling, online check-in and meal on board, doing our best to set up sustainable flying environment as an industrial milestone. Advanced Maintenance & Operation FLY NET ZERO Operation Improvements Renew Fleet Reduce Weight of Aircraft CHINA AIRLINES Four Fuel-Saving Strategies 21 24#22Sustainability award & performance The only Taiwanese airline selected as a component of DJSI Emerging Markets for six consecutive years. ✈Ranking 2nd place in the global aviation industry. Member Dow Jones Sustainability Indices Fed by the S&P G 8 consecutive years 2014 - 2021 3 consecutive years 2019-2021 Won the Taiwan Corporate FTSE4Good Won the Global Corporate Sustainability Award Sustainability Award 11 consecutive years 2012-2022 Pioneer in Environmental Protection Achieved great CDP score on climate change 6 consecutive years 2016-2021 6 consecutive years 2016-2021 Included in the TCSA Included in the GCSA DJSI Emerging FTSE4Good Markets CHINA AIRLINES Emerging Index 8 consecutive years 2014 - 2022 Excellent Corporate Governance Top 6%-20% TWSE/TPEX listed companies in the eighth corporate governance review CDP DISCLOSURE INSIGHT ACTION 5 consecutive years 2017-2021 Establish Happy Workplace Taiwan High Compensation 100 Index (HC 100) Taiwan Employment Creation 99 Index (EMP 99) 22 22#23Thank you CHINA AIRLINES EAM-