FOR IMMEDIATE RELEASE

20 April 1998

China Eastern Airlines Corporation Limited ("Eastern Airlines" or the "Company") announced today its audited results for the year 1997. For the year ended 31 December, 1997, total income of the Company amounted to RMB 8.57 billion, an increase by 17.68% or RMB 1.29 billion compared to 1996. Net profit amounted to RMB 0.635 billion, representing a 7.53% increase compared to 1996. The directors do not propose to declare any dividend for the year 1997.

1997 saw steady growth of Eastern Airlines. A total of 1.29 billion tonne-kilometers were completed in traffic turnover, a 18.34% growth compared to 1996. The average daily utilization rate was 7.2 hours, an improvement of 0.5 hour compared to 1996. Total revenues generated by passenger traffic amounted to RMB 6.89 billion, an increase of 16.9% compared to 1996 and accounting for 80.38% of the total income of the Company. The passenger traffic volume was 10.051 billion passenger-kilometers, representing an increase by 16.75% compared to 1996.

A total of 4.102 billion passenger-kilometers in domestic passenger traffic was recorded, an increase of 9.12% compared to 1996. An income of RMB 2.858 billion was generated, representing an increase of 12.79% compared to 1996 and accounting for 41.47% of total revenues generated by passenger traffic. 1.524 billion passenger-kilometers were recorded for Hong Kong routes, an increase of 8.22% compared to 1996. An income of RMB 1.86 billion was generated, representing an increase of 12.12% compared to 1996 and accounting for 26.98% of total revenues generated by passenger traffic. International passenger traffic was 4.425 billion passenger-kilometers, up 28.56% compared to 1996. An income of RMB 2.174 billion was generated, representing a rise of 27.73% compared to 1996 and accounting for 31.55% of total revenues generated by passenger traffic. Cargo traffic was 0.536 billion tonne-kilometers, up 20.65% compared to 1996. An income of RMB 1.332 billion was generated, representing a rise of 20.08% compared to 1996 and accounting for 15.54% of total revenues of the Company.

According to the Company, the passenger yield of domestic flights improved by 3.4% as a result of the increase in domestic airfares in the second half of 1996, and the growth in revenues has exceeded the growth in turnover of passenger traffic. The Company made further adjustments to the structure of domestic routes amidst keen competition in the market. Aircraft for medium-distance and short-distance flights were purchased to support the development of domestic routes. Revenues from the Hong Kong routes also increased as a result of higher airfares and a drop in discount rates.

The increase in the volume and revenues of international passenger traffic was mainly attributable to the increase in the Company's passenger transportation capacity. With the opening of the new Shanghai-Beijing-San Francisco route which started operation on 16 July, 1997, the Company's passenger transportation capacity was increased by 26.84% compared to 1996.

The rise in the volume of and revenues generated by cargo traffic was attributable to the growth in both cargo traffic capacity and cargo yield. The Company's cargo traffic capacity grew by 23.87% compared to 1996.

Total operating costs of the Company amounted to RMB 7.131 billion in 1997, representing an increase of 21.95% compared to 1996. This is mainly attributable to higher operating expenses, engine maintenance costs and depreciation charges following the purchase of two A340 aircraft and three Boeing MD90 aircraft to expand traffic capacity and the increase in fuel prices. Appropriations to the pension fund in 1997 also contributed to rising costs.

Listed on the Hong Kong Stock Exchange and the New York Stock Exchange in February 1997, and on the Shanghai Stock Exchange in November 1997, China Eastern Airlines is one of the three largest air carriers in China and the primary air carrier serving Shanghai, China's eastern gateway. As of 31 December, 1997, the Company operated 140 routes, 113 of which were domestic routes (including 12 Hong Kong routes) and 15 were international routes. The scheduled flights operated per week were 1336 covering 70 domestic and international cities. The Company's fleet has 47 aircraft, including 46 jet passenger aircraft with seats over 100 and 1 jet cargo aircraft.

Issued by:	China Eastern Airlines Corporation Limited
Through:	Keith Statham Associates PR Tel: 2810 8108     Fax: 2869 1022
Contact:	Philip Hui - dir. line 2801 0016

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