CAL — Investor Presentation 2021

Nov 16, 2021

China Airlines 2021 Investor Conference

Nov 16, 2021 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. Financial Results for First Three Quarters of 2021

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

2. Impact of COVID-19 Pandemic

• 1) Operational Performance Update 2) Industry Environment Update 3) Response to COVID-19 and outlook for post COVID

Financial Results for First Three Quarters of 2021

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4

O eratin Performance –2021Q3 p g

Operating Performance –2021Q3	Operating Performance –2021Q3	Operating Performance –2021Q3	Operating Performance –2021Q3
Consolidated Financial Statistics TWD 100 Million
	2020Q3	2021Q3	YoY %
Operating Revenue	26,612	34,474	29.54%
Net Operating Income (Loss)	-358	3,985	-
Non-Operating Income (Loss)	-817	2,801	-
Net Income (Loss) After Tax	-708	2,917	-
Earnings (Loss) Per Share (TWD)	-0.13	0.51	-

Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million
	2020Q3	2021Q3	YoY %
Passenger Revenue	3,241	1,189	-63.31%
Cargo Revenue	21,509	31,247	45.27%
Other Operating Revenue	1,862	2,038	9.45%
Total Operating Revenue	26,612	34,474	29.54%

O eratin Performance –2021Q1~Q3 p g

Operating Performance –2021Q1~Q3	Operating Performance –2021Q1~Q3	Operating Performance –2021Q1~Q3	Operating Performance –2021Q1~Q3
Consolidated Financial Statistics TWD 100 Million
	2020Q1-Q3	2021Q1-Q3	YoY %
Operating Revenue	85,484	91,675	-7.24%
Net Operating Income (Loss)	-581	4,722	-
Non-Operating Income (Loss)	-2,375	1,098	-
Net Income (Loss) After Tax	-2,022	1,555	-
Earnings (Loss) Per Share (TWD)	-0.37	0.28	-

Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million	Group Revenue TWD 100 Million
	2020Q1-Q3	2021Q1-Q3	YoY %
Passenger Revenue	23,483	4,569	-80.54%
Cargo Revenue	56,046	81,310	45.08%
Other Operating Revenue	5,955	5,796	-2.67%
Total Operating Revenue	85,484	91,675	7.24%

Composition of Op. Revenue -CI

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2020Q1-Q3
Other Op.
Rev 4%
19%24%
Passenger
Rev 24%
67%66%
Cargo Rev
72%
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2021Q1-Q3
Other Op.
Rev 4%
4%
Passenger
Rev 3%
4%
Cargo Rev
93%
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Cargo revenue accounted for 93%, and Passenger and other operating revenue accounted for 3% and 4% respectively in 2021Q1-Q3.

Composition of Op. Expenses -CI

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2020Q1-Q3
2021Q1-Q3
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22.2%
Airport &
Airport &
Ground
Ground
Fuel 28% Handling
Handling
Fuel 22% Labor Cost
Charge 11%
Charge 12%
17%
Others 3% Labor Cost
Others 4%
16%
Pax Service Rental & Pax Service Rental &
2% Depreciation 1% Maitenance Depreciation
Sales &
Sales & 30.7%Maitenance & 17% &
General Adm.
General 19% Amortization Amortization
1%
Adm. 2% 23% 22%
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Fuel cost accounted for 28% of operating expenses due to the increase in fuel price during 2021.

Financial Risk Management (CI)

1.Fuel Cost：Hedging ratio is 4.5% during next six months

		2020 Q1-Q3	2021 Q1-Q3	YoY%
Jet Fuel(MOPS)	USD/BBL	44.04	70.75	60.65%
Fuel Consumption	10KBBL	1,026.71	1,059.95	3.24%
Fuel Expend	TWD/100Million	167.38	223.27	33.39%
HedgingLoss(Gain)	TWD/100Million	0.34	-0.02	-
Total Fuel Cost	TWD/100Million	167.72	223.25	33.11%

2. Exchange rate hedging

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The current cash position of US Dollars well manages to offset the unrealized gains(losses) of the US Dollars liabilities caused by the exchange rate, as the effect of natural hedging.

3. Interest rate hedging

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As of Sep 30 2021, The portion of Fixed-rate borrowing positions was approximate 18%.

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Keeping a close watch on the monetary policy trends of major economies and formulate hedging strategies based on market dynamics.

Impact of COVID-19 PandemicOperational Performance Update

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10

Passenger Performance

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Revenue Composition by Region
16,295 19,075million in 2020Q1-Q3
Australia/
Trans Pacific
▼86% New Zealand
Ocean 31%
5%
Europe 9%
2,579 million in 2021Q1-Q3 Hong Kong
3%
972 1,808 1,433 1,287 612 680 South East Mainland North East
China 23% Asia 2%
Asia 27%
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2020 2021
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• Passenger revenue decreased by 86% to TWD 2,579 million in 2021Q1-Q3.

• Trans Pacific Ocean accounted for the largest share (31%) of revenue, followed by South East Asia and Mainland China with revenue share of 27% and 23% respectively.

Passenger Performance Index

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、
Load Factor ASK (MN) Yield (TWD)
5.7
5.5
10,731 5.2 5.0
67% 4.5 4.5
36%
2.3
26%
16% 17% 20% 17%
1,977
1,342 1,348
811
496 669
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2020 2021 2020 2021
ASK Pax LF
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ASK and load factor decreased by 77% and 43.8ppt respectively while yield was 5.0 which increased by 110% in 2021Q1-Q3.

Impact on Passenger Traffic

• Our frequencies between 2020 and 2021 plunged more than 90% compared to the same period during 2019.

• There was no rebound tendency in demand for passenger transport capacity from 2021 to the third quarter due to the worldwide Alpha and Delta variant, domestic outbreak of epidemics and low vaccinated population in Asia-Pacific.

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5000 0%
4000
3,240
3,315
3,128 3,253 3,229 3,271 3,194 [3,331 ] 3,157 3,247 3,091 3,214 -40%
2,984
3000
2,309
2000
1,150 -80%
-89%
-93%
-95% -93% -96% -96% -96% -96%
-99% -98%
1000
336 160 216 89 231 132 156 187 232 286 346 325
53 86 32 75 149 129 134
0 -120%
Round Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Trips
2019 2020 2021 2021 v.s 2019 Diff%
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Cargo Performance

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Revenue Composition by Region
Australia/
▲45% 81,106million in 2021Q1-Q3
New
31,170
55,894million in 2020Q1-Q3 Trans Zealand
25,798 25,978 Pacific 3%
23,400 23,958 Europe
21,448 Ocean
8%
Hong Kong
61%
4%
11,046 North East
Mainland
Asia
China
5%
South
6%
East Asia
Q1 Q2 Q3 Q4 Q1 Q2 Q3 13%
2020 2021
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• Cargo revenue totaled TWD 81,106 million, a 45% increase, in 2021Q1-Q3.

• Trans Pacific Ocean accounted for the largest share(61%) of revenue, followed by Southeast Asia and Europe with revenue share of 13% and 8% respectively.

Cargo Performance Index

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、
Load Factor FATK (MN) Yield (TWD)
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1,802 2,092 2,392 2,542 2,329 2,328 2,669 69% 72% 73% 74% 76% 76% 75% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 FATK CGO LF	8.8 15.6 12.3 13.8 13.5 14.7 15.6	8.8 15.6 12.3 13.8 13.5 14.7 15.6
	Q1 Q2 Q3 Q4 2020	Q1 Q2 Q3 2021

FATK increased by 17% and load factor grew 4.03 ppt. Yield was 15.6 which increased by 18% in 2021Q1-Q3.

Impact of COVID-19 PandemicIndustry Environment Update

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16

2020-2021 Air Passenger／Freight Demand

International Air Passenger(RPK)／Freight(CTK) （%YoY, vs 2019）

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2020 [RPK][ ↓ ][75.6%] 2021 RPK ↓ 80.2%
20% CTK ↓ 11.8% (til Sep) CTK ↑ 8.7%
1.2% Freight
0%
-29.5%
-20%
2021/1
-40%
1 [st] positive growth
vs. pre-pandemic level
-60% APR 2020
low point Passenger
-80%
-98.4%
-100%
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Demand of PaxMarket is far below the pre-crisis levels

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International Pax Traffic decreased by 69.2% in Sep,2021. and decreased by 80.2% from Jan to Sep, which is still far lower than the pre epidemic level.

The recovery of international pax market of airlines in the Asia lags behind other regions, because delta variant virus epidemic and strict border control measures. YoY% International Pax capacity/traffic/LF

International Capacity/Traffic

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20% Capacity 100% 2021/01~09 （international capacity）
2021/01~09 （international traffic）
0%
80%
-20% LF Traffic 0% -50% -100%
-40% 60% -94.5%
Asia
-86.5%
-60%
40%
2020 (vs 19) 2021YTD (vs 19)
-80% Capacity -68.1% Capacity -69.9% Middle -76.7%
Traffic -75.6% Traffic -80.2% 20% East -61.5%
-100% LF 62.8% LF 54.2%
-74.7%
-120% 0% Europe
2019 2020 2021 -65.1%
Year 202101 202102 202103 202104 202105 202106 202107 202108 202109 Latin -73.3%
America
Capacity -74.4% -77.9% -77.4% -76.0% -74.6% -71.0% -63.8% -59.0% -59.1% -67.3%
Yoy%
Traffic -85.6% -88.7% -87.8% -87.3% -85.1% -80.9% -73.6% -68.8% -69.2% North -71.0%
Yoy% America -56.7%
LF % 44.9% 40.8% 43.7% 43.8% 47.3% 55.2% 62.1% 65.3% 61.6%
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• ※ 2021 (vs the same month in 2019)

• ※ 2021 (vs the same month in 2019)

Impact of COVID-19 PandemicResponse to COVID-19 and outlook for post COVID

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19

Air cargo continue to rise

Demand surge still spread across various sectors from hi-tech, automotive to pharma.

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E-commerce contributed to robust air demand.

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Cargo demand remains strong amidst the upcoming e-commerce heavy events(Black Friday, Singles Day) and holiday shopping along with new tech product launched.

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Healthy PMI index, historically low I/S ratio & peak season indicate strong air cargo demand.

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Continued conversion of ocean freight to air as US port congestion worsens.

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Yields elevated, load factors close to historical highs

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Air cargo continue to rise, trend above goods trade

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Ease travel restrictions for vaccinated tourists

Government policies will play a huge role in air traffic recovery, with travel restrictions mostly impacting cross-border flights.

More and more countries beginning to reopen was not only welcome news to airlines but also represents a structural improvement in the international travel landscape.

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2021 JUL
2021/11/01 Countries for Taiwan vaccinated travelers can visit
travel restriction
29%
36%
completely closed
34% partially closures
testing or quarantine
2021 NOV
travel restriction
The travel status of individual
countries can change suddenly. 17%
26%
Entry is restricted
57% testing or quarantine
travel is open
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Passenger volume recovery projection

Looking ahead to projected air traffic into July 2022

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Most major flows are expected to recover by 2023 or 2024 Projected recovery by region , index(2019=100)

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For intraregional flights, we expect close to full recovery as early as 2022.

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Baseline scenario projection of G20 countries’ total airline passenger volume in July 2022, as percentage of July 2019 numbers.

Overall air traffic demand will still be hampered by the low level of interregional flights, which is currently at 20 percent of pre-COVID-19 levels.

Operational strategies during pandemic

• Mainly rely on air cargo supplemented by passenger service, during pandemic air cargo is our core source of revenue.

• ：

• Cargo Differentiation pricing strategy, maximize cargo capacity, consolidate source of goods, optimize rate structure, hold on to cargo business opportunities.

• ：

• Passenger Stay ahead of market trends, maintain schedule stability, consolidate rigid demand and pay a close attention to border & quarantine-free policy.

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Fleet Cargo Flexible Financial
Fly Safe
Planning Biz Schedule Stability
 Max capacity
Fleet modernization  Belly hold  Passenger aircraft for cargo  “IATA Travel Pass” trial  Stable cash-flow
Expand cargo fleet  21 Freighter demand  Disinfection & deep cleaning  Adequate liquidity
 Market opportunity  Schedule stability  Fly safe information & Service  Minimize costs
 (core routes)  Touchless services
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 Fleet modernization
 Expand cargo fleet
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• Sea-to-Air conversions

• Aircrew Safety and Health

• Charter

• Board package

• Valuable cargo

CAL Expands Cargo Service

CAL leverages Taiwan’s strategic position and cargo capacity during the pandemic, increasing by 23% of schedule flights per week . The overall weekly capacity will be up to 130 flights including charter flights in 2021.

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• Fully utilize CAL 18 747-400 freighters

• Leverage belly space to support cargo demand

• Maintain high efficiency with 3 777F operation

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• Monthly route review and flexible route adjustment

• Prioritize high-yield goods and regular project shipment for route profit boost

• Pursue high yield charter to uplift load factor and revenue

The fifth cargo capacity in the world

• IATA ranked China Airlines the fifth in the world in terms of cargo capacity, three places higher than 2019, ranking first among Asian airlines. It also ranked ninth in

the world in terms of CTK.

2020 Top 10 Airlines: Ranked by Cargo Traffic

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25

Flight Schedule Adjusted in Line with Market Demand

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

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Operate selected routes to maintain network connectivity, and enhance revenue management .

Gradually resume flights to align with boarder reopening, regional business travel needs and travel bubbles.

Operate charter flights to generate revenue.

Resume Passenger flights as borders progressively reopen

• - Asia Pacific :

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Indonesia： CECChas removed Indonesia from list of high-risk countries. flight services to Jakarta have resumed since 20[th] Oct.

： Myanmar having been removed from list of high-risk countries because of the Delta variant by CECC since 6[th] Nov. Flight services will resume according to market demand.

： Singapore It is going to the scheme of “ Vaccinated TravellersLane “ to welcome the reopen to foreign visitors. Flight frequency tends toward stability.

• Oceania：

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•

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Australia： Australia’s international borders have progressively reopened since 1st Nov. New Zealand： Non-New Zealand citizens as fully vaccinated are permitted to travel to New Zealand from 1[st] Nov. Bookings on our current ANZ flights will increase after travellrestrictions were lifted. USA： From 8[th] Nov, borders reopen to Non US citizens who must be fully vaccinated. We have responded to maintain stable flight operations to and from several gateways in US. UK： having been removed from list of high-risk countries because of the Delta variant by CECC since 6[th] Nov. Flight services to and from London will resume in Dec.

Cargo opportunity | Passenger recovery

• Economic recovery , strong cargo demand, seato-air conversions, supply chain disruption, low inventory, air cargo becomes a sellers' market, freight rates at a higher level and outlook for cargo stays positive.

• Stay ahead of market trends, seize the chance to manage rate, ship high-value goods as priority, schedule flexible cargo operation, optimize revenue.

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International cargo Traffic
(thousand tonne)
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Market Dynamics & Demand

Source of Goods Restock Inventory （Bulk、Heavy、Value） （Low inventory） Sea-to-Air Flexible Pricing Conversions Strategy

• Increasing vaccination coverage, reopening of international travel , new international travel vaccine rules, herd immunity is the key to lead the way in travel recovery.

• Introduce Airbus A321neo, featuring the new touchless Audio and Video On Demand (AVOD) system to meet post Covid-19 passenger demand.

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International pax Traffic
(100 million RP)
100,000,000 RP
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Demand, Border & Quarantine
Schedule Stability Epidemic Prevention
& Manpower Demand
A321neo Delivery Strengthen Revenue
management system
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Proactive COVID-19 Response Strategies

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Comply with
Conserve cash-
regulations to
flow & lower the promote safe travel
Integrate sales
cost
and marketing
strategy
Rebuild
Maintain business
passenger
continuity and
confidence in
stability
air travel
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Fleet status

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2021
2021 2022 2022
Oct
Oct Dec
Boeing 747-400F
18 18
Boeing 737-800
15 (-3) 12 Freighters
Narrow Boeing 777F
Body Airbus 321neo 3 (+2) 5
(+10)
0 10
Freighters 21 23
Airbus 350-900
14 14
Boeing 777-300ER
10 10
2022年
Wide
Body Airbus 330-300 23 (-2) 21 67 Airline industry will recover, especially start from
regional market
Boeing 747-400
sold 0
23 Due to port congestion ,Lack
of cargo capacity remains
a key obstacle for the rising
2021 OCT
Passengers 62 67 Total 83 aircraft 90 demand,.
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S&P revised rating outlook to stable

		Rating Organization		Long-Term Rating	Outlook	Rating Date
			Taiwan Ratings	twBBB+	Stable	2021/10/28
		Taiwan Ratings		twBBB+	Negative	2020/3/16
		Taiwan Ratings		twBBB+	Stable	2019/10/30
CAL isthe firstairline that received revised rating outlook to stable in Asia

CAL is the first airline that received revised rating outlook to stable in Asia

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Sustainability We Care

• The only Taiwanese airline selected for DJSI Emerging Markets for six consecutive years.

• China Airlines ranked in 2[nd] place among the world's airlines(DJSI ).

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Excellent Corporate Governance

2014-2021

7 consecutive years Top 6%-20% TWSE/TPEx listed companies in the seventh corporate governance review.

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Pioneer in Environmental Protection

2012-2020

9 consecutive years Achieved great CDP score on climate change

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Establish Happy Workplace

5 consecutive years Taiwan High Compensation 100 Index (HC 100) Taiwan Employment Creation 99 Index (EMP 99)

2017-2021

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2021.11

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