DRAGONAIR BUYS BOEING 747 FOR CARGO FLEET

Two jumbos to be converted into freighters and enter service in 2001

As part of its move into the all-cargo market, Dragonair has bought two Boeing 747-300s which will join the airline’s cargo fleet as freighters in 2001. Dragonair launched a freighter service between Hong Kong and Europe via the Middle East and to Shanghai in mainland China earlier this year with a wet-leased Boeing 747-200.

“We made it clear when we introduced our freighter service that we saw cargo as an important and growing part of our business, and this purchase shows that we intend to be an important cargo player,” said Stanley Hui, Dragonair’s Chief Executive Officer.

The two B747-300 combination aircraft - purchased from Singapore Airlines - are scheduled to enter service in July 2001 and September 2001 respectively. Between now and then they will be reconfigured from combi aircraft to freighters by Taikoo Aircraft Engineering Company Ltd. (TAECO) in Xiamen, China.

“We see this as the right move at the right time. Cargo traffic is continuing its strong upward trend, and by the time the new freighters enter service China should be a member of the WTO, boosting demand even further,” Mr. Hui said.

“Hong Kong International Airport has seen cargo throughput in the past 12 months increase by 20.7 percent to 2.2 million tones of cargo, so the environment is good.”

He added: “We’ll be looking for the new freighters to strengthen our service to Europe and the Middle East, and to serve destinations in the mainland and the region.”

Freight is playing an increasingly important role for Dragonair. At present cargo accounts for about 21 percent of total revenue – up from 6 percent just three years ago - and with the new freighters that could jump to more than 30 percent.

Mr. Hui said: “Our expansion in this area is creating new opportunities. Our Cargo Department has gone from having 12 staff at the beginning of this year to having 25 at present. By the end of next year we expect it to be 40-strong.”

Dragonair is a Hong Kong based airline, operating a fleet of five A330-300s, three A321s and six A320s in addition to the Boeing 747-200 freighter. It will almost double its fleet by the end of 2005. The airline’s passenger network covers 27 destinations across the Asia-Pacific region, including 17 in mainland China, while its cargo network connects the markets of Europe, the Middle East and China.