(April 20, 2007, Hong Kong) ¡V China Airlines (CAL) today held a cocktail in celebration of its 40 years of service in Hong Kong and to showcase its new crew uniform collection. CAL is pleased to announce that its 2006 passenger and cargo delivery volume has broken company records again, with increments of 5.2% and 7.2% respectively.

¡§Ever since China Airlines launched the service to Hong Kong, we have witnessed the robust development in trade, economic and travel relations between Hong Kong and Taiwan. While we further developed Hong Kong as our hub to several key destinations in Southeast Asia, we have rapidly become the largest foreign-owned airlines in Hong Kong. Hong Kong is our most important source of revenues. The air link between Hong Kong and Taiwan is also famous of being the ¡§Golden Route¡¨ for long time.¡¨ said Mr. Philip Hsing-Hsiung Wei, Chairman of CAL.

CAL¡¦s 2006 revenue is at a record high of NT$121.9 billion (US$ 3.7 billion), with 13.3% generated from Hong Kong. Over the past 12 months, the total passenger and cargo delivery volume has reached an unprecedented 8.5 million passengers and over 116,000 tons in the year, an increment of 5.2% and 7.2% from last year. In particular, the revenues from Hong Kong¡¦s passenger and cargo delivery make up 4.5% and 23.8% of the Company¡¦s total revenue respectively. The flights commuting between Hong Kong and Taipei and Kaohsiung City have been increased to over 140 flights weekly, making CAL the airline with the most frequent flights to and from the above destinations.

In light of globalization in the business world, CAL has been making breakthroughs in the quality of its services and operations, and has been recognized through numerous international accolades: CAL has been ranked number one in the world in the Air Cargo Excellence Award survey conducted by Air Cargo World magazine. CAL¡¦s service quality is also recognized by the 2006 SKYTRAX AWARDS from Skytrax Research, a world-renowned aviation research organization - business class service is ranked 7 in the globe, a first time for the airline. In addition, CAL was also accredited by the IATA with the IOSA (IATA Operations Safety Audit) for its safety practices, ensuring that CAL¡¦s flight safety has reached the highest standard in the industry. Over the years, CAL has established itself as an international brand and its service has been well received by its customers from all over the world.

¡§When we are evolving into our new corporate imaging initiative, China will continuously be the bridges between Hong Kong and Taiwan in the next 40 years or longer. We will extend our service to more corporate and individuals customers in Hong Kong.¡¨ said CAL President Mr. Ringo Chao.

Furthermore, as part of a new corporate imaging initiative since its logo change in 1995, CAL has changed the design of its crew uniform in April. The new uniform features the esthetically-pleasing palette of Cloud (mauve) and Plum (an understated burgundy), communicating to customers a ¡§Simple Elegance¡¨ that is synonymous to the legendary CAL service.

¡§With a mixture of traditional and modern spirits, these uniforms mark the new era of CAL. we hope our customers will experience our hearty service through this new image initiates.¡¨ concluded Mr. Wei.

CAL¡¦s 40th Anniversary Cocktail Reception was held in the 4D Extreme Screen in Terminal 2 of Hong Kong International Airport and was hosted by CAL Chairman Philip Wei, President Ringo Chao and CAL (Hong Kong) General Manager Michael Wu. The event was well attended by over 300 guests and government officials.