Management Discussion and Analysis

During the reporting period, the Group followed the environment-friendly principle of “Green Flight” and promoted energy conservation and low emission in every possible way. For example, the Group upgraded its fleet, operated aircraft with higher fuel use efficiency as far as possible, and took various measures to reduce the weight of the aircraft. With all these measures, the Group achieved continuous reduction both in fuel consumption of aircraft and ground service related energy consumption. The Group has initiated discussion with suppliers for technological advancement to reduce noise pollution, proactively cooperated with airports and air traffic control authorities, and chose
appropriate landing programs, thereby the noise pollution generated by taking off and landing made to local residential areas was substantially reduced.
The Group aims to accomplish a major strategic reform and improve service level and brand awareness through strengthened technological innovation and enhanced management proficiency, system development and technological upgrades, so that diversified products and convenient, punctual and rapid services are provided to its customers. During the reporting period, the Group further improved and optimized its online sales network, and launched Tencent sales counter in cooperation with Tencent Technology Limited, thus expanded the B2C sales network of the Group. Meanwhile the Group upgraded and reconstructed the SMS platform, and launched the 95539 services hotlines, which provide SMS services of information on mileage, flight schedule, flight status, and air ticket price. In addition, the Group developed service system for high-end customers, realized functions such as instant membership for high-end customers, and made use of information technology to promote sophisticated management and scientific operation.

Management Discussion and Analysis 
ANNUAL REPORT 2008 OPERATING DATA SUMMARY Part of the financial information presented in this section is derived from the Company’s audited financial statements that have been prepared in accordance with IFRS. The following table sets forth certain financial information and operating data by geographic region: For the year ended 31 December 2008 2007 Traffic Revenue passenger kilometres (RPK) (million) – Domestic 70,619 68,369 – Hong Kong, Macau and Taiwan 1,139 1,180 – International 11,426 12,178 Total 83,184 81,727 Revenue tonne kilometres (RTK) (million) – Domestic 7,392 7,219 – Hong Kong, Macau and Taiwan 110 115 – International 1,698 1,916 Total 9,200 9,250 Passengers carried (thousand) – Domestic 53,063 51,326 – Hong Kong, Macau and Taiwan 1,220 1,339 – International 3,954 4,238 Total 58,237 56,903 Cargo and mail carried (thousand tonnes) – Domestic 713 733 – Hong Kong, Macau and Taiwan 11 12 – International 111 127 Total 835 872 2008 vs 2007 Increase/ (decrease) % 3.3 (3.5) (6.2) 1.8 2.4 (4.3) (11.4) (0.5) 3.4 (8.9) (6.7) 2.3 (2.7) (8.3) (12.6) (4.2)  11 

Management Discussion and Analysis

For the year ended
2008 vs 200
31 December
Increas
2008 2007
(decreas
Capacity
Available seat kilometres (ASK) (million)

– Domestic  93,384  89,452 
– Hong Kong, Macau and Taiwan  1,790  1,881 
– International  17,593  18,400 
Total  112,767  109,733 
Available tonne kilometres (ATK) (million) 
– Domestic  10,985  10,440 
– Hong Kong, Macau and Taiwan  200  210 
– International  3,091  3,558 
Total  14,276  14,208 

Load factor
Passenger load factor (RPK/ASK) (%)

– Domestic  75.6  76.4 
　
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