TravelSky Technology Limited — Proxy Solicitation & Information Statement 2009

May 25, 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, stock broker, solicitor, professional accountant or other appropriate independent advisers.

If you have sold or transferred all your shares in TravelSky Technology Limited , you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Stock Code: 0696)

CONTINUING CONNECTED TRANSACTIONS AND NOTICE OF EGM

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on pages 1 to 8 of this circular. A letter from the Independent Board Committee is set out on page 9 of this circular. A letter from China Merchants containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 10 to 20 of this circular.

A notice convening the EGM to be held at Conference Room of the Company, 8/F, No. 157, Dongsi West Street, Dongcheng District, Beijing, the People’s Republic of China at 11 a.m. on Friday, 10 July 2009 is set out on pages 25 to 27 of this circular. Whether or not you intend to be present at the EGM, you are requested to complete and return the same to the branch share registrar of the Company in Hong Kong, Hong Kong Registrars Ltd. at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (in case of holders of H shares) or the registered office of the Company at Floor 18-20, South Wing, Park C, Raycom InfoTech Park, No. 2 Ke Xue Yuan South Road, Haidian District, Beijing, the People’s Republic of China (in case of holders of domestic shares), no later than 24 hours before the time fixed for holding the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not prevent you from attending, and voting at, the EGM or any adjournment thereof if you so wish.

25 May 2009

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . .	9
LETTER FROM CHINA MERCHANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

— i —

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“2006 Circular”

the Company’s circular dated 7 April 2006 in relation to, among other things, the Existing Southern Airline Services Agreement

“Annual Caps”

the expected maximum amount of fees payable by Southern Airlines under the Southern Airline Services Agreement for the year ending 31 December 2009

“associate(s)”

have the same meaning ascribed to it under Chapters 1 and 19A of the Listing Rules

“Board”

the board of the Directors

“CAAC”

中國民用航空局 (Civil Aviation Administration of China), the administrative authority in the civil aviation industry in the PRC

“China Merchants”

China Merchants Securities (HK) Co., Ltd., the independent financial adviser to the Independent Board Committee and the Independent Shareholders and a corporation licensed to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO

“Company”

TravelSky Technology Limited, a company incorporated under the laws of the PRC whose Shares are listed on the Stock Exchange and whose American depositary shares are traded on the over-the-counter market in the United States

• “Continuing Connected Transactions”

the transactions contemplated under the Southern Airline Services Agreement

“Directors”

the directors of the Company

“EGM”

extraordinary general meeting of the Company convened to be held on 10 July 2009 for the purpose of approving the Continuing Connected Transactions and the Annual Caps by the Independent Shareholders, and the notice of which is set out on pages 25 to 27 of this circular

— ii —

DEFINITIONS

“Existing Southern Airline the agreement dated 23 January 2006 and entered into between Services Agreement” the Company and Southern Airlines in relation to the Technology Services, particulars of which are set out in the 2006 Circular

• “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Independent Board Committee” the independent board committee of the Company established by the Company which comprises Yick Wing Fat, Simon, Yuan Yaohui and Chua Keng Kim to advise the Independent Shareholders in respect of the Continuing Connected Transactions and the Annual Caps

• “Independent Shareholders” the shareholders of the Company, other than Southern Airlines and its associates (if holding Shares at the EGM)

• “Latest Practicable Date” 20 May 2009, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Percentage Ratios” the percentage ratios, other than the profits ratio and equity capital ratio, under Rule 14.07 of the Listing Rules as calculated on an annual basis

• “PRC” the People’s Republic of China “Promoter” promoter of the Company “RMB” Renminbi, the lawful currency of the PRC “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)” H share(s) of RMB1.00 each in the capital of the Company “Shareholder(s)” shareholder(s) of the Company

— iii —

DEFINITIONS

• “Southern Airline Services Agreement”

the agreement dated 7 May 2009 and entered into between the Company and Southern Airlines in relation to the Technology Services

• “Southern Airlines”

China Southern Airlines Company Limited（中國南方航空股份有 限公司）, a subsidiary of Southern Holding

“Southern Holding”

• China Southern Air Holding Company（中國南方航空集團公司）, a shareholder of the Company and a Promoter

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Technology Services”

various aviation information technology services and ancillary support to be provided by the Group to Southern Airlines as set out in the paragraph headed “Continuing Connected Transactions” in the Letter from the Board in this circular

“%” per cent.

For the purpose of this circular, unless otherwise indicated, the exchange rate at HK$1= RMB0.88 has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amount have been, could have been or may be exchanged.

— iv —

LETTER FROM THE BOARD

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(Stock Code: 0696)

Directors: Xu Qiang (Chairman) Cui Zhixiong Xiao Yinhong Wang Quanhua[#] Luo Chaogeng[#] Cao Guangfu[#] Yick Wing Fat, Simon[##] Yuan Yaohui[##] Chua Keng Kim[##]

Registered office:

Floor 18-20, South Wing, Park C Raycom InfoTech Park No. 2 Ke Xue Yuan South Road Haidian District, Beijing 100190 the PRC

# Non-executive Directors

## Independent non-executive Directors

25 May 2009

To the Shareholders

Dear Sir/Madam

CONTINUING CONNECTED TRANSACTIONS AND NOTICE OF EGM

1. BACKGROUND

As set out in the Company’s announcement dated 12 May 2009, the Company has entered into the Southern Airline Services Agreement and the Directors propose to seek the Independent Shareholders’ approval for the Continuing Connected Transactions and the Annual Caps at the EGM.

— 1 —

LETTER FROM THE BOARD

The purposes of this circular are to provide you with, among other things, (i) further details of the Continuing Connected Transactions; (ii) a letter of advice from China Merchants to the Independent Board Committee and the Independent Shareholders on the Continuing Connected Transactions and the Annual Caps; (iii) the recommendation of the Independent Board Committee regarding the Continuing Connected Transactions and the Annual Caps to the Independent Shareholders; and (iv) a notice of the EGM to consider, if thought fit, and approve the resolution in respect of the Continuing Connected Transactions and the Annual Caps.

2. CONTINUING CONNECTED TRANSACTIONS

Background

As set out in the 2006 Circular, the Company entered into the Existing Southern Airline Services Agreement with Southern Airlines pursuant to which the Group shall provide the Technology Services to Southern Airlines from 1 January 2005 to 31 December 2008. The Existing Southern Airline Services Agreement expired on 31 December 2008. The Company and Southern Airlines entered into the Southern Airline Services Agreement.

Particulars of the Southern Airline Services Agreement are set out below:

Date : 7 May 2009 Parties : The Company (as provider of the Technology Services); and Southern Airlines (as recipient of the Technology Services) (Note) Term : 1 January 2009 to 31 December 2009

Note: According to the confirmation letter dated 7 May 2009 issued by Chongqing Airlines Company Limited （重慶航空有限責任公司）and the confirmation letter dated 7 May 2009 issued by Xiamen Airlines Company Limited（廈門航空有限公司）under the Southern Airline Services Agreement, reference to Southern Airlines includes Xiamen Airlines Company Limited（廈門航空有限公司）and Chongqing Airlines Company Limited（重慶航空有限責任公司）.

— 2 —

LETTER FROM THE BOARD

3. SERVICES TO BE PROVIDED UNDER THE SOUTHERN AIRLINE SERVICES AGREEMENT

Services :

The services to be provided by the Group to Southern Airlines under the Southern Airline Services Agreement will cover:

• (i) flight control system services which provide, among other services, the consolidated information, flight formation, flight control, flight tickets sales, automatic tickets sales and announcement of freight price;

• (ii) electronic travel distribution system services which provide, among other services, flight information display, real-time flight reservation, automatic tickets sales, tickets price display and other travel-related services;

• (iii) airport passenger processing system services which provide check-in, boarding and load planning services; and

• (iv) civil aviation and commercial data network services which provide, among other services, the network transmission services and connection services.

Service fees :

The service fees for the Technology Services payable by Southern Airlines under the Southern Airline Services Agreement are currently determined in accordance with the existing pricing schedule prescribed by CAAC, which is same as the one disclosed in the Company’s prospectus dated 29 January 2001.

In accordance with CAAC’s prescribed prices, depending on the types of system through which the transactions are processed, Southern Airlines is required to pay the Company a per passenger booking fee for domestic routes ranging from RMB4.5 to RMB6.5 depending on the monthly booking volume and for international and regional routes ranging from RMB6.5 to RMB7.

In addition, the fees payable by Southern Airlines to the Company for the services include (i) fees for each boarding passenger handled by the airport passenger processing system up to maximum allowable price of RMB7 for international and regional routes and up to a maximum of allowable price of RMB4 for domestic routes depending on the types of the route, volume, level of services etc, (ii) load balancing fees for each flight handled by the airport passenger processing system up to maximum allowable price of RMB500 depending on the size of the aircraft, and (iii) fees for using the Company’s data network services such as physical identified device (PID) connection fees and maintenance fees depending on type and quantity of equipment at the rate prescribed by CAAC.

— 3 —

LETTER FROM THE BOARD

The service fees shall be calculated on monthly basis and shall be paid within 30 days after receipt of the invoice by cash. The invoice shall be issued by the Company on the 20[th] day of each month for the amount charged for the immediately preceding month.

The Directors are of the view that the basis of determination of the service fees mentioned above is fair and reasonable.

4. INFORMATION ON SOUTHERN AIRLINES

Southern Airlines is a subsidiary of Southern Holding (a Promoter). As an associate of a Promoter, Southern Airlines is a connected person of the Company under Rule 14A.11(4) of the Listing Rules. Southern Airlines is principally engaged in the provision of domestic, Hong Kong and Macau and international passenger, cargo and mail airline services. It is also a company listed on the Main Board of the Stock Exchange.

5. HISTORICAL TRANSACTION RECORDS

Set out below is a summary of the amount of the transactions between Southern Airlines and the Company for the three years ended 31 December 2008:

Year ended 31 December

2006 2007 2008 RMB300,552,000 RMB347,507,000 RMB336,495,000 (equivalent to approximately (equivalent to approximately (equivalent to approximately HK$341,536,000) HK$394,894,000) HK$382,381,000)

6. HISTORICAL ANNUAL CAPS

As set out in the 2006 Circular, the annual caps for the transactions under the Existing Southern Airline Services Agreement for the three years ended 31 December 2008 are RMB374,500,000, RMB487,000,000 and RMB633,000,000 respectively.

— 4 —

LETTER FROM THE BOARD

7. ANNUAL CAPS

Set out below is a summary of the Annual Caps of the Continuing Connected Transactions entered or to be entered between Southern Airlines and the Company under the Southern Airline Services Agreement for the year ending 31 December 2009 is RMB403,794,000 (equivalent to approximately HK$458,857,000).

The Annual Caps set out above are determined by reference to (i) the historical transaction amounts of the Continuing Connected Transactions for the year ended 31 December 2008; and (ii) the estimated growth of the transaction volume taking into account of the anticipated growth of the China’s aviation and travel industry as well as the increasing frequency of business trips. The Directors estimate that the Continuing Connected Transactions will increase by about 15% to 20% per annum and 20% is used in determining the amount of the Annual Caps under the Southern Airline Services Agreement.

The Directors are of the view that the Annual Caps are fair and reasonable.

8. REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS

The Group is principally engaged in provision of aviation information technology services in the PRC as well as provision of accounting, settlement and clearing services and information system development and support services to domestic and worldwide airline companies.

The provision of the Technology Services to Southern Airlines is in the ordinary and usual course of business of the Group. The Group will receive service fees for the Technology Services from Southern Airlines under the Southern Airline Services Agreement and thus, will increase the total revenue of the Group.

The Continuing Connected Transactions have been and will be conducted in the ordinary and usual course of business of the Group.

The Directors are of the view that the Continuing Connected Transactions are on normal commercial terms and the terms of the Continuing Connected Transactions are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

— 5 —

LETTER FROM THE BOARD

9. LISTING RULES REQUIREMENTS

Given that Southern Airlines is a connected person of the Company as mentioned above, the Continuing Connected Transactions constitute continuing connected transaction for the Company under Chapter 14A of the Listing Rules.

Since the Percentage Ratios for the Continuing Connected Transactions on an annual basis exceed 2.5%, the Continuing Connected Transactions are subject to the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules.

The Company will disclose information in relation to the Continuing Connected Transactions in its subsequent published annual report and accounts in accordance with Rule 14A.45 of the Listing Rules.

10. THE EGM

The EGM will be held at Conference Room of the Company, 8/F, No. 157, Dongsi West Street, Dongcheng District, Beijing, the PRC at 11 a.m. on 10 July 2009 to consider and, if thought fit, approve, among other matters, the transactions contemplated under the Continuing Connected Transactions and the Annual Caps. Notice of the EGM is set out on pages 25 to 27 of this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you intend to be present at such meetings, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Registrar at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (in case of holders of H Shares) or the Company’s registered office at Floor 18-20, South Wing, Park C, Raycom InfoTech Park, No. 2 Ke Xue Yuan South Road, Haidian District, Beijing, the PRC (in case of holders of domestic shares of the Company), no later than 24 hours before the time fixed for holding the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not prevent you from attending, and voting at, the EGM or any adjournment thereof if you so wish.

— 6 —

LETTER FROM THE BOARD

11. VOTING ARRANGEMENTS

Under the Listing Rules, the Continuing Connected Transactions and the Annual Caps are subject to the approval of the Independent Shareholders. Accordingly, Southern Airlines with a material interest in the Continuing Connected Transactions and its associates will abstain from voting on the resolution to approve the Continuing Connected Transactions and the Annual Caps. As at the Latest Practicable date, Southern Holding, the holding company of Southern Airlines, was interested in 232,921,000 domestic shares of RMB1 each in the issued share capital of the Company, representing about 11.94% of the total issued share capital of the Company, and Xiamen Airlines Company Limited（廈門航空 有限公司）, a subsidiary of Southern Holding, was interested in 43,849,000 domestic shares of RMB1 each in the issued share capital of the Company, representing about 2.25% of the total issued share capital of the Company.

12. POLL PROCEDURE

Pursuant to Rule 13.39 of the Listing Rules, all votes of the Shareholders at the EGM must be taken by poll.

Pursuant to article 73 of the Articles of Association of the Company, voting by poll can be demanded:

• (i) by the chairman of such meeting;

• (ii) by at least two Shareholders present in person or by proxy for the time being entitled to vote at the meeting; or

• (iii) by shareholder(s) of the Company present in person or by proxy(ies) and holding 10% or more Shares conferring a right to vote at the meeting on his/her own or in aggregate.

— 7 —

LETTER FROM THE BOARD

13. RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee set out on page 9 of this circular and the letter of advice from China Merchants to the Independent Board Committee and the Independent Shareholders in connection with the Continuing Connected Transactions and the Annual Caps and the principal factors and reasons considered by it in arriving at such advice set out on pages 10 to 20 of this circular.

The Independent Board Committee, having taken into account the advice of China Merchants, considers that the Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole, and the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution approving the Continuing Connected Transactions and the Annual Caps at the EGM.

14. GENERAL

Your attention is drawn to the general information set out in the appendix to this circular.

Yours faithfully, By order of the Board TravelSky Technology Limited Xu Qiang Chairman

— 8 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Stock Code: 0696)

25 May 2009

To the Independent Shareholders

Dear Sir/Madam,

CONTINUING CONNECTED TRANSACTIONS

We refer to the circular (“ Circular ”) issued by the Company to its shareholders dated 25 May 2009 of which this letter forms part. Capitalised terms defined in the Circular shall have the same meanings in this letter unless the context otherwise requires.

We have been appointed by the Board to consider the Continuing Connected Transactions. China Merchants has been appointed as independent financial adviser to advise us and the Independent Shareholders in this respect.

We wish to draw your attention to the letter from the Board and the letter from China Merchants set out in the Circular. Having considered the principal factors and reasons considered by, and the advice of, China Merchants set out in its letter of advice set out in the Circular, we consider that the Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole, and the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution approving the Continuing Connected Transactions and the Annual Caps at the EGM.

Yours faithfully,

For and on behalf of the

Independent Board Committee

Yick Wing Fat, Simon Yuan Yaohui Chua Keng Kim

Independent Non-executive Directors

— 9 —

LETTER FROM CHINA MERCHANTS

The following is the text of the letter of advice from China Merchants to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of inclusion in this circular.

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48th Floor, One Exchange Square, Central, Hong Kong

25 May 2009

TravelSky Technology Limited Floor 18-20, South Wing, Park C, Raycom InfoTech Park, No. 2 Ke Xue Yuan South Road, Haidian District, Beijing 100190, the PRC

• To: the Independent Board Committee and the Independent Shareholders of TravelSky Technology Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions and the Annual Caps, details of which are contained in the letter from the Board (the “ Letter from the Board ”) of the circular dated 25 May 2009 (the “ Circular ”) issued by the Company to the Shareholders, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

As referred to in the Letter from the Board, Southern Airlines is a connected person of the Company under the Listing Rules. Thus, the transactions contemplated under the Southern Airline Services Agreement constitute continuing connected transaction for the Company under Chapter 14A of the Listing Rules. Given that the Percentage Ratios for the Continuing Connected Transactions on an annual basis exceed 2.5%, the Continuing Connected Transactions constitute non-exempt continuing connected transaction for the Company under Chapter 14A of the Listing Rules. Thus, the Continuing Connected Transactions are subject to the approval by the Independent Shareholders at the EGM.

— 10 —

LETTER FROM CHINA MERCHANTS

In our capacity as the independent financial adviser to the Independent Board Committee and the Independent Shareholders, our role is to provide you with an independent opinion and recommendation as to (1) whether the Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole; and (2) whether the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

BASIS OF OUR OPINION

In formulating our advice and recommendation, we have relied on the accuracy of the information and facts supplied, and the opinions expressed by the Group, the Directors and the Group’s management to us. We have assumed that all statements of belief and intention made by the Directors in the Circular were made after due enquiries. We have also assumed that all information, representations and opinion made or referred to in the Circular were true, accurate and complete at the time they were made and will continue to be true at the date of the EGM. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Group, the Directors and the Group’s management, and have been advised by the Directors that no material facts have been omitted from the information provided by or referred to in the Circular.

In rendering our opinion, we have researched, analyzed and relied on information in relation to the Group, the Continuing Connected Transaction and the Annual Caps as set out below:

• (i) the Southern Airline Services Agreement;

• (ii) the Existing Southern Airline Services Agreement;

• (iii) the annual report of the Company for the year ended 31 December 2007 (the “ 2007 Annual Report ”);

• (iv) the annual report of the Company for the year ended 31 December 2008 (the “ 2008 Annual Report ”);

• (v) the official website of the Company;

• (vi) the 2006 Circular; and

• (vii) the Circular.

— 11 —

LETTER FROM CHINA MERCHANTS

We have also researched, analyzed and relied on information as set out below:

• (i) the annual report of Southern Airlines for the year ended 31 December 2008;

• (ii) China Statistical Yearbook 2008（《中國統計年鑑－2008年》）published by the National Bureau of Statistics of China（中華人民共和國國家統計局）;

• (iii) the report headed “Production statistics report for civil aviation airports in 2007”（《2007年民航機場 生產統計公報》）published on the official website of CAAC on 6 March 2008; and

• (iv) the report headed “Production statistics report for civil aviation airports in 2008”（《2008年民航機場 生產統計公報》）published on the official website of CAAC on 16 March 2009.

We have assumed such information to be accurate and reliable and have not carried out any independent verification on the accuracy of such information. Such relevant information provides us with a basis on which we have been able to formulate our independent opinion.

We consider that we have reviewed sufficient information to reach an informed view, to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We also consider that we have performed all reasonable steps as required under Rule 13.80 of the Listing Rules (including the notes thereto) to formulate our opinion and recommendation. We have not, however, conducted any form of in-depth investigations into the business affairs, financial position and future prospects of the Group and the parties to the Continuing Connected Transactions, nor carried out any independent verification of the information supplied, representations made or opinions expressed by the Group, the Directors and the Group’s management.

— 12 —

LETTER FROM CHINA MERCHANTS

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation regarding the Continuing Connected Transactions and the Annual Caps, we have taken into account the following principal factors and reasons:

I. BACKGROUND

1. Information on the Group

The Group is principally engaged in provision of aviation information technology services in the PRC. As referred to in the 2008 Annual Report, being a leading provider of information technology solutions for the China’s aviation and travel industry, the Group is at a core position along the value chain of China’s aviation and travel service distribution. While the Group provides advanced aviation information technology and extended services to the Chinese commercial airlines, it also distributes commercial airline products and services to travel agents, travel service distributors, ticketing offices, corporate clients and individual consumers.

The Group’s turnover for each of the three years ended 31 December 2008 is set out below:

		Year ended 31 December
	2006	2007	2008
	(RMB’000)	(RMB’000)	(RMB’000)
	(Audited)	(Audited)	(Audited)
The Group’s turnover	1,711,705	2,001,903	2,005,168

Source: the 2007 Annual Report and the 2008 Annual Report

— 13 —

LETTER FROM CHINA MERCHANTS

The Group’s information in respect of bookings of seats of commercial airlines of the PRC for each of the four years ended 31 December 2008 is set out below:

Bookings of seats of commercial airlines of the PRC

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

250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
2005 2006 2007 2008
Year
Bookings
----- End of picture text -----

Source: the official website of the Company

From the year ended 31 December 2006 to the year ended 31 December 2008, (i) the Group’s audited turnover achieved a compound average growth rate (“ CAGR ”) of approximately 8.2% per annum; and (ii) the Group’s total bookings on seats of flights of commercial airlines of the PRC achieved a CAGR of approximately 10.5% per annum. As advised by the Directors, the growth in the Group’s turnover and total bookings of seats of flights of commercial airlines of the PRC were attributable to: (i) the rapid economic growth in the PRC; (ii) the increase of international trade between the PRC and other countries; and (iii) the growing aviation and tourist industries in the PRC.

— 14 —

LETTER FROM CHINA MERCHANTS

2. Information on Southern Airlines

Southern Airlines is a promoter of the Company and is principally engaged in airline operations of the PRC. Set out below is the audited operating revenue of Southern Airlines from 2006 to 2008 (prepared under the International Financial Reporting Standards (“ IFRS ”)):

		Year ended 31 December
	2006	2007	2008
	(RMB’million)	(RMB’million)	(RMB’million)
	(restated)	(restated)
	(Audited)	(Audited)	(Audited)
Southern Airline’s audited
operating revenue
(prepared under the IFRS)	46,081	54,401	55,288

Source: the annual report of Southern Airlines for the year ended 31 December 2008

Based on the above, we noted that, from the year ended 31 December 2006 to the year ended 31 December 2008, the audited operating revenue of Southern Airlines achieved a CAGR of approximately 9.5%. We consider that the aforesaid increase in the audited operating revenue of Southern Airlines demonstrated the business growth of this airline.

3. Economy and aviation industry in the PRC

Based on (i) the report headed “Production statistics report for civil aviation airports in 2008” （《2008年民航機場生產統計公報》）published on the official website of CAAC on 16 March 2009; and (ii) the report headed “Production statistics report for civil aviation airports in 2007” （《2007年民航機場生產統計公報》）published on the official website of CAAC on 6 March 2008, the number of passenger traffic of the PRC airports (measured by number of passengers) in the PRC increased from approximately 387.6 million for the year ended 31 December 2007 to approximately 405.8 million for the year ended 31 December 2008, representing an increase of approximately 4.7%.

Based on China Statistical Yearbook 2008（《中國統計年鑑－2008年》）published by the National Bureau of Statistics of China（中華人民共和國國家統計局）, from 2000 to 2007, the PRC’s Gross Domestic Product increased from approximately RMB9,921 billion to approximately RMB24,953 billion, representing a CAGR of approximately 14.1% per annum.

Taking into account (i) the robust growth in the passenger traffic of the aviation industry in the PRC; (ii) the steady growth of the Gross Domestic Product of the PRC; and (iii) the CAGR of the Group’s turnover of approximately 8.2% per annum from the year ended 31 December 2006 to the year ended 31 December 2008, the Directors expect that the Group’s turnover will continue to achieve a growth in the coming years.

— 15 —

LETTER FROM CHINA MERCHANTS

II. THE SOUTHERN AIRLINE SERVICES AGREEMENT

1. Reasons for and benefits of the entering into of the Southern Airline Services Agreement

The details of the Existing Southern Airline Services Agreement were already set out in the 2006 Circular, and such agreement was already approved at the extraordinary general meeting of the Company held on 25 May 2006, and it subsequently expired on 31 December 2008. As advised by the Directors, the Company and Southern Airlines agreed to enter into the Southern Airline Services Agreement for the year ending 31 December 2009.

After reviewing the Southern Airline Services Agreement, we noted that the Technology Services provided under such agreement are similar to (i) the core business of the Group; and (ii) the transactions contemplated under the Existing Southern Airline Services Agreement. In light of the above, we consider that the entering into of the Southern Airline Services Agreement is in the ordinary and usual course of business of the Group. In addition, we concur with the Directors’ view that the Continuing Connected Transactions would offer an important source of revenue to the Group.

2. The terms of the Southern Airline Services Agreement

As referred to in the Letter from the Board, the service fees for the Technology Services payable by Southern Airlines under the Southern Airline Services Agreement are currently determined in accordance with the existing pricing schedule prescribed by CAAC, which is the same as the one disclosed in the Company’s prospectus dated 29 January 2001. We have discussed with the Directors and were informed that the services fees to be charged by the Group under the Southern Airline Services Agreement are governed by the aforesaid pricing schedule prescribed by CAAC.

In accordance with CAAC’s prescribed prices, depending on the type of system through which the transactions are processed, Southern Airlines is required to pay the Company a per passenger booking fee for domestic routes ranging from RMB4.5 to RMB6.5 depending on the monthly booking volume, and for international and regional routes ranging from RMB6.5 to RMB7.

In addition, the fees payable by Southern Airlines to the Company for the services include (i) fees for each boarding passenger handled by the airport passenger processing system up to maximum allowable price of RMB7 for international and regional routes and up to a maximum of allowable price of RMB4 for domestic routes depending on the types of the route, volume, level of services etc.; (ii) load balancing fees for each flight handled by the airport passenger processing system up to maximum allowable price of RMB500 depending on the size of the aircraft; and (iii) fees for using the Company’s data network services such as physical identified device connection fees and maintenance fees depending on type and quantity of equipment at the rate prescribed by CAAC.

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LETTER FROM CHINA MERCHANTS

In this regard, we have reviewed the services fees to be charged by the Group under the Southern Airline Services Agreement, and noted that they are within the respective price ranges prescribed by CAAC. Based on the aforesaid, we consider that the service fees for the Technology Services under the Southern Airline Services Agreement, which is based on the price ranges prescribed by CAAC, is on normal commercial terms and is fair and reasonable so far as the Independent Shareholders are concerned.

Overall, we consider that the terms of the Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

III. THE ANNUAL CAPS

1. The Annual Caps

Set out below is a summary of the annual caps for (i) the Southern Airline Services Agreement for the year ending 31 December 2009; and (ii) the Existing Southern Airline Services Agreement for the year ended 31 December 2008:

		Annual caps	Annual caps
	For the year ended		For the year ending
		31 December 2008	31 December 2009
		(RMB)	(RMB)
Southern	Airline Services Agreement	N/A	403,794,000
Existing	Southern Airline Services Agreement	633,000,000	N/A
		(Note)

Note: as set out on page 8 of the 2006 Circular

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LETTER FROM CHINA MERCHANTS

2. The historical transaction amounts of the Existing Southern Airline Services Agreement

Set out below is a summary of the historical transaction amounts for the Existing Southern Airline Services Agreement for the three years ended 31 December 2008:

		Historical transaction amount
		for the year ended 31 December
	2006	2007	2008
	(RMB)	(RMB)	(RMB)
Existing Southern Airline
Services Agreement	300,552,000	347,507,000	336,495,000

Source: Letter from the Board

3. The comparison of historical transaction amount for the year ended 31 December 2008 and the Annual Caps

We noted that the annual cap for the Southern Airline Services Agreement for the year ending 31 December 2009 is higher than the historical transaction amount of the Existing Southern Airline Services Agreement for the year ended 31 December 2008 by 20%.

4. The basis for the Annual Caps

As referred to in the Letter from the Board, the Annual Caps are determined by reference to:

• (i) the historical annual transaction amounts between Southern Airlines and the Company for the year ended 31 December 2008; and

• (ii) the estimated growth of the transaction volume, after taking into account the anticipated growth of China’s aviation and travel industry as well as the increasing frequency of business trips.

The Directors estimate that the Continuing Connected Transactions will increase by about 15% to 20% per annum. Thus, a growth rate of 20% (the “ Adopted Growth Rate ”) is adopted by the Group in determining the amount of the Annual Caps under the Southern Airline Services Agreement.

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LETTER FROM CHINA MERCHANTS

We wish to draw the attention of the Independent Board Committee and the Independent Shareholders that:

• (i) as illustrated in Section I.1 of this letter, from the year ended 31 December 2006 to the year ended 31 December 2008, (a) the Group’s audited turnover achieved a CAGR of approximately 8.2% per annum; and (b) the total bookings on seats of flights of commercial airlines of the PRC (through the Group’s operations) achieved a CAGR of approximately 10.5% per annum; and

• (ii) as illustrated in Section I.2 of this letter, from the year ended 31 December 2006 to the year ended 31 December 2008, the CAGR of the audited operating revenue of Southern Airlines was approximately 9.5% per annum.

Based on the foregoing, we consider that the Adopted Growth Rate is acceptable, taking into account (1) the Group’s business growth during the three years ended 31 December 2008; and (2) the increase in the audited operating revenue of Southern Airlines from 2006 to 2008.

5. Overall opinion on the Annual Caps

We consider that the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned, taking into account:

• (i) the positive outlook of the civil aviation industry in the PRC;

• (ii) the historical growth in the Group’s turnover and the booking of seats of commercial airlines of the PRC through the Group’s operations;

• (iii) the historical growth in the audited operating revenue of Southern Airlines; and

• (iv) the Annual Caps would facilitate the Group’s business growth for the year ending 31 December 2009.

Based on the aforesaid, we consider that the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned, and are in the interests of the Company and the Shareholders as a whole.

— 19 —

LETTER FROM CHINA MERCHANTS

RECOMMENDATION

Having considered the above principal factors and reasons, we consider that (1) the Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole; and (2) the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the proposed resolution to approve the Continuing Connected Transactions and the Annual Caps at the EGM. We also advise the Independent Shareholders to vote in favour of the proposed resolution to approve the Continuing Connected Transactions and the Annual Caps at the EGM.

For and on behalf of

China Merchants Securities (HK) Co., Ltd.

Tony Wu

Managing Director and Head of Investment Banking Department

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. INTERESTS AND SHORT POSITIONS OF DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE IN THE SHARE CAPITAL OF THE COMPANY

As at the Latest Practicable Date, the interest or short position in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) held by the Directors, supervisor or chief executive of the Company which is required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or any interests required to be entered in the register maintained in accordance with Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules are as follow:

			Percentage to the	Percentage to
	Number and class	Capacity of	corresponding	the total share
Name of Director	of shares	Holder	share capital	capital
	(Note 1)			(Note 2)
Chua Keng Kim	417,000 H shares (L)	Interest of spouse	0.07%	0.02%
	of RMB1 each

Notes:

1. (L) - Long position

2. The percentage to the total share capital is calculated based on the total number of 1,950,806,393 shares in issue of the Company as at the Latest Practicable Date.

— 21 —

GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, supervisor or chief executive of the Company had any interest or short position in any shares, underlying shares and debentures of the Company or any of its associated corporations (as defined in Part XV of the Ordinance) which is required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or any interests required to be entered in the register maintained in accordance with Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules.

As at the Latest Practicable Date, each of China TravelSky Holding Company, Southern Holding, China Eastern Air Holding Company and China National Aviation Holding Company had interest in the shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

As at the Latest Practicable Date,

• (a) each of Mr Xu Qiang (Chairman of the Company) and Mr Cui Zhixiong (an executive Director) is an employee of China TravelSky Holding Company;

• (b) Mr Cao Guangfu (a non-executive Director) is an employee of China National Aviation Holding Company;

• (c) Mr Wang Quanhua (a non-executive Director) is an employee of Southern Holding; and

• (d) Mr Luo Chaogeng (a non-executive Director) is an employee of China Eastern Air Holding Company.

3. SERVICE AGREEMENT

As at the Latest Practicable Date, none of the Directors had entered or proposed to enter into a service agreement with any member of the Group (which will not expire or is not determinable by the employer within one year without payment of compensation (other than statutory compensation)).

4. MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2008, being the date to which the latest published audited financial statements of the Group were made up.

— 22 —

GENERAL INFORMATION

APPENDIX

5. INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors or China Merchants had any interest, direct or indirect, in any asset which had been since 31 December 2008, being the date to which the latest published audited accounts of the Group were made up, acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

6. MATERIAL INTEREST IN CONTRACTS

As at the Latest Practicable Date, none of the Directors was materially interested in any contracts or arrangement subsisting as at the date hereof which was significant in relation to the business of the Group.

7. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors or their respective associates had any interest in any business apart from the Company’s business which competes or is likely to compete, either directly or indirectly, with the Company’s business.

8. EXPERT

China Merchants is licensed under the SFO for Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities as defined under the SFO. Its letter of advice to the Independent Board Committee and the Independent Shareholders dated as of the date of this circular was given for the purpose of incorporation herein.

China Merchants has given and has not withdrawn its written consent to the issue of this circular with copy of its letter and the reference to its name and its advice included in this circular in the form and context in which they respectively appear.

As at the Latest Practicable Date, China Merchants did not have any shareholding, directly or indirectly, in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

— 23 —

GENERAL INFORMATION

APPENDIX

9. GENERAL

The English text of this circular shall prevail over the Chinese text in case of inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copy of each of the Existing Southern Airline Services Agreement and the Southern Airline Services Agreement will be available for inspection at the offices of Chiu & Partners, 41st Floor, Jardine House, 1 Connaught Place, Central, Hong Kong during normal business hours from the date of this circular up to and including the date of the EGM.

— 24 —

NOTICE OF EGM

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this notice.

==> picture [416 x 62] intentionally omitted <==

(Stock Code: 0696)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of TravelSky Technology Limited (“ Company ”) will be held at Conference Room of the Company, 8/F, No. 157, Dongsi West Street, Dongcheng District, Beijing, the People’s Republic of China, at 11 a.m. on Friday, 10 July 2009 to consider and, if thought fit, pass with or without amendments, the following ordinary resolution:

“ THAT :

• (a) the form and substance of the agreement (“ Southern Airline Services Agreement ”) dated 7 May 2009 (a copy of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) and made between the Company and China Southern Airlines Company Limited（中國南方航空股份有限公司）(“ Southern Airlines ”) in relation to the provision of the Technology Services (as defined in the circular (“ Circular ”) of the Company dated 25 May 2009 (copy of which has been produced to the meeting marked “B” and signed by the chairman of the meeting for the purpose of identification)) to Southern Airlines (including Chongqing Airlines Company Limited（重慶航空有限責任公司）and Xiamen Airlines Company Limited（廈門航空有限 公司）) by the Group (as defined in the Circular) and all the transactions contemplated thereby; and

— 25 —

NOTICE OF EGM

• (b) the Annual Caps (as defined in the Circular) for the transactions contemplated under the Southern Airline Services Agreement for the year ending 31 December 2009 as shown in the Circular, be and they are hereby approved and that the directors of the Company be and they are hereby authorised to take any step as they consider necessary, desirable or expedient in connection with the Southern Airline Services Agreement and the transactions contemplated thereby.”

By order of the Board TravelSky Technology Limited Xu Qiang Chairman

Beijing, the People’s Republic of China 25 May 2009

Registered office:

Floor 18-20, South Wing, Park C Raycom InfoTech Park No. 2 Ke Xue Yuan South Road Haidian District, Beijing 100190 the People’s Republic of China

Notes:

1. The register of holders of H shares of the Company (“ H Shares ”) will be closed from 10 June 2009 to 10 July 2009 (both days inclusive), during which time no transfer of H Shares will be effected. Holders of H Shares and domestic Shares of the Company (“ Domestic Shares ”) whose names appear on the register of members of the Company at the close of business on 9 June 2009 are entitled to attend the EGM. Transfers of H Shares must be lodged with the branch share registrar of the Company’s in Hong Kong, Hong Kong Registrars Ltd., at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. by 4:30 p.m. on 9 June 2009 in order to entitle the transferee to attend the EGM.

2. A member entitled to attend and vote at the EGM is entitled to appoint one or more than one proxy to attend and vote instead of him. A proxy need not be a member of the Company.

3. The instrument appointing a proxy must be in writing under the hand of the appointer or his attorney duly authorised in writing, or in the case of a legal person, must either be executed under its seal or under the hand of a legal representative or other attorney duly authorised to sign the same. If that instrument is signed by an attorney of the appointer, the power of attorney authorising that attorney to sign, or other document of authorisation, must be notarially certified. To be valid, for holders of Domestic Shares, the notarially certified power of attorney, or other document of authorisation, and the form of proxy must be delivered to the registered address of the Company no later than 24 hours before the time appointed for the holding of the meeting. To be valid, for holders of H Shares, the above documents must be delivered to Hong Kong Registrars Ltd. within the same period of time.

— 26 —

NOTICE OF EGM

1. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the EGM or any adjournment thereof. If such member attends the EGM, his form of proxy will be deemed to have been revoked.

2. Shareholders who intend to attend the EGM in person or by proxy should return the reply slip for attending the EGM to the registered address of the Company on or before 19 June 2009 personally or by mail or fax.

3. The EGM is expected to last for half a day. Shareholders (or their proxies) attending the EGM are responsible for their own transportation and accommodation expenses.

4. As at the date hereof, the board of the directors of the Company comprises:

Executive directors: Non-executive directors: Independent non-executive directors:

Mr Xu Qiang (Chairman) , Mr Cui Zhixiong and Mr Xiao Yinhong; Mr Wang Quanhua, Mr Luo Chaogeng and Mr Cao Guangfu; Mr Yick Wing Fat, Simon, Mr Yuan Yaohui and Mr Chua Keng Kim.

— 27 —