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| (1)   | CHINA SOUTHERN AIRLINES CO.      LTD., a legal person duly organised and existing under the laws of      the People's Republic of China ("PRC") and having its      legal address at Guangzhou Economic and Technological Development Zone,      Guangdong Province, PRC ("Transferor"); |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | CHINA SOUTHERN AIR HOLDING      COMPANY, a legal person duly organised and existing under the laws      of the PRC and having its legal address at Baiyun International Airport,      Guangzhou, Guangdong Province, PRC ("Transferee"); |
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| (3)   | MTU AERO ENGINES GMBH, a      company duly incorporated and existing under the laws of the Federal      Republic of Germany and having its registered address at Dachauer Str.      665, 80995 Munich, Germany ("MTU");    and |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | MTU MAINTENANCE ZHUHAI CO.      LTD., a company duly incorporated and existing under the laws of      the PRC and having its registered address at Zhuhai Free Trade Zone,      Guangdong Province, PRC ("JV      Company"). |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A)   | The Transferor and MTU established the JV Company in 2001 and      entered into an Equity Joint Venture Contract for establishment of the JV      Company on March 12, 2001 ("JV      Contract").  Under the JV Contract, each of the      Transferor and MTU owes certain obligations to each other and the JV      Company. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B)   | The Transferor intends to transfer its entire equity interest      in the JV Company to the Transferee, the parent company of the Transferor,      pursuant to Article 15.2 of the JV Contract ("Proposed      Transfer"). |
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| (C)   | The      Parties intend to enter into this Agreement to comply with the provisions      of Article 15.2 of the JV Contract and set out the Parties' rights and      obligations after the Proposed Transfer is  completed. |
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| 1.   | Unless otherwise defined herein or the context expressly      requires otherwise, words and expressions used in this Agreement shall      have the meanings given to them in the JV Contract.  The JV      Contract and the Articles of Association of the JV Company referred to in      this Agreement shall mean the amended and restated JV Contract and the      amended and restated Articles of Association of the JV Company when      referring to any period after the completion of the Proposed      Transfer. |
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| 2.   | The Transferor hereby undertakes to each of MTU and the JV      Company (and the Transferee shall procure the Transferor to duly comply      with its undertakings to MTU and the JV Company hereunder) that upon this      Agreement becoming effective: |
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|  | 2.1.   | it      shall continue to perform its obligations, and comply with the provisions,      under Articles 17.1.3, 17.1.8, 17.2 and 17.3 of the JV Contract ;      and |
|--|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2.2.   | the      Proposed Transfer shall not in any way affect the performance by the      Transferor of its obligations under each of the CFM56 Maintenance      Agreement, the V2500 Maintenance Agreement and any other agreements      entered into between the Transferor and the JV Company for the term of the      JV Contract.  For the avoidance of doubt, the Transferor hereby      confirms that the CFM56 Maintenance Agreement includes the exclusive      repair, overhaul and maintenance by the JV Company of CFM56-5 and CFM56-7      engines operated by the Transferor, subject to the JV Company being      internationally competitive as defined through the “Net Most Favoured      Contract Terms” specified in the Maintenance  Agreements. |
|--|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Subject      to this Agreement becoming effective in accordance with Section 4, the      Transferee undertakes and warrants to MTU and the JV Company that, during      the remaining term of the JVContract: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.1   | The      Transferee will continue to be a controlling shareholder of the Transferor      and the Transferee shall not sell or otherwise dispose of a controlling      stake in the Transferor; |
|--|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.2   |  The      Transferee shall take all actions and perform all acts necessary, or shall      procure that all actions are taken and all acts necessary are performed,      to ensure that the Transferor will not act in any manner that will (i)      result in any breach of the Transferee's obligations under the JV Contract      and/or the Articles of Association of the JV Company, or (ii) otherwise      contravene the Transferee’s obligations under the JV Contract and/or the      Articles of Association;and |
|--|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.3 | The      Transferee shall procure that the Transferor will duly perform its      obligations, and comply with this Agreement and the provisions under      Articles 17.1.3, 17.1.8, 17.2 and 17.3 of the JV Contract ;      and |
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| 4.   | Upon the obtaining of the approval by the Transferor’s      shareholders and the PRC government authorities’ approval of this      Agreement (if necessary), the Transferee and MTU will enter into amended      and restated JV Contract and Articles of Association of the JV Company to      reflect the Proposed Transfer and submit the same to the approval      authorities for approval.  The Proposed Transfer will become      effective on the date on which the approval by the Transferor’s      shareholders and the PRC government authorities’ approval of the Proposed      Transfer are given ("Effective Date"). If      this Agreement does not become effective on or before 31 December 2009, it      will lapse and be of no further force and effect, and the Parties shall      have no claims whatsoever against each  other. |
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| 5.   | Nothing      in this Agreement shall release the Transferor from any liability in      respect of any obligations under the JV Contract due to be performed prior      to the Effective Date. |
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| 6.   | If      any provision, or any portion thereof, of this Agreement shall be held      invalid, illegal or unenforceable under the laws of the PRC, the validity,      legality and enforceability of the remaining provisions herein shall not      in any way be affected or impaired thereby.  The Parties shall      consult with each other in good faith to reach an agreement on provisions      acceptable to each Party to replace to such  provisions. |
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| 7.   | The      validity, interpretation and implementation of this Agreement and the      resolution of disputes concerning the validity, interpretation and      implementation of this Agreement shall be governed by relevant and      published laws of the PRC. |
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| 8.   | This      Agreement is made in Chinese and English.  Both language      versions shall have the same validity.  Each Party acknowledges      and confirms that it has reviewed both language versions and that no      material differences between the two language versions of this Agreement      in terms of substance. |
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| CHINA      SOUTHERN AIRLINES CO.LTD.   |   | MTU      AERO ENGINES GMBH                  |
|----------------------------------------|--------|---------------------------------------------|
|                                   |   |                                        |
|                                   |   |                                        |
| Name:Tan      Wangeng                  |   | Name:      WEINGARTNER/ R.Winkler           |
| Title:                                 |   | Title:      CEO Commercial Maintenance /CFO |
| Date:                                  |   | Date:                                       |
| Company      seal:                     |   |                                        |
|                                   |   |                                        |
| CHINA      SOUTHERN AIR HOLDINGCOMPANY |   | MTU      MAINTENANCE ZHUHAI CO.LTD.         |
|                                   |   |                                        |
|                                   |   |                                        |
| Name: Si      Xianmin             |   | Name:      Holger Sindemann                 |
| Title:                                 |   | Title:      President & CEO             |
| Date:                                  |   | Date:                                       |
| Company      seal:                     |   | Company      seal:                          |

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