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Presentation Team

Mr. Xiao Lixin EVP & CFO

Mr. Xie Bing SVP & Company Secretary

Executive Vice Director General-Commercial Steering

Mr. Wang Zhen
Committee

Mr. Yang Bin SVP-Finance Division

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 Address in 2018 Social
Responsibility Report Release
Conference of
China Southern Airlines
The Report of 2018 is the
12th social responsibility
report of China Southern
Airlines
 ESG“Three Focuses”

E Focus on
Environmental
Protection
S Focus on
Giving Back to
the Society
G Focus on
Corporate
Governance
 E
Enhance
performance of
Focus on environmental
Environmental
Protection responsibilities to
contribute to a
beautiful China.
 Enhance performance of
environmental
responsibilities to contribute
to a beautiful China.

Buckingham Palace
Declaration

Ton-kilometer carbon
dioxide emission of the
last year was

8.88 tons per 10k

ton-kilometers
decreased by 3.1%
year-on-year.
 Enhance

S
performance of
social
Focus on
responsibilities to
Giving Back to
the Society
care for people’s
livelihood and
wellbeing.
 Enhance performance of
social responsibilities to
care for people’s livelihood
and wellbeing.

Carried out on poverty alleviation projects

in 2 counties, and 21 villages of 12
provinces and regions in the last year

investment of RMB

17,232,000

Provided special flight emergency rescue

7,984
support services for
chartered airplane for
peacekeeping transported
passengers for such purposes
 Enhance performance of
social responsibilities to
care for people’s livelihood
and wellbeing.

In globalization, we proactively answered

the call of the Belt and Road Initiative and
constantly increased our transport capacity
in the countries and regions along the Belt
and Road, becoming the air carrier having
the most air routes on the Belt and Road.
 Enhance

GFocus on
Corporate
performance of
economic
responsibilities to
Governance
achieve high
quality
development.
 Enhance performance of
economic responsibilities
to achieve high quality
development.

controlled the flight

incident rate per 10k
hours at

0.0047

We flew safely for 2,773,000 hours

(including Xiamen Airlines)
 Enhance performance of
economic responsibilities
to achieve high quality
development.

Flight on-time rate was

Was granted “Diamond
Two-Star Award for
Flight Safety”
by CAAC
80.96%
ranking first among the top
three airlines in China

Passenger complaint rate

of 2018 was

Becoming the airline of the 24.65 per

highest safety million and we were

awarded “Skytrax World’s
star level in China Most Improved Airline” in
the last year
 Enhance performance of
economic responsibilities
to achieve high quality
development.

In 2018, the hub of Guangzhou was

entirely transferred to T2 Terminal
of Guangzhou Baiyun International Airport
 Enhance performance of
economic responsibilities
to achieve high quality
development.

roof of the base of

Beijing’s new airport

was constructed
 Enhance performance of
economic responsibilities
to achieve high quality
development.

In the last year, we transported

140 million passengers

increasing by 10.8%
year-on-year

operating revenue was

142.623 billion
increasing by 12.66%
year-on-year
CONTENTS
I. Industry Environment
II. Business Overview & Operational Highlights
III. 2018 Financial Highlights
IV. Future Prospects

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Favorable Factors

Supply and demand remained solid in 2018

Air traffic volumes expansion Overall operation capacity control

China's civil transport reached to Regulator strictly control the
612 mn in 2018, a 10.9 % o v e r a l l o p e r a t i o n c a p a c i t y,
increase year on year optimizing the flights structure

New passengers increase Market-oriented reforms

In 2018, the number of new Market-oriented reform on ticket
passengers in the domestic price, promoting healthy and
m a r ke t r e a c h e d t o 4 8 . 7 3 o rd e r l y d e ve l o p m e n t o f t h e
million industry

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Unfavorable Factors

China-US trade friction adversely The macroeconomic slowdown

affected the global economy affected industry demand

Oil prices rose sharply from In 2018, the central parity of the RMB
January to October 2018 against the US dollar fell by 5%

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CONTENTS
I. Industry Environment
II. Business Overview & Operational Highlights
III. 2018 Financial Highlights
IV. Future Prospects

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Aviation Safety Situation Remains Stable

2.773 mn hours 23.44mn hours

Safe Flight in 2018 Safe Flight Accumulated

13,700 hours 19 years

General Aviation Aviation Safety

2-Star Flight Safety

24 years Diamond Award
Aviation Security Honors

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Business Highlights

1 3 5

Deepening
Marketing Network Hub
Reform

Global
Brand Image
Cooperation

2 4

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8
Marketing
Profitability APP operation leads industry Strengthen member marketing

l Renovated the cabin of 31 l Social media follower: 32 mn l Pearl members: 39.78 mn

wide-body aircrafts to add l “China Southern e--Travel” l Increased by 15.2% year-
1,046 seaters APP activation: 40 mn on-year

30.33 bn 140 mn 1,732thousand 138.06 bn

Passenger Carried Cargo Carried Transportation
RTK
Revenue

11.0% 10.8% 3.6% 13.3%

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Brand Image

Self Check-in with Baggage 100% E-ticket Check-in World’s Most Improved
100% Seat Pre-selection Airline

Punctuality rate Complaint rate Regularity rate Baggage-handling error

rate
80.96% 24.65‱ 98.2% -48.6%
Increased by 7.7% year- on- Lowest in the three major Transit passenger travel rate The first airline in China to
year, ranked No.1 in the airlines of Guangzhou hub realize the status of baggage
three major airlines transport status

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Network Hub

Beijing

Guangzhou

New Routes Guangzhou-Beijing dual-hub strategy

Guangzhou Sanya London Accelerated the construction of Beijing
Daxing International Airport Base
Guangzhou Rome
Completed the transition of Terminal 2 of
Guangzhou hub transit passengers 4.42mn 8.4% Guangzhou Baiyun International Airport

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Global Cooperation

• 270 mn shares represents

Equity • 2.2% of CSA’s shares

Strengthened
• Long term strategic partnership
Cooperation Strategy • Extend network to more cities

Business • Joint operations & code sharing

• Staff exchange, facility sharing
and industrial cooperation

BEIJING

GUANGZHOU

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Deepening Reform

Promote big operation and make resource allocation more efficient

+26% -7.38% -50%

Capacity Proportion of multi- Number of crew

replacement flights fueling flights

Further optimization of asset structure Achieve equity diversification

Equity financing
127 billion

Debt Asset ratio

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CONTENTS
I. Industry Environment
II. Business Overview & Operational Highlights
III. 2018 Financial Highlights
IV. Future Prospects

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2018 Annual Results Highlights

　 2018 vs 2017

Total Operating Revenue RMB 143,623m +12.4%

Attributable to Equity shareholders of the

RMB 2,895m -51.4%
Company
Basic EPS RMB 0.27 -55.0%

EBITDA RMB 21,874m -11.7%

　

ASK 314,421m +12.0%

ATK 42,728m +11.5%

Pax Load Factor 82.4% +0.2pts

Overall Load Factor 71.0% -0.3pts

Aircraft Utilization(Hr) 9.73h -0.06h

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 Operating Data

Revenue Passenger Kilometers (RPK) Passenger

RMB mn RMB mn
.4% .8%
+12 +10
259,194

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2018 Traffic Revenue Breakdown
Revenue breakdown (Geographic) Revenue breakdown (Product)

Regional
[-]% Cargo & Mail Passenger
[-]% [-]%
International
[-]%

Transportation Revenue
RMB mn
138,064

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Traffic Revenue by Geographic Region
PAX revenue
Market Segment (PAX) 2018 vs 2017

Domestic RMB 95,773 m +12.2%

Regional RMB 2,446 m +7.2%

International RMB 29,819m +18.7%

Total RMB 128,038 m +13.5%

Cargo revenue
Market Segment 2018 vs 2017

Domestic RMB 1,955 m -1.1%

Regional RMB 117 m +11.4%

International RMB 7,954 m +13.6%

Total RMB 10,026 m +10.4%

Traffic Total RMB 138,064 m +13.3%

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Passenger Yield and Freight Yield

PAX Yield in RMB

Market Segment 2018 2017 Change

Domestic 0.535 0.532 +0.6%

Regional 0.740 0.777 -4.8%

International 0.388 0.373 +4.0%

Average 0.494 0.489 +1.0%

Cargo Yield in RMB

Market Segment 2018 2017 Change

Domestic 1.169 1.170 -0.1%

Regional 4.674 4.242 +10.2%

International 1.363 1.322 +3.1%

Average 1.331 1.296 +2.7%

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2018 Annual Operating Costs

Operating Costs

RMB million 2018 2017 Change

Jet Fuel 42,922 31,895 +34.6%

Cost Breakdown
of 2018 Staff 25,030 23,709 +5.6%

Landing and Navigation 15,980 14,910 +7.2%

Depreciation and Amortization 14,308 13,162 +8.7%

Operating lease 8,726 8,022 +8.8%

Airframe and Engine
8,394 7,930 +5.9%
Maintenance
Catering 3,734 3,379 +10.5%

others 21,148 20,091 +5.3%

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 Jet Fuel Price
Fuel Cost (RMB) Aviation Fuel Consumption
RMB million KT

Monthly Jet Fuel Price (RMB/TON) Sensitivity Performance

RMB thousand

Oil price 10% Operating expenses

RMB 4,292 m
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Debt Analysis

Debt Structure (RMB million Equivalent) Term of the Debt

Exchange Rate Sensitivity Performance Interest Rate Sensitivity Performance

RMB/USD 1% Net Profit RMB195m Interest Rate100bp Net Profit RMB 539m

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Our Fleet
As of 31 Dec 2018
Operating Finance Daily profit
　 Aircraft type Owned Total Avg. Age
Leased Leased rate
As　of 31 Dec 2017
Airbus 380 2 3 5 6.7 9.6

Airbus 330 10 30 10 50 6.2 11.8

Airbus 320 126 83 90 299 8.1 9.7

Boeing 787 5 21 4 30 2.9 11.8

Airliner
Boeing 777 　 9 1 10 3.6 13.1

Boeing 757 　 　 4 4 15.6 6.8

840 Boeing 737

EMB190
165

20
82

　
155

6
402

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5.5

6.5
9.4

8.1
aircrafts B777 　 5 7 12 6.3 13.2
Cargo

1st
B747 　 　 2 2 16.4 1

Total Total 326 232 282 840 6.5 9.73

（%） 38.8% 27.6% 33.6% 100.00% / /

in Asia 　 Boeing Airbus Others
Aircraft type（%） 100.00% / /
54.8% 42.1% 3.1%

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Delivery and Retirement Plan (2019-2021)

2018 2019 2020 2021

Aircraft type Year-end Year-end Year-end
Year-end Delivery Retirement Delivery Retirement Delivery Retirement
Forecast Forecast Forecast
Airliner
Airbus
A380 5 　 　 5 　 　 5 　 　 5
A330 50 　 3 47 　 7 40 　 　 40
A350 　 6 　 6 6 　 12 4 　 16
A320 299 51 30 320 26 8 338 　 　 338
Boeing
B787 30 7 　 37 5 　 42 　 　 42
B777 10 5 　 15 1 　 16 　 　 16
B757 4 　 4 　 　 　 　 　 　 　
B737 402 45 2 445 51 2 494 25 　 519
Others
EMB190 26 　 6 20 　 11 9 　 3 6
Total 826 114 45 895 89 28 956 29 3 982
　
Cargo
B777 12 　 　 12 2 　 14 　 　 14
B747 2 　 　 2 　 　 2 　 　 2
Total 14 　 　 14 2 　 16 　 　 16
　
Total 840 114 45 909 91 28 972 29 3 998

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CONTENTS
I. Industry Environment
II. Business Overview & Operational Highlights
III. 2018 Financial Highlights
IV. Future Prospects

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Development Strategy
“32453” Strategic framework
Three first-class strategic goals
• First-class safety quality
• First-class profitability
• First-class brand image
Strategic layout of “Dual-Hub”
• Beijing Hub
• Guangzhou Hub
Four strategic directions
• Standardization, integration,
intelligence, and internationalization
Improve five systems
• CPC leadership, governance structure,
strategic management, market
mechanism and corporate culture
system
Guarantee from three aspects
• Condition, resource, environment
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Future Prospects

Adhere to safety as the first priority and ensure

the stable aviation safety situation

Improve quality and efficiency, and strive for

better operational performance

Realize the successful flight transfers to Beijing

Daxing International Airport and ensure the high-
quality commencement of the Beijing hub

Strengthen bilateral and multilateral cooperation,

and embark on the road of international
development

Implement the market-oriented mechanism and

steadily promote the reform of the three
institutional reforms

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Q&A

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Investor Relations – Contact Information

Website www.csair.com

Email ir@csair.com

Tel (86) 20 8611 4989 / (86) 20 8611 2480

Fax (86) 20 8665 9040

Address 68 Qi Xin Road, Guangzhou, Guangdong Province PRC 510403

Disclaimer
Warning about Forward-looking Statement
This presentation contains certain forward-looking statements in relation to the financial conditions, operating results and business of the
Company. These statements represent the expectations or beliefs of the Company regarding future events, and are subject to risks and
uncertainties, whether known or unknown. Such risks and factors might result in significant difference between actual results, performances or
events and the results, performances or events stated or implied in such statements. Certain statements, such as those including words and
expressions such as "potential", "estimate", "expect", "anticipate", "target", "intend", "plan”, "believe", "project" and similar phrases expressed
in different forms, are regarded as "forward-looking statements". Forward-looking statements are subject to inherent risks and uncertainties. It
should be noted that a number of factors might result in the actual outcome deviating from conditions expected or implied in the forward-
looking statements, and in some cases such deviation might be significant. The contents of the forward-looking statements are updated as at the
date on which such forward-looking statements are made, and should not be assumed to have been revised or updated to reflect latest
information or subsequent events. Market trends and factors that are expected to affect the operating results of the Company are set out in the
sections headed "Business Review and Outlook" and "Financial Review."

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