Air China (00753) has entered into an Aircraft Sales Framework Agreement with Beijing Leasing Company, valid from 30 October 2025 to 31 December 2027. Under this arrangement, Air China will periodically sell its owned aircraft — primarily older narrow-body models scheduled for phase-out — to Beijing Leasing Company through agreement transfers.

Beijing Leasing Company is 60% owned by China National Aviation Corporation (Group) Limited and 40% by China National Aviation Capital Holding Co., both wholly-owned subsidiaries of China National Aviation Holding Corporation Limited (CNAHC), Air China’s controlling shareholder. Since Beijing Leasing Company is a connected person under the Hong Kong Listing Rules, the arrangement is classified as a continuing connected transaction.

Annual caps for these sales have been set at RMB120 million for the period from 30 October 2025 to 31 December 2025, and RMB840 million for each of 2026 and 2027. The consideration per aircraft will be based on valuations by independent third-party appraisers. Several directors who also hold positions at CNAHC abstained from voting on the relevant board resolution. The board, including independent non-executive directors, considers the terms fair, reasonable, and in the best interests of both the company and its shareholders.

The transaction is subject to announcement and annual review requirements under Chapter 14A of the Hong Kong Listing Rules but is exempt from independent shareholders’ approval, as the highest applicable percentage ratio is above 0.1% but below 5%. The board notes that the arrangement is intended to optimize Air China’s fleet structure, improve operational efficiency, and capitalize on Beijing Leasing Company’s expertise in aviation-related assets.