China Airlines
2021 Investor Conference
April 14, 2021
TSE：2610

LegalDisclaimer• The information contained in this presentation,
including all forward-looking information, issubject to change without notice, whether as aresult of new information, further events orotherwise, and China Airlines(the “Company”)
undertakes no obligation to publicly update orrevise the information contained in thispresentation.
• No guarantees regarding the completeness,accuracy, and reliability of information contained
are made explicitly or implicitly. They are notintended to represent complete statement of theCompany, industry or future development.

2Agenda

1. Full Year Financial Results for 2020
1) Operating Performance2) Composition of Op. Revenue & Cost
3) Financial Risk Management

2. Impact of COVID-19 Pandemic
1) Industry Environment Update2) Operational Performance Update

3) Response to COVID-19

3. Post-COVID-19 Outlook

3

Full Year Financial Results for 20204

Consolidated Operating Performance – 2020FY
Consolidated Financial Statistics

TWD 100 Million

2019FY2020FY

YoY %1,684.44

1,152.5-31.58%Net Operating Income

26.66

21.84

-18.08%Net Loss After Tax

-6.75

-2.80

58.52%Net Income (Loss) Attributable toOwners of the company-12.001.40-

Earnings (Loss) Per Share (TWD)

-0.22

0.03

-

Operating Revenue

Group Revenue

TWD 100 Million
2019FY

2020FYYoY %1,114.13

257.04-76.93%

Cargo Revenue

437.93819.1887.06%

Other Operating Revenue

132.3876.28-42.38%1,684.44

1,152.5-31.58%Passenger Revenue

Total Group Operating Revenue

5Operating Performance – 2020FY
Financial Statistics

TWD 100 Million
2019FY

2020FYYoY %1,463.72

1,063.27-27.36%Net Operating Income

0.80

48.85

-Non-Operating Loss

-12.67-47.14-272.06%

Net Income (Loss) After Tax-12.001.40-

Earnings (Loss) Per Share (TWD)

-0.22

0.03

-

Operating Revenue

TWD 100 Million

CI Revenue
2019FY

2020FYYoY %Passenger Revenue

961.77205.08-78.68%Cargo Revenue

434.06816.9388.21%

Other Operating Revenue

67.89

41.26

-39.23%

Total Operating Revenue

1,463.72

1,063.27-27.36%
6Composition of Op. Revenue - CI
Passenger
Revenue

Cargo Revenue 77%

19%
24%

Other Op. Rev.

2020 FY

4%66%
Passenger Revenue 67%

Cargo Revenue 30%

Other Op. Rev.

2019 FY

4%

Passenger, Cargo and other operating revenue accounted for 19%, 77%
and 4% respectively in 2020.

7

Composition of Op. Expenses - CI
1.4%

12.3%

Personnel
16.5%

Rental &Depreciation
22.9%

Maitenance
19.4%

Others22.2%

Airport &Ground
Handling

Pax Service
Sales&General Adm.

2020FY

Fuel

3.5%
3.8%

1.5%

Personnel

30.7%

13.6%

13.5%

Rental &Depreciation
16.5%

Maitenance
13.4%

4.5%

4.0%

Others

Airport &Ground Handling

Pax Service

Fuel

Sales&General Adm.

2019FY

3.8%

Fuel cost accounted for 22.2% of operating expenses due to the decreasein fuel price and consumption during COVID-19 pandemic.

8

Financial Risk Management – Fuel (CI)
Fuel Cost
2019FY2020FY

YoY%

Jet Fuel (MOPS)USD/BBL

77.25

44.82

-41.98%

Fuel Consumption

10KBBL

1,759.04

1,424.65-19.01%

Fuel Expend

TWD/100Million

449.61224.87-49.99%Hedging Loss

TWD/100Million

0.19

0.60

215.79%Total Fuel Cost

TWD/100Million

449.80225.47-49.87%

Fuel Hedging
YearHedging%2021.04-2022.03

0.4%

9

Impact of COVID-19 Pandemic
Industry Environment Update

10RPK Path Depends on New Variants andPolicy Response•Air travel recovery in 2020 stalled after the summer, RPKs ended year down 70%：
domestic -43%, international -85% yoy in 2020.

•According to IATA’s data released on February 24, 2021 RPKs might only grow 13%
to average 38% of 2019 levels.

Global RPK Forecast

Source： IATA Economics

11

Recovery in Cargo Capacity Impacted byGroundings of Passenger Aircraft
Available cargo tonne-kilometres (FATKs) in February 2021 were lower by 14.9% vs.
the pre-crisis levels, February 2019 because of variants of the virus of COVID-19.
Global Available Passenger and Cargo Tonne-km flown (ASK/FATK)

Source： IATA Economics

12

Drivers of Air Cargo Demand Remained
Generally Supportive•

Global manufacturing PMI was at 53.5 in January 2021, where anything above
50 indicates expansion.

•International cargo tonne-kilometres (FRTK) in February 2021 was 9.6% higher
comparing with the same month in 2019.
Monthly Data From Manufacturing PMIs

International FRTK Growth versus The Same Month in 2019

Source： IATA Economics, IATA Markit

1313

Impact of COVID-19 Pandemic
Operational Performance Update

14

Passenger Performance
Revenue

Composition by Region

Trans Pacific
Ocean
22%

TWD 96.18 BillionAustralia/
NewZealand
9%
Europe12%▼78.7%
Hong Kong
4%

TWD 20.51 Billion

2019 FY

2020 FY

South East
Asia
21%

North East
Asia
23%
MainlandChina9%•Passenger revenue decreased by 78.7% to TWD 20.51 billion in 2020.

•Northeast Asia accounted for the largest share (23%) of revenue, followed byTrans Pacific Ocean and South East Asia with revenue share of 22% and 21%
respectively.
15

Passenger Performance Index
ASK (MN)
52,671

Load Factor
80.8%▼72.4%▼25.5ppt

Yield (TWD)

2.26▲12.8%

2.55

55.3%

14,545

2019FY

2020FY

2019FY2020FY

2019FY2020FY

ASK and load factor decreased by 72.4% and 25.5ppt respectively while yield
increased by 12.8% in 2020.

16

Impact on Passenger Traffic
5,000
4%

0%
4,000

3,000

3,240 -23%
3,128
2,984

3,253

3,229

3,271

3,331

3,194

3,315

3,157

3,247

3,091

3,214
-40%

2,309
-65%

2,000
1,150
-97%

1,000

89
Round
Trips

-98%

-97%

-95%

5386

156

-94% -93%

187

232

-91%

-89%-90%

286

346

325

-80%

-120%
JanFebMar

AprMay2019

JunJul2020

AugSepOctNovDecYoY%•CAL provided a minimum passengers-carried schedule to meet market demand.

•Our frequencies between April and June plunged more than 97% compared to the same period
last year; however there is slowly recovering with essential travelling.
17Passenger Impact- Skeletal NetworkRegion

North America

Route Adjustments
Los Angeles/San Francisco 3 Flights/wk, Vancouver 1~2 Flights/wk, New York 1Flights/fortnightly

EuropeAmsterdam 1~2 Flights/wk, Frankfurt/ London 1 Flight/wk

Oceania

Sydney/ Brisbane 1 Flight/wk, Melbourne 3(O) + 4(I) Flights/mth,Auckland 1 Flight/mthNortheast Asia

Tokyo 2~3 Flights/wk, Seoul 1~2 Flights/wk, Osaka/ Fukuoka/ Nagoya 1 Flight/wk

Southeast Asia

Jakarta 7(O) + 4~6(I) Flights/wk, Vietnam 2~3(O) + 11~12(I) Flights/wk, Manila 3(O) +6(I) Flights/wk, Bangkok 2(O) + 4(I) Flights/wk, Kuala Lumpur 2 Flights/wk, Penang
1~2 Flights/wk, Singapore/ Phnom Penh 1 Flight/wk, Yangon 1(O) + 3~4(I)Flights/fortnightly, Palau 1 Flight/mth /Mainland China

Shanghai 9 Flights/wk, Xiamen 3 Flights/wk, Chengdu 2 Flights/wk,Beijing 1 Flight/wk(KHH departures included)

Hong Kong(KHH, RMQ departuresincluded)7(O) + 11(I) Flights/wk18

Cargo PerformanceRevenue

Composition by Region
Europe9%

TWD 81.69 Billion▲88.2%TWD 43.41 Billion
Trans Pacific
Ocean
58%

2019FY

Australia/
New Zealand3%
Hong Kong
4%

North East
Asia
5%
MainlandChina
6%South East
Asia
15%

2020FY•

Cargo revenue totaled TWD 81.69 billion, a 88.2% increase, in 2020.

•Trans Pacific Ocean accounted for the largest share(58%) of revenue, followed bySoutheast Asia and Europe with revenue share of 15% and 9% respectively.

19

Cargo Performance Index
FATK (MN)

Load Factor

Yield (TWD)
12.83

8,828
8,006

▲ 10.3%

2019FY67.0%

2020FY

2019FY

72.1%▲ 5.1ppt

8.09

2020FY

2019FY

▲58.6%

2020FYFATK increased by 10.3% and load factor grew 5.1 ppt with a 58.6% rise inyield in 2020.

20

Response to COVID-19- Passenger- Cargo

21

Flight Schedule Adjusted in Line with Market DemandOperations remain active in adapting to the dynamic changes of the market landscapeand governments regulations.

Operate selected routes to maintain network connectivity, taking
advantage of sixth traffic rights after open for transit through TPE.
Gradually resume flights to align with boarder reopening, regional
business travel needs and travel bubble.

Increase Taiwan domestic air travel market via CAL Group’s
subsidiaries .

Operate charter flights to generate revenue.

22

Biosecurity for Air Transport•

Contactless travel is a key element of IATA Travel Pass –making travel easier &more sanitary.

•CAL has launched biometric self-check-in services in Hong Kong, New York andSan Francisco.

資料來源： IATA

23

Air Cargo Market Demand Persists•Pre-pandemic：Around 50%～80％ cargo worldwide used to be transported bypassenger aircraft based on IATA’s estimations.

•During the COVID-19 crisis：CAL adjusting some of the passenger aircraft andputting them to use in freight transportation.
Freighter

Preighter

Passenger

TTL FLTs

FLTs(sector)

100%

8,000
7,000

80%
6,000
5,000

60%

4,000
40%

3,000
2,000

20%

1,0000%

0JAN

FEB

MAR

APR

MAYJUN

JUL
2020

AUG

SEP

OCT

NOV

DEC

JAN
2021

24CAL Expands Cargo Service
CAL leverages Taiwan’s strategic position and cargo capacity during the pandemic,
reaching 117 schedule flights per week or 120-125 flights including charter flights perweek in 2021.

• Utilize CAL 18 747-400 freighters• Make the most of belly capacity of passenger aircraft• Improve operational efficiency with 3 777F deliveries• Monthly route review and flexible routeadjustment• Priority for high-yield goods andregular project shipment for route
profit boost• Pursue charter to maintain load factor
and revenue uplift25

Post-COVID-19 Outlook

26

Proactive COVID-19 Response Strategies
01 Conserve
cash-flow& lower thecost

02

04 Rebuildpassenger

with
05 Complyregulations

confidencein air travel

Maintainbusiness
continuityand stability

03

Integratesales andmarketingstrategy

to promote
safe travel

27

Work Together with All Stakeholders to Create
Greater Value
2016-2020
Dow Jones Sustainability Indices
CAL was also the only transportation company in Taiwan to be included in the DJSIEmerging Market Index for five years in a row.

2016-2020
FTSE4Good Emerging Index

2014-2020
Taiwan Corporate SustainabilityAwards2019-2020
Global Corporate Sustainability Awards
Reporting (World Class)2017-2020
Taiwan High Compensation 100 Index (HC 100)
Taiwan Employment Creation 99 Index (EMP 99)
28

Operating Fleet as of March 2021
As of March 2021, CAL operates 83 aircraft, including 62 passenger aircraft
and 21 freighters, and 43 of which are self-owned and 40 are operatingleased.
Aircraft TypeOwned

Leased777-300ER-

10

A350-900

14-

A330-300

815

737-800-15

747-400F (Freighter)

18-

777F (Freighter)3-

Number of aircraft in fleet

4340

29

Thank you# We fly We fight# We will all be fine2021.04
China Airlines│No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City, Taiwan
TEL│03.399.8888