China Southern and Et-china Announce New E-Business Joint Venture

China Southern Airlines has joined with Et-china to form the new China Southern Et-china.com E-business Company Ltd.

Et-China will contribute RMB 5.88 Million for a 49% stake in the joint venture. It will be jointly managed by executives from both Et-China and China Southern Airlines under a separate board of directors.

The new joint venture will benefit from substantial International expertise and technology, reducing unnecessary research expenses while maintaining China Southern's leading position in the domestic e-business marketplace. This e-ticket venture under the management of Et-China and China Southern is expected to reach gross ticket sales of more than RMB 500 Million in 2002 and RMB 1.6 Billion - or approximately 10% gross ticket sales of China Southern Airlines - in 2003. This exclusive joint venture will service China Southern Airlines' expanding e-ticketing needs for the next five years.

Mr. Yang Guang Hua, Vice President, China Southern Airlines and Mr. Matthew Chik-hui Ng, President and CEO of Et-China, signed the deal in Guangzhou.

Since the initial e-commerce agreement between China's largest airline and Et-china in December 1999, China Southern's e-business has reached a number of impressive firsts in China: the first airline to offer Internet e-ticketing to an expanded number of domestic routes; WAP reservation service and comprehensive business travel solution packages for corporate customers. To further develop its Internet business, cut sales costs and reinforce the airlines' competitive position, China Southern formed this e-business joint venture with Et-China to inject more "energy" to its electronic Internet business platform.

The main goal of this newly founded company will be to gradually sell more high-yield airline tickets to generate additional revenue and reduce costs. The new company will also be responsible for market expansion and terminal servicing of China Southern's E-commerce platform as well as taking part in selling value-added products such as hotels, travel/tourism packages and rental cars. China Southern Airlines is one of the foundation shareholders of Et-china.