Air China Philosophy

Development Strategy of Air China -- To bring our strength into play, To carry out brand strategy

• The development strategy of Air China is the fundamental principle that guide the development of the enterprise.

• The key for development is to foster the core by building competitive strength.

• We will continue to bring the network strength into full play. In China, the consolidation of the hub structures in Beijing, Shanghai, Chengdu, Guangzhou and Shenzhen will complement the international route network with the key markets of Europe, North America, Japan and Korea. The broad and highly effective network strength will help increase our competitive edge both in China and abroad.

• We will continue to build up our brand advantage. As the only flag carrier of China and with our long history, Air China has been in the leading position in the Chinese airline industry for the past few years in terms of safety operation and services. We have gained a high brand value. We will keep on strengthening our brand and make constant efforts to be innovative in our service to satisfy customer needs. We will work hard to make the brand of Air China attractive to customers and maintain the customer loyalty.

• Cost control is a key to success for any enterprise. Air China has demonstrated good cost control and will continue to promote effective methods to minimize costs and maximize profits.

• Air China should appropriately deal with the relationship between scale and economic result. We should compete with our rivals by increasing the efficiency in our resource utilization and by implementing effective management. In addition, we should further maximize profits by establishing a presence in key and high value markets.

• Air China should measure itself against competitors on a constant basis and build up its unique strength while creating new advantages and differentiating itself from others. We should put forth a great effort to improving our core competitiveness.

• The brand strategy of the company should be emphasized for company success. Brand is the core competitive advantage of Air China and is also a key feature that differentiates Air China from other airlines. Air China's brand value rests on its safety standard, service level, position as the flag carrier as well as overall strength. A brand of global recognition has tremendous appeal in the marketplace. Air China has been a well-known aviation brand domestically, but it still needs growth to compete with other Chinese brands across industries. When the brand is recognized by customers both in China and abroad, our success will come with a rapid and healthy growth of the company.

• Long term efforts need to be made to build our brand, and through the decades, employees have dedicated their efforts to this. However, we are aware that one incident of public concern might endanger the brand image of the company. Therefore, every department and employee of Air China bears the responsibility of building up the brand. We need to do our jobs well to satisfy customer demands to the greatest extent. We should play an active role in communicating and promoting the brand of Air China and to make it an internationally well-known brand.

Positioning of Air China -- To be an internationally well-known airline

Air China's positioning, the objective of future development and the vision of Air China is to be an airline recognized by mainstream customers, the most valuable and profitable airline in China and an internationally competitive airline. It is also an outline of the Air China's development strategy.

• In order to be an internationally well-known airline, Air China must achieve the leading service level, service brand, profitability and international competitive edge in the Chinese airline industry. The vision of Air China clearly defines the leading position of Air China in the world airline industry as well as its international reputation.

• To be an internationally well-known airline represents the comprehensive strength and competitive advantage of Air China, which demands that Air China's organization, management, service, operation, brand, fleet, credit and culture are all of international standards. An internationally well-known Air China must have the following fundamental features:

1. To be recognized by mainstream customers of business and commercial travelers with the aim of making Air China their preferred airline by featuring high value products. Passengers other than business and commercial travelers are Air China's focus because once our service is recognized by mainstream customers it will be more easily favored by other customers. To measure whether we are recognized by mainstream customers, we look at having the highest market share in the domestic business and commercial travel market. We also look at other leading airlines in terms of aircraft, infrastructure, service, management, capabilities and employees.

2. To be the most valuable airline in China means that Air China is committed to having the highest market value and value per share among Chinese listed companies. Air China's stock should be valuable for investors and welcomed by shareholders. Additionally, Air China is aiming at the highest brand and service values so Air China becomes the priority choice of customers. The employees of Air China are committed to working hard to offer superior customer services and to maximize the value of Air China.

3. To be the most profitable airline in China and have growth potential to achieve healthy development while reaping better returns for shareholders, the company and the employees, Air China is pursuing a way that leads to the combination of both scale of business and strong profitability. By seizing historical opportunities of the continuous growth momentum of the Chinese air transport industry, Air China is striving for market optimization and cost reduction while maintaining strong profitability.

4. To be an internationally competitive airline with the objective of becoming an international leading airline by competing with foreign airlines, Air China strives to establish its global presence to obtain more room for development. In order to be competitive in international markets, it is necessary for Air China to build and maintain its competitive strengths in terms of management, personnel, resources, etc. and to secure a strong competitive edge in the world airline industry. Air China will play its role as an industry leader domestically and shorten the gap with international leading companies. Our goal is to be ranked within top 15 airlines in the world by 2010 and to be one of the strongest airlines in the world.

Mission of Air China -- To meet customers' demand and to create mutual value

• As a business entity, Air China's operational goal is to have economic benefits at the core and to realize the maximization of profits. However, to achieve this goal, it is important for us to create a variety of values by means of accommodating the increasing demands of customers, which demonstrates the social responsibility of Air China as an internationally recognized airline.

• To meet customers' demands is the priority and fundamental mission of Air China. Customer service is the most important product that we provide. Satisfying the customer comes before the shareholders, the company and the employees.

• To create mutual value demonstrates the idea of value sharing and benefit sharing of Air China as a public company and a modern enterprise. Mutual value means the value that should be shared by shareholders, enterprises, employees, customers and the society as a whole.

• Air China is a stakeholder for shareholders, enterprises, employees, customers and the society. The majority shareholder of Air China is the government, and other investors make up the remaining shareholders. Air China will make unremitting efforts to ensure an attractive return to shareholders, give momentum to Air China, have a sustainable and healthy development, assure satisfactory salaries, benefits and welfare to employees, offer excellent services to customers and bring positive benefits and returns to the society.

• Employees are Air China's most valuable resources and they are treasured by the company. While adhering to the people-oriented management philosophy, Air China will assume the primary responsibility of caring for the life, work and growth of their employees. In addition to the importance of employees' benefits and welfare, a new initiative will be established to help employees redesign their career life and stay motivated.

• Air China also embarks on a social mission. With the growth of Air China, we care for social issues by making donations, supporting public welfare and charity and by meeting our social responsibilities.

Spirit of Air China -- We serve the world with care, We navigate our future with innovation

The corporate spirit reflects the fundamental notion of Air China and the basic ideas of the employees. Corporate spirit, an integration and abstraction from the business philosophy, values proposition and the historical corporate culture of the enterprise and reflects the fundamental spiritual philosophies of the company and its employees.

• With the long lasting spiritual and cultural traditions of over several decades, Air China is always striving for the best. In the new era, new century and new competitive environment, the corporate spirit of Air China is concentrating on "care" and "innovation"- "we serve the world with care and we navigate our future with innovation".

• We are committed to serving the world with care and therefore we are sure to "win the world with care". To realize the vision and long-term goals of Air China, the employees need to foster an internal competitive spirit of persistence and promote a philosophy of serving the world with care both internally and externally. We should care for the society and our customers as well as our colleagues. This care and love will enable us and our team to grow stronger.

• Services with care demonstrate our adherence to market orientation. Care is a necessity for customers and is determined by the characteristics of our jobs. Serving the world with care is the natural attribute of Air China and is representative of the service feature and depth of Air China. Differentiated from services of other companies, the caring services of Air China will help to promote the service level to customers and to obtain customer satisfaction and loyalty. Services with care will enable Air China to win domestic and international markets and to create good business performance and rich economic benefits.

• Services filled with care represent a view that values more than just profits. The concept of services with care calls for the reform of the service plan by Air China people by an adjustment of service mentality, an enhancement of service actions, an innovation of the service mode, an improvement of service standard, and eventually for the realization of customer satisfaction and trust and loyalty by customers towards the Air China brand. Only service with care will lead us to service excellence and service civilization, while increasing Air China's value and social progress.

• To navigate our future with innovation is the core of Air China's spirit. Innovation is the soul of a nation and also the soul of Air China. Only by pursuing new innovations constantly and in various aspects of our work, could we adapt to the changing situations and requirements of the competition, maintain our vitality and competitive ability and achieve the long-term goal of business operations.

• "Navigation" is an attribute of airlines. Only innovation can navigate and lead us into the future of Air China and to reach our goal of being the leading airline in the world that has international recognition.

• The spirit of innovation is the essence of Air China. It encompasses the inherent elements of corporate spirit including renovation, enterprise, competition, responding to changes, and pursuing excellence. These spiritual elements will lead us to new achievements.

Value Proposition of Air China -- Commitment to service excellence, Universal acceptance by the public

The value proposition is the fundamental judging criteria and observed code of conduct that are accepted and adhered to by Air China's employees. The value proposition gives guidance to the perception and activities of the Air China employees. Every employee of Air China should have a high regard for the value proposition in their routine work as demonstrated by their actions.

• Service is our principal product and the foundation for our survival and development. We are committed to the excellence of service, symbolizing a superior service standard and strive for excellence and continuous progress. The excellence is a dynamic standard, which we pursue constantly and diligently.

• Commitment to service excellence is the fundamental means to achieve Air China's goals of making profits and achieving growth. Our commitment to excellence is pursued in both ground services and onboard services, from one single service point to the whole service chain between the different organizations of Air China. Every employee, every department and every team should have excellent service as their key objective and the basic value criteria for judgment, perception and action.

• We understand the commitment to service excellence from three aspects. First, as an airline, our company provides a high standard of services to customers and freight owners. All the Air China employees take part in delivering services with the highest working standard.

• Second, while we are delivering services to customers, we are happy to share in the customer satisfaction experience.

• Third, in terms of internal management of Air China, each employee should be committed to service excellence with creativity. When all employees deliver excellent service, Air China is able to improve their competitive ability, achieve the mission of meeting the customer's demands and create mutual value. Only then is the individual value of the employees realized.

• Commitment to service excellence is a new concept for the Air China employees. The traditional service concept of the past focused on profit orientation. We will fulfill every task in our work with this consensus to realize the mission of the Company and value of individuals.

• Service excellence is the critical criteria for our work, which will be measured and endorsed by the public's response. Whether or not our services are universally recognized and accepted by the public becomes the symbol of our measurement. Therefore, we must take customer satisfaction as the most important criteria for our work and it will determine and guide our work and activities.

• To achieve universal acceptance by the public, we are required to build a value proposition that is market oriented and fostered by a philosophy that focuses on customer demand. Market orientation requires that resource allocation and optimization is based on market demands and customer needs and that we cater to increasing demands. In the daily business operations, every employee should bear in mind the principle of customer orientation and regard it as the guideline for us to resolve problems and make further improvement in our work. We must bear in mind that gaining the acceptance and satisfaction from the public will determine the prosperity or decline and success or failure of Air China.

Service Philosophy of Air China -- Trust, Convenience, Comfort, Satisfaction

• The service philosophy is the code of conduct and the ultimate goal of Air China. Air China has proposed a service philosophy of "Trust, Convenience, Comfort and Satisfaction", which has gained prominent results in practice.

• "Trust" is a service requirement emphasizing safety, which means customers need to feel assured after choosing Air China. "Convenience" is a service requirement that ensures the punctuality of flights and a smooth travel experience for passengers during the whole flight experience. "Comfort" emphasizes the necessity of ensuring that passengers feel comfortable, happy and at ease. "Satisfaction" requires that we offer individualized services according to the special needs of the customers.

• Our dedicated service is both a requirement and a standard and we will make it a core part of our efforts towards the building of Air China's brand.

• To carry out the dedicated service philosophy and to facilitate the service project, we must work with our service providers to deliver consistent good service. To foster the service philosophy, we must deliver service with care so our goal of service excellence is met.

Business Concept of Air China -- Safety as the top priority, Customer orientation, Credibility as the core

The business concept is the guideline and fundamental business philosophy that the company is following to conduct business operations and activities.

• Safety is the most fundamental service that an airline provides to its customers. To ensure the safety of the passengers and their property is the most important task to us and the foundation for Air China's development. We take safety as the top priority in Air China's business operations.

• Customer orientation is the core of Air China's business concept. All our business activities rely on the target customers we serve. We care for our customers by monitoring the market and we understand that by winning customers we will be successful in the marketplace. The entire business operations and activities of Air China are aimed at providing superior service for customers. We must foster the business concept of customer orientation and make it our first priority in order to satisfy increasing customer demands.

• Credibility is the morality benchmark for the business operations of Air China. Credibility to us means being honest. Without it, we cannot sustain long-term success. The business operations and development of Air China must be credible. As the flag carrier of China that serves the whole world, Air China values credibility as the fundamental requirement that serves as our business philosophy and key component of Air China's brand image.

Management Philosophy of Air China -- People Orientation, Science, Harmony, High Efficiency

The management philosophy is the key policy and guideline for the management of the company.

• Air China's management philosophy of "people orientation, science, harmonization and high efficiency" is aimed at a management style that is people oriented, scientific, harmonized and highly efficient. This philosophy is needed for Air China to sharpen its competitive edge when facing new environments.

• People orientation means that human resources is one of the most critical resources for the operation of Air China and the value of the employees should be recognized by means of new employment and a good salary system. We care for employees' individual interests and their development and try to motivate them by deploying personalized human resources management.

• Science means that we should carry out the decision making and management of the company while employing the latest scientific theories and scientific methodologies. Currently, organizational restructuring has been in full swing and it demands the promotion of Air China's management efficiency and productivity by means of modern philosophy and scientific methodology. Scientific management is one of the key features for Air China to build itself into a highly respected airline worldwide.

• Harmony means an ambience of solidarity, teamwork, tolerance and harmonious relationships. All executives and employees of Air China should move towards the strategic goals of the company and follow the company's policies and procedures to strive for a life and work balance of harmony, solidarity, and teamwork.

• High efficiency has been accelerated by the organizational restructuring which optimized the allocation of resources and achieved high efficiency of management and operations. Air China's executives and employees should make dedicated efforts and contribute to the realization of high efficiencies in the management and work of Air China in a new systematic environment.

Talent Philosophy of Air China -- Morality, Passion, Capability, Performance

• The talent philosophy is the fundamental criteria for the company's evaluation, selection, cultivation and utilization of talent resources.

• Morality is the foundation for an employee to bring his or her capacity into full play and passion is the key driving force for getting the job done well. Capability is the prerequisite for success and performance is the ultimate outcome. The process of talent selection, evaluation, and utilization must be performance oriented.

• Total morality is the aggregation of individual morality, professional ethics and social morality. Air China heavily weighs the fundamental morality of individuals and personal moral character as criteria for judgment.

• Passion is the spirit of making unremitting efforts towards the development goals of the company. It is a proactive attitude towards work, a style of prompt and resolute execution, the courage of pursuing innovation and the driving force in taking the initiative. We do not favor those who do not work hard and are passive. We need creative and passionate talents that are full of vigor and vitality and in pursuit of excellence.

• Capability represents the capacity, intelligence and physical strength required to perform the job. We need talented people with dedicated professional skills and comprehensive capabilities. At present, Air China must focus on personal capabilities and measure individual contributions.

• Performance is the basic criteria for judging talent and qualifications and one has to deliver good performance to be considered talented and capable. Air China is in favor of a performance oriented philosophy, which also serves as the criteria for determining the value of talented people.

Safety Philosophy of Air China -- Prevention as Priority, System Enhancement, Solid Foundation, Science and Preciseness

The safety philosophy is Air China's safety guidelines.

• Safety is extremely important to Air China. The characteristics of the aviation industry require us to highly value and emphasize the significance of safety. Safety is the most basic service that we provide to our customers and it serves as the foundation for our business and operations. Nothing is more important than our responsibility of assuring safety for customers and employees.

• Our safety guideline is to focus on science based management and experience to build and enhance the long term safety management system. This is to secure the flight safety, air safety and ground safety on the basis of training and supervision.

• We give priority to prevention in safety. Safety guidelines must be based on scientific management, proactive prevention and effective control. The fact that nine out of ten incidents are caused by violations of rules and regulations teaches us that all procedures, operations and transfer of information must be based on strict compliance with rules and regulations. We believe that by giving priority to prevention, appropriate controls, finding and resolving problems in advance and taking effective measures, we are able to achieve the best results for safety.

• System enhancements and systematic management are requirements for ensuring safety. We attach great importance to building the Flight Management System, the Maintenance and Engineering System, the Operations Control System, the Safety Supervision System and all other Air China systems. The successful construction of these systems will ensure effective safety mechanisms in the operations of Air China.

• The solid foundation of Air China's safety work is the building of crew, engineer and flight operation teams with the proper rules and regulations. The safety work of Air China can be assured only when all of the foundations are built solidly.

• Science and preciseness means that our safety work must meet with modern scientific management thoughts, means and facilities. Therefore, we must adopt scientific attitudes, scientific methods and scientific means. We should also focus on preciseness and carefulness in our work and ensure our safety goals with scientific methods and approaches.

Teamwork Philosophy of Air China -- Loyalty and Dedication, Solidarity and Teamwork, Vigor and Vitality

Air China builds its teams through the teamwork philosophy.

• Air China is a big team which consists of many smaller teams. The team refers to a working group in different forms. The concept of teamwork is important to the internal workings of Air China and competition in the marketplace.

• Loyalty and dedication mean that the teams must be loyal to Air China and conduct their work based on the fundamental interests of Air China. The teams should handle any issues or problems in order to ensure the goals of Air China. The members of the team must be dedicated and determined to accomplish the tasks given by the team and Air China.

• Solidarity and teamwork mean the firm solidarity and effective communication and collaboration, which is the essential for the team to be successful. It is important for there to be good communication between the departments of Air China. Air China puts much emphasis on the solidarity and teamwork among teams, information sharing, effective communication and integrated efforts. Teams and different departments should think in the big picture trying to be tolerant, supportive and considerate of each other.

• The teams should be full of vigor and vitality which comes from good management, the determination and courage of the team, and from the spirit of overcoming obstacles and pursuing excellence. Vitality is of great significance to the team. Only if full of vigor and vitality, can the teams at Air China be unbeatable and invincible with sustainable growth.

• Employees are encouraged to make contributions to the enhancement of corporate core values. Teams are to be determined and full of courage. Each team within Air China should be persistent and ready for any challenge leading to success.

Advertising Words

The advertising words are the key words through which Air China communicates its philosophy to customers and the whole world. They are a powerful means to establish Air China's image and brand. The advertising words of Air China are the essence of Air China's philosophy and they communicate Air China's image of excellence and uniqueness. Some advertising words of Air China are:

• Commitment to service excellence

• Trust, Convenience, Comfort, and Satisfaction

• We serve the world with care. We navigate our future with innovation.

• To meet customers' demands, to create mutual value

• The Phoenix brings you good luck.

• Wings of China - Our love from the sky.

• The care of Air China is always with you