CAL — Audit Report / Information 2025

Apr 21, 2026

China Airlines, Ltd.

Parent Company Only Financial Statements for the Years Ended December 31, 2025 and 2024 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders China Airlines, Ltd.

Opinion

We have audited the accompanying parent company only financial statements of China Airlines, Ltd. (the “Company”), which comprise the balance sheets as of December 31, 2025 and 2024, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including material accounting policy information (collectively referred to as the “parent company only financial statements”).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter in the audit of the parent company only financial statements is stated below:

International Passenger Fare Revenue Recognition

In accordance with IFRS 15 “Revenue from Contracts with Customers”, passenger sales are accounted for as contract liabilities before relevant transportation services are provided. After providing the related services, contract liabilities are reclassified to passenger revenue. Refer to Notes 4 and 25 of the accompanying parent company only financial statements for related detailed information.

• 1 -

Since relevant sales can only be recognized after passengers have boarded the aircraft and unused tickets are subsequently reclassified as international passenger fare revenue, the revenue recognition process involves complex workflows. There is a risk that revenue may be recognized before performance obligations are fully satisfied. Accordingly, we identified international passenger fare revenue recognition as a key audit matter.

The main audit procedures that we performed included the following:

1. We understood and tested the internal control related to the process of revenue from international passenger fare, including manual and automatic control.

2. We understood and tested the effectiveness of the information system related to the recognition of international passenger fare revenue.

3. We sampled several flight tickets, which were used and recognized as revenue, to verify whether the boarding date matched the date recorded on the tickets from advanced sales of tickets, ensuring the occurrence of revenue recognition.

Other Matter - Audited by Other Independent Auditors

The parent company only financial statements of some investments accounted for using the equity method in Note 12 were audited by other independent auditors, and our audit opinion is based solely on the reports of other auditors. As of December 31, 2025 and 2024, the aforementioned investments accounted for using the equity method amounted to NT$4,791,799 thousand and NT$4,993,997 thousand, representing 1.49% and 1.68% of the total assets, respectively. For the years ended December 31, 2025 and 2024, the combined share of profit (loss) and other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method amounted to NT$1,618,249 thousand and NT$2,036,068 thousand, representing 10.09% and 14.88% of the total comprehensive income, respectively.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

• 2 -

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

• 3 -

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Kuan-Hao Lee and I-Chi Chien.

Deloitte & Touche Taipei, Taiwan Republic of China

March 11, 2026

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and parent company only financial statements shall prevail.

• 4 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4, 6 and 29) Financial assets at amortized cost - current (Notes 4, 8 and 29) Financial assets for hedging - current (Notes 4, 6 and 29) Notes and accounts receivable, net (Notes 4, 9 and 29) Notes and accounts receivable - related parties (Notes 29 and 30) Finance lease receivables - current (Notes 4, 19 and 29) Other receivables (Notes 4 and 29) Inventories (Notes 4 and 10) Other current assets (Note 16) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4, 7 and 29) Financial assets for hedging - non-current (Note 4 and 29) Investments accounted for using the equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 5, 13 and 31) Right-of-use assets (Notes 4 and 19) Investment properties (Notes 4 and 14) Other intangible assets (Notes 4 and 15) Deferred tax assets (Notes 4 and 26) Other non-current assets (Notes 16, 19, 29 and 31) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Financial liabilities for hedging - current (Notes 4, 19 and 29) Notes and accounts payable (Note 29) Accounts payable - related parties (Note 30) Other payables (Notes 20 and 25) Current tax liabilities Lease liabilities - current (Notes 4, 19 and 29) Contract liabilities current (Notes 4 and 21) Provisions - current (Notes 4 and 22) Current portion of bonds payable and put option of convertible bonds (Notes 4, 18, 24 and 29) Current portion of long-term borrowings (Notes 17, 29 and 31) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Financial liabilities for hedging - non-current (Notes 4, 19 and 29) Bonds payable - non-current (Notes 4, 18, 24 and 29) Long-term borrowings - non-current (Notes 17, 29 and 31) Contract liabilities - non-current (Notes 4 and 21) Provisions - non-current (Notes 4 and 22) Deferred tax liabilities (Notes 4 and 26) Lease liabilities - non-current (Notes 4, 19 and 29) Net defined benefit liabilities - non-current (Notes 4, 5 and 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 18 and 24) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity Treasury shares Total equity TOTAL		2025 Amount % $ 42,025,844 13 10,000 - 2,450 - 9,326,847 3 288,190 - - - 593,193 - 10,976,486 4 3,509,767 1 66,732,777 21 56,616 - 3,236 - 17,517,657 5 117,804,274 37 51,732,046 16 2,047,448 1 668,109 - 6,872,030 2 58,370,552 18 255,071,968 79 $ 321,804,745 100 $ 8,721,795 3 884,410 - 1,843,284 1 17,909,709 6 2,060,679 1 2,353,574 1 26,515,791 8 3,633,090 1 1,632,809 - 10,346,390 3 4,557,040 1 80,458,571 25 32,090,362 10 5,750,000 2 64,731,682 20 5,629,512 2 16,697,247 5 8,260 - 10,671,307 3 7,792,996 3 391,016 - 143,762,382 45 224,220,953 70 60,853,733 19 5,892,301 2 3,292,629 1 1,544,819 - 26,261,106 8 31,098,554 9 (229,921) - (30,875) - 97,583,792 30 $ 321,804,745 100		2024
				Amount % $ 49,643,299 17 10,000 - 2,982,605 1 10,082,879 3 267,372 - 200,222 - 776,942 - 12,006,521 4 1,281,071 1 77,250,911 26 71,460 - 6,227 - 16,197,219 6 112,582,072 38 50,994,259 17 2,047,448 1 607,904 - 6,715,022 2 30,913,036 10 220,134,647 74 $ 297,385,558 100 $ 9,659,385 3 1,371,135 - 1,581,198 1 18,002,118 6 1,921,489 1 1,457,772 - 25,772,773 9 1,497,724 1 1,650,000 1 9,450,715 3 4,296,882 1 76,661,191 26 31,970,060 11 4,419,339 1 53,893,164 18 4,849,929 2 18,050,869 6 189,686 - 12,200,785 4 8,520,780 3 629,124 - 134,723,736 45 211,384,927 71 60,769,350 20 5,829,477 2 1,868,376 1 690,014 - 18,419,108 6 20,977,498 7 (1,544,819) - (30,875) - 86,000,631 29 $ 297,385,558 100

The accompanying notes are an integral part of the parent company only financial statements.

(With Deloitte & Touche auditors’ audit report dated March 11, 2026)

• 5 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 25 and 30) OPERATING COSTS (Notes 4, 10, 25 and 30) GROSS PROFIT OPERATING EXPENSES (Notes 4, 25 and 30) PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Note 25) Other gains and losses (Notes 11, 13 and 25) Finance costs (Notes 25 and 29) Share of profit of subsidiaries and joint ventures (Note 12) Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: (Loss) gain on hedging instruments subject to basis adjustment (Notes 4, 24 and 29) Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income (Notes 4 and 24) Remeasurement of defined benefit plans (Notes 4 and 23) Share of the other comprehensive income (loss) of subsidiaries and joint ventures accounted for using the equity method (Notes 4 and 24) Income tax related to items that will not be reclassified subsequently to profit or loss (Note 26)		2025 Amount % $ 178,953,945 100 150,638,099 84 28,315,846 16 12,851,441 7 15,464,405 9 1,553,300 1 (454,693) - (2,586,463) (2) 3,562,468 2 2,074,612 1 17,539,017 10 2,838,698 2 14,700,319 8 (298,133) - (14,844) - 314,541 - 69,535 - (72,618) -		2024
				Amount % $ 175,182,455 100 149,899,348 86 25,283,107 14 12,502,997 7 12,780,110 7 2,251,299 1 637,237 1 (2,321,755) (1) 3,740,009 2 4,306,790 3 17,086,900 10 2,703,555 2 14,383,345 8 850,569 1 10,757 - 5,393 - (121,109) - (7,973) - (Continued)

• 6 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations (Notes 4 and 24) Share of the other comprehensive income of subsidiaries and joint ventures accounted for using the equity method (Notes 4 and 24) Gain (loss) on hedging instruments not subject to basis adjustment (Notes 4, 24 and 29) Income tax related to items that may be reclassified subsequently to profit or loss (Note 26) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 27) Basic Diluted		2025 Amount % $ (62,639) - 1,222 - 1,737,368 1 (334,946) - 1,339,486 1 $ 16,039,805 9 $ 2.42 $ 2.38		2024
				Amount % $ 119,621 - 6,662 - (1,928,353) (1) 361,746 - (702,687) - $ 13,680,658 8 $ 2.38 $ 2.33

The accompanying notes are an integral part of the parent company only financial statements.

(With Deloitte & Touche auditors’ audit report dated March 11, 2026)

(Concluded)

• 7 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

Share Capital Capital Surplus BALANCE ON JANUARY 1, 2024 $ 60,513,407 $ 3,887,046 Basis adjustment to loss on hedging instruments - - Appropriation of 2023 earnings Legal reserve - - Special reserve - - Cash dividends - $0.69016808 per share - - Changes in capital surplus from dividends distributed to subsidiaries - 1,431 Actual disposal of partial equity interest in subsidiaries - 1,425,334 Changes in percentage of ownership interests in subsidiaries - 285,416 Issuance of employee share options by the subsidiaries - 43,216 Net income for the year ended December 31, 2024 - - Other comprehensive income (loss) for the year ended December 31, 2024, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2024 - - Convertible bonds converted to ordinary shares 255,943 187,034 BALANCE ON DECEMBER 31, 2024 60,769,350 5,829,477 Basis adjustment to gain on hedging instruments - - Appropriation of 2024 earnings Legal reserve - - Special reserve - - Cash dividends - $0.79587046 per share - - Changes in capital surplus from dividends distributed to subsidiaries - 1,651 Net income for the year ended December 31, 2025 - - Other comprehensive income (loss) for the year ended December 31, 2025, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2025 - - Convertible bonds converted to ordinary shares 84,383 61,173 BALANCE ON DECEMBER 31, 2025 $ 60,853,733 $ 5,892,301	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 1,230,977 $ 534,375 $ 9,146,199 - - - 637,399 - (637,399) - 155,639 (155,639) - - (4,176,580) - - - - - - - - - - - - - - 14,383,345 - - (140,818) - - 14,242,527 - - - 1,868,376 690,014 18,419,108 - - - 1,424,253 - (1,424,253) - 854,805 (854,805) - - (4,842,015) - - - - - 14,700,319 - - 262,752 - - 14,963,071 - - - $ 3,292,629 $ 1,544,819 $ 26,261,106	Other Equity Exchange Differences on Translation of the Financial Statements of Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Gain (Loss) on Foreign Operations Comprehensive Income Hedging Instruments Treasury Shares $ (12,965) $ 22,726 $ (699,775) $ (30,875) - - (292,936) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 101,646 27,887 (691,402) - 101,646 27,887 (691,402) - - - - - 88,681 50,613 (1,684,113) (30,875) - - 238,164 - - - - - - - - - - - - - - - - - - - - - (49,939) 33,861 1,092,812 - (49,939) 33,861 1,092,812 - - - - - $ 38,742 $ 84,474 $ (353,137) $ (30,875)	Total Equity $ 74,591,115 (292,936) - - (4,176,580) 1,431 1,425,334 285,416 43,216 14,383,345 (702,687) 13,680,658 442,977 86,000,631 238,164 - - (4,842,015) 1,651 14,700,319 1,339,486 16,039,805 145,556 $ 97,583,792

The accompanying notes are an integral part of the parent company only financial statements.

(With Deloitte & Touche auditors’ audit report dated March 11, 2026)

• 8 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss reversed on trade receivables Interest income Dividend income Share of profit of subsidiaries and joint ventures Gain on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Gain on disposal of investments Reversal of impairment loss recognized on flight equipment Loss on inventory and property, plant and equipment Net (gain) loss on foreign currency exchange Finance costs Recognition of provisions Others Changes in operating assets and liabilities Notes and accounts receivable Accounts receivable - related parties Other receivables Inventories Other current assets Notes and accounts payable Accounts payable - related parties Other payables Contract liabilities Provisions Other current liabilities Defined benefit liabilities Other liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost	2025 $ 17,539,017 25,304,747 141,813 (73,668) (1,195,567) (16,202) (3,562,468) (45,598) - (4,628) - 1,883,288 (239,810) 2,586,463 5,223,291 423 873,567 (20,818) (365,137) (601,375) (1,747,185) (415,617) 262,086 1,445,393 1,522,600 (3,861,966) 261,224 (413,243) (241,519) 44,239,111 1,380,180 2,264,301 (3,385,423) (3,445,505) 41,052,664 - (20,000) 20,000	2024 $ 17,086,900 25,691,683 169,120 - (1,788,003) (15,863) (3,740,009) (337,738) (9,753) - (189,430) 2,339,868 270,336 2,321,755 4,048,349 (1,976) (919,233) (94,546) (191,142) (3,585,033) (313,980) 238,561 283,248 3,977,858 4,551,025 (4,200,272) 202,566 (77,959) - 45,716,332 1,729,204 261,939 (2,872,622) (997,248) 43,837,605 (278) (7,010,236) 10,248,610 (Continued)

• 9 -

CHINA AIRLINES, LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

Purchase of financial assets for hedging Proceeds from sale of financial assets for hedging Net cash generated from disposal of subsidiaries Proceeds from disposal of non-current assets held for sale Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Decrease in finance lease receivables Increase in prepayments for equipment Increase in other intangible assets (Increase) decrease in restricted assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of bonds payable Repayments of bonds payable Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of the principal portion of lease liabilities Proceeds of guarantee deposits received Refund of guarantee deposits received Payment of cash dividends Partial disposal of interests in subsidiaries without a loss of control Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2025 $ (7,894,600) 10,578,513 10,150 - (4,057,935) 774,632 (175,262) 118,421 198,363 (44,998,091) (202,018) (7,544) (45,655,371) 3,100,000 (1,650,000) 21,200,000 (9,465,807) (10,760,024) 127,323 (106,441) (4,842,015) - (2,396,964) (617,784) (7,617,455) 49,643,299 $ 42,025,844	2024 $ (26,177,606) 34,352,036 - 5,866,122 (4,133,499) 364,345 (236,581) 357,717 300,888 (18,519,144) (192,286) 12,738 (4,767,174) - (3,150,000) 23,500,000 (17,908,326) (11,114,241) 204,159 (141,842) (4,176,580) 1,958,844 (10,827,986) 1,015,186 29,257,631 20,385,668 $ 49,643,299

The accompanying notes are an integral part of the parent company only financial statements.

(With Deloitte & Touche auditors’ audit report dated March 11, 2026)

(Concluded)

• 10 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

CHINA AIRLINES, LTD.

1. GENERAL INFORMATION

China Airlines, Ltd. (the “Company”) was founded in 1959 and its shares have been listed on the Taiwan Stock Exchange since February 26, 1993. The Company is primarily involved in (a) air transport services for passengers, cargo and mail; (b) ground services and routine aircraft maintenance; (c) major maintenance of flight equipment; (d) communications and data processing services to other airlines; (e) the sale of aircraft parts, equipment and aviation equipment; and (f) leasing of aircraft.

2. APPROVAL OF PARENT COMPANY ONLY FINANCIAL STATEMENTS

The parent company only financial statements were approved by the Company’s board of directors on March 11, 2026.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the FSC

The initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026

New, Amended and Revised Standards and Interpretations Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” Annual Improvements to IFRS Accounting Standards - Volume 11 IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17)	Effective Date Announced by IASB
	January 1, 2026 January 1, 2026 January 1, 2026 January 1, 2023

As of the date the parent company only financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

• 11 -

• c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB (Note 1)

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027 (Note 2) IFRS 19 “Subsidiaries without Public Accountability: Disclosures” January 1, 2027 (including the 2025 amendments to IFRS 19) Amendments to IAS 21 “Translation to a Hyperinflationary January 1, 2027 Presentation Currency”

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosure in Financial Statements” and consequential amendments

IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise:

• To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Company shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.

• The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.

• Provides guidance to enhance the requirements of aggregation and disaggregation: The Company shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Company shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company labels items as “other” only if it cannot find a more informative label.

• Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Company as a whole, the Company shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items.

In addition, the following consequential amendments have been made to IAS 7 “Statement of Cash Flows”:

• The Company shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.

• 12 -

• Interest and dividends received by the Company shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Company has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows.

Except for the above impact, as of the date the parent company only financial statements were authorized for issue, the Company is continuously assessing other impacts of the above amended standards and interpretations on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

Statement of Compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and related regulations.

Basis of Preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• a. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• b. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• c. Level 3 inputs are unobservable inputs for an asset or liability.

When preparing these parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries, associates and joint ventures. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, associates and joint ventures, the share of other comprehensive income of subsidiaries, associates and joint ventures and the related equity items, as appropriate, in these parent company only financial statements.

Classification of Current and Non-current Assets and Liabilities

Current assets include:

• a. Assets held primarily for the purpose of trading;

• b. Assets expected to be realized within 12 months after the reporting period; and

• 13 -

• c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• a. Liabilities held primarily for the purpose of trading;

• b. Liabilities due to be settled within 12 months after the reporting period; and

• c. Liabilities for which the Company does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

Foreign Currencies

In preparing the Company’s parent company only financial statements, the transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise except for exchange differences on:

• a. Foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and

• b. Transactions entered into in order to hedge certain foreign currency risks.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

Inventories

Inventories are primarily expendable and nonexpendable parts and materials, supplies used in operations and items for in-flight sales and are stated at the lower of cost or net realizable value. The costs of inventories sold or consumed are determined using the weighted-average method.

• 14 -

Non-current Assets Held for Sale

Non-current assets are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Such assets classified as held for sale are not depreciated.

Investments Accounted for Using the Equity Method

The Company uses the equity method to account for its investments in subsidiaries, associates and joint ventures.

• a. Investment in subsidiaries

A subsidiary is an entity (including a structured entity) that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted therefore to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the change in Company’s share of the other equity of the subsidiary.

Changes in the Company’s ownership interests in a subsidiary that do not result in the Company losing control of the subsidiaries are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amounts of the investment and the fair value of the consideration paid or received.

When the Company’s share of losses of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses, if any.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s parent company only financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

• 15 -

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides this, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Company directly disposed of the related assets or liabilities.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

b. Investments in associates and joint ventures

An associate is an entity over which the Company has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement and the rights to the net assets of the arrangement.

The Company uses the equity method to account for its investments in associates and joint ventures. Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Company also recognizes the changes in the Company’s share of equity of associates and joint ventures attributable to the Company.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate and a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to it additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate and joint venture), the Company discontinues recognizing its share of further loss. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

• 16 -

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

When the Company transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate and the joint venture that are not related to the Company.

Property, Plant and Equipment

Property, plant and equipment are tangible items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used for more than one period. The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Company; the cost of the item can be measured reliably. Property, plant and equipment are stated at cost less recognized accumulated depreciation and recognized accumulated impairment loss.

Freehold land is not depreciated.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period. The impact of any changes in accounting estimates is accounted for on a prospective basis under IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

Investment Properties

Investment properties are properties held to earn rentals or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

• 17 -

Intangible Assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period. The residual value of an intangible asset with a finite useful life shall be assumed zero unless the Company expects to dispose of the intangible asset before the end of its economic life. The impact of any changes in accounting estimates is accounted for on a prospective basis under IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”.

Impairment of Property, Plant and Equipment, Right-of-use Asset, Investment Properties and Intangible Assets Other Than Goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use asset, investment properties and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis; otherwise, corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset, cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

• a. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. All regular way purchases or sales of financial assets are buy or sell of financial assets in the period set by regulation or market convention.

• 18 -

• 1) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

• a) Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI.

Financial assets at FVTPL are subsequently measured at fair value, and any remeasurement gains or losses on such financial assets are recognized in profit or loss. Fair value is determined in the manner described in Note 29.

• b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i. The financial assets are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii. The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables, other receivables and other financial assets, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• c) Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if an equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• 19 -

2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables and finance lease receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables, finance lease receivables and other receivables. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represents the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

• 3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

b. Equity instruments

Equity instruments issued by the Company are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity, and its carrying amounts are calculated based on weighted average by share types. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

c. Financial liabilities

1) Subsequent measurement

Except for derivative financial instruments, all financial liabilities are measured at amortized cost using the effective interest method.

• 20 -

2) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• d. Convertible bonds

The component parts of compound instruments (i.e., convertible bonds) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

• e. Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate, foreign exchange rate and fuel price risks, including foreign exchange forward contracts, interest rate swaps, currency options, fuel options and swap.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

• 21 -

Hedge Accounting

The Company designates certain hedging instruments, which include derivatives and non-derivatives in respect of foreign currency risk, as cash flow hedges. When entering into hedging transactions, the Company has prepared official documents that describe the hedging relationship between hedging instruments and items which have been hedged, the objective of risk management, the hedging strategy, and the way to evaluate the effectiveness of the hedging instrument.

The effective portion of gains and losses on derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gains or losses relating to the ineffective portion are recognized immediately in profit or loss.

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as reclassification adjustments in the line items relating to the hedged item in the same period in which the hedged item affects profit or loss. If a hedge of a forecasted transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the non-financial asset or non-financial liability.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income (from the period in which the hedge was effective) remains separately in equity until the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the gains or losses accumulated in equity are recognized immediately in profit or loss.

Provisions

The Company recognizes provisions when the Company has a present obligation (legal or constructive obligation) arising from past events, the payment for the obligation is probable, and the expenditure for settling the obligation can be reliably estimated.

The amount recognized as a provision is measured at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured at the estimate of using the cash flows to settle the present obligation, its carrying amount is the present value of those cash flows. When the aircraft lease contracts expire and the leased item will be returned to the lessor, the Company will assess if there are existing obligations exist and if a provision is required to be recognized when signing the lease contract.

Revenue Recognition

The Company recognizes revenue by applying the following steps:

• Identifying the contract with the customer;

• Identifying the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations in the contract; and

• Recognize revenue when the Company satisfies a performance obligation.

Shipping service revenue

Passenger and cargo revenue are recognized as revenue when the passengers and goods are actually carried. When the tickets are sold, due to the fact that the fulfillment of performance obligations of the shipment have not been met, the relevant amount of revenue is initially recorded as contract liabilities until passengers actually board.

• 22 -

Maintenance service revenue

The Company provides maintenance services. As customers simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, revenue is recognized over time. The Company measures progress toward complete satisfaction of a performance obligation based on the proportion of actual maintenance costs incurred (including labor hours and materials consumed) to the total expected maintenance costs, and recognizes revenue and costs accordingly.

When recognizing revenue, if the revenue recognized exceeds the amount billed, the excess is recognized as a contract asset. When the Company has an unconditional right to consideration from the customer, the contract asset is reclassified to accounts receivable. If the amount billed exceeds the revenue recognized, the difference is recognized as a contract liability.

Leasing

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. However, if leases transfer ownership of the underlying assets to the Company by the end of the lease terms or if the costs of right-of-use assets reflect that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, residual value guarantees, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives payable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the amounts expected to be payable under a residual value guarantee, a change in the assessment of an option to purchase an underlying asset, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

• 23 -

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Company recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction.

Employee Benefits

• a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

• b. Retirement benefits

Payments to the defined contribution retirement benefit plan are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

Frequent Flyer Programs

The Company has a “Dynasty Flyer Program” through which program members can convert accumulated mileage to a cabin upgrade, free tickets and other member rewards.

A portion of passenger revenue attributable to the rewards for the frequent flyer program is deferred. The Company should recognizes this deferred revenue as revenue only when the Company has fulfilled its obligations on the granting of rewards or when the period for converting the mileage to rewards has expired.

• 24 -

Income Tax

Income tax expense represents the sum of the current tax and deferred tax.

a. Current tax

The current tax liabilities are based on current taxable profit. Since part of the income and expenses are taxable or deductible in other periods, or in accordance with the relevant tax laws are taxable or deductible, current taxable profit differs from net profit reported in the parent company only statements of comprehensive income. The Company’s current tax liabilities are calculated by the tax rate was legislated or substantially legislated at the balance sheet date.

According to the Income Tax Act in the R.O.C Income Tax Law, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve the retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carryforwards and unused tax credits for purchases of machinery, equipment and technology, research and development expenditures, and personnel training expenditures to the extent that it is probable that taxable profit will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profit against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company has applied the exception from the recognition and disclosure of deferred tax assets and liabilities relating to Pillar Two income taxes. Accordingly, the Company neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes.

• 25 -

• c. Current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

Maintenance and Overhaul Costs

Routine maintenance costs are recognized in profit or loss in the period in which they are incurred.

The overhaul costs of an owned or leased aircraft that meet the criteria for fixed asset capitalization are capitalized as replacements for aircraft and engines and are depreciated on a straight-line basis over the expected annual overhaul cycle.

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies as disclosed in Note 4, management is required to make judgments, estimations and assumptions on the carrying amounts that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Useful Lives of Property, Plant and Equipment - Flight Equipment

Flight equipment is measured at cost less residual value and are depreciated on a straight-line basis over their estimated useful lives. The estimated useful lives and residual values are evaluated based on the Company’s historical experience and current usage condition in the aviation industry.

Because of the change in fleet planning to match the economic benefits with the useful lives, on March 8, 2024, the Company’s board of directors resolved to modify the estimated useful lives of eight B747-400F freighters from 24 years to 22 years and the estimated useful lives of two 80C2 engines from 8 years to 6 years, effective on May 1, 2024. The depreciation expense in 2024 increased by $679 million.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving funds Checking accounts and demand deposits Cash equivalent Time deposits with original maturities of less than three months Repurchase agreements collateralized by bonds		December 31	December 31
		2025 $ 54,358 10,240,601 10,829,360 20,901,525 $ 42,025,844	2024 $ 65,474 7,395,451 29,980,211 12,202,163 $ 49,643,299

• 26 -

The market rate intervals of cash in the bank and cash equivalents at the end of the reporting period were as follows:

Bank balance Time deposits with original maturities of less than three months Repurchase agreements collateralized by bonds	December 31
	2025 2024 0.00%-1.25% 0.00%-1.90% 1.61%-4.28% 1.65%-5.11% 1.46%-4.00% 1.55%-5.12%

The Company designated some deposits denominated in USD and repurchase agreements collateralized by bonds as hedging instruments to avoid exchange rate fluctuations on final payments of aircraft orders and prepayments for equipment and applied cash flow hedge accounting to hedge its foreign exchange exposure. The contract information is as follows:

			Maturity Date	Subject	Carrying Value	Carrying Value
December	31,	2025	-	Financial assets for hedging - current	$	-
December	31,	2024	2025.1.2	Financial assets for hedging - current		2,950,820

Impact on other comprehensive income (loss)

			Recognized in
			Other
			Comprehensive
			Income (Loss)
For the year ended December	31,	2025	$ (239,324)
For the year ended December	31,	2024	572,698

For the years ended December 31, 2025 and 2024, the amount of hedging instrument settlements recognized as prepayments for equipment were increased to $210,582 thousand and decreased to $36,900 thousand, respectively. Additionally, due to the amount of ineffectiveness of hedging recognized as foreign exchange gains were $0 thousand and $11,177 thousand, respectively.

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

Investments in Equity Instruments

Non-current Foreign investments Unlisted shares Listed shares Domestic investments Unlisted shares		December	31
		2025 $ 36,268 407 19,941 $ 56,616	2024 $ 47,997 368 23,095 $ 71,460

• 27 -

These investments in equity instruments are not held for trading. Instead, they are held for medium- to long-term strategic purposes and are expected to profit through long-term investment. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair values in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

8. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months		December	31
		2025 $ 10,000	2024 $ 10,000

The interest rates for time deposits with original maturities of more than 3 months was 1.46% per annum as of December 31, 2025 and 2024.

9. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE, NET

Notes receivable Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss		December 31	December 31
		2025 $ 136,444 9,338,146 (147,743) 9,190,403 $ 9,326,847	2024 $ 207,030 10,104,159 (228,310) 9,875,849 $ 10,082,879

The average credit period is 7 to 55 days. In determining the recoverability of an accounts receivable, the Company considers any change in the credit quality of the receivable since the date credit is initially granted to the end of the reporting period, and any allowance for impairment loss is based on the estimated irrecoverable amounts determined by reference to the Company’s past default experience with the counterparty and an analysis of the counterparty’s current financial position. The Company adopts a policy of only dealing with entities that are rated the equivalent of investment grade or higher and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit rating information is obtained from independent rating agencies where available or, if not available, the Company uses other publicly available financial information or its own trading records to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually.

• 28 -

The Company applies the simplified approach to allowing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss allowance for all account receivable. The expected credit losses on accounts receivable are estimated using a provision matrix by reference to past default experience with the debtors and an analysis of the debtors’ current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the loss allowance based on past due status is not further distinguished according to the different segments of the Company’s customer base.

The Company writes off accounts receivable when there is information indicating that the debtor is experiencing severe financial difficulty and there is no realistic prospect of recovery. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the past due receivables. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of accounts receivable based on the Company’s provision matrix:

December 31, 2025

Not Past Due Expected credit loss rate 0.28% Gross carrying amount $ 9,143,500 Loss allowance (lifetime ECLs) (25,263) Amortized cost $ 9,118,237 December 31, 2024 Not Past Due Expected credit loss rate 0.18% Gross carrying amount $ 9,776,451 Loss allowance (lifetime ECLs) (17,482) Amortized cost $ 9,758,969	1 to 30 Days Past Due 31 to 60 Days Past Due 61 to 90 Days Past Due Over 90 Days Past Due 10.16% 51.11% 100.00% 100.00% $ 75,621 $ 8,642 $ 564 $ 109,819 (7,680) (4,417) (564) (109,819) $ 67,941 $ 4,225 $ - $ - 1 to 30 Days Past Due 31 to 60 Days Past Due 61 to 90 Days Past Due Over 90 Days Past Due 10.06% 51.01% 100.00% 100.00% $ 30,851 $ 181,934 $ 457 $ 114,466 (3,103) (92,802) (457) (114,466) $ 27,748 $ 89,132 $ - $ -	Total $ 9,338,146 (147,743) $ 9,190,403 Total $ 10,104,159 (228,310) $ 9,875,849

The movements of the loss allowance of accounts receivable were as follows:

Balance on January 1 Add: Amounts recovered Less: Net remeasurement of loss allowance Less: Amounts written off Balance on December 31	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2025 $ 228,310 373 (73,668) (7,272) $ 147,743	2024 $ 225,830 3,396 - (916) $ 228,310

• 29 -

10. INVENTORIES, NET

Aircraft spare parts Items for in-flight sale Work in process - maintenance services		December 31	December 31
		2025 $ 9,646,529 797,539 532,418 $ 10,976,486	2024 $ 9,732,934 746,347 1,527,240 $ 12,006,521

The operating costs for the years ended December 31, 2025 and 2024 included losses from inventory write-downs of $790,242 thousand and $842,879 thousand, respectively.

11. NON-CURRENT ASSETS HELD FOR SALE

To enhance its competitiveness, the Company plans to introduce new aircraft and retire old aircraft according to a planned schedule. Such aircraft, classified as non-current assets held for sale, had an original carrying amount which was higher than the expected sale price and which was recognized as an impairment loss, and would be continuously assessed whether there are further impairments in subsequent periods. However, the actual loss shall be identified by the actual sale price. The Company recognized gain on reversal of impairment of $310,605 thousand for the year ended December 31, 2024.

The fair value measurement is classified as Level 3, and the fair value was determined according to similar transactions of the related markets. The proposed sale prices were based on the current status of the aircraft.

The Company disposed of the aircraft held for sale for the year ended December 31, 2024, and recognized a gain of $9,753 thousand.

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in joint ventures		**December 31 **	**December 31 **
		2025 $ 15,318,553 2,199,104 $ 17,517,657	2024 $ 14,723,552 1,473,667 $ 16,197,219

a. Investment in subsidiaries

Tigerair Taiwan Co., Ltd. Cal Park Mandarin Airlines Cal-Dynasty International Taiwan Air Cargo Terminal Taoyuan International Airport Services Cal-Asia Investment Sabre Travel Network (Taiwan) Cal Hotel	**December 31 **
	2025 2024 $ 4,791,799 $ 4,993,997 1,925,212 1,844,037 2,235,913 2,074,749 1,515,323 1,559,788 1,580,167 1,418,805 511,261 397,118 819,043 720,382 270,402 275,251 323,294 308,630 (Continued)

• 30 -

Taiwan Airport Services Dynasty Aerotech International Taiwan Aircraft Maintenance and Engineering Global Sky Express Kaohsiung Catering Services		**December 31 **	**December 31 **
		2025 $ 329,807 136,916 280,763 - 598,653 $ 15,318,553	2024 $ 174,077 136,866 336,612 5,524 477,716 $ 14,723,552 (Concluded)

At the end of the reporting period, the proportion of ownership and voting rights of subsidiaries held by the Company were as follows:

Tigerair Taiwan Co., Ltd. Taiwan Air Cargo Terminal Cal Park Mandarin Airlines Cal-Dynasty International Taoyuan International Airport Services Cal-Asia Investment Sabre Travel Network (Taiwan) Taiwan Airport Services Cal Hotel Dynasty Aerotech International Taiwan Aircraft Maintenance and Engineering Global Sky Express Kaohsiung Catering Services	**December 31 **
	2025 2024 65% 65% 54% 54% 100% 100% 97% 97% 100% 100% 49% 49% 100% 100% 94% 94% 47% 47% 100% 100% 100% 100% 100% 100% - 25% 54% 54%

The Company has control over Taoyuan International Airport Service, Taiwan Airport Service and Global Sky Express despite its ownership of less than 50%. Therefore, they were listed as subsidiaries.

To align with the listing of Tigerair Taiwan Co., Ltd. on the main board, the Company disposed of 36,745 thousand shares of Tigerair Taiwan Co., Ltd. in September 2024, with a disposal amount of $1,958,844 thousand. After the disposal, the Group’s comprehensive ownership percentage dropped to 71%. Since the transaction did not change the authority the Company has over the subsidiaries, it was treated as an equity transaction. The net asset carrying amount of the subsidiaries, in accordance with the change in relative equity, was transferred to non-controlling interests in the amount of $533,510 thousand. The difference between the actual disposal price of the subsidiary’s shares and the carrying amount was $1,425,334 thousand, which was recognized as an increase in capital reserve.

Additionally, Tigerair Taiwan Co., Ltd. applied for the listing of its shares on the main board on August 16, 2024, and the application was approved by the Taiwan Stock Exchange on September 13, 2024. To align with the public offering prior to the board transfer, Taiwan Tigerair’s board of directors approved a cash capital increase on September 27, 2024, with a total planned issuance of 10,530 thousand shares. In addition, due to relevant regulations, the Group did not participate in the cash capital increase; therefore, the Group’s comprehensive ownership percentage dropped to 69%. Because the shares were subscribed at a rate different from its existing ownership percentage, the Company’s capital surplus increased by $285,416 thousand. In addition, Tigerair Taiwan Co., Ltd. reserves 15% of the total issuances for employees to subscribe to in accordance with article 267, item 1 of the Company Act. As a result, the Company’s capital surplus increased by $43,216 thousand.

• 31 -

In June 2025 and July 2024, Cal Park gained of $19,363 thousand and $18,370 thousand by capital increase out of retained earnings; the proportion of ownership of the Company remained unchanged.

The Company’s board of directors approved the proposal for the dissolution and liquidation of Global Sky Express on August 9, 2024, and Global Sky Express’s extraordinary shareholders’ meeting likewise resolved to dissolve the company on September 5, 2024. On September 25, 2025, Global Sky Express’s extraordinary shareholders’ meeting approved a distributable residual asset amount of $40,610 thousand, of which the Company received $10,153 thousand in proportion to its shareholding and recognized a disposal gain of $4,628 thousand. The court approved the completion of liquidation on December 22, 2025.

The share of profit or loss of subsidiaries accounted for using the equity method was as follows:

Share of profit	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 2,757,357	2024 $ 3,150,439

b. Investment in joint ventures

The investments in joint ventures were as follows:

China Pacific Catering Services China Pacific Laundry Services NORDAM Asia		**December 31 **	**December 31 **
		2025 $ 2,061,394 137,710 - $ 2,199,104	2024 $ 1,353,902 119,765 - $ 1,473,667

At the end of the reporting period, the proportion of ownership and voting rights in joint ventures held by the Company were as follows:

China Pacific Catering Services China Pacific Laundry Services NORDAM Asia	December 31
	2025 2024 51% 51% 55% 55% - 49%

The Company entered into a joint venture agreement with the Swire Company to invest in China Pacific Catering Services and China Pacific Laundry Services. According to the agreement, both parties have the right to make motion vetoes on the board of directors, and therefore, the Company does not have control.

NORDAM Asia was classified as an associate accounted for using the equity method. On October 27, 2023, the provisional shareholders’ meeting resolved to dissolve NORDAM Asia. The court approved the completion of liquidation on July 29, 2025. No related gains or losses were recognized.

• 32 -

In June 2024, China Pacific Catering Services Company had increased its capital out of retained earnings by $560,000 thousand. After the capital increase, the Company’s ownership percentage remained. In addition, pursuant to a resolution approved by the Company’s Board of Directors on January 19, 2026, the Company plans to acquire a 49% equity interest in China Pacific Catering Services Company held by the former joint venture shareholder for a total consideration of NT$3,088 million. Upon completion and settlement of the transaction, the Company’s cumulative ownership interest will increase to 100%, thereby obtaining full control. Accordingly, China Pacific Catering Services will be accounted for as a subsidiary of the Company from the settlement date.

The share of profit or loss of joint ventures accounted for using the equity method was as follows:

China Pacific Catering Services China Pacific Laundry Services NORDAM Asia		**December 31 **	**December 31 **
		2025 $ 787,605 17,506 - $ 805,111	2024 $ 572,365 17,205 - $ 589,570

The Company’s shares of other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method for the years ended December 31, 2025 and 2024 were $70,757 thousand and $(114,447) thousand, respectively.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of subsidiaries, associates, and joint ventures were based on these investees’ parent company only financial statements which have been audited.

For information on the major businesses and products and the locations of registration for the major business offices of the above entities, refer to Table 5 and Table 6 (names, locations, and related information of investees on which the Company exercises significant influence and investment in mainland China) following the notes to the parent company only financial statements.

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance on January 1, 2024 Additions Disposals Reclassification Balance on December 31, 2024 Accumulated depreciation and impairment Balance on January 1, 2024 Depreciation expense Disposals Reclassification Impairment losses recognized Balance on December 31, 2024 Balance at December 31, 2024, net value	Freehold Land $ 181,593 - - - $ 181,593 $ - - - - - $ - $ 181,593	Buildings $ 7,357,912 247,132 (956 ) 266 $ 7,604,354 $ (4,395,309 ) (199,920 ) 956 - - $ (4,594,273) $ 3,010,081	Flight Equipment $ 221,329,253 3,442,128 (3,948,695 ) (12,928,303) $ 207,894,383 $ (114,730,880 ) (13,784,869 ) 3,633,731 25,166,726 (121,175) $ (99,836,467) $ 108,057,916	Others $ 7,150,638 444,239 (281,768 ) 13,018 $ 7,326,127 $ (5,960,923 ) (314,240 ) 281,295 223 - $ (5,993,645) $ 1,332,482	Total $ 236,019,396 4,133,499 (4,231,419 ) (12,915,019) $ 223,006,457 $ (125,087,112 ) (14,299,029 ) 3,915,982 25,166,949 (121,175) $ (110,424,385) $ 112,582,072 (Continued)

• 33 -

Cost Balance on January 1, 2025 Additions Disposals Reclassification Balance on December 31, 2025 Accumulated depreciation and impairment Balance on January 1, 2025 Depreciation expense Disposals Reclassification Balance on December 31, 2025 Balance on December 31, 2025, net value	Freehold Land $ 181,593 - - - $ 181,593 $ - - - - $ - $ 181,593	Buildings $ 7,604,354 292,760 (5,309 ) 1,550 $ 7,893,355 $ (4,594,273 ) (258,547 ) 5,309 2,494 $ (4,845,017) $ 3,048,338	Flight Equipment $ 207,894,383 3,042,963 (2,276,462 ) 16,567,717 $ 225,228,601 $ (99,836,467 ) (14,147,404 ) 1,301,359 332,081 $ (112,350,431) $ 112,878,170	Others $ 7,326,127 722,213 (269,583 ) (163,806) $ 7,614,951 $ (5,993,645 ) (366,221 ) 267,084 174,004 $ (5,918,778) $ 1,696,173	Total $ 223,006,457 4,057,935 (2,551,354 ) 16,405,462 $ 240,918,500 $ (110,424,385 ) (14,772,172 ) 1,573,752 508,579 $ (123,114,226) $ 117,804,274 (Concluded)

Reclassification is mainly resulted from the transfer of prepayments for equipment and adaption of non-current assets held for sale.

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful life of the assets as follows:

Buildings Main buildings 45-55 years Others 10-25 years Machinery and equipment Electro-mechanical equipment 25 years Others 3-13 years Office equipment 3-15 years Leasehold improvements Building improvements 5 years Others 3-5 years Leased assets 3-5 years Flight equipment and equipment under finance leases Airframes 18-22 years Aircraft cabins 10-13 years Engines 12-20 years Heavy maintenance on aircraft 6-8 years Engine overhauls 3-7 years Landing gear overhauls 8-12 years Repairable spare parts 6-15 years Leased aircraft improvements 5-12 years Flight simulation training equipment. 18-25 years Nonexpendable apparatus of flight simulation training equipment. 8 years

To replace aging aircraft and revitalize the fleet, the Company’s board of directors resolved to sell five 747-400F aircraft on March 8, 2024, all of which were fully disposed of in 2024. In addition, the Company’s board of directors resolved to sell four 747-400F aircraft on November 26, 2025.

• 34 -

Considering the changes in model mix and phase-out plans, the Company used the fair value (Level 3) deducting transaction costs as the recoverable amount of some flight equipment and the recognized impairment losses of $0 thousand and $121,175 thousand for the years ended December 31, 2025 and 2024, respectively. The fair value was determined with reference to factors such as the condition of the flight equipment and possible market estimates.

Refer to Note 31 for the carrying amounts of flight equipment pledged by the Company.

Based on the particularity of risk in the aviation industry, all of the Company’s assets such as aircraft, real estate, and movable property are adequately insured to diversify the potential risk related to operations.

14. INVESTMENT PROPERTIES

Carrying amount Investment properties		December 31	December 31
		2025 $ 2,047,448	2024 $ 2,047,448

The investment properties held by the Company were land located in Nankan, which were leased to other parties.

The fair values of the investment properties held by the Company both were $3,105,185 thousand as of December 31, 2025 and 2024, respectively. The fair value valuations were performed by independent qualified professional valuers, and the future income evaluated by management was based on market transactions. All of the Company’s investment properties were held under freehold interests.

15. OTHER INTANGIBLE ASSETS

Computer Software Costs Accumulated Amortization Balance on January 1, 2024 $ 1,682,093 $ (1,097,337) Additions 192,286 - Amortization expense - (169,120) Reclassification (206,984) 206,966 Balance on December 31, 2024 $ 1,667,395 $ (1,059,491) Balance on January 1, 2025 $ 1,667,395 $ (1,059,491) Additions 202,018 - Amortization expense - (141,813) Reclassification (546,049) 546,049 Balance on December 31, 2025 $ 1,323,364 $ (655,255)

Net Value $ 584,756 192,286 (169,120) (18) $ 607,904 $ 607,904 202,018 (141,813) - $ 668,109

The above items of other intangible assets are amortized on a straight-line basis over 2-10 years.

• 35 -

16. OTHER ASSETS

Current Contract assets Temporary payments Prepayments Advance payments Non-current Prepayments for aircraft Prepayments - long-term Refundable deposits Restricted Assets Other financial assets		December 31	December 31
		2025 $ 359,361 402,871 605,912 2,141,623 $ 3,509,767 $ 54,944,965 3,013,659 366,147 38,648 7,133 $ 58,370,552	2024 $ - 292,261 645,536 343,274 $ 1,281,071 $ 28,726,377 1,828,454 313,292 35,812 9,101 $ 30,913,036

The prepayments for aircraft are comprised of prepaid deposits and capitalized interest from the purchase of A321neo, B777F, B787-9, B787-10, 777-9, 777-8F, A350-1000 and A350-900 aircraft. For details of the contract for the purchase of the aircraft, refer to Note 32.

17. BORROWINGS

Long-term Borrowings

Unsecured bank loans Secured bank loans Commercial paper Proceeds from issuance Less: Unamortized discounts Less: Current portion Interest rates		December 31	December 31
		2025 $ 7,428,571 44,202,617 23,500,000 53,116 75,078,072 10,346,390 $ 64,731,682 1.90%-2.34%	2024 $ 2,000,000 41,189,270 20,200,000 45,391 63,343,879 9,450,715 $ 53,893,164 1.92%-2.30%

Secured bank loans are secured by flight equipment, refer to Note 31.

• 36 -

Bank loans (denominated in New Taiwan dollars) are repayable quarterly, semiannually or in lump sum upon maturity. The related information is summarized as follows:

Periods	December 31
	2025 2024 2016/10/18- 2037/12/26 2016/10/18- 2036/11/28

The Company also entered into separate commercial paper financing agreements with financial institutions, under which the notes are reissued on a revolving basis upon each 90-day maturity and are to be fully redeemed by the end of May 2030. The annual discount rates were 2.0633%-2.1573% and 2.0853%-2.2220% as of December 31, 2025 and 2024, respectively. Pursuant to the FSC’s Q&A issued on August 15, 2025 regarding the Accounting Research and Development Foundation’s interpretation on the liability classification of funds raised through revolving commercial paper issuances, such commercial paper will be classified as current liabilities beginning in the first quarter of 2026 when reissued on a revolving basis. The related amount was $19,958,125 thousand.

18. BONDS PAYABLE

December 31 2025 2024 Unsecured corporate bonds first-time issued in 2018 $ - $ 1,025,000 Unsecured corporate bonds first-time issued in 2019 625,000 1,250,000 Unsecured corporate bonds first-time issued in 2023 2,650,000 2,650,000 Unsecured corporate bonds first-time issued in 2025 3,100,000 - Convertible bonds seventh-time issued 1,007,809 1,144,339 7,382,809 6,069,339 Less: Current portion and put option of convertible bonds 1,632,809 1,650,000 $ 5,750,000 $ 4,419,339 Category Period Conditions Rate (%) Seven-year private unsecured bonds - issued at par in November 2018; repayable in November 2024 and 2025; 1.45% interest p.a., payable annually 2018.11.30- 2025.11.30 Principal repayable in November of 2024 and 2025; indicator rate; payable annually 1.45 Seven-year private unsecured bonds - issued at par in June 2019; repayable in June 2025 and 2026; 1.32% interest p.a., payable annually 2019.06.21- 2026.06.21 Principal repayable in June of 2025 and 2026; indicator rate; payable annually 1.32 Five-year private unsecured bonds - issued at par in May 2023; repayable in May 2027 and 2028; 1.90% interest p.a., payable annually 2023.05.22- 2028.05.22 Principal repayable in May of 2027 and 2028; indicator rate; payable annually 1.90 Five-year private unsecured bonds - issued at par in August 2025; repayable in August 2029 and 2030; 2.18% interest p.a., payable 2025.08.28- 2030.08.28 Principal repayable in August of 2029 and 2030; indicator rate; payable annually 2.18		December 31

Five-year private unsecured bonds - issued at par in August 2025; repayable in August 2029 and 2030; 2.18% interest p.a., payable annually

(Continued)

• 37 -

			Rate
Category	Period	Conditions	(%)
Five-year convertible bonds - issued at	2021.04.28-	Unless bonds are converted to	-
discount in April 2021; repayable in lump	2026.04.28	share capital or redeemed,
sum upon maturity; 0.8612% discount rate		principal repayable one
p.a.		time in April of 2026;
		0.8612% discount rate p.a.
		(Concluded)

• a. The Company issued the seventh issue of its unsecured convertible bonds, and the issuance conditions were as follows:

• 1) The holders may demand a lump-sum payment for the bonds upon maturity.

• 2) The holders can request that the Company repurchase their bonds at face value on the third anniversary of the offering date. The holders can exercise the right to sell on April 28, 2024.

• 3) The Company may redeem the bonds at face value between July 28, 2021 and March 18, 2026 under certain conditions.

• 4) Between July 28, 2021 and April 28, 2026 (except for the period between the former dividend date and the date of the dividend declaration on record), holders may convert their bonds into the Company’s ordinary shares. The initial conversion price was set at NT$19 per share, which is subject to adjustment if there is a capital injection by cash or share dividend distribution. Because the Company distributed cash dividends on July 22, 2025, the conversion price was adjusted to NT$16.9. As of December 31, 2025, a total face value of $3,489,600 thousand of convertible bonds was converted into 188,215 thousand ordinary shares of the Company.

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus - options. The effective interest rate of the liability component was 0.8612% per annum on initial recognition.

Proceeds from issuance Equity component Liability component at the date of issuance Interest charged at an effective interest rate Convertible bonds converted into ordinary shares Liability component on December 31, 2024 Interest charged at an effective interest rate Convertible bonds converted into ordinary shares Liability component on December 31, 2025	$ 4,500,000 (188,862) 4,311,138 75,938 (3,242,737) 1,144,339 9,026 (145,556) $ 1,007,809

• b. On March 10, 2025, the board of directors of the Company resolved to issue unsecured corporate bonds. The unsecured corporate bonds may be issued in installments throughout 2025 with a limited total face value of $8,000 million. As of December 31, 2025, $3,100 million had been issued.

• c. On March 11, 2026, the board of directors of the Company resolved to issue unsecured corporate bonds. The unsecured corporate bonds may be issued in installments throughout 2026 with a limited total face value of $8,000 million.

• 38 -

19. LEASE AGREEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Flight equipment Other equipment Additions to right-of-use assets Depreciation for right-of-use assets Land Buildings Flight equipment Other equipment		**December 31 **	**December 31 **
	2025 2024 $ 4,370,639 $ 4,173,068 6,433,072 6,776,235 40,901,374 40,006,253 26,961 38,703 $ 51,732,046 $ 50,994,259 For the Year Ended December 31
		2025 $ 11,372,302 $ 268,240 785,173 9,449,403 29,759 $ 10,532,575	2024 $ 17,180,504 $ 216,815 774,224 10,396,355 5,260 $ 11,392,654

b. Lease liabilities

Carrying amount Current Non-current		December 31	December 31
		2025 $ 2,353,574 $ 10,671,307	2024 $ 1,457,772 $ 12,200,785

Range of discount rates for lease liabilities (include leases denominated in USD designated as hedging instruments):

Land Buildings Flight equipment Other equipment	December 31
	2025 2024 0%-1.92% 0%-1.92% 0%-4,65% 0%-4.65% 2.56%-5.73% 0.74%-5.73% 0%-1.92% 0%-1.74%

• 39 -

• c. Financial instruments under hedge accounting

The Company specifies a part of aircraft leases denominated in USD as hedging instruments to avoid exchange rate fluctuations in passenger revenue and applies the accounting treatment of cash flow hedging. The lease information is as follows:

			Maturity Date	Subject	Carrying Value	Carrying Value
December	31,	2025	2026.1.16-2037.8.19	Financial liabilities for hedging -	$	8,719,154
				current
				Financial liabilities for hedging -		32,090,362
				non-current
December	31,	2024	2025.8.23-2036.7.4	Financial liabilities for hedging -		9,649,668
				current
				Financial liabilities for hedging -		31,970,060
				non-current

Impact on other comprehensive income (loss)

			Recognized in
			Other
			Comprehensive	Reclassified to
			Income (Loss)		Income
For the year ended December	31,	2025	$ 1,731,392	$	51,924
For the year ended December	31,	2024	(2,002,745)		(425,264)

d. Material leasing activities and terms

China Airlines leased one A350-900 plane, ten 777-300ER planes, thirteen A330-300 planes, ten 737-800 planes and sixteen A321neo planes for operation, lease periods are 4 to 16 years from June 2015 to August 2037. The rental pricing method is partly a fixed amount of funds, and some of them are floating rents; floating rents are according to benchmark ratio, and the rent is revised every half year. When the lease expires, the lessee does not have purchase rights.

The information of refundable deposits and letter of credit due to rental of planes:

Refundable deposits Credit guarantees	December 31
	2025 2024 $ 93,742 $ 53,803 1,696,613 1,769,270

On November 7, 2025, the Company’s Board of Directors resolved to lease office premises on Minquan East Road from Kindom Development Co., Ltd., covering a ten-year term from March 2026 to February 2036, with a right of first refusal for renewal for a maximum additional period of ten years. The right-of-use asset is expected to amount to NT$910,641 thousand.

• e. Lease agreement signed but not yet delivered

On June 25, 2025, the Company signed a rental contract for three A321neo with Avolon Aerospace Lease Corporation, which are expected to be introduced in 2027.

• 40 -

On June 25, 2025, the Company’s Board of Directors approved the lease of five A321neo aircraft from ALC, of which two aircraft had already been leased under signed agreements and were introduced in August 2025.

The Company also signed related aircraft purchase agreement, please refer to Note 32 for details.

f. Aircraft leases

In order to revitalize assets, the Company signed a lease agreement for two 747-400F aircraft with US Cargo Company in August 2021 and September 2021, respectively. The lease commencement dates were on July 15 and October 10, 2022, respectively. Due to early termination of the lease agreements, these two cargo aircraft were sold to Icelandic owner Air Atlanta Icelandic in August 2023. One of the cargo aircraft was sold on a finance lease basis, and ownership can only be obtained after the payment is paid in accordance with the 24-installment payment schedule. Air Atlanta Icelandic completed the final payment on August 30, 2025, and finalized the aircraft re-registration process.

Finance lease receivables

The composition of finance lease receivables is as follows:

Undiscounted lease payments Year 1 Year 2 Less: Unearned finance income Net investment in leases presented as finance lease receivables Current Non-current	For the Year Ended	For the Year Ended	December 31
		2025 $ - - - - $ - $ - $ -	2024 $ 205,513 - 205,513 (5,291) $ 200,222 $ 200,222 $ -

The Company measures the loss allowance for finance lease receivables at an amount equals to lifetime ECLs. As of the date of balance sheet, no finance lease receivable was past due. The Company has not recognized a loss allowance for finance lease receivables after considering the historical default experience and the future prospects of the industries in which the lessees operate, together with the value of collateral held over these finance lease receivables.

g. Other lease information

The Company use operating lease agreement for investment properties, refer to Note 14.

Short-term leases and low-value asset leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 100,477 $ (12,772,831)	2024 $ 75,297 $ (12,743,451)

The Company chooses to waive the recognition of the contract provisions for short-term leases and low-value asset leases and does not recognize the related right-of-use assets and lease liabilities for such leases.

• 41 -

20. OTHER PAYABLES

Short-term employee benefits Fuel costs Repair expenses Ground service expenses Terminal surcharges Commission expenses Finance cost Others		December 31	December 31
		2025 $ 8,232,336 3,481,611 1,957,147 775,290 750,969 237,994 164,357 2,310,005 $ 17,909,709	2024 $ 8,313,954 3,626,690 1,884,594 803,039 784,640 239,947 154,841 2,194,413 $ 18,002,118

21. CONTRACT LIABILITIES

Frequent flyer program Advance ticket sales Current Non-current		December 31	December 31
		2025 $ 8,047,203 24,098,100 $ 32,145,303 $ 26,515,791 5,629,512 $ 32,145,303	2024 $ 5,810,530 24,812,172 $ 30,622,702 $ 25,772,773 4,849,929 $ 30,622,702

For the years ended December 31, 2025 and 2024, revenue recognized that was included in the contract liability balance at the beginning of the year amounted to NT$20,704,667 thousand and NT$17,868,843 thousand, respectively.

22. PROVISIONS

Leases - aircraft Current Non-current		December 31	December 31
		2025 $ 20,330,337 $ 3,633,090 16,697,247 $ 20,330,337	2024 $ 19,548,593 $ 1,497,724 18,050,869 $ 19,548,593

The Company leased flight equipment under operating lease agreements. Under the contracts, when the leases expire and the equipment is returned to the lessor, the flight equipment has to be repaired according to the expected years of use, number of flight hours, flight cycles and the number of engine revolution. The Company had existing obligations to recognize provisions when signing a lease or during the lease term.

• 42 -

	Operating
	Lease-Aircraft
Balance on January 1, 2024	$ 18,883,876
Additional provisions recognized	4,048,349
Usage	(4,200,272)
Effect of foreign currency exchange differences	816,640
Balance on December 31, 2024	$ 19,548,593
Balance on January 1, 2025	$ 19,548,593
Additional provisions recognized	5,223,291
Usage	(3,861,966)
Effect of foreign currency exchange differences	(579,581)
Balance on December 31, 2025	$ 20,330,337

23. RETIREMENT BENEFIT PLANS

• a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contribute amounts equal to 15% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the parent company only balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2025 $ 17,266,039 (9,473,043) $ 7,792,996	2024 $ 16,990,181 (8,469,401) $ 8,520,780

• 43 -

Movements in net defined benefit liabilities were as follows:

Balance on January 1, 2024 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in financial assumptions Actuarial loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Direct payment to employees Exchange differences on foreign plans Balance on December 31, 2024 Balance on January 1, 2025 Service cost Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in financial assumptions Actuarial gain - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Direct payment to employees Exchange differences on foreign plans Balance on December 31, 2025	Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets $ 16,349,379 $ (7,745,247) 1,003,624 - 186,825 (89,512) 1,190,449 (89,512) - (694,245) 657,930 - 30,922 - 688,852 (694,245) - (1,096,411) (1,156,014) 1,156,014 (97,072) - 14,587 - $ 16,990,181 $ (8,469,401) $ 16,990,181 $ (8,469,401) 820,703 - 256,295 (129,598) 1,076,998 (129,598) - (602,329) 319,356 - (31,568) - 287,788 (602,329) - (989,625) (717,910) 717,910 (366,490) - (4,528) - $ 17,266,039 $ (9,473,043)	Net Defined Benefit Liabilities (Assets) $ 8,604,132 1,003,624 97,313 1,100,937 (694,245) 657,930 30,922 (5,393) (1,096,411) - (97,072) 14,587 $ 8,520,780 $ 8,520,780 820,703 126,697 947,400 (602,329) 319,356 (31,568) (314,541) (989,625) - (366,490) (4,528) $ 7,792,996

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 44 -

• 3) Salary risk: The present value of the defined benefit obligation is calculated using to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of salary increase	December 31
	2025 2024 1.34% 1.59% 2.00% 2.00%

If possible reasonable changes in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.5% increase 0.5% decrease		December 31	December 31
		2025 $ (303,029) $ 319,864 $ 606,058 $ (572,388)	2024 $ (314,084) $ 330,614 $ 628,167 $ (595,106)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December 31	December 31
		2025 $ 864,303 7.2 years	2024 $ 888,967 7.6 years

24. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousands of shares) Amount of shares authorized Amount of shares issued		December 31	December 31
		2025 7,000,000 $ 70,000,000 $ 60,853,733	2024 7,000,000 $ 70,000,000 $ 60,769,350

• 45 -

The Company issued the 7th domestic unsecured convertible bonds, and the holders of the convertible bonds applied for conversion in the amount of NT$146,800 thousand and NT$448,100 thousand for the years ended December 31, 2025 and 2024, respectively. The number of ordinary shares exchanged was 8,438 thousand and 25,594 thousand, respectively, and entitled to registration change after the issuance of new shares.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Issuance of convertible bonds in excess of par value and conversion premium Dividend distributed to subsidiaries Expired equity component of convertible bonds Difference between consideration and carrying amount arising from the disposal of subsidiaries’ stock May only be used to offset a deficit (2) Long-term investments May not be used for any purpose Equity component of convertible bonds		**December 31 **	**December 31 **
		2025 $ 2,630,253 5,762 983,202 1,425,334 805,344 42,406 $ 5,892,301	2024 $ 2,569,080 4,111 977,041 1,425,334 805,344 48,567 $ 5,829,477

• 1) Such capital surplus may be used to offset deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

• 2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.

• c. Appropriation of earnings and dividend policy

The Company resolved and recognized to amend the Company Act in the shareholders’ meeting on May 30, 2024. Under the dividend policy as set forth in the amended Company Act, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan. The profit can be distributed in the form of new shares or cash, and the cash dividends should be no less than 30% of the total dividends.

• 46 -

Under the Company Act before the amendments, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations. Then, if any remaining profit together with any undistributed retained earnings, it shall be used by the Company’s board of directors as the basis for proposing a distribution plan that dividends and bonus shall be no less than 50% of the remaining profit and undistributed retained earnings. The dividends and bonus mentioned above can be distributed in the form of new shares or cash, and the cash dividends should be no less than 30% of the total dividends. If surplus earnings are distributed in the form of new shares, the distribution of shares shall be resolved in the shareholders’ meeting; if such earnings are distributed in the form of cash, the cash distribution shall be authorized after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; in addition, a report of such distribution shall be submitted to the shareholders’ meeting. If the Company has no loss, according to laws and regulations, the Company can distribute its capital reserve, in whole or in part, by issuing new shares or cash based on financial, business and management considerations. If such capital reserve is distributed in the form of new shares, it shall be resolved by a meeting of the shareholders; if such capital reserve is distributed in the form of cash, it shall be authorized after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

The distribution of dividends should be resolved and recognized in the shareholders’ meeting in the current year.

• 1) Appropriation of earnings in 2023

The appropriation of earnings in 2023 which was resolved and recognized in the shareholders’ meeting on May 30, 2024 is as follows:

	Appropriation	Appropriation	Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	637,399
Special reserve		155,639
Cash dividends		4,176,580	$0.69016808

• 2) Appropriation of earnings in 2024

The appropriation of earnings in 2024 which was resolved and recognized in the shareholders’ meeting on May 28, 2025 is as follows:

	Appropriation	Dividends Per
	of Earnings	Share (NT$)
Legal reserve	$ 1,424,253
Special reserve	854,805
Cash dividends	4,842,015	$ 0.79587046

• 47 -

d. Other equity items

The movement of other equity items is as follows:

Exchange Differences on the Translation of the Financial Statements of Foreign Operations Unrealized Gain (Loss) on Financial Assets at FVTOCI Gain (Loss) on Hedging Instruments Balance on January 1, 2024 $ (12,965) $ 22,726 $ (699,775) Exchange differences on the translation of the financial statements of foreign operations 119,621 - - Cumulative gain (loss) on changes in fair value of hedging instruments - - (1,487,267) Cumulative gain (loss) on changes in fair value of hedging instruments reclassified to profit or loss - - 409,482 Unrealized gain (loss) on financial assets at FVTOCI - 10,757 - Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method 5,950 24,024 712 Effects of income tax (23,925) (6,894) 385,671 Other comprehensive income (loss) recognized in the period 101,646 27,887 (691,402) Transferred to initial carrying amount of hedged items - - (292,936) Balance on December 31, 2024 $ 88,681 $ 50,613 $ (1,684,113) Balance on January 1, 2025 $ 88,681 $ 50,613 $ (1,684,113) Exchange differences on the translation of the financial statements of foreign operations (62,639) - - Cumulative gain (loss) on changes in fair value of hedging instruments - - 1,470,061 Cumulative gain (loss) on changes in fair value of hedging instruments reclassified to profit or loss - - (30,825) Unrealized gain (loss) on financial assets at FVTOCI - (14,844) - Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method 172 58,415 1,050 Effects of income tax 12,528 (9,710) (347,474) Other comprehensive income (loss) recognized in the period (49,939) 33,861 1,092,812 Transferred to initial carrying amount of hedged items - - 238,164 Balance on December 31, 2025 $ 38,742 $ 84,474 $ (353,137)

Total $ (690,014) 119,621 (1,487,267) 409,482 10,757 30,686 354,852 (561,869) (292,936) $ (1,544,819) $ (1,544,819) (62,639) 1,470,061 (30,825) (14,844) 59,637 (344,656) 1,076,734 238,164 $ (229,921)

• 48 -

e. Treasury shares

Treasury shares are the Company’s shares held by its subsidiaries as of the reporting date and were as follows:

(In Thousands of Shares)

	Number of
	Shares,	Reduction	Number of
	Beginning of	During the	Shares, End of
Period of Treasury Shares	Year	Year	Year
For the year ended December 31, 2025	2,075	-	2,075
For the year ended December 31, 2024	2,075	-	2,075
	Number of
	Shares
	(In Thousands	Carrying
Name of Subsidiary	of Shares)	Amount	Market Value
December 31, 2025
Mandarin Airlines	2,075	$ 41,907	$ 41,907
December 31, 2024
Mandarin Airlines	2,075	$ 53,214	$ 53,214

The above acquisitions by subsidiaries of the Company’s shares in previous years was due to investment planning. The shares of the Company held by its subsidiaries were treated as treasury shares. The subsidiaries can exercise shareholders’ right on these treasury shares, except for the right to subscribe for the Company’s new shares and voting rights.

25. NET INCOME

a. Revenue

Passenger Cargo Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 103,975,037 66,593,752 8,385,156 $ 178,953,945	2024 $ 107,420,017 60,444,475 7,317,963 $ 175,182,455

• 49 -

b. Other income

Interest income Dividend income Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 1,195,567 16,202 341,531 $ 1,553,300	2024 $ 1,788,003 15,863 447,433 $ 2,251,299

c. Other gains and losses

Gain on disposal of property, plant and equipment Net foreign exchange (loss) gain Reversal of impairment loss recognized on flight equipment Gain on disposal of investments Gain on disposal of non-current assets held for sale Others	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2025 $ 45,598 (232,613) - 4,628 - (272,306) $ (454,693)	2024 $ 337,738 400,254 189,430 - 9,753 (299,938) $ 637,237

d. Finance costs

Interest expense Bonds payable Bank loans Interest on lease liabilities Loss arising from derivatives designated as hedging instruments in cash flow hedge accounting relationships reclassified from equity to profit or loss Capitalization interest Capitalization rate Depreciation and amortization expense Property, plant and equipment Right-of-use assets Intangible assets	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2025 2024 $ 108,258 $ 121,310 567,474 647,363 1,912,330 1,553,913 (1,599) (831) $ 2,586,463 $ 2,321,755 $ 799,983 $ 588,876 2.07%-2.16% 1.84%-2.21% For the Year Ended December 31
		2025 $ 14,772,172 10,532,575 141,813 $ 25,446,560	2024 $ 14,299,029 11,392,654 169,120 $ 25,860,803 (Continued)

e. Depreciation and amortization expense

• 50 -

An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses f. Employee benefits expense Post-employment benefits Defined contribution plan Defined benefit plan Other employee benefits Salary expenses Labor and health insurance expenses Personnel service expenses An analysis of employee benefits expense by function Operating costs Operating expenses	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2025 2024 $ 24,188,869 $ 24,651,387 1,115,878 1,040,296 $ 25,304,747 $ 25,691,683 $ 141,813 $ 169,120 (Concluded) **For the Year Ended December 31 **
		2025 $ 474,210 947,400 $ 1,421,610 $ 22,110,497 1,577,999 5,909,963 $ 29,598,459 $ 25,826,272 5,193,797 $ 31,020,069	2024 $ 438,090 1,100,937 $ 1,539,027 $ 21,373,147 1,370,263 6,215,420 $ 28,958,830 $ 25,024,899 5,472,958 $ 30,497,857

According to the Company’s Articles, the Company accrues compensation of employees at rates of no less than 3% of the net profit before income tax and compensation of employees. When the Company has an accumulated deficit, the Company shall set aside some amounts to offset the deficit in advance. According to the amendments to the Securities and Exchange Act in August 2024, the Company resolved at its 2025 shareholders’ meeting to amend the Articles, stipulating that compensation for non-executive employees shall be no less than 30% of the total employee compensation actually accrued in that year. For the years ended December 31, 2025 and 2024, the estimated amount of compensation of employees (including compensation for non-executive employees) were $730,792 thousand and $711,954 thousand, respectively.

Material differences between such estimated amounts and the amounts proposed by the board of directors on or before the date that the annual parent company only financial statements are authorized for issue are adjusted in the year that the compensation and remuneration are recognized. If there is a change in the proposed amounts after the annual parent company only financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

• 51 -

There was no difference between the actual appropriated amounts of compensation of employees and the amounts recognized in the parent company only financial statements for the years ended December 31, 2024 and 2023.

Information on the compensation of employees resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

26. INCOME TAX

• a. Income tax expense recognized in profit or loss

The major components of tax expense are as follows:

Current tax In respect of the current year Adjustments for prior year Deferred tax In respect of the current year Adjustments for prior year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 3,579,406 5,290 (746,878) 880 $ 2,838,698	2024 $ 2,731,837 (25,984) (26,116) 23,818 $ 2,703,555

A reconciliation of accounting profit and income tax expense was as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate (20%) Effects of adjustments to income tax: Non-deductible expenses in determining taxable income Tax-exempt income Overseas income tax expense Adjustments for prior years’ tax Adjustments for prior years’ deferred tax Income tax expense recognized in profit or loss	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2025 $ 17,539,017 $ 3,507,803 11,259 (703,738) 17,204 5,290 880 $ 2,838,698	2024 $ 17,086,900 $ 3,417,380 11,168 (730,247) 7,420 (25,984) 23,818 $ 2,703,555

As of December 31, 2025, among the jurisdictions in which the Company operates, except for Hong Kong, all other jurisdictions have entered into double taxation agreements with the Republic of China or have not enacted or substantively enacted Pillar Two income tax legislation. The Company has performed a preliminary assessment and concluded that the related financial impact is not expected to be material. However, under the Inclusive Framework of the Pillar Two income tax rules, further guidance has not yet been provided on substantive carve-outs, including those relating to aircraft and flight crew. Accordingly, there remains a degree of uncertainty regarding the potential impact.

• 52 -

• b. Income tax recognized in other comprehensive income

Deferred tax Recognized in other comprehensive income Translation of foreign operations Fair value changes of hedging instruments for cash flow hedges Remeasurement of defined benefit plans Fair value changes of financial assets at FVTOCI Total income tax recognized in other comprehensive income	For the Year Ended	For the Year Ended	December 31
		2025 $ 12,528 (347,474) (62,908) (9,710) $ (407,564)	2024 $ (23,925) 385,671 (1,079) (6,894) $ 353,773

c. Deferred tax assets and liabilities

For the year ended December 31, 2025

Deferred tax assets Temporary differences Defined benefit obligations Frequent flyer programs Maintenance reserve Allowance for impairment loss of inventories Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains Others	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income (Loss) $ 1,703,077 $ (81,570) $ (62,908) 1,176,605 459,113 - 2,769,718 156,349 - 496,487 (52,359) - 569,135 83,039 (344,656) $ 6,715,022 $ 564,572 $ (407,564) $ 181,426 $ (181,426) $ - 8,260 - - $ 189,686 $ (181,426) $ -	Closing Balance $ 1,558,599 1,635,718 2,926,067 444,128 307,518 $ 6,872,030 $ - 8,260 $ 8,260

• 53 -

For the year ended December 31, 2024

Deferred tax assets Temporary differences Defined benefit obligations Frequent flyer programs Maintenance reserve Allowance for impairment loss of inventories Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains Others	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income (Loss) $ 1,734,657 $ (30,501) $ (1,079) 791,198 385,407 - 2,636,774 132,944 - 492,510 3,977 - 549,411 (335,128) 354,852 $ 6,204,550 $ 156,699 $ 353,773 $ 27,025 $ 154,401 $ - 8,260 - - $ 35,285 $ 154,401 $ -	Closing Balance $ 1,703,077 1,176,605 2,769,718 496,487 569,135 $ 6,715,022 $ 181,426 8,260 $ 189,686

Deductible temporary differences for which no deferred tax assets have been recognized in the parent company only balance sheets were as follows:

Other temporary differences		December 31	December 31
		2025 $ 5,700,000	2024 $ 5,700,000

• d. As of December 31, 2025, the Company has no unused tax loss carryforwards.

• e. Income tax assessment

The income tax returns of the Company through 2023 have been examined by the tax authorities.

27. EARNINGS PER SHARE

Basic earnings per share (NT$ per share) Diluted earnings per share (NT$ per share)	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2025 $ 2.42 $ 2.38	2024 $ 2.38 $ 2.33

(Continued)

• 54 -

Net income for the year Earnings used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Interest on convertible bonds (after tax) Earnings used in the computation of diluted earnings per share In thousands of shares Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Convertible bonds Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2025 $ 14,700,319 8,934 $ 14,709,253 6,081,043 60,860 41,649 6,183,552	2024 $ 14,383,345 13,275 $ 14,396,620 6,051,387 87,922 30,094 6,169,403 (Concluded)

The Company may settle the compensation of employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

28. CAPITAL MANAGEMENT

The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings and other equity items).

To support operating activities and purchase of aircraft, the Company needs to maintain sufficient capital. Therefore, the goal of capital management is to ensure that financial resources and operating plan is able to support the future working capital, capital expenditures, debt repayment, dividend payments and other needs in the next 12 months.

• 55 -

29. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

Financial liabilities Bonds payable	**December 31 **	**December 31 **
	2025 Carrying Amount Fair Value $ 7,382,809 $ 7,615,919	2024
		Carrying Amount Fair Value $ 6,069,339 $ 6,616,629

Lease liabilities and long-term borrowings are floating-rate financial liabilities, so their carrying amounts are their fair values. Fair values of bonds payable trading in OTC are based on quoted market prices (Level 1).

• b. Fair value of financial instruments measured at fair value on a recurring basis

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• 1) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

December 31, 2025 Financial assets at FVTOCI Investments in equity instruments Unlisted shares - domestic Unlisted shares - foreign Listed shares - foreign Financial assets for hedging Financial liabilities for hedging	Level 1 $ - - 407 $ 407 $ - $ 40,809,516	Level 2 $ - - - $ - $ 4,132 $ 686	Level 3 $ 19,941 36,268 - $ 56,209 $ 1,554 $ 1,955	Total $ 19,941 36,268 407
				$ 56,616
				$ 5,686
				$ 40,812,157

• 56 -

December 31, 2024

Financial assets at FVTOCI Investments in equity instruments Unlisted shares - domestic Unlisted shares - foreign Listed shares - foreign Financial assets for hedging Financial liabilities for hedging	Level 1 $ - - 368 $ 368 $ 2,950,820 $ 41,619,728	Level 2 $ - - - $ - $ 37,664 $ -	Level 3 $ 23,095 47,997 - $ 71,092 $ 348 $ 9,717	Total $ 23,095 47,997 368
				$ 71,460
				$ 2,988,832
				$ 41,629,445

There were no transfers between Levels 1 and 2 in the current period.

• 4) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instrument Valuation Techniques and Inputs

Derivatives The fair values of derivatives (except for options) have been determined based on discounted cash flow analyses using interest yield curves applicable for the duration of the derivatives. The estimates and assumptions that the Company used to determine the fair values are identical to those used in the pricing of financial instruments for market participants.

• 5) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair values of fuel options and swap are determined using option pricing models. Changes in the implied fluctuations used in isolation would result in an increase or decrease in the fair value of the fuel options and swap.

The domestic and foreign unlisted equity investment are based on the comparative company valuation to estimate the fair value. The main assumptions are based on the multiplier of the market price of the comparable listed company and the net value per share, which have considered the liquidity discount. The higher the multiplier or the lower the liquidity discount, the higher the fair value of the relevant financial instruments.

The multiplier and liquidity discount of financial instruments based on Level 3 fair value measurement were as follows:

				Liquidity
			Multiplier	Discount
December	31,	2025	0.91	80%
December	31,	2024	1.05	80%

• 57 -

	Derivative	Derivative	Equity
	Instruments		Instruments
Balance on January 1, 2025	$	(9,369)	$ 71,092
Recognized in other comprehensive income		8,968	(14,883)
Balance on December 31, 2025	$	(401)	$ 56,209
Balance on January 1, 2024	$	(72,026)	$ 60,425
Recognized in other comprehensive income		62,657	10,667
Balance on December 31, 2024	$	(9,369)	$ 71,092

Because some financial instruments and nonfinancial instruments may not have their fair values disclosed, the total fair value disclosed herein is not the total value of the Company’s collective instruments.

• c. Categories of financial instruments

Financial assets Financial assets for hedging Financial assets at amortized cost (Note 1) Financial assets at FVTOCI - investments in equity instruments Financial liabilities Financial liabilities for hedging Financial liabilities at amortized cost (Note 2)	December 31
	2025 2024 $ 5,686 $ 2,988,832 52,656,002 61,338,919 56,616 71,460 40,812,157 41,629,445 136,844,518 124,203,942

• Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, time deposits with original maturities of more than 3 months, notes and accounts receivable, accounts receivable - related parties, finance lease receivables, other receivables, refundable deposits, restricted assets and other financial assets.

• Note 2: The balances include financial liabilities measured at amortized cost, which comprise notes and accounts payable, accounts payable - related parties, other payables, bonds payable, long-term borrowings, lease liabilities, provisions and parts of other non-current liabilities.

• d. Financial risk management objectives and policies

The Company has risk management and hedging strategies to respond to changes in the economic and financial environment and in the fuel market. To reduce the financial risks from changes in interest exchange rates and in fuel prices, the Company has its operating costs stay within a specified range by using appropriate financial hedging instruments and hedging percentages in accordance with the “Processing Program of Derivative Financial Instrument Transactions” approved by the Company’s shareholders to reduce the impact of market price changes on earnings. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

• 58 -

In addition, the Company has a risk committee, which meets periodically to evaluate the performance of derivative instruments and determine the appropriate hedging percentage. The committee informs the Company of global economic and financial conditions, controls the entire financial risk resulting from changes in the financial environment and fuel prices, and develops the strategy and response to avoid financial risk with the assistance of financial risk experts to effect risk management.

1) Market risk

The Company is primarily exposed to the financial risks of changes in foreign currency exchange rates and interest rates. The Company entered into derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk. The Company enters into foreign exchange forward contracts, foreign currency option contracts, and interest swap contracts with fair values that are highly negatively correlated to the fair values of hedged items and evaluates the hedging effectiveness of these instruments periodically.

a) Foreign currency risk

The Company enters into foreign currency option contracts to hedge against the risks on change in related exchange rates, enters into forward contracts to hedge against the risks on changes in foreign-currency assets, liabilities and commitments in the related exchange rates.

Sensitivity analysis

The Company was mainly exposed to the U.S. dollar.

An increase/decrease in U.S. dollars one dollar against New Taiwan dollars when reporting foreign currency risk internally to key management personnel represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items at the end of the reporting period for U.S. dollars increase/decrease by one dollar against New Taiwan dollars in foreign currency rates.

When New Taiwan dollars increased by one dollar against U.S. dollars and all other variables were held constant, there would be an increase in pre-tax profit and an increase in pre-tax other comprehensive income for the year ended December 31, 2025 of $305,809 thousand and $1,258,743 thousand, respectively; and a decrease in pre-tax profit and an increase in pre-tax other comprehensive income for the year ended December 31, 2024 of $362,073 thousand and $1,143,402 thousand, respectively.

The Company’s hedging strategy is to enter into foreign exchange forward contracts to avoid exchange rate exposure of its foreign currency denominated receipts and payments and to manage exchange rate exposure of its aircraft are designated as cash flow hedges. When forecasted purchases actually take place, basis adjustments are made to the initial carrying amounts of hedged items.

For the hedges of highly probable aircraft prepayments, as the critical terms (i.e., the notional amount, useful life and underlying asset) of the foreign exchange forward contracts and their corresponding hedged items are the same. The Company performs a qualitative assessment of the effectiveness. The value of the foreign exchange forward contracts and the value of the corresponding hedged items are expected to change systematically in the opposite direction in response to movements in the underlying exchange rates.

• 59 -

The following table summarizes the information relating to the hedging of foreign currency risk.

Refer to Note 19 for rental contract for hedging.

December 31, 2025

Notional Line Item in Hedging Instruments Currency Amount Maturity Forward Rate Balance Sheet Cash flow hedge Aircraft prepayment - forward exchange contracts NTD/USD NTD1,226,415/ USD39,000 2026.01.26 31.314- 31.405 Financial assets for hedging - current/liabilities for hedging - current	Carrying Amount
	Asset Liability $ 896 $ 686

The abovementioned hedging instruments applied hedge accounting. The book value of other equity for each hedging item (aircraft prepayments) was $210 thousand.

For the year ended December 31, 2025

	Hedging Gain	Amount
	(Loss)	Reclassified to
	Recognized in	Profit and Loss
	Other	and the
	Comprehensive	Adjusted Line
Comprehensive Income	Income	Item
Cash flow hedge
Aircraft prepayment	$ (58,809)	$ -

For the year ended December 31, 2025, the amount of hedging instrument settlements recognized as an increase of aircraft prepayments were $27,582 thousand.

December 31, 2024

		Notional			Line Item in	Carrying Amount
Hedging Instruments	Currency	Amount	Maturity	Forward Rate	Balance Sheet	Asset Liability
Cash flow hedge
Aircraft prepayment - NTD/USD		NTD1,180,328/	2025.1.24-	30.993-32.277	Financial assets for hedging -	$ 31,437 $	-
forward exchange		USD36,000	2025.9.30		current/liabilities for
contracts					hedging - current
The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft prepayments) was $31,437 thousand.
For the year ended December 31, 2024
					Hedging Gain	Amount
					(Loss)	Reclassified to
					Recognized in	Profit and Loss
					Other	and the
					Comprehensive	Adjusted Line
Comprehensive	Income				Income	Item
Cash flow hedge
Aircraft prepayment					$ 277,871	$	-

The abovementioned hedging instruments applied hedge accounting. The book value of other equity for each hedging item (aircraft prepayments) was $31,437 thousand.

For the year ended December 31, 2024, the amount of hedging instrument settlements recognized as a decrease of aircraft prepayments were $244,859 thousand.

• 60 -

b) Interest rate risk

The Company enters into interest swap contracts to hedge against the risks on change in interest rates of long-term borrowings. The Company was exposed to interest rate risk because the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings and using interest rate swap contracts.

The carrying amounts of the Company’s financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Cash flow interest rate risk	**December 31 **
	2025 2024 $ 48,192,325 $ 47,689,067 88,102,953 77,002,436

Sensitivity analysis

The sensitivity analysis below was determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A one yard (25 basis points) increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

Had interest rates increased by one yard (25 basis points) and all other variables been held constant, the Company’s pre-tax profit for the years ended December 31, 2025 and 2024 would have decreased by $220,257 thousand and $192,506 thousand, respectively.

The following tables summarize the information relating to the hedges for interest rate risk.

December 31, 2025

Notional Line Item in Hedging Instruments Currency Amount Maturity Forward Rate Balance Sheet Cash flow hedge Interest expense on long-term borrowings - interest rate swaps NTD NTD900,000 2027.4.1- 2027.5.24 1.39-1.58 Financial assets for hedging - current/liabilities for hedging - non-current	Carrying Amount
	Asset Liability $ 3,236 $ -

Note: The Company recognized interest receivable for $324 thousand.

The abovementioned hedging instruments applied hedge accounting. The book value of other equity for each hedging item (interest expense on long-term borrowings) was $3,236 thousand.

For the year ended December 31, 2025

	Hedging Gain	Amount
	(Loss)	Reclassified to
	Recognized in	Profit and Loss
	Other	and the
	Comprehensive	Adjusted Line
Comprehensive Income	Income	Item
Cash flow hedge
Interest expense on long-term borrowings	$ (2,991)	$ 1,599	(Note)

• 61 -

Note: Decrease in financial costs or other losses.

December 31, 2024

Notional Line Item in Carrying Amount Hedging Instruments Currency Amount Maturity Forward Rate Balance Sheet Asset Liability Cash flow hedge Interest expense on NTD NTD900,000 2027.4.11.39-1.58 Financial assets for hedging - $ 6,227 $ - long-term borrowings - 2027.5.24 current/liabilities for interest rate swaps hedging - non-current

Note: The Company recognized interest receivable for $307 thousand.

The abovementioned hedging instruments applied hedge accounting. The book value of other equity for each hedging item (interest expense on long-term borrowings) was $6,227 thousand.

For the year ended December 31, 2024

	Hedging Gain	Amount
	(Loss)	Reclassified to
	Recognized in	Profit and Loss
	Other	and the
	Comprehensive	Adjusted Line
Comprehensive Income	Income	Item
Cash flow hedge
Interest expense on long-term borrowings	$ 11,735	$ 831	(Note)

Note: Increase in financial costs or other losses.

• c) Other price risk

The Company was exposed to fuel price risk on its purchase of aviation fuel. The Company enters into fuel options and swap contracts to hedge against adverse risks on fuel price changes.

December 31, 2025

Notional Line Item in Hedging Instrument Currency Amount Maturity Forward Rate Balance Sheet Cash flow hedges Aviation fuel - fuel options USD NTD401 2026.3.31- 2026.6.30 USD55- USD68.84 Financial assets for hedging - current/liabilities for hedging - current	Carrying Amount
	Asset Liability $ 1,554 $ 1,955

Hedge accounting continues to be applied to the abovementioned hedging instruments. The carrying amount of other equity for each hedging item (fuel payments in U.S. dollars) was $(401) thousand.

For the year ended December 31, 2025

	Hedging Gain	Amount
	(Loss)	Reclassified to
	Recognized in	Profit and Loss
	Other	and the
	Comprehensive	Adjusted Line
Comprehensive Income	Income	Item
Cash flow hedge
Fuel options	$ 8,967	$ (22,698)	(Note)

• 62 -

Note: Increase in operating costs. December 31, 2024

Notional Line Item in Hedging Instrument Currency Amount Maturity Forward Rate Balance Sheet Cash flow hedges Aviation fuel - fuel options USD NTD3,758 2025.3.31- 2025.9.30 USD65- USD92.2 Financial assets for hedging - current/liabilities for hedging - current Aviation fuel - swap USD NTD5,611 2025.3.31- 2025.6.30 USD76.5- USD76.76 Financial assets for hedging - current/liabilities for hedging - current

Carrying Amount

Asset Liability $ 348 $ 4,106 - 5,611

Hedge accounting continues to be applied to the abovementioned hedging instruments. The carrying amount of other equity for each hedging item (fuel payments in U.S. dollars) was $(9,369) thousand.

For the year ended December 31, 2024

	Hedging Gain	Amount
	(Loss)	Reclassified to
	Recognized in	Profit and Loss
	Other	and the
	Comprehensive	Adjusted Line
Comprehensive Income	Income	Item
Cash flow hedge
Fuel options	$ 62,657	$ 14,951	(Note)

Note: Decrease in operating costs.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to fuel price risks at the end of the reporting period.

Fuel price increase 5% Fuel price decrease 5%	For the Year Ended December 31	For the Year Ended December 31
	2025 Pre-tax Profit Increase (Decrease) Other Comprehensiv e Income Increase (Decrease) $ 1,931 $ 20 (1,931) (20)	2024
		Pre-tax Profit Increase (Decrease) Other Comprehensiv e Income Increase (Decrease) $ 2,374 $ 468 (2,551) (468)

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The Company’s credit risk primarily comes from accounts receivable generated from operating activities and bank deposits generated from investing activities, fixed income investments and other financial instruments, operation related credit risk and financial credit risk are managed separately.

• 63 -

Operation - related credit risk

The Company has established procedures to manage operations related credit risk to maintain the quality of accounts receivable.

To assess the risk of individual customers, the Company consider into the financial condition of the customers, the credit rating agency rating, the Company’s internal credit rating, transaction history and current economic conditions and many other factors that may affect the repayment. Sometimes, the Company uses certain credit enhancement tools to reduce the credit risk of specific customers.

Since the customers of the aviation industry are dispersed and non-related, the credit risk concentration is not critical.

Financial credit risk

Credit risk on bank deposits, fixed income investments and other financial instruments are measured and monitor by the Company’s finance department. The Company’s trading partners and other parties are well-performing banks and financial institutions, corporations, and government agencies, and so the risk of counterparties failing to discharge an obligation is low; therefore, there is no significant credit risk.

Endorsements given by the Company on behalf of its subsidiaries can be found in Note 30(h).

3) Liquidity risk

The objective of the Company’s management of liquidity is to maintain cash and cash equivalents sufficient for operating purposes, marketable securities with high liquidity and loan commitments that are sufficient to ensure that the Company has adequate financial flexibility.

Liquidity and interest rate risk table

The following table shows the remaining contractual maturity analysis of the Company’s financial liabilities with agreed-upon repayment periods, which were based on the date the Company may be required to pay the first repayment and financial liabilities is evaluated based on undiscounted cash flows, including cash flows of interest and principal.

Bank loans with a repayment on demand clause were included in the second column of the table below regardless of whether or not the banks would choose to exercise early their rights to repayment. The maturity dates for other non-derivative financial liabilities were based on the agreed-upon repayment dates. The Company’s liquidity analysis for its derivative financial instruments is also shown in the following table. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross cash inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by yield curves at the end of the reporting period.

• 64 -

December 31, 2025

The Weighted Average Effective Interest Rate (%) Lease liabilities 2.2614 Floating interest rate liabilities 2.1290 Hedging instruments 4.0544 Bonds payable 1.7091	Less than 1 Year $ 2,550,826 11,944,776 9,930,493 1,758,990 $ 26,185,085	1 to 5 Years $ 2,593,979 49,830,743 23,178,563 5,848,274 $ 81,451,559	Over 5 Years $ 10,483,824 16,625,629 12,094,300 - $ 39,203,753

December 31, 2024

The Weighted Average Effective Interest Rate (%) Lease liabilities 2.1225 Floating interest rate liabilities 2.1325 Hedging instruments 3.8208 Bonds payable 1.3463	Less than 1 Year $ 1,674,515 10,801,549 10,853,365 1,731,713 $ 25,061,142	1 to 5 Years $ 4,622,492 40,572,638 26,088,849 4,478,837 $ 75,762,816	Over 5 Years $ 9,963,613 14,778,395 9,618,253 - $ 34,360,261

Loan commitments

Undrawn bank loan commitments (unsecured)	**December 31 **
	2025 2024 $ 26,591,791 $ 31,023,377

30. TRANSACTIONS WITH RELATED PARTIES

Besides information disclosed elsewhere in other notes, details of transactions between the Company and other related parties are as follows:

a. Related party name and relationships

Related Party Name Relationship with the Company

Taiwan Aircargo Terminal Company	Subsidiary
Taoyuan International Airport Service Co., Ltd.	Subsidiary
Sabre Travel Network (Taiwan), Ltd.	Subsidiary
Taiwan Airport Service Co., Ltd.	Subsidiary
Taiwan Airport Service (Samoa)	Subsidiary

(Continued)

• 65 -

Related Party Name Dynasty Aerotech International Corp. Global Sky Express Mandarin Airlines Cal Park Cal Hotel Co., Ltd. Cal-Asia Investment Cal-Dynasty International Inc. Tigerair Taiwan Co., Ltd. Taiwan Aircraft Maintenance and Engineering Co., Ltd. Kaohsiung Catering Services Airport Air Cargo Terminal (Xiamen) Co., Ltd. Airport Air Cargo Service (Xiamen) Co., Ltd. Eastern United International Logistics (Hong Kong) China Pacific Catering Services China Pacific Laundry Services NORDAM Asia Ltd. Delica International Co., Ltd. China Aviation Development Foundation (CADF) Others

Relationship with the Company

Subsidiary Subsidiary (completed the dissolution and liquidation procedures in September 2025) Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Joint venture Joint venture Joint venture (completed the dissolution and liquidation procedures in July 2025) Joint venture (completed the dissolution and liquidation procedures in October 2024) Director of the Company and major shareholder Director, key management personnel, chairman, general manager of the Company, spouse and second-degree relative (Concluded)

b. Operating income

Account Items Related Party Type Other operating income Subsidiary Major shareholder of the Company Joint venture	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 1,957,677 $ 29,861 $ 30,604	2024 $ 1,806,839 $ 18,402 $ 31,395

• c. Purchases

Related Party Type Subsidiary Associate Joint venture	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2025 $ 4,412,282 $ 175,776 $ 3,744,038	2024 $ 3,898,835 $ 221,913 $ 3,124,963

• 66 -

• d. Accounts receivable - related parties (generated by operations)

Related Party Type Subsidiary Major shareholders of the Company Joint venture		December 31	December 31
		2025 $ 282,711 2,968 2,511 $ 288,190	2024 $ 261,150 3,472 2,750 $ 267,372

The receivables are not guaranteed, and there is no allowance for doubtful accounts related to accounts receivable - related parties. The payment periods of such accounts were within 30 to 90 days, and there are no overdue payments.

• e. Accounts payable - related parties (generated by operations)

Related Party Type Subsidiary Major shareholder of the Company Associates Joint venture		December 31	December 31
		2025 $ 843,084 6,469 13,892 979,839 $ 1,843,284	2024 $ 770,009 8,040 18,681 784,468 $ 1,581,198

The remaining balance of accounts payable - related parties will be paid in cash if they are not secured.

• f. Disposal of property, plant and equipment

Related Party Type Major shareholder of the Company	Proceeds For the Year Ended December 31 2025 2024 $ 671,617 $ -	**Gain(Loss) on Disposal **
		For the Year Ended December 31
		2025 2024 $ (12,654) $ -

• g. Lease arrangements (operating leases)

The Company rented out planes to Mandarin Airlines under an operating lease contract. The monthly rental received is based on flight hours. For the years ended December 31, 2025 and 2024, the rentals received amounted to $943,560 thousand and $955,627 thousand, respectively.

Under an operating lease agreement, the Company rented flight training machines and flight simulators from the China Aviation Development Foundation to train pilots, and the Company paid the rental based on usage hours. For the years ended December 31, 2025 and 2024, the Company paid rentals of $62,956 thousand and $40,191 thousand, respectively.

In March 2010, the Company signed a yearly renewable operating lease agreement to use the Operating and Aviation Headquarters building of the Taiwan Taoyuan International Airport with CAL Park. For the years ended December 31, 2025 and 2024, the Company paid right-of-use assets of $5,215,714 thousand and $5,389,571 thousand, respectively, and paid rental expenses of $231,288 thousand.

• 67 -

h. Endorsements and guarantees

The Company Tigerair Taiwan Co., Ltd. Cal Park Taiwan Aircraft Maintenance and Engineering Co., Ltd.	December 31	December 31
	2025	2024 Amount Endorsed Amount Utilized $ 2,131,148 $ 84,907 3,400,000 1,005,960 2,000,000 1,586,500
	Amount Endorsed Amount Utilized $ 2,044,025 $ 41,727 3,400,000 786,840 2,000,000 1,499,239

• i. Remuneration of key management personnel

The compensation to directors and other key management personnel were as follows:

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2025 $ 72,720 3,260 $ 75,980	2024 $ 66,618 3,030 $ 69,648

The remuneration of directors and key executives, as determined by the remuneration committee, is based on the performance of individuals and market trends.

31. ASSETS PLEDGED AS COLLATERAL FOR SECURITY

The following assets were pledged or mortgaged as collateral for long-term bank loans and business transactions:

Property, plant and equipment Restricted Assets		**December 31 **	**December 31 **
		2025 $ 56,704,621 38,648 $ 56,743,269	2024 $ 51,043,644 35,812 $ 51,079,456

32. SIGNIFICANT COMMITMENTS AND CONTINGENT LIABILITIES

In addition to those disclosed in the other notes, significant commitments and contingent liabilities of the Company on December 31, 2025 were as follows:

• a. In October 2019, the Company signed a contract with Airbus S.A.S. to purchase eleven A321neo aircraft and an option to purchase five A321neo aircraft. The total list price of the eleven aircraft is US$1,687,810 thousand, and the list price of the option to purchase five aircraft is US$769,922 thousand. The expected delivery periods of the eleven aircraft are from 2024 to 2026. As of December 31, 2025, five out of the eleven aircraft have been delivered. The total list price of the remaining eight aircraft is US$932,935 thousand, and the list price had been paid in the amount of US$87,074 thousand (recognized as prepayments for aircraft). In October 2019, the Company signed a contract with

• 68 -

International Aero Engines Company to purchase four backup engines for the A321neo. The total list price of the four engines is US$60,289 thousand. As of December 31, 2025, three out of the four backup engines have been delivered. The Group also signed a related aircraft lease agreement; refer to Note 19.

• b. On September 28, 2022, the Company signed a contract with the Boeing Company to purchase sixteen 787-9 aircraft and the option to purchase eight 787-9 aircraft. On May 23 and June 20, 2023, the Company exercised the option to purchase eight aircraft, six of it 787-9 aircraft were converted to 787-10, with a total of twenty-four aircraft (including eighteen 787-9 aircraft and six 787-10 aircraft). The total list price is approximately US$9,246,181 thousand. The expected delivery periods are from 2026 to 2029. As of December 31, 2025, the list price has been paid in the amount of US$1,131,216 thousand (recognized as prepayments for aircraft).

• c. On March 31, 2025, the Company signed a contract with The Boeing Company to purchase ten 777-9 passenger aircraft and obtained purchase options for five additional aircraft. The total list price of the ten aircraft is approximately US$7,382,236 thousand. The delivery of the ten aircraft is scheduled to commence in 2030. As of December 31, 2025, payments of US$157,920 thousand had been made (recognized as prepayments for aircraft). On November 26, 2025, the Company exercised the option to purchase five aircraft. The total list price is approximately US$3,815,465 thousand.

• d. On March 31, 2025, the Company also signed a contract with The Boeing Company to purchase four 777-8F freighter aircraft and obtained purchase options for four additional aircraft. The total list price of the four aircraft is approximately US$2,733,966 thousand. The delivery of the aircraft is scheduled to commence in 2031. As of December 31, 2025, payments of US$62,899 thousand had been made (recognized as prepayments for aircraft). On November 26, 2025, the Company exercised the option to purchase four aircraft. The total list price is approximately US$2,748,725 thousand.

• e. On March 31, 2025, the Company signed a contract with Airbus S.A.S. to purchase ten A350-1000 passenger aircraft and obtained purchase options for five additional aircraft. The total list price of the ten aircraft is approximately US$5,477,580 thousand. The delivery of the aircraft is scheduled to commence in 2029. As of December 31, 2025, payments of US$87,549 thousand had been made (recognized as prepayments for aircraft). On November 26, 2025, the Company exercised the option to purchase five aircraft. The total list price is approximately US$2,899,348 thousand.

• f. On June 25, 2025, the Board of Directors approved the introduction of three A321neo passenger aircraft and five A350-900 passenger aircraft. The related procurement negotiations are currently in progress; among them, three A350-900 aircraft are to be contracted with ILFC Ireland Limited, with a list price of approximately US$1,200,000 thousand for the three aircraft. The delivery of the aircraft is scheduled to commence in 2026. The payments of US$36,000 thousand had been made (recognized as prepayments for aircraft).

• g. On November 26, 2025, the Board of Directors approved the introduction of four 777F freighter aircraft; among them, two aircraft have been contracted with Boeing Company, with a list price of approximately US$1,004,928 thousand. The payments of US$190,000 thousand had been made, while negotiations for the procurement of the remaining two aircraft are currently in progress.

• h. On November 26, 2025, the Board of Directors approved the disposal of four 747-400F freighter aircraft. Among them, two aircraft will be sold to Cargolux, while negotiations for the sale of the remaining two aircraft are currently in progress.

• i. On November 26, 2025, the Board of Directors approved the purchase of one Rolls-Royce XWB-97 backup engine and three GE Aviation GE9X backup engines. The total list price is approximately US$228,723 thousand.

• 69 -

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company, and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

December 31, 2025

		Foreign
		Currency		Carrying
	(In Thousands)		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	421,103	31.4465	$ 13,242,233
EUR		19,545	36.9004	721,218
HKD		321,329	4.0339	1,296,204
JPY		4,269,258	0.2011	858,453
RMB		275,536	4.4863	1,236,137
Financial liabilities
Monetary items
USD		2,024,655	31.4465	63,668,396
EUR		7,062	36.9004	260,590
HKD		59,573	4.0339	240,311
JPY		5,769,317	0.2011	1,160,081
RMB		95,798	4.4863	429,780
December 31, 2024
		Foreign
		Currency		Carrying
	(In Thousands)		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	1,148,838	32.7869	$ 37,666,837
EUR		20,504	34.1297	699,795
HKD		328,472	4.2230	1,387,137
JPY		4,062,086	0.2096	851,413
RMB		493,826	4.4924	2,218,464
Financial liabilities
Monetary items
USD		1,966,166	32.7869	64,464,494
EUR		10,413	34.1297	355,393
HKD		76,815	4.2230	324,390
JPY		5,505,384	0.2096	1,153,928
RMB		96,732	4.4924	434,559

• 70 -

For the years ended December 31, 2025 and 2024, respectively; the Company’s net foreign exchange gains (losses) were $(232,613) thousand and $400,254 thousand. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

34. ADDITIONAL DISCLOSURES

• a. Following are the additional disclosures required by the Securities and Futures Bureau for the Company and its investees:

• 1) Financing provided to others: Table 1 (attached)

• 2) Endorsements/guarantees provided: Table 2 (attached)

• 3) Significant marketable securities held: None

• 4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 3 (attached)

• 5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 4 (attached)

• 6) Names, locations, and related information of investees over which the Company exercises significant influence: Table 5 (attached)

• b. Information on investments in mainland China: Table 6 (attached)

35. SEGMENT INFORMATION

The Company mainly engages in air transportation services for passengers, cargo and others. Its major revenue-generating asset is its aircraft fleet, which is used jointly for passenger and cargo services. Thus, the Company’s sole reportable segment its flight segment. For the disclosure of operating segment in the consolidated financial statements, the reportable segment of the Group comprises flight and non-flight business departments. The related information of reportable segment has been disclosed in the consolidated financial statements.

• 71 -

TABLE 1

CHINA AIRLINES, LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit	Note
													Item	Value
1	Cal-Dynasty International	Dynasty Hotel of Hawaii, Inc.	Notes receivable	Yes	$ 116,279	$ 110,063	$ 110,063	2.25	Short-term financing facility is necessary	$ -	Operating cycle capital expenditure	$ -	-	$ -	$ 164,102	$ 328,204

Cal-Dynasty International’s operational procedures for financing provided to others or legal requirements:

Note 1: The maximum amount of loans provided to others by the Company is up to 40% of the Company’s net worth as stated in its latest financial statements.

Note 2: The maximum amount of loans provided to an individual counterparty by the Company is up to 20% of the Company’s net worth as stated in its latest financial statements.

Note 3: The balance of Cal-Dynasty International’s loan to the Dynasty Hotel of Hawaii, Inc. as of December 31, 2024, was $114,754 thousand.

• 72 -

TABLE 2

CHINA AIRLINES, LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Amount Borrowed	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statement (%)	Aggregate Endorsement/ Guarantee Limit (Note 2)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0	China Airlines (the “Company”)	Cal Park Tigerair Taiwan Co., Ltd. Taiwan Aircraft Maintenance and Engineering Co., Ltd.	100% owned subsidiary 69.09% owned subsidiary by direct and indirect shareholdings 100% owned subsidiary	$ 19,516,758 19,516,758 19,516,758	$ 3,400,000 2,159,468 4,000,000	$ 3,400,000 2,044,025 2,000,000	$ 786,840 41,727 1,499,239	$ - - -	3.48 2.09 2.05	$ 48,791,896 48,791,896 48,791,896	Yes Yes Yes	No No No	No No No

Note 1: Based on the Company’s operational procedures for endorsements/guarantees, the maximum amount of guarantee to an individual counterparty is up to 20% of the Company’s shareholders’ equity.

Note 2: Based on the Company’s operational procedures for endorsements/guarantees, the maximum amount of collateral guarantee is up to 50% of the Company’s shareholders’ equity.

• 73 -

TABLE 3

CHINA AIRLINES, LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable or Payable	Notes/Accounts Receivable or Payable	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
China Airlines, Ltd. (“China Airlines”) Mandarin Airlines Tigerair Taiwan Co., Ltd. Cal Hotel	Dynasty Aerotech International Corp. Cal Park Cal Hotel Co., Ltd. Mandarin Airlines Mandarin Airlines Taiwan Air Cargo Terminal Taoyuan International Airport Service Taiwan Airport Services Tigerair Taiwan Co., Ltd. Taiwan Aircraft Maintenance and Engineering Co., Ltd. Kaohsiung Catering Service, Ltd. Eastern United International Logistics (Holdings) Ltd. China Pacific Laundry Services China Pacific Catering Services Taiwan Airport Services Taoyuan International Airport Services Taiwan Airport Services Cal Park	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Joint venture Joint venture Same parent company Same parent company Same parent company Same parent company	Purchase Purchase Purchase Sale Purchase Purchase Purchase Purchase Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase	$ 427,351 231,610 242,188 (1,129,943) 109,658 562,739 1,331,135 421,003 (637,957) 412,018 634,576 171,088 177,017 3,567,021 421,249 328,184 235,446 114,637	0.28 0.15 0.16 (0.63) 0.07 0.37 0.88 0.28 (0.36) 0.27 0.42 0.11 0.12 2.37 7.28 2.68 1.93 30.79	2 months 2 months 2 months 2 months 2 months 30 days 40 days 40 days 1 month 1 month 90 days 2 months 90 days 90 days 1 month 40 days 40 days 1 month	$ - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - -	$ (64,946) - (21,707) 218,562 (146,450) (54,287) (359,460) (79,874) 45,480 (27,791) (87,090) (13,494) (29,588) (950,251) (20,261) (50,459) (36,366) (431)	(2.38) - (0.80) 2.14 (5.37) (1.99) (13.18) (2.93) 0.44 (1.02) (3.19) (0.49) (1.08) (34.84) (2.18) (2.80) (2.02) (0.58)	- - - - - - - - - - - - - - - - - -

• 74 -

TABLE 4

CHINA AIRLINES, LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
Taoyuan International Airport Service China Pacific Catering Services Mandarin Airlines China Airlines	China Airlines China Airlines China Airlines Mandarin Airlines	Parent company Joint venture investment Parent company Subsidiary	$ 359,460 950,251 146,450 218,562	3.71 4.18 Note Note	$ - - - -	- - - -	$ 359,460 643,329 143,600 210,420	$ - - - -

Note: Due to the nature of the industry, accounts receivable and operating revenue are not directly related, and the turnover rate is not applicable.

• 75 -

TABLE 5

CHINA AIRLINES, LTD. AND SUBSIDIARIES

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2025	December 31, 2025	Net Income (Loss) of the Investee	Share of profit (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	Percentage of Ownership (%)	Carrying Amount
China Airlines, Ltd. Mandarin Airlines Cal-Asia Investment Taiwan Airport Services	Cal Park Mandarin Airlines Taiwan Air Cargo Terminal Cal-Dynasty International China Pacific Catering Services Taoyuan International Airport Services Cal-Asia Investment Sabre Travel Network (Taiwan) Taiwan Airport Services Kaohsiung Catering Services Cal Hotel Co., Ltd. China Pacific Laundry Services Dynasty Aerotech International Corp. Tigerair Taiwan Co., Ltd. Taiwan Aircraft Maintenance and Engineering Co., Ltd. Tigerair Taiwan Co., Ltd. Taiwan Airport Services Eastern United International Logistics Taiwan Airport Service (Samoa)	Taoyuan, Taiwan Taipei, Taiwan Taoyuan, Taiwan Los Angeles, U.S.A. Taoyuan, Taiwan Taoyuan, Taiwan Territory of the British Virgin Islands Taipei, Taiwan Taipei, Taiwan Kaohsiung, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Samoa	Real estate lease and international trade Air transportation and maintenance of aircraft Air cargo and storage A holding company, real estate and hotel services In-flight catering Airport services General investment Sale and maintenance of hardware and software Airport services In-flight catering Hotel business Cleaning and leasing of the towel of airlines, hotels, restaurants and health clubs Cleaning of aircraft and maintenance of machine and equipment Air transportation and maintenance of aircraft Aircraft maintenance Air transportation and maintenance of aircraft Airport services Forwarding and storage of air cargo Airport services and investment	$ 1,500,000 4,039,140 1,080,000 US$ 26,145 439,110 147,000 US$ 7,172 52,200 12,289 383,846 334,800 137,500 77,270 5,560,884 560,000 183,846 11,658 HK$ 3,329 US$ 5,877	$ 1,500,000 4,039,140 1,080,000 US$ 26,145 439,110 147,000 US$ 7,172 52,200 12,289 383,846 334,800 137,500 77,270 5,560,884 560,000 183,846 11,658 HK$ 3,329 US$ 5,877	158,209,368 387,831,234 108,000,000 2,614,500 72,471,000 34,300,000 7,172,346 13,021,042 20,626,644 21,494,637 33,480,000 13,750,000 77,270 300,879,050 56,000,000 16,613,624 469,755 1,050,000 -	100.00 96.96 54.00 100.00 51.00 49.00 100.00 93.93 47.35 53.67 100.00 55.00 100.00 65.48 100.00 3.61 1.08 35.00 100.00	$ 1,925,212 2,235,913 1,580,167 1,515,323 2,061,394 511,261 819,043 270,402 329,807 598,653 323,294 137,710 136,916 4,791,799 280,763 264,862 7,502 48,154 422,897	$ 47,773 154,645 645,159 18,778 1,544,322 202,857 36,915 76,278 355,876 327,431 11,078 31,830 35,515 2,467,072 (55,849) 2,467,072 355,876 10,903 37,338	$ 81,175 148,209 348,346 19,680 787,605 99,400 36,915 71,648 168,507 173,680 14,664 17,506 35,596 1,615,386 (55,849) 89,259 3,833 3,816 37,338	Note 4 Notes 1 and 4 Note 4 Notes 2 and 4 - - - - - Note 5 Note 4 - Note 4 Note 4 - - - - Note 3

Note 1: Adopted the treasury share method in recognizing investment income or loss.

Note 2: Represents the consolidated financial information of the foreign holding company disclosed in accordance with local regulations.

Note 3: The Company does not issue shares because it is a limited company.

Note 4: The difference is due to lease arrangement between consolidated entities.

Note 5: The difference is due to acquisition.

• 76 -

TABLE 6

CHINA AIRLINES, LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars/Renminbi/U.S. Dollars in Thousands, Unless Stated Otherwise)

China Airlines

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2025	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025
							Outward	Inward
Airport Air Cargo Terminal (Xiamen) Co., Ltd. Airport Air Cargo Service (Xiamen) Co., Ltd. Taikoo (Xiamen) Landing Gear Services Taikoo Spirit Aerospace Systems (Jinjang)	Forwarding and storage of air cargo Forwarding and storage of air cargo Landing gear maintenance services Composite material		$ 1,141,674 (RMB 254,480) 62,808 (RMB 14,000) 2,612,890 (US$ 83,090) 366,761 (US$ 11,663)	Indirect (Note 1) Indirect (Note 1) Indirect (Note 1) Indirect (Note 1)		$ 131,634 (US$ 4,186) 61,240 (US$ 1,947) 67,648 (US$ 2,151) 20,000 (US$ 636)	$ - - - -	$ - - - -	$ 131,634 (US$ 4,186) 61,240 (US$ 1,947) 67,648 (US$ 2,151) 20,000 (US$ 636)	$ 209,051 (RMB 47,790) 79,456 (RMB 18,164) - -	14.00 14.00 2.59 5.45	$ 27,438 (RMB 6,691) 11,307 (RMB 2,543) - -	$ 316,607 (RMB 70,572) 108,739 (RMB 24,238) - 131,111 (RMB 29,225)	$ 133,685 (US$ 4,251) (Note 2) 133,609 (US$ 4,249) (Note 2) - 29,760 (US$ 946)
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2025		Investment Amounts Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
$280,522 (US$8,920)		$679,041 (Note 3)			$61,524,131 (Note 4)

(Continued)

• 77 -

Taiwan Airport Services

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2025	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025
							Outward	Inward
Airport Air Cargo Terminal (Xiamen) Co., Ltd. Airport Air Cargo Service (Xiamen) Co., Ltd.	Forwarding and storage of air cargo Forwarding and storage of air cargo		$ 1,141,674 (RMB 254,480) 62,808 (RMB 14,000)	Indirect (Note 5) Indirect (Note 5)		$ 126,363 (US$ 4,018) 60,590 (US$ 1,927)	$ - -	$ - -	$ 126,363 (US$ 4,018) 60,590 (US$ 1,927)	$ 209,051 (RMB 47,790) 79,456 (RMB 18,164)	14.00 14.00	$ 27,438 (RMB 6,691) 11,307 (RMB 2,543)	$ 313,907 (RMB 69,970) 108,360 (RMB 24,154)	$ 165,276 (US$ 5,256) 86,779 (US$ 2,760)
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2025		Investment Amounts Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
$186,953 (US$5,945)		$186,953 (US$5,945)			$417,918 (Note 4)

Note 1: The Company invested in CAL-Asia Investment, which invested in a company located in mainland China.

Note 2: As of December 31, 2025, the inward remittance of earnings amounted to US$4,251,192 and US$4,248,772.

Note 3: The amount comprised US$19,828,324, RMB4,200,000 and NT$36,666,667.

Note 4: The limit stated in the Investment Commission’s regulation “The Review Principle of Investment or Technical Cooperation in mainland China” is the larger of the Company’s net asset value or 60% of the consolidated net asset value.

Note 5: Taiwan Airport Services invested in Taiwan Airport Services (Samoa), which invested in a company located in mainland China.

Note 6:

The RMB and U.S. dollar amounts of assets are converted at period-end rates and the gains (losses) are converted at the average of the period-end rates for the reporting period.

(Concluded)

• 78 -