China Airlines 2020 Investor Conference

August 26, 2020 TSE：2610

• The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new further events or information, otherwise, and China Airlines(the “Company”) undertakes no to or obligation publicly update revise the information contained in this presentation.

No guarantees regarding the completeness, accuracy, and reliability of information contained are made explicitly or implicitly. They are not intended to represent complete statement of the Company,industryorfuturedevelopment.

1. First Half Year Financial Results for 2020

1) Operating Performance 2) Composition of Op. Revenue & Cost 3) Financial Risk Management

2. Impact of COVID-19 Pandemic

1) Industry Environment Update 2) Operational Performance Update 3) Response to COVID-19

3. Post-COVID-19 Outlook

First Half Year Financial Results for 2020

O eratin Performance –2020Q2 p g

Operating Performance –2020Q2	Operating Performance –2020Q2	Operating Performance –2020Q2	Operating Performance –2020Q2
Consolidated Financial Statistics TWD 100 Million
	2019Q2	2020Q2	YoY %
Operating Revenue	428.92	263.16	-38.64%
Net Operating Income	5.73	27.48	379.58%
Net Income(Loss) After Tax	-2.91	22.53	-
Net Income(Loss) Attributable to Owners ofthe company	-4.43	24.59	-
Earnings(Loss) Per Share (TWD)	-0.08	0.45	-

Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million
	2019Q2	2020Q2	YoY %
Passenger Revenue	282.06	15.13	-94.63%
Cargo Revenue	109.56	234.42	113.96%
Other Operating Revenue	37.3	13.61	-63.51%
Total Group Operating Revenue	428.92	263.16	-38.64%

O eratin Performance –2020H1 p g

Operating Performance –2020H1	Operating Performance –2020H1	Operating Performance –2020H1	Operating Performance –2020H1
Consolidated Financial Statistics TWD 100 Million
	2019H1	2020H1	YoY %
Operating Revenue	832.98	588.73	-29.32%
Net Operating Income(Loss)	13.34	-2.23	-
Net Loss After Tax	-4.38	-15.58	-
Net Loss Attributable to Owners ofthe company	-6.86	-13.14	-
Loss Per Share (TWD)	-0.13	-0.24	-

Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million
	2019H1	2020H1	YoY %
Passenger Revenue	554.56	202.42	-63.49%
Cargo Revenue	211.18	345.37	63.54%
Other Operating Revenue	67.24	40.94	-39.11%
Total Group Operating Revenue	832.98	588.73	-29.32%

Composition of Op. Revenue -CI

==> picture [608 x 267] intentionally omitted <==

----- Start of picture text -----

4%
2020H1 Passenger Revenue Cargo Revenue 64%
32%
2019H1 Passenger Revenue 66% Cargo Revenue 29%
5%
Other Op. Revenue
Other Op. Revenue
----- End of picture text -----

Passenger, Cargo and other operating revenue accounted for 32%, 64% and 4% respectively in 2020H1.

Composition of Op. Expenses -CI

==> picture [698 x 299] intentionally omitted <==

----- Start of picture text -----

2.1%
Airport&Ground
2020H1 Fuel Handling Personnel Rental&Depreciation Maintenance
21.8% 12.1% 16.5% 22.5% 19.1% 3.5%
3.5%
2.4%
Airport&Ground
2019H1 Fuel Personnel Rental&Depreciation Maintenance
Handling
30.5% 13.5% 13.8% 16.8% 13.4%
3.7%
4.3% 4.0%
Others
Pax Service
Sales&General Adm.
Others
Pax Service
Sales&General Adm.
----- End of picture text -----

Fuel cost accounted for 21.8% of operating expenses due to COVID-19 pandemic in 2020H1.

Financial Risk Management –Fuel (CI)

Financial Risk Management –Fuel (CI)	Financial Risk Management –Fuel (CI)	Financial Risk Management –Fuel (CI)	Financial Risk Management –Fuel (CI)	Financial Risk Management –Fuel (CI)
Fuel Cost
		2019H1	2020H1	YoY%
Jet Fuel (MOPS)	USD/BBL	78.05	45.01	-42.3%
Fuel Consumption	10KBBL	854.58	664.63	-22.2%
Fuel Expend	TWD/100Million	219.23	114.43	-47.8%
Hedging Loss	TWD/100Million	0.07	0.26	271.4%
Total Fuel Cost	TWD/100Million	219.3	114.69	-47.7%

Fuel Hedging

	Fuel Hedging
	Year	Hedging%
	2020.09-20201.08	0.8%

Financial Risk Management – Currency of Revenue and Expenditure

==> picture [661 x 380] intentionally omitted <==

----- Start of picture text -----

2020H1 2019H1
Rev. Exp. Rev. Exp.
100%
7% 7%
15% 2% 16% 2%
1% 2%
7% 7%
6%
6%
12% 7%
5% 38% 9%
42%
13%
15%
50%
49%
47%
45%
40%
0%
TWD USD JPY CNY HKD Others
----- End of picture text -----

Impact of COVID-19 Pandemic Industry Environment Update

COVID-19: Severe Impact on the Global Airline Industry

A slump in air travel demand due to COVID-19 pandemic which has forced airlines to cut flights.

==> picture [676 x 250] intentionally omitted <==

----- Start of picture text -----

Air Airport Freighter
RPKs
Passengers Revenue Tonnes
YoY% YoY% YoY% YoY%
-55% -60% -57% -17%
----- End of picture text -----

IATA forecasted airlines across the world are expected to lose USD 84.3 billion in 2020.

2019 Level Recovered Only by 2024

Five years to return to pre-pandemic level of passenger demand
75% growth forecast for 2021 but RPKs still 36% below 2019 levels

==> picture [666 x 316] intentionally omitted <==

Impact of COVID-19 Pandemic Operational Performance Update

Passenger Performance

==> picture [677 x 276] intentionally omitted <==

----- Start of picture text -----

Revenue Composition by Region
Australia/
New
Zealand
Trans 10%
TWD 47.76 Billion
Pacific
Europe
Ocean
11%
21%
▼ 63.8%
Hong Kong
4%
TWD 17.27 Billion South East
Asia
20% North East
Asia
27%
Mainland
China
2019H1 2020H1 7%
----- End of picture text -----

Passenger revenue decreased by 63.8% to TWD 17.27 billion in 2020H1.
Northeast Asia accounted for the largest share (27%) of revenue, followed by Trans Pacific Ocean with revenue share of 21%.

Passenger Operation Index

==> picture [637 x 197] intentionally omitted <==

----- Start of picture text -----

ASK (MN) Load Factor Yield (TWD)
79.8% 2.32 2.34
▼14.2ppt 65.6% ▲0.9%
25,821
▼56.5%
11,227
2019H1 2020H1 2019H1 2020H1 2019H1 2020H1
----- End of picture text -----

ASK and load factor decreased by 56.5% and 14.2ppt respectively while yield increased by 0.9% in 2020H1.

Impact on Passenger Traffic

==> picture [660 x 286] intentionally omitted <==

----- Start of picture text -----

5,000
4%
0%
4,000
-23%
3,240
3,253 3,229 3,271 3,194
3,128
2,984
3,000
-40%
2,309
-65%
2,000
1,150 -80%
-97% -98% -97%
1,000
89 53 86
- -120%
Round Trips Jan Feb Mar Apr May Jun
2019 2020 YoY change(%)
----- End of picture text -----

CAL provided a minimum passengers-carried schedule to meet market demand.
Our frequencies between April and June plunged more than 97% compared to the same period last year.

Passenger Impact-Skeletal Network

Region	Route Adjustments
North America	Los Angeles/ San Francisco 2 Flights/wk、Vancouver 1 Flight/wk、New York 1~4 Flights/mth
Europe	Amsterdam/ Frankfurt/ London 1 Flight/wk
Oceania	Sydney/ Melbourne/ Brisbane 2 Flights/mth
Northeast Asia	Tokyo1~2 Flights/wk
Southeast Asia	Jakarta/ Ho Chi Minh City 2~3 Flights/wk、Yangon 2~4 Flights/mth、 Others routes 1~3 Flights/wk
Mainland China	Shanghai 3~4 Flights/wk、Xiamen 1~3 Flights/wk、
(KHH departures included)	Chengdu 1 Flight/wk、Beijing 2 Flights/mth
Hong Kong	4~5 Flights/wk

Cargo Performance

==> picture [684 x 277] intentionally omitted <==

----- Start of picture text -----

Revenue Composition by Region
Australia/
New
Zealand 2%
TWD 34.45Billion
Europe 9% Hong Kong
4%
▲64.6% North East
TWD 20.93Billion Asia 5%
Mainland
China 7%
Trans
Pacific South East
Ocean 58% Asia 15%
2019H1 2020H1
----- End of picture text -----

Cargo revenue totaled TWD 34.45 billion, a 64.6% increase, in 2020H1.
Trans Pacific Ocean accounted for the largest share(58%) of revenue, followed by Southeast Asia and Europe with revenue share of 15% and 9% respectively.

Cargo Performance Index

==> picture [657 x 209] intentionally omitted <==

----- Start of picture text -----

FATK (MN) Load Factor Yield (TWD)
3,852 3,894 12.52
▲ 1.1% 70.6%
65.8%
▲ 4.8ppt 8.25 ▲51.8%
2019H1 2020H1 2019H1 2020H1 2019H1 2020H1
----- End of picture text -----

FATK increased by 1.1% and load factor grew 4.8 ppt with a 51.8% rise in yield in 2020H1.

Response to COVID-19

Passenger - Cargo

Flight Schedule Adjusted in Line with Market Demand

Operations remain active in adapting to the dynamic changes of the market landscape and governments regulations.

==> picture [104 x 73] intentionally omitted <==

==> picture [104 x 70] intentionally omitted <==

==> picture [107 x 67] intentionally omitted <==

Operate selected routes to maintain network connectivity. Gradually resume flights to align with boarder reopening and regional business travel needs. Gain Taiwan domestic air travel market via CAL Group’s subsidiaries Operate charter flights or repatriation flights to generate revenue

==> picture [43 x 42] intentionally omitted <==

Resuming Operation with Safety Procedures

CAL is committed to providing passengers a safe and comfortable travel experience by implementing enhanced measures to ensure travel safety.

==> picture [101 x 101] intentionally omitted <==

==> picture [138 x 77] intentionally omitted <==

==> picture [136 x 74] intentionally omitted <==

==> picture [101 x 101] intentionally omitted <==

On board

Prepare for travel

Cabin Crew Protective Equipment
Clean Cabin
Sky Boutique Pre-Order
PA Announcement
COVID-19 Service Information
Inflight Supplies
Inflight Meal
Flight Messaging Service
Fresh and recycled air

At the Airport

quality

Arrival

Onboard Lavatory

==> picture [136 x 76] intentionally omitted <==

Cabin Disinfection & Cleaning
Wear face masks
Temperature checks
Social distancing
Meal Carts Disinfection
CAL Lounges closed temporarily
Safe Airport Journey Plan
Luggage Disinfection upon Arrival

Expanding Cargo Service to Seize the window of Opportunity

COVID-19 has significantly disrupted global supply chain, also led to air cargo capacity crunch stemming from the evaporation of the belly capacity of passenger aircraft.

==> picture [193 x 134] intentionally omitted <==

Utilize CAL 18 747-400 freighters
Make the most of belly capacity of passenger aircraft
Improve operational efficiency with upcoming 777F deliveries
Monthly route review and flexible route adjustment
Priority for high-yield goods and regular project shipment for route profit boost
Pursue charter or BSA business to maintain load factor and revenue uplift

36 destinations with 101 flights per week for cargo service

Post-COVID-19 Outlook

New Normal of Air travel in Post-Covid-19 Age

Market

Domestic and regional air travel will recover first.
3[rd] /4[th] traffic rights will be dominant.
Business travel will recover first, followed by family visit and leisure travel.
Local staycation becomes popular.

Passenger

International travelers will most concern with safety.
Wearing masks, checking temperatures, and cleaning hands throughout the journey will be required.

Service

Digital solution will be implemented to reduce touchpoints literally in the check-in and boarding process

Post-COVID-19 Cargo Market Outlook

Potential Business

COVID-19 has led to a major change in consumer behavior toward online channels. Online demand for essentials and entertainment has increased.
Work-from-home triggers a jump in demand for chips, laptops and network goods.

Market Challenge

Appreciation of TWD may have an adverse effect on exports .
-
US China trade war results in a slowdown in economic and industrial output growth.

==> picture [104 x 88] intentionally omitted <==

==> picture [159 x 89] intentionally omitted <==

==> picture [215 x 89] intentionally omitted <==

==> picture [188 x 89] intentionally omitted <==

==> picture [91 x 35] intentionally omitted <==

Proactive COVID-19 Response Strategies

==> picture [682 x 342] intentionally omitted <==

----- Start of picture text -----

Reduce cost and conserve cash
Create business resiliency
Integrate sales and marketing strategy
Rebuild passenger confidence in air travel
Comply with regulations to promote safe travel
----- End of picture text -----

==> picture [53 x 23] intentionally omitted <==

==> picture [45 x 35] intentionally omitted <==

==> picture [39 x 34] intentionally omitted <==

==> picture [59 x 17] intentionally omitted <==

Thank you

# We fly We fight # We will all be fine

China Airlines│No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City, Taiwan TEL│03.399.8888

2020.08