China Airlines and Accor
Sign a Management Contract
for New Airport Hotel

March 22, 2007, Taipei, Taiwan ¡V Today China Airlines and the European leader in hotels management, Accor, joint to announce their partnership in operating a new world-class airport hotel scheduled in 2009. More than 100 guests attended the press conference, including local officials, both executive representatives, and media personnel.

Along with China Airlines Operation Center being open by end of 2009, Accor will launch the first campaign in Taiwan by introducing its Novotel brand with location at Taoyuan International Airport, aiming at the potential market, including transit passengers, aircrew, and a large local corporate base. Accor Asia Pacific Regional Director, Michael Issenberg thanked CAL at the signing ceremony for the opportunity to manage what will be an outstanding new Novotel hotel at the well established airport and its opening reflects the growing importance of Taipei for visiting business, leisure or transit passengers. China Airlines has poised Taoyuan International Airport in a higher visibility globally with the European selected brand Novotel as the first international airport hotel in Taiwan.

The 360-room hotel, full-named ¡§Novotel Taoyuan International Airport Taipei¡¨, is being constructed by China Airlines and will be managed by Accor Group in late 2009. It is scaled 8 stories plus a basement with facilities for leisure and business, including an all-day dinning room, a ballroom, a specialty restaurant, lounge bars, five conference rooms, a business center, a swimming pool, a modern fitness center and a kids¡¦ club. The opening is targeted in September 2009. It will be the closest hotel to the airport with location less than 1.5 kilometers from Taoyuan International Airport¡¦s main terminal complex. The airport area is only 35 km from the Taipei city. Once the MRT system established in the future, it will provide great convenience and advantage for China Airlines passengers and the airport hotel clients.

Novotel is the eldest and most key brand for Accor. With nearly 4,000 hotels worldwide, covering all from economy to upper scales, Accor is making continuous effort to extend its Novotel as a leading brand towards a new airport business hotel model. Accor has vastly opened four Novotes in the region at Hongkong, Guangzhou, Bangkok and Hyderabad airports. This newly built one will be the new record as Accor¡¦s 5th airport hotel in Asia.

The Civil Aeronautics Administration and China Airlines signed a 50-year contract in September 2006 to construct a large Build-Operate-Transfer (BOT) project at Taoyuan International Airport. The project called ¡§Taoyuan International Airport Airlines Operation Center,¡¨ spans 50 years, including three years for construction, and the remaining 47 years for operations. There will be three developments in this new complex, including China Airlines¡¦ Corporate Head Office, Crew Training and Dispatch Center and a highly qualified four-start airport hotel. CAL anticipates its relocation to the Taoyuan International Airport area after 2009.

By investing in the Taoyuan International Airport Airlines Operation Center, CAL will gain several key benefits. The newly built airport hotel will lift Taiwan¡¦s image internationally, by providing a world-class facility and services in a convenient location. By moving its headquarters to Taoyuan International Airport, China Airlines can improve its corporate image, increase market visibility, and enhance its position in the international airline industry. It can also consolidate and centralize its maintenance, flight operations and in-flight service functions into a single location.