Form 6-K CHINA SOUTHERN AIRLINES For: Mar 31

Article Stock Quotes (1)

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 4/23/2024

1. GM
2. SPY
3. TSLA
4. SPOT
5. SHW

6. AAPL
7. AMZN
8. NVDA
9. MTTR
10. MINN

Top News Most Read Special Reports

April 1, 2022 6:22 AM EDT

E-mail

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

March 31, 2022

CHINA SOUTHERN AIRLINES COMPANY LIMITED

68 Qi Xin Road

Guangzhou, 510403

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

China Southern Airlines Company Limited (the “Company”) published the following announcements on March 30, 2022 on the Hong Kong Stock Exchange’s website at:

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0330/2022033002952.pdf, in relation to the annual results for the year ended December 31, 2021;

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0330/2022033003008.pdf, in relation to the 2021 corporate social responsibility report of the Company;

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0330/2022033003246.pdf, in relation to the provision for impairment of the Company; and

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0330/2022033003188.pdf, in relation to the resolutions of the board of directors and the supervisory committee of the Company.

The announcements in English are included as exhibits to this Form 6-K.

Certain statements contained in these announcements may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements. All information provided in this announcement is as of the date of this announcement, unless otherwise stated, and we undertake no duty to update such information, except as required under applicable law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHINA SOUTHERN AIRLINES COMPANY LIMITED


By:		/s/ Xie Bing
Name:		Xie Bing
Title:		Company Secretary

Date: March 31, 2022

Exhibit 99.1

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

LOGO

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1055)

2021 ANNUAL RESULTS

The board of directors (the “Board”) of China Southern Airlines Company Limited (the “Company”) hereby announces the results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2021 together with the comparative figures for 2020, which have been derived from the Group’s audited consolidated financial statements for the year ended 31 December 2021.

FINANCIAL RESULTS

A.	PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”)

CONSOLIDATED INCOME STATEMENTS

For the year ended 31 December 2021

Note

2021

RMB million

2020

RMB million

Operating revenue

Traffic revenue

95,279

87,027

Other operating revenue

6,365

5,534

Total operating revenue

101,644

92,561

Operating expenses

Flight operation expenses

45,569

37,545

Maintenance expenses

12,162

13,375

Aircraft and transportation service expenses

21,147

18,743

Promotion and selling expenses

4,705

5,007

General and administrative expenses

3,663

4,088

Depreciation and amortisation

24,241

24,590

Impairment losses on property, plant and equipment, right-of-use assets and other assets

2,597

3,961

Others

2,256

1,802


	Note		2021 *RMB million*			2020 RMB million
Total operating expenses				116,340			109,111

Other net income		7		4,767			4,686

Operating losses				(9,929	)		(11,864	)

Interest income				675			322
Interest expense		8		(6,202	)		(6,716	)
Exchange gain, net		20		1,575			3,485
Share of associates’ results				9			(776	)
Share of joint ventures’ results				271			309
Changes in fair value of financial assets/liabilities				(309	)		53
Loss on disposal of a subsidiary				—			(8	)

Loss before income tax				(13,910	)		(15,195	)
Income tax		9		2,894			3,368

Loss for the year				(11,016	)		(11,827	)

Loss attributable to:
Equity shareholders of the Company				(12,106	)		(10,847	)
Non-controlling interests				1,090			(980	)

Loss for the year				(11,016	)		(11,827	)

Loss per share
Basic and diluted		10		RMB(0.75	)		RMB(0.77	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the year ended 31 December 2021


	2021 *RMB million*			2020 RMB million
Loss for the year		(11,016	)		(11,827	)

Other comprehensive income:
Items that will not be reclassified to profit or loss
– Equity investments at fair value through other comprehensive income – net movement in fair value reserve (non-recycling)		(236	)		(250	)
– Share of other comprehensive income of an associate		(2	)		(2	)
– Income tax effect of the above items		60			63

Items that may be reclassified subsequently to profit or loss
– Cash flow hedge: fair value movement of derivative financial instrument		42			(45	)
– Differences resulting from the translation of foreign currency financial statements		—			8
– Share of other comprehensive income of an associate		3			(3	)
– Income tax effect of the above items		(10	)		11

Other comprehensive income for the year		(143	)		(218	)

Total comprehensive income for the year		(11,159	)		(12,045	)

Total comprehensive income attributable to:
Equity shareholders of the Company		(12,189	)		(11,011	)
Non-controlling interests		1,030			(1,034	)

Total comprehensive income for the year		(11,159	)		(12,045	)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2021

Note

31 December

2021

RMB million

31 December

2020

RMB million

Non-current assets

Property, plant and equipment, net

91,186

86,146

Construction in progress

31,847

32,407

Right-of-use assets

138,439

151,065

Goodwill

237

237

Interest in associates

2,637

2,449

Interest in joint ventures

3,341

3,225

Aircraft lease deposits

321

362

Other equity instrument investments

563

799

Other non-current financial assets

589

Amounts due from related companies

151

—

Deferred tax assets

12,823

7,739

Other assets

3,211

2,877

285,345

287,398

Current assets

Inventories

1,652

1,760

Trade receivables

2,858

2,525

Other receivables

9,599

8,347

Cash and cash equivalents

21,456

25,419

Assets held for sale

1,292

—

Restricted bank deposits

158

117

Prepaid expenses and other current assets

736

732

Amounts due from related companies

115

37,866

38,985

Note

31 December

2021

RMB million

31 December

2020

RMB million

Current liabilities

Derivative financial liabilities

1,222

3,148

Borrowings

57,913

40,099

Lease liabilities

20,805

20,930

Trade payables

1,328

1,782

Contract liabilities

1,542

1,513

Sales in advance of carriage

3,716

3,997

Current income tax

844

462

Amounts due to related companies

363

357

Accrued expenses

15,479

15,920

Other liabilities

7,778

7,473

110,990

95,681

Net current liabilities

(73,124

)

(56,696

)

Total assets less current liabilities

212,221

230,702

Non-current liabilities

Borrowings

38,354

38,134

Lease liabilities

81,944

100,283

Derivative financial liabilities

Other non-current liabilities

1,824

2,036

Provision for major overhauls

4,820

4,216

Deferred benefits and gains

725

769

Deferred tax liabilities

127,713

145,571

Net assets

84,508

85,131

Capital and reserves

Share capital

16,948

15,329

Reserves

50,903

54,255

Total equity attributable to equity shareholders of the Company

67,851

69,584

Non-controlling interests

16,657

15,547

Total equity

84,508

85,131

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2021


	Attributable to equity shareholders of the Company
	Share capital		Share premium		Fair value reserve (recycling)			Fair value reserve (non- recycling)			Other reserves			Retained Earnings/(acc umulated losses)			Total			Non- controlling interests			Total equity
	RMB million		RMB million		RMB million			RMB Million			RMB million			RMB million			RMB million			RMB million			RMB million
Balance at 1 January 2020		12,267		25,652		2			409			2,844			22,932			64,106			13,223			77,329
Changes in equity for 2020
Loss for the year		—		—		—			—			—			(10,847	)		(10,847	)		(980	)		(11,827	)
Other comprehensive income		—		—		(37	)		(135	)		8			—			(164	)		(54	)		(218	)
Total comprehensive income		—		—		(37	)		(135	)		8			(10,847	)		(11,011	)		(1,034	)		(12,045	)
Issuance of shares		3,062		12,889		—			—			—			—			15,951			—			15,951
Acquisition of non-controlling interests in a subsidiary		—		—		—			—			(155	)		—			(155	)		(105	)		(260	)
Capital injection from non-controlling interests		—		—		—			—			700			—			700			3,521			4,221
Distributions to non-controlling interests		—		—		—			—			—			—			—			(57	)		(57	)
Decrease in non-controlling interests as a result of loss of control of a subsidiary		—		—		—			—			—			—			—			(1	)		(1	)
Change in other reserves		—		—		—			—			(7	)		—			(7	)		—			(7	)

Balance at 31 December 2020		15,329		38,541		(35	)		274			3,390			12,085			69,584			15,547			85,131

Changes in equity for 2021:
Loss for the year		—		—		—			—			—			(12,106	)		(12,106	)		1,090			(11,016	)
Other comprehensive income		—		—		35			(118	)		—			—			(83	)		(60	)		(143	)
Total comprehensive income		—		—		35			(118	)		—			(12,106	)		(12,189	)		1,030			(11,159	)
Distributions to non-controlling interests		—		—		—			—			—			—			—			(659	)		(659	)
Conversion of convertible bonds to ordinary shares		1,619		8,837		—			—			—			—			10,456			—			10,456
Capital injection from non-controlling interests		—		—		—			—			—			—			—			810			810
Decrease in non-controlling interests as a result of liquidation of a subsidiary		—		—		—			—			—			—			—			(71	)		(71	)

Balance at 31 December 2021		16,948		47,378		—			156			3,390			(21	)		67,851			16,657			84,508

Notes to the financial information prepared in accordance with IFRSs:

1.	CORPORATE INFORMATION

China Southern Airlines Company Limited (the “Company”), a joint stock limited company, was incorporated in the People’s Republic of China (the “PRC”) on 25 March 1995. The address of the Company’s registered office is Unit 301, 3/F, Office Tower, Guanhao Science Park Phase I, 12 Yuyan Street, Huangpu District, Guangzhou, Guangdong Province, the PRC. The Company and its subsidiaries (the “Group”) are principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services.

The Company’s majority interest is owned by China Southern Air Holding Company Limited (“CSAH”), a state-owned enterprise incorporated in the PRC.

The Company’s shares are traded on the Shanghai Stock Exchange, The Stock Exchange of Hong Kong Limited and the New York Stock Exchange.

2.	BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (“IFRSs”), which collective term includes all applicable individual IFRSs, International Accounting Standards (“IASs”) and Interpretations issued by the International Accounting Standards Board (the “IASB”). The consolidated financial statements also comply with the applicable disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The IASB has issued certain amendments to IFRSs that are first effective or available for early adoption for the current accounting period of the Group. Note 3 provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current accounting period reflected in these consolidated financial statements.

The consolidated financial statements for the year ended 31 December 2021 comprise the Group and the Group’s interest in associates and joint ventures.

The measurement basis used in the preparation of the consolidated financial statements is the historical cost basis except that the following assets and liabilities are stated at their fair value:

•

other equity instrument investments;

•

other non-current financial assets (FVPL); and

•

derivative financial assets/liabilities.

Non-current assets (or disposal groups) held for sale are stated at the lower of carrying amount and fair value less costs to sell.

3.	CHANGES IN ACCOUNTING POLICIES

The Group has applied the following amendments to IFRSs issued by the IASB to these financial statements for the current accounting period:

•

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, Interest rate benchmark reform – phase 2

•

Amendment to IFRS 16, Covid-19-related rent concessions beyond 30 June 2021

Other than the amendment to IFRS 16, the Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Impacts of the adoption of the amended IFRSs are discussed below:

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, Interest rate benchmark reform – phase 2

The amendments provide targeted reliefs from (i) accounting for changes in the basis for determining contractual cash flows of financial assets, financial liabilities and lease liabilities as modifications, and (ii) discontinuing hedge accounting when an interest rate benchmark is replaced by an alternative benchmark rate as a result of the reform of interbank offered rates (“IBOR reform”). The adoption of the amendments does not have any material impact on the financial position and the financial result of the Group.

Amendment to IFRS 16, Covid-19-related rent concessions beyond 30 June 2021 (“2021 amendment”)

The Group previously applied the practical expedient in IFRS 16 to all leases except for aircraft and engine leases such that as lessee it was not required to assess whether rent concessions occurring as a direct consequence of the COVID-19 pandemic were lease modifications, if the eligibility conditions are met. One of these conditions requires the reduction in lease payments affect only payments originally due on or before a specified time limit. The 2021 amendment extends this time limit from 30 June 2021 to 30 June 2022.

The Group has early adopted the 2021 amendment in this financial year. The adoption of 2021 amendment does not have any material impact on the financial position and the financial result of the Group.

4.	REVENUE AND SEGMENT INFORMATION

Operating revenue

The Group is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery, and other extended transportation services.

(i)

Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major service lines is as follows:


	2021 *RMB million*		2020 RMB million
Revenue from contracts with customers within the scope of IFRS 15:
Disaggregated by service lines
– Traffic revenue
– Passenger		75,392		70,534
– Cargo and mail		19,887		16,493
– Commission income		2,677		2,771
– General aviation income		572		508
– Cargo handling income		864		507
– Hotel and tour operation income		538		390
– Ground services income		326		210
– Air catering service income		271		273
– Others		885		689

		101,412		92,375
Revenue from other sources:
– Rental income		232		186

		101,644		92,561

Disaggregation of revenue from contracts with customers by the timing of revenue recognition and by geographic markets is disclosed in Notes 4(b) and 4(c) respectively.

(ii)

Revenue expected to be recognised in the future arising from contracts with customers in existence at the reporting date

As at 31 December 2021, the aggregated amount of the transaction price allocated to the remaining performance obligation, which is the unredeemed credits under the frequent flyer award programmes, amounted to RMB3,061 million (31 December 2020: RMB3,196 million). This amount represents revenue expected to be recognised in the future when the customers obtain control of the goods or services.

Business segments

The Group has two reportable operating segments “airline transportation operations” and “other segments”, according to internal organisation structure, managerial needs and internal reporting system. “Airline transportation operations” comprises the Group’s passenger and cargo and mail operations. “Other segments” includes cargo handling, hotel and tour operation, ground services, air catering services and other miscellaneous services.

For the purposes of assessing segment performance and allocating resources between segments, the Group’s chief operating decision maker (“CODM”) monitors the results, assets and liabilities attributable to each reportable segment based on financial results prepared under the People’s Republic of China Accounting Standards for Business Enterprises (“PRC GAAP”). As such, the amount of each material reconciling item from the Group’s reportable segment loss before taxation, assets and liabilities which arises from different accounting policies, are set out in Note 4(d).

Inter-segment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Information regarding the Group’s reportable segments as provided to the Group’s CODM for the purposes of resource allocation and assessment of segment performance is set out below.

The segment results of the Group for the year ended 31 December 2021 are as follows:


	Airline transportation operations			Other segments			Elimination			Unallocated*			Total
	*RMB million*			*RMB million*			*RMB million*			*RMB million*			*RMB million*
Disaggregated by timing of revenue recognition
Point in time		2,763			1,418			(1,171	)		—			3,010
Over time		98,206			3,257			(2,829	)		—			98,634

Revenue from external customers		100,419			1,225			—			—			101,644
Inter-segment sales		550			3,450			(4,000	)		—			—

Reportable segment revenue		100,969			4,675			(4,000	)		—			101,644

Reportable segment loss before taxation		(13,769	)		(111	)		2			(25	)		(13,903	)

Reportable segment loss after taxation		(10,998	)		(67	)		2			52			(11,011	)

Other segment information
Income tax		(2,771	)		(44	)		—			(77	)		(2,892	)
Interest income		763			15			(103	)		—			675
Interest expense		6,291			26			(115	)		—			6,202
Depreciation and amortisation		23,854			380			—			—			24,234
Impairment loss		2,596			18			—			—			2,614
Credit losses		1			(2	)		—			—			(1	)
Share of associates’ results		—			—			—			9			9
Share of joint ventures’ results		—			—			—			271			271
Change in fair value of financial assets/liabilities		—			—			—			(309	)		(309	)
Non-current assets additions during the year^#		21,457			905			(359	)		—			22,003

The segment results of the Group for the year ended 31 December 2020 are as follows:


	Airline transportation operations			Other segments			Elimination			Unallocated*			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Disaggregated by timing of revenue recognition
Point in time		2,856			1,727			(1,483	)		—			3,100
Over time		89,196			2,448			(2,183	)		—			89,461

Revenue from external customers		91,722			839			—			—			92,561
Inter-segment sales		330			3,336			(3,666	)		—			—

Reportable segment revenue		92,052			4,175			(3,666	)		—			92,561

Reportable segment loss before taxation		(14,727	)		(112	)		1			(348	)		(15,186	)

Reportable segment loss after taxation		(11,388	)		(61	)		1			(372	)		(11,820	)

Other segment information
Income tax		(3,339	)		(51	)		—			24			(3,366	)
Interest income		328			26			(32	)		—			322
Interest expense		6,739			11			(34	)		—			6,716
Depreciation and amortisation		24,438			143			—			—			24,581
Impairment loss		4,015			2			—			—			4,017
Credit losses		153			11			—			—			164
Share of associates’ results		—			—			—			(776	)		(776	)
Share of joint ventures’ results		—			—			—			309			309
Change in fair value of financial assets/liabilities		—			—			—			53			53
Non-current assets additions during the year^#		24,039			547			(49	)		—			24,537

The segment assets and liabilities of the Group as at 31 December 2021 and 31 December 2020 are as follows:

Airline

transportation

operations

Other segments

Elimination

Unallocated*

Total

RMB million

As at 31 December 2021

Reportable segment assets

312,020

5,909

(1,616

)

6,635

322,948

Reportable segment liabilities

236,428

2,640

(1,607

)

1,242

238,703

As at 31 December 2020

Reportable segment assets

317,741

6,019

(4,209

)

6,564

326,115

Reportable segment liabilities

239,968

2,237

(4,154

)

3,201

241,252

Unallocated assets primarily include interest in associates and joint ventures, derivative financial assets and equity securities. Unallocated liabilities primarily include derivative financial liabilities. Unallocated results primarily include the share of results of associates and joint ventures, dividend income from equity securities, and the fair value movement of financial instruments recognised through profit or loss.

#	The additions of non-current assets do not include interests in associates and joint ventures, other equity instrument investments, other non-current financial assets, derivative financial assets and deferred tax assets.

Geographical information

The Group’s business segments operate in three main geographical areas, even though they are managed on a worldwide basis.

The Group’s revenue by geographical segment are analysed based on the following criteria:

(1)

Traffic revenue from services of both origin and destination within the PRC (excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan (“Hong Kong, Macau and Taiwan”)), is classified as domestic revenue. Traffic revenue with origin and destination among PRC, Hong Kong, Macau and Taiwan is classified as Hong Kong, Macau and Taiwan revenue; while that with origin from or destination to other overseas markets is classified as international revenue.

(2)

Revenue from commission income, general aviation, cargo handling, hotel and tour operation, ground services, air catering services and other miscellaneous services are classified on the basis of where the services are performed.


	2021		2020
	*RMB million*		RMB million
Domestic		76,517		65,137
International		24,739		27,090
Hong Kong, Macau and Taiwan		388		334

		101,644		92,561

The major revenue earning assets of the Group are its aircraft fleet which is registered in the PRC and is deployed across its worldwide route network. Majority of the Group’s other assets are located in the PRC. CODM considers that there is no suitable basis for allocating such assets and related liabilities to geographical locations. Accordingly, geographical segment assets and liabilities are not disclosed.

Reconciliation of reportable segment loss before income tax, assets and liabilities to the consolidated figures as reported in the consolidated financial statements


	2021			2020
	*RMB million*			RMB million
Loss before income tax
Reportable segment loss before taxation		(13,903	)		(15,186	)
Capitalisation of exchange difference of specific loans		(8	)		(9	)
Government grants		1			—

Consolidated loss before income tax		(13,910	)		(15,195	)


	31 December 2021			31 December 2020
	*RMB million*			RMB million
Assets
Reportable segment assets		322,948			326,115
Capitalisation of exchange difference of specific loans		39			47
Government grants		(5	)		(6	)
Adjustments arising from business combinations under common control		237			237
Others		(8	)		(10	)

Consolidated total assets		323,211			326,383

Liabilities

As at 31 December 2021 and 2020, the amount of reportable segment liabilities is the same as the amount of consolidated total liabilities.

5	FLIGHT OPERATION EXPENSES


	2021		2020
	*RMB million*		RMB million
Jet fuel costs		25,505		18,797
Flight personnel payroll and welfare		10,763		10,232
Air catering expenses		1,577		1,765
Civil Aviation Development Fund		1,059		—
Aircraft operating lease charges		920		977
Training expenses		690		857
Aircraft insurance		184		191
Others		4,871		4,726

		45,569		37,545

6	DEPRECIATION AND AMORTISATION


	2021		2020
	*RMB million*		RMB million
Depreciation of property, plant and equipment		8,835		8,824
Depreciation of right-of-use assets		14,888		15,388
Other amortisation		518		378

		24,241		24,590

7	OTHER NET INCOME


	2021		2020
	*RMB million*		RMB million
Government grants		4,040		4,209
Gains/(loss) on disposal of property, plant and equipment, net
– Aircraft and spare engines		149		(18	)
– Other property, plant and equipment and right-of-use assets		214		75
Others		364		420

		4,767		4,686

8	INTEREST EXPENSE


	2021			2020
	*RMB million*			RMB million
Interest on borrowings		2,448			1,914
Interest relating to leases liabilities		4,434			5,180

Total interest expense on financial liabilities not at fair value through profit or loss		6,882			7,094
Less: interest expense capitalised (Note)		(701	)		(363	)

		6,181			6,731
Interest rate swaps: cash flow hedge, reclassified from equity		21			(15	)

		6,202			6,716

Note:

The weighted average interest rate used for interest capitalisation was 2.61% per annum in 2021 (2020: 2.51%).

9	INCOME TAX

(a)

Income tax credit in the consolidated income statement


	2021			2020
	*RMB million*			RMB million
PRC income tax
– Provision for the year		2,159			1,716
– Under-provision in prior year		35			48

		2,194			1,764
Deferred tax
Origination and reversal of temporary differences		(5,088	)		(5,132	)

Income tax credit		(2,894	)		(3,368	)

In respect of a majority of the Group’s airlines operation outside mainland China, the Group has either obtained exemptions from overseas taxation pursuant to the bilateral aviation agreements between the overseas governments and the PRC government, or has sustained tax losses in those overseas jurisdictions. Accordingly, no provision for overseas income tax has been made for overseas airlines operation in the current and prior years.

For the year of 2021, the Company and its branches and subsidiaries in mainland China are subject to income tax rates ranging from 15% to 25% (2020: 15% to 25%), and certain subsidiaries of the Company in Hong Kong are subject to income tax at 16.5% (2020: 16.5%).

(b)

Reconciliation between actual income tax credit and calculated tax based on accounting loss at applicable income tax rates


	2021			2020
	*RMB million*			RMB million
Loss before income tax		(13,910	)		(15,195	)

Notional tax on loss before taxation, calculated at the rates applicable to loss in the tax jurisdictions concerned		(3,380	)		(3,667	)

Adjustments for tax effect of:
Non-deductible expenses		96			102
Share of results of associates and joint ventures and other non-taxable income		(70	)		111
Unused tax losses and deductible temporary differences for which no deferred tax assets were recognised		489			80
Utilisation of unused tax losses and deductible temporary differences for which no deferred tax assets were recognised in prior years		(32	)		(8	)
Under-provision in prior year		35			48
Super deduction of research and development expenses		(32	)		(34	)

Income tax credit		(2,894	)		(3,368	)

10	LOSS PER SHARE

The calculation of basic loss per share for the year ended 31 December 2021 is based on the loss attributable to equity shareholders of the Company of RMB12,106 million (2020: RMB10,847 million) and the weighted average of 16,201,129,384 shares in issue during the year (2020: 14,056,887,174 shares).


	2021		2020
	*million*		million
Issued ordinary shares at 1 January		15,329		12,267
Effect of issuance of shares		872		1,790

Weighted average number of ordinary shares at 31 December		16,201		14,057

The amount of diluted loss per share is the same as basic loss per share as the effect of convertible bonds is anti-dilutive for the year ended 31 December 2021 and for the year ended 31 December 2020.

11	DIVIDENDS

The directors did not recommend any final dividend in respect of the years ended 31 December 2021 and 2020.

12	PROPERTY, PLANT AND EQUIPMENT, NET


	Investment properties			Buildings			Aircraft			Other flight equipment including rotables			Machinery, equipment and vehicles			Total
	RMB million			RMB million			RMB million			RMB million			RMB million			RMB million
Cost:
At 1 January 2020		470			16,046			113,276			24,385			8,253			162,430
Additions		—			12			1,435			542			935			2,924
Transferred from construction in progress		—			5,720			3,719			497			1,340			11,276
Reclassification on change of holding intention:
– transferred from other property, plant and equipment, net		52			(52	)		—			—			—			—
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			2,780			—			—			2,780
Disposals
– disposals		—			(152	)		(6,830	)		(399	)		(558	)		(7,939	)
– disposal of a subsidiary		—			(99	)		—			–			(34	)		(133	)

At 31 December 2020		522			21,475			114,380			25,025			9,936			171,338

At 1 January 2021		522			21,475			114,380			25,025			9,936			171,338

Additions		—			66			2,855			487			668			4,076
Transferred from construction in progress		—			2,097			8,796			434			486			11,813
Reclassification on change of holding intention:
– transferred to other property, plant and equipment, net		(32	)		32			—			—			—			—
– transferred from other property, plant and equipment, net		50			(50	)		—			—			—			—
Transfer to assets held for sale		—			—			(6,309	)		(152	)		—			(6,461	)
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			2,761			—			—			2,761
Others		9			—			—			—			—			9
Disposals		(8	)		(115	)		(6,393	)		(441	)		(556	)		(7,513	)

At 31 December 2021		541			23,505			116,090			25,353			10,534			176,023


	Investment properties			Buildings			Aircraft			Other flight equipment including rotables			Machinery, equipment and vehicles			Total
	RMB million			RMB million			RMB million			RMB million			RMB million			RMB million
Accumulated depreciation and impairment losses:
At 1 January 2020		166			4,917			54,177			13,119			5,263			77,642
Depreciation charge for the year		23			618			5,744			1,493			946			8,824
Reclassification on change of holding intention:
– transferred from other property, plant and equipment, net		21			(21	)		—			—			—			—
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			982			—			—			982
Disposals
– disposals		—			(59	)		(4,588	)		(372	)		(483	)		(5,502	)
– disposal of a subsidiary		—			(15	)		—			—			(11	)		(26	)
Provision for impairment losses		—			—			3,202			75			2			3,279
Impairment losses written off on disposals		—			—			—			(7	)		—			(7	)

At 31 December 2020		210			5,440			59,517			14,308			5,717			85,192

At 1 January 2021		210			5,440			59,517			14,308			5,717			85,192
Depreciation charge for the year		16			712			5,673			1,394			1,040			8,835
Reclassification on change of holding intention:
– transferred to other property, plant and equipment, net		(19	)		19			—			—			—			—
– transferred from other property, plant and equipment, net		35			(35	)		—			—			—			—
Transfer to assets held for sale		—			—			(2,746	)		(66	)		—			(2,812	)
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			1,202			—			—			1,202
Disposals		(6	)		(28	)		(4,270	)		(406	)		(414	)		(5,124	)
Provision for impairment losses (a)		—			—			914			80			—			994
Impairment losses transfer to assets held for sale		—			—			(2,581	)		(60	)		—			(2,641	)
Impairment losses written off on disposals		—			—			(809	)		—			—			(809	)

At 31 December 2021		236			6,108			56,900			15,250			6,343			84,837

Net book value:
At 31 December 2021		305			17,397			59,190			10,103			4,191			91,186

At 31 December 2020		312			16,035			54,863			10,717			4,219			86,146

(a)

As at 31 December 2021, the Group reported aircraft and related equipment in the amount of RMB199,407 million. For the year ended 31 December 2021, the Group made impairment provision of RMB2,579 million in aggregate towards certain aged or market value declined aircraft and related equipment based on its fleet disposal plans. Among which, the impairment provision for owned aircraft and related equipment were RMB994 million, and the impairment provision for leased aircraft and related equipment were RMB1,585 million (Note 14). Provision were made when asset’s carrying amount exceed its recoverable amount. The estimated recoverable amounts of above aircraft and related equipment with impairment indications were based on the fair value less cost to sell, which was determined by reference to the recent observable market prices for those aircraft and related equipment or appraisal results valued by external appraisal expert based on the cost method.

13.

CONSTRUCTION IN PROGRESS


	2021		2020
	*RMB million*		RMB million
Advance payment for aircraft and flight equipment		30,122		29,342
Others		1,725		3,065

		31,847		32,407

14	RIGHT-OF-USE ASSETS


	Aircraft and engines			Land use rights			Buildings			Others			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Cost:
At 1 January 2020		215,381			4,022			2,790			392			222,585
Additions		6,526			45			412			190			7,173
Transfer from construction in progress		5,993			2,440			—			226			8,659
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(2,780	)		—			—			—			(2,780	)
Disposals
– disposals		(4,419	)		—			(180	)		—			(4,599	)
– disposal of a subsidiary		—			(26	)		—			(43	)		(69	)

At 31 December 2020		220,701			6,481			3,022			765			230,969

At 1 January 2021		220,701			6,481			3,022			765			230,969
Additions		3,493			343			1,194			243			5,273
Transfer from construction in progress		302			61			—			152			515
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(2,761	)		—			—			—			(2,761	)
Transferred to assets held for sale		(1,582	)		—			—			—			(1,582	)
Disposals		(5,959	)		(75	)		(931	)		(26	)		(6,991	)

At 31 December 2021		214,194			6,810			3,285			1,134			225,423


	Aircraft and engines			Land use rights		Buildings			Others			Total
	RMB million			RMB million		RMB million			RMB million			RMB million
Accumulated amortization and impairment losses:
At 1 January 2020		67,890			813		637			34			69,374
Amortisation charge for the year		14,167			134		997			90			15,388
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(982	)		—		—			—			(982	)
Disposals
– disposals		(4,419	)		—		(132	)		—			(4,551	)
– disposal of a subsidiary		—			—		—			(7	)		(7	)
Provision for impairment losses		682			—		—			—			682

At 31 December 2020		77,338			947		1,502			117			79,904

At 1 January 2021		77,338			947		1,502			117			79,904
Amortisation charge for the year		13,616			140		954			178			14,888
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(1,202	)		—		—			—			(1,202	)
Transferred to assets held for sale		(616	)		—		—			—			(616	)
Disposals		(5,959	)		—		(913	)		(21	)		(6,893	)
Provision for impairment losses (Note 12(a))		1,585			—		—			—			1,585
Impairment losses transfer to assets held for sale		(682	)		—		—			—			(682	)

At 31 December 2021		84,080			1,087		1,543			274			86,984

Net book value:
At 31 December 2021		130,114			5,723		1,742			860			138,439

At 31 December 2020		143,363			5,534		1,520			648			151,065

15	DEFERRED TAX ASSETS

Deferred tax assets arise from deductible temporary differences and unused tax losses are recognised to the extent that it is probable that future taxable profits will be available against which the related tax benefit can be utilised. The Group’s tax losses in the PRC are available for carrying forward to set off future assessable income for a maximum period of five or eight years (According to the Notice of the Ministry of Finance on the Taxation Policy for supporting the prevention of pandemic of Covid-19 (No. 8, 2020), the carry over period for tax losses of enterprises in certain difficult industries suffering from the epidemic in 2020 will be extended from 5 years to 8 years). Therefore, the Group’s tax losses occurred in 2020 can be carried forward for 5-8 years, and the Group’s tax losses occurred in other years can be carried forward for 5 years.

16	TRADE RECEIVABLES

Credit terms granted by the Group to sales agents and other customers generally range from one to three months. Ageing analysis of trade receivables based on transaction date is set out below:


	2021			2020
	*RMB million*			RMB million
Within 1 month		2,337			1,972
More than 1 month but less than 3 months		273			307
More than 3 months but less than 12 months		236			231
More than 1 year		51			58

		2,897			2,568
Less: loss allowance		(39	)		(43	)

		2,858			2,525

17	OTHER RECEIVABLES


	2021			2020
	*RMB million*			RMB million
VAT recoverable		7,854			6,072
Government grants receivables		474			523
Rebate receivables on aircraft acquisitions		302			497
Other deposits		155			170
Others		972			1,244

		9,757			8,506
Less: loss allowance		(158	)		(159	)

		9,599			8,347

18	DERIVATIVE FINANCIAL LIABILITIES

In October 2020, the Group issued a total of 160,000,000 A share convertible bonds with par value of RMB100 each at par. The convertible bonds have a term of six years from the date of the issuance and the convertible bonds bear interest at the annual rate of 0.2% in the first year, 0.4% in the second year, 0.6% in the third year, 0.8% in the fourth year, 1.5% in the fifth year and 2.0% in the sixth year. Interest is paid once a year. Conversion rights are exercisable from 21 April 2021 to 14 October 2026 at an initial conversion price of RMB6.24 per share, subject to clauses of adjustment and downward revision of conversion price, redemption and sell-back. Convertible bonds, which conversion rights have not been exercised in five transaction days after maturity, will be redeemed at 106.5% of par value (including the interest for the sixth year).

Any excess of proceeds over the fair value amount initially recognised as the derivative component is recognised as the host liability component. Transaction costs related to the issuance of the convertible bonds are allocated to the host liability and are recognised initially as part of the liability. The derivative component is subsequently remeasured at fair value while the host liability component is subsequently carried at amortised cost using the effective interest method.

For the year ended 31 December 2021, 101,034,070 convertible bonds were converted to A shares at the conversion price of RMB6.24 per share, RMB1,619 million was credited to share capital. As at 31 December 2021, the carrying amount of liability component of the remaining 58,965,930 A share convertible bonds was RMB4,992 million (31 December 2020: 160,000,000 A share convertible bonds with a carrying amount of RMB12,833 million), and the fair value of the derivative component of remaining 58,965,930 A share convertible bonds was RMB1,222 million (31 December 2020: 160,000,000 A share convertible bonds with fair value of RMB3,092 million). For the year ended 31 December 2021, the loss on the changes in fair value of the derivative component amounted to RMB269 million was recognised (31 December 2020: gain on the changes in fair value amounted to RMB201 million).

19	BORROWINGS

Borrowings are analysed as follows:


	2021		2020
	*RMB million*		RMB million
Non-current
Long-term borrowings		15,389		8,811
Corporate bonds		1,000		7,500
Convertible bonds		4,984		12,833
Medium-term notes		16,981		8,990

		38,354		38,134

Current
Current portion of long-term borrowings		169		67
Short-term borrowings		25,116		25,286
Ultra-short-term financing bills		24,710		10,999
Current portion of corporate bonds and medium-term notes		7,910		3,747
Current portion of convertible bonds		8		—

		57,913		40,099

Total borrowings		96,267		78,233

The borrowings are repayable:
Within one year		57,913		40,099
In the second year		18,611		7,662
In the third to fifth year		16,747		14,394
After the fifth year		2,996		16,078

Total borrowings		96,267		78,233

20	LEASE LIABILITIES

At 31 December 2021, the leases liabilities were payable as follows:


	2021		2020
	*RMB million*		RMB million
Within 1 year		20,805		20,930
After 1 year but within 2 years		19,229		20,045
After 2 years but within 5 years		38,950		47,164
After 5 years		23,765		33,074

		102,749		121,213

The Group has significant lease liabilities which are denominated in USD as at 31 December 2021. The net exchange gain of RMB1,575 million for the year ended 31 December 2021 (2020: net exchange gain of RMB3,485 million) was mainly attributable to the translation of balances of lease liabilities which are denominated in USD.

21	TRADE PAYABLES

Ageing analysis of trade payables based on transaction date is set out below:


	2021		2020
	*RMB million*		RMB million
Within 1 month		403		431
More than 1 month but less than 3 months		221		473
More than 3 months but less than 6 months		221		313
More than 6 months but less than 1 year		268		329
More than 1 year		215		236

		1,328		1,782

B.	PREPARED IN ACCORDANCE WITH THE PRC GAAP

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2021


	2021			2020
	*RMB million*			RMB million
Revenue		101,644			92,561
Less: Operating costs		104,229			94,903
Taxes and surcharges		365			330
Selling and distribution expenses		4,993			5,248
General and administrative expenses		3,678			3,989
Research and development expenses		381			367
Finance expenses		4,025			2,993
Including: Interest expense		6,202			6,716
Interest income		675			322
Add: Other income		3,964			4,179
Investment income/(loss)		284			(401	)
Including: in come/(loss) from investment in associates and joint ventures		280			(467	)
(Loss)/gain on fair value movement		(309	)		53
Credit losses		1			(164	)
Impairment loss		(2,614	)		(4,017	)
Gain/(loss) on assets disposals		399			(22	)

Operating loss		(14,302	)		(15,641	)
Add: Non-operating income		660			652
Less: Non-operating expenses		261			197

Loss before income tax		(13,903	)		(15,186	)
Less: Income tax		(2,892	)		(3,366	)

Net loss for the year		(11,011	)		(11,820	)

(1) Net loss classified by continuity of operations:
1. Net loss from continuing operations		(11,011	)		(11,820	)
2. Net loss from discontinued operations		—			—
(2) Net loss classified by ownership:
1. Shareholders of the Company		(12,103	)		(10,842	)
2. Non-controlling interests		1,092			(978	)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2021


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Assets
Current assets:
Cash at bank and on hand		21,841		25,823
Bills receivable		4		12
Accounts receivable		2,894		2,544
Prepayments		736		732
Other receivables		1,275		1,955
Inventories		1,652		1,760
Assets held for sale		1,292		—
Non-current assets due within one year		138		—
Other current assets		8,034		6,159

Total current assets		37,866		38,985

Non-current assets
Long-term equity investments		5,977		5,673
Other equity instrument investment		563		799
Other non-current financial assets		95		92
Investment properties		305		312
Fixed assets		90,817		85,754
Construction in progress		31,869		32,438
Right-of-use assets		132,725		145,540
Intangible assets		6,564		6,155
Long-term receivables		645		—
Aircraft lease deposits		321		362
Long-term deferred expenses		768		887
Deferred tax assets		12,831		7,749
Other non-current assets		1,602		1,369

Total non-current assets		285,082		287,130

Total assets		322,948		326,115


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Liabilities and shareholders’ equity
Current liabilities
Short-term bank borrowings		25,116		25,286
Derivative financial liabilities		1,222		3,148
Bills payable		—		278
Accounts payable		12,183		11,974
Contract liabilities		1,542		1,513
Sales in advance of carriage		3,716		3,997
Employee benefits payable		4,457		4,328
Taxes payable		1,140		680
Other payables		7,914		8,640
Non-current liabilities due within one year		28,990		24,838
Other current liabilities		24,710		10,999

Total current liabilities		110,990		95,681

Non-current liabilities
Long-term bank borrowings		15,389		8,811
Bonds payable		22,965		29,323
Derivative financial liabilities		20		11
Hedging instrument		—		42
Lease liabilities		81,944		100,283
Long-term payables		193		291
Provision for major overhauls		4,820		4,216
Deferred benefits and gains		725		769
Deferred tax liabilities		26		80
Other non-current liabilities		1,631		1,745

Total non-current liabilities		127,713		145,571

Total liabilities		238,703		241,252


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Net assets
Share capital		16,948		15,329
Capital reserve		47,887		39,050
Other comprehensive income		159		242
Surplus reserve		2,579		2,579
Retained earnings		43		12,146

Total equity attributable to equity shareholders of the Company		67,616		69,346
Non-controlling interests		16,629		15,517

Total equity		84,245		84,863

Total liabilities and equity		322,948		326,115

C.	RECONCILIATION OF DIFFERENCES IN FINANCIAL STATEMENTS PREPARED UNDER PRC GAAP AND IFRSs

Difference in loss and equity attributable to equity shareholders of the Company under consolidated financial information in financial statements between IFRSs and PRC GAAP


	Loss attributable to equity shareholders of the Company						Equity attributable to equity shareholders of the Company
	2021			2020			31 December 2021			31 December 2020
	*RMB million*			RMB million			*RMB million*			RMB million
Amounts under PRC GAAP		(12,103	)		(10,842	)		67,616			69,346
Adjustments:
Capitalisation of exchange difference of specific loans		(8	)		(9	)		39			47
Government grants		1			—			(5	)		(6	)
Adjustment arising from the Company’s business combination under common control		—			—			237			237
Income tax effect of the above adjustments		2			2			(8	)		(10	)
Effect of the above adjustments on non-controlling interests		2			2			(28	)		(30	)

Amounts under IFRSs		(12,106	)		(10,847	)		67,851			69,584

BUSINESS REVIEW

In 2021, the global economy rebounded significantly from the low base in 2020. According to the World Economic Outlook issued by the International Monetary Fund, the global economy experienced a growth of 5.9% in 2021. China’s economic development and pandemic prevention and control maintained a leading position in the world. Its construction of a new development paradigm moved a new step and high quality development made new progress. The economy of China grew at 8.1% for the whole year, the economy growth rate ranked at the leading position among major economies, and the GDP exceeded RMB110 trillion.

In 2021, the global aviation industry presented a recovery momentum, and travellers were more confident and willing to travel around. However, as affected by COVID-19 pandemic (the “pandemic”), the passenger transportation and cargo transportation of the global aviation continued to differentiate, with passenger transportation maintaining weak recovery and cargo transportation maintaining high growth. Under the repeated impact of the pandemic, China’s aviation industry showed the trend of gradual recovery and improvement. During the year, the total traffic turnover volume, passenger traffic volume, and cargo and mail transportation volume recorded 85.7 billion ton-kilometers, 440 million passengers and 7.32 million tonnes, respectively, representing a year-on-year increase of 7.3, 5.5 and 8.2 percentage points, respectively. The Group continued to improve pandemic prevention and control mechanism, gave top priority to aviation safety, actively responded to the operation challenges, accumulated new drivers for high quality development. During the reporting period, with the joint efforts of the management and all staff, the Group achieved 2.11 million hours of safe flight, served approximately 98.50 million passengers, and made a new record in operating results of cargo transportation. The “Green Flight” of the Company was awarded the first “Golden Key” Champion by the Ministry of Commerce, and the Company was awarded the First Brand in Aviation Service Industry by the Ministry of Industry and Information Technology in China Brand Power Research for 11 consecutive years.

1. Pandemic Prevention and Control

During the reporting period, the Group resolutely implemented the responsibilities for pandemic prevention and control, and continued to improve the pandemic prevention and control working mechanism. With reference to the national pandemic prevention and control policies, we updated and improved the Company’s pandemic prevention system and measures in a timely manner; we put a premium on the prevention of imported pandemic from overseas, advanced the pandemic prevention check points, ensured the pandemic prevention management and control for inbound tourists, formulated guidelines for the whole-process pandemic prevention for international flight crew; we actively coordinated with national pandemic prevention and control measures, promoted full coverage of vaccination and 100% completion of booster injection for international flight crew and personnel in high-risk positions. During the reporting period, the Group actively coped with the pandemic challenge, protected and quarantined approximately 50,000 crew members, organized the pandemic prevention training to all staff and organized to conduct more than 1.90 million nucleic acid tests. The Company’s special flight for COVID-19 vaccine transported more than 130 million doses of COVID-19 vaccines within and across the borders.

2. Safety Management

During the reporting period, the Group continued to enhance safety quality, commenced special work for safety system improvement, work style construction and rectification, and safety risk management and control. We further carried out a three-year campaign of rectification special work for safety production, pushed forward the construction of seven safety systems, formulated and improved safety management system; we utilized digitalised concept to constantly enhance safety management level, promoted and applied professional system for safety management; we conducted work style rectification special work and promoted the obviousness of work style issues by using technical means.

3. Management Response

During the reporting period, the Group closely followed the changes in the pandemic, made every effort to enhance operating efficiency. We adhered to positive and flexible operation strategy, emphasised “two matching and two strengthening”, that is matching the capacity with the market, matching the load volume with the load cost, strengthening the revenue management, strengthening customer base. We adjusted the pace of capacity introduction, continuously optimized feet structure, implemented different strategies based on the pandemic evolvement; we adjusted the deployment of transport capacity in a timely manner, proactively captured time slot resources; we increased the utilization rate of real estate and promoted the refined management of real estate. During the reporting period, we seized opportunities in the freight market, constantly innovated sales mode, and expanded warehousing, e-commerce trade and other innovative businesses, organized 7,023 freight flights converted from passenger aircraft, completed cargo and mail transportation volume of 1.442 million tonnes and made a new record in the operating results of cargo transportation.

4. Hub Network

During the reporting period, the Group further advanced its hub network strategy, accelerated the construction of two comprehensive international hubs in Guangzhou and Beijing. We continued to establish the Guangzhou-Shenzhen integrated hub, deeply cultivated in the Greater Bay Area market, further enhanced flight time slot coverage for the Greater Bay Area market; we drove the high quality development of Beijing hub, constantly propelled the construction of Daxing express route, developed 6 express routes including the Guangzhou-Shenzhen-Chengdu route and comprehensively enhanced the operating quality of Daxing Airport. We coordinated the expansion of Hainan Free Trade Port market and proactively pursued new time slots; we expanded route network by joint operation of airline network and signed new cooperation agreements with 7 business partners including Juneyao Airlines and Loong Airlines.

5. Lean Control

During the reporting period, the Group continued to improve the long-acting mechanism of cost control. We continued to carry out lean cost management special activities, implemented over 1,120 revenue-increase and cost-reduction measures, and the Company gradually formed a consensus on lean control; we positively pursued preferential policies and commenced taxation planning; we continued to improve procurement system and control the procurement expenses; we continued to optimize the Company’s debt structure, expanded diversified financing channels and lowered financing cost; we prevented and resolved risks in terms of oil prices, exchange rates, interest rates, and receivables, to ensure the security of the Company’s funds.

6. Operation Service

During the reporting period, the Group continued to improve operation quality, and enriched the service brand connotation. We carried out specific improvements actions on flight on-time performance, emphasized on the implementation of key measures to enhance operation efficiency, maintaining a leading position in the industry in terms of flight on-time performance rate for six consecutive years; we established AOC, GOC video collaboration platforms; we strengthened services management and control, established dynamic adjustment mechanism for pandemic service standard, strengthened the management of service quality in relation to flight adjustment within three days; we are the first in China to launch the baggage combined transport service, namely “baggage home” (行李到家) and “air-metro” (航空-地鐵). During the reporting period, the Group ranked No. 12 in Skytrax World Airline awards, and the first among major airlines in China.

7. Reform and Development

During the reporting period, the Group made progress in deepening reform and implemented its development strategies one by one. We formulated the overarching approach for high quality development, coordinated and prepared the development plan for the “14th Five-Year Plan”; promoted downward penetration of governance reform, developed authorization management system from the Board to the management; deeply drove the adjustment and optimization of five major structures for fleet, market, manpower, industry, assets and liabilities; thoroughly promoted the contractual management of the tenure system, promoted the downward penetration of the market-oriented operation mechanism; propelled the development of “marketization, integration, industrialization and internationalization” of aircraft maintenance; proceeded with the non-public issuance of shares. During the reporting period, the Group outperformed the three-year reform action plan and formed the branch of engineering technology and the corporate governance structure has been constantly improved, the adjustment and optimization of the five major structures have achieved initial results, and the Group has moved a solid step for high quality development.

8. Social Responsibility

During the reporting period, the Group firmly promoted the green flight concept, boosted the development of rural revitalization and proactively performed social responsibility. We actively responded to the requirements of peak carbon dioxide emissions and facilitated energy-saving and carbon reduction of aircrafts by optimizing air routes, managing aviation oil, reducing aircraft weight and other measures; the “Green Flight” project reduced over 2,000 tonnes airline meals wastage in aggregate by service on demand; the Group continued to improve environment management system and formulated Work Plan for Green Development, to reduce the use of plastics and accelerate the research and development of and actively promote advanced and applicable plastic replacement products. We continued to put more resources in rural revitalization and brought more than 40,000 impoverished people out of poverty.

OPERATING DATA SUMMARY

The following table sets forth operating data by geographic regions:


	For the year ended 31 December				Increase/(decrease)
	2021		2020		Increase/(decrease)
					(%)
Traffic
Revenue passenger kilometers (RPK) (million)
Domestic		148,223.63		140,135.20		5.77
Hong Kong, Macau and Taiwan		152.48		239.14		(36.24	)
International		4,050.18		13,065.78		(69.00	)

Total:		152,426.29		153,440.11		(0.66	)

Revenue tonne kilometers (RTK) (million)
Domestic		14,389.54		13,720.92		4.87
Hong Kong, Macau and Taiwan		25.48		30.19		(15.60	)
International		6,793.68		7,053.76		(3.69	)

Total:		21,208.71		20,804.88		1.94

RTK – passenger (million)
Domestic		13,124.43		12,390.86		5.92
Hong Kong, Macau and Taiwan		13.48		20.91		(35.54	)
International		359.50		1,138.30		(68.42	)

Total:		13,497.41		13,550.07		(0.39	)

RTK – cargo (million)
Domestic		1,265.11		1,330.06		(4.88	)
Hong Kong, Macau and Taiwan		12.01		9.29		29.30
International		6,434.18		5,915.47		8.77

Total:		7,711.30		7,254.81		6.29


	For the year ended 31 December				Increase/(decrease)
	2021		2020		Increase/(decrease)
					(%)
Passengers carried (thousand)
Domestic		97,717.02		93,911.34		4.05
Hong Kong, Macau and Taiwan		147.75		213.22		(30.71	)
International		639.89		2,731.48		(76.57	)

Total:		98,504.66		96,856.04		1.70

Cargo and mail carried (thousand tonnes)
Domestic		765.34		817.51		(6.38	)
Hong Kong, Macau and Taiwan		12.19		9.12		33.66
International		664.42		634.19		4.77

Total:		1,441.95		1,460.83		(1.29	)

Capacity
Available seat kilometres (ASKs) (million)
Domestic		205,437.17		193,935.93		5.93
Hong Kong, Macau and Taiwan		463.01		550.91		(15.96	)
International		8,021.64		20,235.13		(60.36	)

Total:		213,921.82		214,721.97		(0.37	)

Available tonne kilometres (ATKs) (million)
Domestic		23,431.06		22,182.70		5.63
Hong Kong, Macau and Taiwan		61.20		70.71		(13.46	)
International		10,025.45		11,638.87		(13.86	)

Total:		33,517.70		33,892.28		(1.11	)


	For the year ended 31 December				Increase/(decrease)
	2021		2020		Increase/(decrease)
					(%)
Available tonne kilometres (ATKs) – passenger (million)
Domestic		18,489.35		17,454.23		5.93
Hong Kong, Macau and Taiwan		41.67		49.58		(15.96	)
International		721.95		1,821.16		(60.36	)

Total:		19,252.96		19,324.98		(0.37	)

Available tonne kilometres (ATKs) – cargo (million)
Domestic		4,941.71		4,728.46		4.51
Hong Kong, Macau and Taiwan		19.53		21.13		(7.59	)
International		9,303.50		9,817.71		(5.24	)

Total:		14,264.74		14,567.30		(2.08	)


	For the year ended 31 December				Increase/(decrease) percentage points
	2021		2020		Increase/(decrease) percentage points
Load factor
Passenger load factor (RPK/ASK) (%)
Domestic		72.15		72.26		(0.11	)
Hong Kong, Macau and Taiwan		32.93		43.41		(10.47	)
International		50.49		64.57		(14.08	)

Average:		71.25		71.46		(0.21	)

Overall load factor (RTK/ATK) (%)
Domestic		61.41		61.85		(0.44	)
Hong Kong, Macau and Taiwan		41.64		42.70		(1.06	)
International		67.76		60.61		7.16

Average:		63.28		61.39		1.89


	For the year ended 31 December				Increase/(decrease)
	2021		2020		(%)
Yield
Yield per RPK (RMB)
Domestic		0.46		0.41		12.20
Hong Kong, Macau and Taiwan		1.46		1.05		39.05
International		1.61		0.96		67.71

Average:		0.49		0.46		6.52

Yield per RFTK (RMB)
Domestic		1.18		1.36		(13.24	)
Hong Kong, Macau and Taiwan		13.74		8.93		53.86
International		2.83		2.47		14.57

Average:		2.58		2.27		13.66

Yield per RTK (RMB)
Domestic		4.88		4.34		12.44
Hong Kong, Macau and Taiwan		15.23		11.06		37.70
International		3.64		3.84		(5.21	)

Average:		4.49		4.18		7.42

Cost
Operating expenses per ATK (RMB)		3.47		3.22		7.76

Flight Volume
Kilometers flown (million)		1,317.85		1,304.67		1.01

Hours flown (thousand)
Domestic		1,935.98		1,835.82		5.46
Hong Kong, Macau and Taiwan		3.78		4.88		(22.58	)
International		170.60		236.51		(27.87	)

Total:		2,110.36		2,077.21		1.60

Number of flights (thousand)
Domestic		822.25		786.17		4.59
Hong Kong, Macau and Taiwan		2.27		2.71		(16.17	)
International		18.80		33.58		(44.00	)

Total:		843.32		822.46		2.54

Note: Discrepancies between the column sum and the total sum are due to rounding of numbers.

MANAGEMENT DISCUSSION AND ANALYSIS

I. FINANCIAL PERFORMANCE

Part of the financial information presented in this section below is derived from the Group’s audited consolidated financial statements that have been prepared in accordance with IFRSs.

The net loss attributable to equity shareholders of the Company of RMB12,106 million was recorded in 2021 as compared to the net loss attributable to equity shareholders of the Company of RMB10,847 million in 2020. The Group’s total operating revenue increased by RMB9,083 million or 9.81% from RMB92,561 million in 2020 to RMB101,644 million in 2021. Passenger load factor decreased by 0.21 percentage point from 71.46% in 2020 to 71.25% in 2021. Yield per RPK increased by 6.52% from RMB0.46 in 2020 to RMB0.49 in 2021. Yield per RTK increased by 7.42% from RMB4.18 in 2020 to RMB4.49 in 2021. Operating expenses increased by RMB7,229 million or 6.63% from RMB109,111 million in 2020 to RMB116,340 million in 2021. Mainly affected by the impact of the COVID-19 pandemic on the aviation industry, operating loss of RMB9,929 million was recorded in 2021 as compared to operating loss of RMB11,864 million in 2020.

II. OPERATING REVENUE

2021

2020

Operating
revenue

Percentage

Operating
revenue

Percentage

Changes in
revenue

RMB million

RMB million

Traffic revenue

95,279

93.74

87,027

94.02

9.48

Including:Passenger revenue

75,392

70,534

6.89

– Domestic

68,656

57,793

18.80

– Hong Kong, Macau and Taiwan

223

251

(11.16

)

– International

6,513

12,490

(47.85

)

Cargo and mail revenue

19,887

16,493

20.58

Other operating revenue

6,365

6.26

5,534

5.98

15.02

Mainly including:

Commission income

2,677

2,771

(3.39

)

Ground services income

326

210

55.24

General aviation income

572

508

12.60

Hotel and tour operation income

538

390

37.95

Cargo handling income

864

507

70.41

Total operating revenue

101,644

100.00

92,561

100.00

9.81

Less: fuel surcharge income

(673

)

(1,259

)

(46.54

)

Total operating revenue excluding fuel surcharge

100,971

91,302

10.59

Substantially all of the Group’s operating revenue is attributable to airlines transport operations. Traffic revenue accounted for 94.02% and 93.74% of the total operating revenue in 2020 and 2021, respectively. Passenger revenue and cargo and mail revenue accounted for 79.13% and 20.87%, respectively, of the traffic revenue in 2021. During the reporting period, the Group’s total traffic revenue was RMB95,279 million, representing an increase of RMB8,252 million or 9.48% from the same period of prior year, mainly because of the increase in passenger revenue and in cargo revenue. The other operating revenue of the Group is mainly derived from commission income, hotel and tour operation income, general aviation income, cargo handling income and ground services income.

The increase in operating revenue was primarily due to an increase in passenger revenue by 6.89% from RMB70,534 million in 2020 to RMB75,392 million in 2021. The total number of passengers carried increased by 1.7% from 96.86 million passengers in 2020 to 98.50 million passengers in 2021. RPKs decreased by 0.66% from 153,440 million in 2020 to 152,426 million in 2021.

Domestic passenger revenue, which accounted for 91.07% of the total passenger revenue in 2021, increased by 18.80% from RMB57,793 million in 2020 to RMB68,656 million in 2021, mainly due to the maturity of COVID-19 prevention policies in the PRC and the number of passengers carried by domestic flight increased by 4.05% as compare to 2020. Domestic passenger traffic in RPKs increased by 5.77%, while passenger capacity in ASKs increased by 5.93%, resulting in a decrease in passenger load factor by 0.11 percentage point from 72.26% in 2020 to 72.15% in 2021. Yield per RPK increased by 12.2% from RMB0.41 in 2020 to RMB0.46 in 2021.

Hong Kong, Macau and Taiwan passenger revenue, which accounted for 0.30% of total passenger revenue, decreased by 11.16% from RMB251 million in 2020 to RMB223 million in 2021. For Hong Kong, Macau and Taiwan flights, passenger traffic in RPKs decreased by 36.24%, while passenger capacity in ASKs decreased by 15.96%, resulting in a decrease in passenger load factor by 10.47 percentage points from 43.41% in 2020 to 32.93% in 2021. Passenger yield per RPK increased from RMB1.05 in 2020 to RMB1.46 in 2021.

International passenger revenue, which accounted for 8.64% of total passenger revenue, decreased by 47.85% from RMB12,490 million in 2020 to RMB6,513 million in 2021, primarily due to the continuous impact of overseas COVID-19 pandemic and the restriction of cross border traveling policy not lifted yet. For international flights, passenger traffic in RPKs decreased by 69.00%, while passenger capacity in ASKs decreased by 60.36%, resulting in a decrease in passenger load factor by 14.08 percentage points from 64.57% in 2020 to 50.49% in 2021. Passenger yield per RPK increased from RMB0.96 in 2020 to RMB1.61 in 2021.

Cargo and mail revenue, which accounted for 20.87% of the Group’s total traffic revenue and 19.57% of total operating revenue, increased by 20.58% from RMB16,493 million in 2020 to RMB19,887 million in 2021. The increase was mainly attributable to the increase of demand for freight, especially international freight, due to the impact of COVID-19 pandemic.

Other operating revenue increased by 15.02% from RMB5,534 million in 2020 to RMB6,365 million in 2021. The increase was primarily due to the increase of ground services income, general aviation income, and hotel and tour operation income, and cargo handling income .

III. OPERATING EXPENSES

Total operating expenses in 2021 amounted to RMB116,340 million, representing an increase of RMB7,229 million or 6.63% comparing to that of 2020 because of the increase of various traffic expenses. Total operating expenses as a percentage of total operating revenue decreased from 117.88% in 2020 to 114.46% in 2021.

Operating expenses

2021

2020

RMB million

Percentage (%)

RMB million

Percentage (%)

Flight operation expenses

45,569

39.17

37,545

34.41

Mainly including:

Jet fuel costs

25,505

18,797

Aircraft operating lease charges

920

977

Flight personnel payroll and welfare

10,763

10,232

Maintenance expenses

12,162

10.45

13,375

12.26

Aircraft and transportation service expenses

21,147

18.18

18,743

17.18

Promotion and selling expenses

4,705

4.04

5,007

4.59

General and administrative expenses

3,663

3.15

4,088

3.75

Depreciation and amortisation

24,241

20.84

24,590

22.54

Impairment losses on property, plant and equipment, right-of-use assets and other assets

2,597

2.23

3,961

3.63

Hotel and tour operation expense

423

0.36

317

0.29

External air catering service expense

368

0.32

333

0.31

Financial institution charges

0.06

0.08

Cargo handling expense

398

0.34

400

0.37

Others

993

0.86

668

0.61

Total operating expenses

116,340

100.00

109,111

100.00

Flight operation expenses, which accounted for 39.17% of total operating expenses, increased by 21.37% from RMB37,545 million in 2020 to RMB45,569 million in 2021, mainly resulted from the increase of jet fuel cost, which increased by 35.69% from RMB18,797 million in 2020 to RMB25,505 million in 2021. The increase in jet fuel cost was caused by the increase in jet fuel price in 2021.

Maintenance expenses, which accounted for 10.45% of total operating expenses, decreased by 9.07% from RMB13,375 million in 2020 to RMB12,162 million in 2021.

Aircraft and transportation service expenses, which accounted for 18.18% of total operating expenses, increased by 12.83% from RMB18,743 million in 2020 to RMB21,147 million in 2021. The increase was mainly due to an increase in the amounts of take-off and landing as well as navigation fees and ground service related staff costs.

Promotion and selling expenses, which accounted for 4.04% of total operating expenses, decreased by 6.03% from RMB5,007 million in 2020 to RMB4,705 million in 2021. General and administrative expenses, which accounted for 3.15% of the total operating expenses, decreased by 10.40% from RMB4,088 million in 2020 to RMB3,663million in 2021.

Depreciation and amortisation, which accounted for 20.84% of the total operating expenses, stayed at the same level in amounts as compared to 2020.

Impairment losses on property, plant and equipment and right-of-use assets, which accounted for 2.23% of the total operating expenses, decreased by 34.44% from RMB3,961 million in 2020 to RMB2,597 million in 2021, mainly due to the impairment provision for aircraft and related equipment.

IV.

OPERATING LOSS

Operating loss of RMB9,929 million was recorded in 2021 (2020: operating loss of RMB11,864 million).

V.	OTHER NET INCOME

Other net income slightly increased by RMB81 million from RMB4,686 million in 2020 to RMB4,767 million in 2021.

VI.

INCOME TAX

Income tax credit of RMB2,894 million was recorded in 2021 (2020: income tax credit of RMB3,368 million was recorded), as the Company recorded operating loss as impacted by the COVID-19 pandemic, and recognised deferred tax asset for tax losses.

VII.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

As at 31 December 2021, the Group’s current liabilities exceeded its current assets by RMB73,124 million. For the year ended 31 December 2021, the Group recorded a net cash inflow from operating activities of RMB7,688 million mainly due to the improvement of the operation, a net cash outflow from investing activities of RMB15,820 million mainly due to the increase in the purchase of self-owned aircrafts, net cash inflow from financing activities of RMB4,186 million mainly due to the non-public issuance of shares and public issuance of convertible bonds of the Company in 2020, and the absence of such event in 2021, which in total resulted in a net decrease in cash and cash equivalents of RMB3,946 million. The decrease in cash and cash equivalents was mainly due to the decrease in the scale of financing for issuance of shares, bonds and long-term and short-term loans.

The Group is dependent on its ability to maintain adequate cash inflow from operations, its ability to maintain existing external financing, and its ability to obtain new external financing to meet its debt obligations as they fall due and to meet its committed future capital expenditures. The Group’s policy is to regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term. As at 31 December 2021, the Group has obtained credit facilities of RMB295,683 million in aggregate (31 December 2020: RMB315,452 million) granted by several banks and other financial institutes, among which approximately RMB204,051 million was unutilised. The Directors of the Company believe that sufficient financing will be available to the Group when and where needed.

The analyses of the Group’s total interest-bearing liabilities are as follows:

Composition of interest-bearing liabilities


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Lease liabilities		102,749		121,213
Borrowings		96,267		78,233
Long-term payable		291		385

Fixed rate interest-bearing liabilities		144,553		130,072
Floating rate interest-bearing liabilities		54,754		69,759

Analysis of interest-bearing liabilities by currency


	31 December 2021		31 December 2020
	*RMB million*		RMB million
USD		43,778		52,862
RMB		152,429		142,545
Others		3,100		4,424

Total		199,307		199,831

Maturity analysis of interest-bearing liabilities


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Within 1 year		78,816		61,123
After 1 year but within 2 years		37,942		27,805
After 2 years but within 5 years		55,761		61,751
After 5 years		26,788		49,152

Total		199,307		199,831

Interest expense and exchange difference/net exchange loss

Interest expense decreased by RMB514 million from RMB6,716 million in 2020 to RMB6,202 million in 2021, mainly due to decrease in interest expense on lease liabilities.

Net exchange gains of RMB1,575 million was recorded in 2021, as compared with a net exchange gains of RMB3,485 million in 2020. Net exchange gain was primarily attributable to the exchange difference arising from the lease liabilities denominated in USD, along with the depreciation of the U.S. dollar against Renminbi .

The Group’s capital structure at the end of the year is as follows:


	31 December 2021			31 December 2020			Change
Total liabilities (RMB million)		238,703			241,252			(1.06	%)
Total assets (RMB million)		323,211			326,383			(0.97	%)
Debt ratio		73.85	%		73.92	%		Decreased by 0.07 percentage point

The Group monitors capital on the basis of debt ratio, which is calculated as total liabilities divided by total assets. The debt ratio decreased by 0.07 percentage point compared to that of the end of 2020.

VIII. MAJOR CHARGE ON ASSETS

As at 31 December 2021, no property, plant and equipment of the Group (31 December 2020: Nil) were mortgaged for bank borrowings.

IX. COMMITMENTS AND CONTINGENCIES

Commitments

As at 31 December 2021, the Group had capital commitments (excluding investment commitment) of RMB64,243 million (31 December 2020: RMB66,996 million), of which, RMB54,662 million (31 December 2020: RMB56,547 million) related to the acquisition of aircraft and related flight equipment and RMB9,581 million (31 December 2020: RMB10,449 million) related to other projects of the Group.

The Group had investment commitments as follows:


	31 December 2021		31 December 2020
	*RMB million*		RMB million
Authorised and contracted for:
Share of capital commitments of a joint venture		185		405
Capital contributions for acquisition of interest in an associate		171		—

		356		405
Authorised but not contracted for:
Share of capital commitments of a joint venture		24		26

		380		431

Contingent liabilities

(a)

The Group leased certain properties and buildings from CSAH which were located in Guangzhou, Wuhan, Haikou, etc. Although such properties and buildings were used by CSAH before being leased to the Group, as known to the Group, such properties and buildings lack adequate documentation evidencing CSAH’s rights thereto. Pursuant to the indemnification agreement dated 22 May 1997 entered into between the Group and CSAH, CSAH has agreed to indemnify the Group against any loss or damage arising from any challenge of the Group’s right to use the aforementioned properties and buildings.

(b)

The Group entered into certain agreements with CSAH in prior years to acquire certain land use right and buildings from CSAH. The change of business registration of such land use right and buildings are still in progress. CSAH issued letters of commitment to the Company, committing to indemnify the Group against any claims from third parties to the Group, or any loss or damage in the Group’s operation activities due to lack adequate documentation of the certain properties and buildings, without recourse to the Group.

(c)

The Company and its subsidiary, Xiamen Airlines, entered into agreements with certain pilot trainees and certain banks to provide guarantees on personal bank loans amounting to RMB696 million (31 December 2020: RMB696 million) that can be drawn by the pilot trainees to finance their respective flight training expenses. As at 31 December 2021, total personal bank loans of RMB181 million (31 December 2020: RMB221 million), under these guarantees, were drawn down from the banks. During the year, RMB2 million has been made by the Group (2020: Nil) due to the default of payments of certain pilot trainees.

SUBSEQUENT EVENTS

On 29 October 2021, the Company entered into the Conditional Subscription Agreement in relation to the Subscription of the A Shares under the Non-public Issue of A Shares of China Southern Airlines Company Limited with CSAH, pursuant to which the Company proposed to issue 803,571,428 new A Shares to CSAH (“the A Share Issuance”). The total funds to be raised from the A Share Issuance will be not more than RMB4,500 million (including RMB4,500 million). The consideration shall be made by CSAH in full by cash. On 29 October 2021, the Company entered into the Conditional Subscription Agreement in relation to the Subscription of the H Shares under the Non-public Issue of H Shares of China Southern Airlines Company Limited with Nan Lung Holding Limited (“Nan Lung”), pursuant to which the Company proposed to issue not more than 855,028,969 new H shares (including 855,028,969 H shares) to Nan Lung (“the H Share Issuance”). The total funds to be raised from the H Share Issuance will be not more than HKD1,800 million (including HK$1,800 million). The consideration shall be made by Nan Lung in full by cash. Both of the A Share Issuance and the connected transaction contemplated under H Share Issuance were approved by the Extraordinary General Meeting of the Company on 28 December 2021. The Company announced that it had received the “Acceptance Notice of the Application for Administration Permission” issued by China Securities Regulatory Commission (“CSRC”) for the A Share Issuance and H share Issuance on 10 January 2022 and 11 January 2022, respectively. On 18 March 2022, the Company announced that it had received the Approval on Issuance of Overseas Listed Foreign Shares by China Southern Airlines Company Limited (Zheng Jian Xu Ke 2022 No. 497) issued by the CSRC. As at the date of this announcement, the A Share Issuance is under review by the CSRC.

CHANGES IN SHARE CAPITAL STRUCTURE

Unit: Share


	31 December 2020				Increase/ (decrease) in 2021			31 December 2021
	Number of Shares		Percentage *(%)*		Number of Shares			Number of Shares		Percentage *(%)*
I. Shares subject to restrictions on sales
1. RMB ordinary shares		2,942,637,115		19.20		(489,202,658	)		2,453,434,457		14.48
2. Foreign listed shares (Note)		1,209,621,577		7.89		(1,209,621,577	)		0		0

Total		4,152,258,692		27.09		(1,698,824,235	)		2,453,434,457		14.48

II. S hares not subject to restrictions on sales
1. RMB ordinary shares		8,111,520,431		52.91		2,108,338,291			10,219,858,722		60.30
2. Foreign listed shares (Note)		3,065,523,272		20.00		1,209,621,577			4,275,144,849		25.22

Total		11,177,043,703		72.91		3,317,959,868			14,495,003,571		85.52

III. Total number of shares		15,329,302,395		100		1,619,135,633			16,948,438,028		100

Note:

In the above table, the 1,209,621,577 foreign listed shares of the Company subject to restrictions on sales as at 31 December 2020 included (i) 600,925,925 H shares (“2018 Subscription Shares”) owned by Nan Lung, a wholly-owned subsidiary of the Company’s controlling shareholder, China Southern Air Holding Company Limited, as a result of the subscription of the non-public issuance of H shares of the Company in 2018, while Nan Lung undertook that the 2018 Subscription Shares shall not be listed or traded on any stock exchange, or transferred within 36 months from the completion date of the issuance thereof (i.e. 11 September 2018) and such commitment period has expired during the year ended 31 December 2021; (ii) 608,695,652 H shares (“2020 Subscription Shares”) owned by Nan Lung as a result of the subscription of the non-public issuance of H shares of the Company in 2020, while Nan Lung undertook that the 2020 Subscription Shares shall not be listed or traded on any stock exchange, or transferred within 36 months from the completion date of the issuance thereof (i.e. 15 April 2020). Considering that the 2018 Subscription Shares and the 2020 Subscription Shares are not subject to restrictions on sales in nature, the 2018 Subscription Shares and the 2020 Subscription Shares were reclassified as the Company’s foreign listed shares not subject to restrictions on sales during the year ended 31 December 2021.

PURCHASE, SALE OR REDEMPTION OF SHARES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any shares during the year ended 31 December 2021.

PRE-EMPTIVE RIGHTS

There is no specific provision under the PRC laws or the articles of association of the Company regarding pre-emptive rights, which requires the Company to offer new shares to existing shareholders in proportion to their existing shareholdings when there is issuance of shares.

AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee of the Company has reviewed the audited consolidated financial statements of the Group for the year ended 31 December 2021.

COMPLIANCE WITH THE MODEL CODE

Having made specific enquiries, all Directors and Supervisors of the Company confirmed that they had complied with the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Rules (the “Listing Rules”) Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) for the year ended 31 December 2021. The code of conduct adopted by the Company regarding securities transactions by the Directors and Supervisors is no less stringent than the Model Code.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

As Mr. Wang Chang Shun resigned as the Chairman, the executive Director, the chairman of the Strategic and Investment Committee of the Board and the member of the Nomination Committee of the Board of the Company on 21 December 2020 due to his retirement, the Board on the same day appointed the vice Chairman and president of the Company, Mr. Ma Xu Lun, as the Chairman of the 8th session of the Board. Due to the fact that Mr. Ma Xu Lun concurrently served as the Chairman and the President of the Company, the Company at that time was not in compliance with provision A.2.1 of the Corporate Governance Code which requires the roles of chairman and chief executive should be separate. Nevertheless, having considered that (i) the co-performance of the duties of the Chairman and the President was a temporary arrangement pending election and appointment of a candidate to fill vacancy of the President position; and (ii) the Board would meet regularly and whenever needed to consider matters relating to business operations of the Group, the Board at that time was of the view that this temporary arrangement would not impair the balance of power and authority of the Board and the management of the Company, nor will the effectiveness of corporate planning and implementation of corporate strategies and decisions be affected. On 22 June 2021, the Board appointed Mr. Han Wen Sheng as the President of the Company and Mr. Ma Xu Lun resigned from the President of the Company. From then on, the roles of Chairman and the President of the Company are held by different individuals, and accordingly, compliance in the code provisions as set out in provision A.2.1 of the Corporate Governance Code has been restored.

Save as disclosed above, the Board considers that the Group has complied with the code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules for the year ended 31 December 2021.

DIVIDENDS

Considering that the Company suffered an operating loss for year of 2021, which does not meet the conditions for profit distribution as required under the Articles of Association of the Company, the Board did not recommend any payment of cash dividend or conversion of capital reserve into share capital or other profit distribution of the Company for the year of 2021. The proposal in relation to the profit distribution plan is still subject to the consideration and approval of the shareholders’ general meeting of the Company.

2022 OUTLOOK

Looking forward to 2022, the trend of the global pandemic still has relatively highly uncertainty, and measures for pandemic prevention and control of different countries differentiated gradually. The prospects for economic recovery in both developed countries and developing countries are uncertain. According to the forecast of the International Monetary Fund, the global economy is more fragile than expected. The global economy growth for 2022 is expected to be lowered to 4.4%.

China’s economic development encounters three pressures, namely demand reduction, supply disruption and anticipation weakening. In 2022, China will insist on the overall basis of prioritising stability and persuing improvement in stability, accelerating the building of new development pattern, comprehensively deepen reform and opening up, adhere to innovation-driven development to drive high quality development, and keep taking supply-side structural reform as its main task, to coordinate pandemic prevention and control and economic and social development.

Facing the complicated and changeable environment both domestically and abroad, the Group will proactively participate in the construction of a strong country in the new era and support China’s civil aviation in building a strong country of civil aviation. Besides, the Group will coordinate pandemic prevention and control and management response, stick to high quality development and spare no efforts to build the Group into a world-class air transport enterprise with global competitiveness.

1.	To stick to scientific and precise prevention and control, and strengthen normalized management of pandemic prevention and control

The Group will stick to scientific and precise prevention and control, and assume its main responsibility for pandemic prevention and control. We will pay attention to the situation of pandemic prevention and control, and follow the requirements of each regulator to dynamically adjust measures for pandemic prevention and control; we will strengthen pandemic prevention training and the supervision and inspection of epidemic prevention, and strengthen the awareness of responsibility for pandemic prevention and control; we will manage passengers and staffs according to their classifications, so as to implement precise prevention and control; we will continue to amend working system for pandemic prevention and control, improve working mechanism to achieve scientific prevention and control; and we will continue to control the risk of imported pandemic and whole-process monitoring of passengers, to implement normalized management of pandemic prevention and control.

2.	To put safety first, and prevent and dissolve safety risks

The Group will build a sustainable and high quality safety, and by taking the deepening the construction of seven major safety systems as its core, strengthen responsibilities, controlling risks and managing process. We will strictly implement safety responsibility, improve the construction of safety system; improve safety training system, reform flight training management system, implement maintenance skill improvement training; perform dual prevention mechanism of safety risks classification and control and the identification and management of potential safety hazards, to propel the construction of operation risk control system; strengthen safety performance management and application, to drive the digital transformation of safety process management; to promote the construction of safety system by means of innovative technologies. In 2022, the Group will ensure its continuation in aviation safety as in past years.

3.	To ensure management response, and spare no effort to improve business performance

The Group will pay close attention to the pandemic situation and changes in the aviation market, and adjust operation strategies in a timely manner. We will increase inputs in domestic transportation capacity, optimize international layout, continue to enhance market control, optimize market structure, spare no efforts to pursue time slot resources, and establish management system for high-value clients and to consolidate the cooperation with airlines; we will capture the opportunities in the international freight market to improve the utilization rate of freighters and do well in international in-bound market and belly-hold operation; an improved product system will be established to expand group customers and increase freight flights converted from passenger aircraft; we will accelerate the construction of freight hubs to establish Guangzhou-Shenzhen integrated hub, strengthen Shanghai Pudong hub and enhance the operating quality of Beijing Daxing hub; we will promote the sustainable development of warehousing, e-commerce trade, supply chain management and other new businesses.

4.	To establish a long-term mechanism for cost control, and enhance the ability to resist risks

The Group shall establish a long-term mechanism for cost control to found a solid foundation for high quality development. We will continue to conduct projects of “Golden Idea Makes Benefits”, comprehensive improvement of budget management, market-based accounting, digitalised finance, goal setting and benchmarking management, etc. and optimize the business-based variable cost management system; we will expand financing channels to realize diversified and low-cost financing, continue to optimize debt structure; proceed with non-public issuance of shares, to constantly optimize assets and liabilities structure; strengthen the management of financial risks and finance risks; strengthen centralized control of funds to ensure the security of capital chain; and continue to invigorate idle assets and real estate.

5.	To improve operation quality, and build a first-class brand service system

The Group will continue to improve operational efficiency and service quality. We will strengthen the management ability to the operation and dispatching system at all levels, and promote the digitalised and intelligent transformation in operational area; improve the whole chain management mechanism for jet fuel, to drive the data-based transformation of fuel saving control and constantly lower fuel consumption per ATK; we will establish a customer-oriented service quality management system, to manage the service quality during the whole process, and promote the integration of service with marketing and operation, so as to develop “Humanized, Digitalized, Refined, Personalized, Convenient” service. We will strengthen the brand image of “Affinity and Refinement”, further enhance brand management capacity, formulate and optimize the management standard of corporate identity system.

6.	To intensify reforms, expedite the implementation of strategies and create momentum for development

The Group will deeply promote the reform of systems and mechanisms, to ensure that the critical strategies for high quality development are implemented gradually, and continue to explore development space. We will complete the reforms of three systems, to realize the full coverage of tenure system and contractual management of staff; deepen reform of aircraft maintenance to build aircraft maintenance brand; promote the implementation of “Double Hundred Action” and “Innovative Technology Reform Demonstration Actions”, continue to improve the modern enterprise system with Chinese characteristics, and perform the powers and functions of the Board; establish “Sunshine Purchase” system to drive the construction of standardized procurement; we will proceed with the construction of hubs in high quality, grasp the opportunities arising from the development of Greater Bay Area, continue to expedite the “Four Integrations”; continue to promote the adjustment and optimization of five major structures, deeply proceed the building of business ecosystem and establish products lines by focusing on “food, accommodation, transportation, entertainment, travel and shopping”. We will accelerate the deployment in Hainan Free Trade Port, to drive the implementation of projects in freight, air catering, general aviation and e-commerce industries.

PUBLICATION OF ANNUAL REPORT ON THE WEBSITES OF THE STOCK EXCHANGE AND THE COMPANY

The 2021 annual report of the Company, which contains consolidated financial statements for the year ended 31 December 2021, with an unmodified auditor’s report, and all other information required under Appendix 16 to the Listing Rules will be despatched to the shareholders of the Company and published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company(www.csair.com) in due course.

By order of the Board

China Southern Airlines Company Limited

Xie Bing

Company Secretary

Guangzhou, the People’s Republic of China

30 March 2022

As at the date of this announcement, the Directors include Ma Xu Lun and Han Wen Sheng as executive Directors; and Liu Chang Le, Gu Hui Zhong, Guo Wei and Yan Andrew Y as independent non-executive Directors.

Exhibit 99.2

China Southern Airlines Co., Ltd.

Corporate Social Responsibility Report

Year 2021

Set Sail on a New Journey-

Flying Safely into the Future

About the Report

This report is the 15^th Corporate Social Responsibility report issued by China Southern Airlines Co., Ltd. It presents the Company’s practice and achievements in the fields of economics, environment and Corporate Social Responsibility.

We look forward to your learning more about China Southern Airlines through this report.

Reliability Guarantee

The Board of Directors and all directors of the Company undertake that there are no false records, misleading statements or major omissions in the contents of this report and are responsible for the authenticity, accuracy and completeness of its contents.

Report Time Frame

The reporting time range is from January 1 to December 31, 2021 and has been appropriately extended to enhance the comparability of the report. This report is published concurrently with the Annual Report, which was published in March 2021.

Reporting Boundaries

The disclosure boundary of the data indicators in this report is mainly based on China Southern Airlines Co., Ltd., and individual indicators are extended to China Southern Airlines Group Co., Ltd. The scope of data disclosure has been specified in the report. There are no significant changes in the organization size, structure, ownership or supply chain during the reporting period.

Data Statement

The financial data in this report comes from the audited annual report of China Southern and other data comes from the public data of government departments, official documents of the Company and relevant statistics. This report collects data based on the quantitative Corporate Social Responsibility indicator system that conforms to the characteristics of China Southern Airlines.

The financial data in this report is in RMB unless otherwise stated.

Compilation Basis

The State-owned Assets Management and Supervision Commission of the State Council “Guiding Opinions on the Fulfillment of Corporate Social Responsibility by Central Enterprises”

Hong Kong Stock Exchange Environmental, Social and Governance Reporting Guidelines (HK-ESG)

Guidelines for the preparation of the “Report on Corporate Social Responsibility” issued by the Shanghai Stock Exchange

Chinese Academy of Social Sciences “Guidelines for Compilation of Corporate Social Responsibility Reports in China” (CASS-CSR4.0)

Global Sustainability Standards Council GRI Sustainability Reporting Standards (GRI Standards)

GB/T 36001-2015 Guidelines for Compilation of Corporate Social Responsibility Reports

Appellation Description

For the convenience of expression and reading, “China Southern Airlines Co., Ltd.” is also represented by “China Southern” or “Company”, “China Southern Group Co., Ltd.” is also represented by “China Southern Group”, “Group”, “Xiamen Airlines Co., Ltd.” is also represented by “Xiamen Airlines”, local branches are represented by “region name + branch company” and “Civil Aviation Administration of China” is also represented by “Civil Aviation Administration.”

Report Acquisition

This report includes both Chinese and English versions and is published in both paper and electronic formats. You may log in to the official website of China Southern Airlines to browse or download this report online.

Contact Information

If you have any questions or suggestions about this report, please write to us at China Southern Airlines Co., Ltd.

Address: China Southern Airlines Company Limited, No.68 Qixin Road, Baiyun District, Guangzhou.

Postal code: 51040

Website: www.csair.com

Contact: Huang Kun

E-mail: [email protected]

TABLE OF CONTENTS5


Letter from the Chairman			5

About Us			7

Board Statement			14

Focus 2021			21

1. Building a Strong Line of Defense - Setting Sail for a Safe Future			35

1.1 Consolidating Safety Management			35

1.2 Adhering to Aviation Safety			37

1.3 Ensuring Passenger Safety			41

1.4 Managing Occupational Health			42

2. Low Carbon Environmental Protection - Setting Sail Towards a Green Future			44

2.1 Improving Environmental Management			44

2.2 Implementing Energy Saving and Emission Reduction			46

2.3 Strengthening Pollution Prevention and Control			47

2.4 Advocating Green Environmental Protection			49

3. Affinity and Refinement - Setting Sail for a Warm Future			51

3.1 Guaranteeing Safe Flight Operations			51

3.2 Smart Travel			52

3.3 Providing Warm Service			54

3.4 Maintaining Customer Relations			59

3.5 Quality Logistics Service			62

4. Innovation and Efficiency - Setting Sail for a Prosperous Future			65

4.1 Compliant and Stable Flight Operations			65

4.2 Deepening Reforms			69


4.3 Sustainable Supply Chain			71

4.4 Strengthening Exchanges and Cooperation			74

5. Moving Forward Hand in Hand - Setting Sail Toward a Wonderful Future			78

5.1 Helping Employees Flourish			78

5.2 Contributing to a Harmonious Society			88

6. Report Appendix

Outlook			98

List of Policies and Regulations			99

Performance Data			103

Index of Indicators			107

Feedback Form			115

Letter from the Chairman

During Year 2021, in the face of the complex and severe situation created by the COVID-19 global pandemic, China Southern adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and resolutely implemented the requirements of the Central Government and superiors, staying true to its original mission.

China Southern began this new “normal” situation of COVID-19 with practical work and made overall plans for pandemic prevention and control as well as safe production and operation, reform and promoting various work of party building, fully fulfilled political, economic and social responsibilities, and practiced “airline of the people and for the people” with practical actions.

We took solid and meticulous prevention and control measures to push down the impact of COVID-19. We regarded pandemic prevention and control of COVID-19 as a top priority, further consolidating responsibilities, improved pandemic prevention and control mechanisms, adjusted in-flight service procedures, carried out special rectification at airports to prevent the importation of this plague from overseas travelers and strengthened our closed-loop management of five categories of personnel on international flights. Concurrently, we strengthened employee pandemic prevention training and education and psychological counseling for quarantined personnel and promoted the full coverage of vaccination. A total of 79 new crown vaccine charter flights were carried out throughout the year, carrying 130 million doses of new crown vaccine, ranking first in China’s civil aviation.

We overcame multiple challenges and demonstrated good momentum for high-quality development. In terms of safety, we vigorously promoted the construction of seven major safety systems and continuously provided flight operations safely for 266 months and air defense safely for 331 months. This high safety level commitment continued to maintain China Southern Airlines’ leadership position in China’s civil aviation.

In terms of flight operations, we fully responded to the severe impact of the COVID-19 pandemic, improved operational revenue, reduced costs and revitalized resources; regarding flight operations, a special campaign to improve flight regularity was carried out and as flight regularity rate reached a strong 89.89%, 1.9 percentage points higher than the industry average.

In terms of service, we built a new service brand. “Affinity and Refinement”, strengthened service management and control and all service indicators were listed in the forefront of China’s domestic airlines. Strategically, the overall idea of high-quality development has been clarified; The 14th Five-Year Plan has been formulated; Digital transformation has been accelerated; Five major structural adjustments have been optimized; China Southern’s ecosystem has been built, and various strategic tasks have been steadily advanced. In terms of reform, more than 70% of the three-year reform action tasks have been exceeded and the vitality of development momentum has been further enhanced.

We fully fulfilled the Corporate Social Responsibilities of central enterprises and achieved “three boosts”. The first was to boost the national strategy, promoting the high-quality development of our Beijing at Beijing Daxing International Airport hub; promoted the “four integrations” of the Greater Bay Area market, products, services and networks and accelerated the implementation of projects such as cross-border e-commerce, general aviation and aircraft leasing at the Hainan Free Trade Port. The second was to boost rural revitalization, investing 17.28 million in assistance funds and implementing 40 new projects in the rural revitalization stage throughout the year. We donated five million to purchase 5,617 television sets that were given to disadvantaged residents of Moyu and Pishan counties in the Hotan area of Xinjiang - the designated aid targets - and invested 58 million to construct the Xinjiang Moyu Mingzhu Primary School. The total amount of consumer assistance exceeded 66.32 million. The

third was to promote green development, carrying out a streamlined digital energy conservation and emission reduction program that reduced carbon emissions by 221,100 tons, guiding passengers to our all-new On Demand Dining in-flight meal program which saved more than 3.71 million meals and earned the “Annual Environmental Protection Airline”, “Golden Key” Champion Award, “Carbon Neutral Case” and other honors.

We focused on people’s livelihood projects and conducted “three services” very well. In the study of party history, the “I do practical things for the masses” activity was carried out, 21 new key livelihood projects were announced, and secondary units launched more than 600 key livelihood projects, meeting the people’s “urgent and long-awaited” challenges. One is to serve the public. We always put the safety of people’s lives first. In April 2021, in order to rescue a Uyghur boy with a broken arm, China Southern airport officials instructed the flight to return to the departure gate to open the cabin door a second time to invite the child (and his parents) into the cabin and still maintained an on-time departure/arrival so the young child could meet the awaiting ambulance and receive needed treated in time; In June, a shipment of lychees from Guangdong was blocked due to the COVID-19 pandemic. China Southern urgently deployed 320 flights, carrying more than 7,200 tons of lychees, opening up the air passage for Guangdong lychees to leave the province and in doing so earned a special contribution award of “I do practical things for farmers who grow lychees” by Guangdong Province. The second was to serve our travelling passengers. We sincerely care for our special passenger groups, and we have opened service windows for our senior travelers at 66 directly affiliated ticket offices and 30 airports, and launched the “one-network interconnection” function for unaccompanied minors. The arrival time of flight delay compensation has been shortened to less than two minutes, and the entire process of domestic passenger tickets has now been automated. Our baggage transportation error rate dropped by 15.7% year-on-year. The third is to honor and respect the more than 100,000 employees and managers who work for China Southern Airlines. We optimized and adjusted the standard of heatstroke prevention fees for front-line positions, popularized supplementary medical insurance policies, provided additional service for families where both husband-and-wife are working for China Southern, strengthened the care of quarantined personnel, equipped 900 sets of fitness equipment, and launched nearly 500,000 “specialized quarantine meals” to let employees and the masses experience the special cuisine which was created just for them!

During Year 2022, China Southern Airline is pledged to work closely around the CPC Central Committee with Comrade Xi Jinping as the core, forge ahead with a new journey of high-quality development with a more high-spirited attitude, accelerate the pace of becoming a world-class airline while actively giving back to the society and celebrating the successful convening of the 20^th National Congress of the CPC.

Ma Xulun

Chairman

China Southern Airlines Co., Ltd.

About Us

Company Profile

Headquartered in Guangzhou, China Southern Airlines Co., Ltd. was established in Year 1995, listed on the Hong Kong Stock Exchange and the New York Stock Exchange in 1997 and was listed on the Shanghai Stock Exchange in Year 2003. As the largest airline of the People’s Republic of China, China Southern has 20 branches (including branches in Taiwan and Macau), with 23 domestic sales offices and 55 international sales offices.

China Southern Airlines is proud to operate the largest number of modern aircraft, the most developed route network and the largest annual passenger volume in China. The scope of business services spans domestic, international and regional scheduled and irregular air passenger, cargo, mail and luggage transportation.

In recent years, China Southern has made significant progress in building up its Guangzhou-Beijing dual aviation hubs through newly opened and optimized route networks … while continuously providing passengers with safe and reliable air transportation products and services as it works to become a world-class air transport enterprise.

By the conclusion of Year 2021

Routes operated by China Southern – 1,401 lines

New domestic routes throughout the year - 175 lines

The total transportation turnover was 21.2 billion ton-kilometers

98.50 million passenger traffic

1.44 million tons of cargo and mail

Ranked 12^th in Skytrax’s “2021 Global Airline Top 100” list, ranked #1 among major domestic airlines

Earned the seventh CAPSE Airline Service Award for “Best Airline” and “Innovative Service”

Awarded the highest “Seven-Star Safety Rating” and the title of “COVID-19 Pandemic Prevention Seven Star Airline” by AirlineRatings.com – an internationally renowned independent aviation rating network.

Earned the “Advanced Unit to Win the Blue Sky Defense War” by the Civil Aviation Administration

The 4^th “China Centralized Supply Chain Leading Enterprise” Award in 2021

Ranked 7^th in Brand Finance Magazines’ 2021 “World’s 50 Most Valuable Airlines”

Claimed 41^st place in “China’s 50 Most Valuable Brands” by World Brand Lab in 2021

Selected as a “Typical Case of Carbon Neutrality” by People’s Daily Online

Ranked No. 1 in China’s Brand Power Research Aviation Service Industry for 11 Consecutive Years

Ranked in the “2021 Chinese Enterprise Sustainable Development 100 List”

Ranked the top 15 of SASAC’s 2020 Important Enterprise Brand Building Capability Top 30 List

Named the Best Airline of the Year Award from CAPSE for the four consecutive year


2021 Fleet Structure

Passenger Aircraft

Airbus A350 系列		12

Airbus A330 系列		40

Airbus A320 系列		334

Airbus A380 系列		5

Boeing B787 系列		39

Boeing B777 系列		15

Boeing B737 系列		399

EMB190 系列		6

ARJ21 系列		12

Cargo Aircraft

Boeing B777 系列		14

Boeing B747 系列		2

A total of 878 passenger aircraft

862 passenger aircraft

16 cargo aircraft

Company Culture

China Southern’s corporate culture embraces “Sunshine China Southern Convention” as its precious spiritual wealth, accumulated during the continued Company’s growth and development. It is both a call to action and ideological guide that all China Southern staff and senior managers abide by and practice together, which injects a special inspiration into all employees to build China Southern into a world-class air transport enterprise with global competitiveness.


Core Concepts	Cultural Character: Sunshine China Southern	Corporate Mission Connecting the world for a better life

		Corporate Vision Building a world-class air transport enterprise with global competitiveness

		Spirit of China Southern Diligence, pragmatism, tolerance, innovation

		Core Values: CSAIR Customers first, respecting all talents, pursuing excellence with continuous innovation

Development Strategy

Year 2021 was the first year of the “14th Five-Year Plan”.

With the vision and goal focused squarely becoming a major, world-class airline, China Southern remains steadfast in its mission of high-quality development, adheres to five major developments, implements five major strategies, promotes six major actions, realizes six major transformations and formulates the “14th Five-Year” development plan and 19 business sub-plans by actively promoting the implementation of its strategic plan while striving to develop a its market-leading high-quality development path.


Five Major Developments

Safe Development	High-Quality Development	Innovative Development	Cooperative Development	Shared Development

Five Strategies

Hub Network Strategy	Ecosystem Strategy	Innovation Driven Strategy	Lean and Control Strategy	Brand Management Strategy

Six Actions

Special Rectification of Production Safety	Grasping Major Strategic Opportunities	Deepening Key Reform Breakthroughs	Improving the Benchmarking of First Class Management	Adjusting and Optimizing Five Major Structures	Improving Service Quality

Six Changes

From Speed to Quality	From Comprehensive Market Expansion to Key Breakthroughs	From Single Industry to Related Diversified Industry	From Planned Management to Market Operation	From Traditional Business Model to Digital and Ecosystem	From Extensive Management to Refined Management

Daxing China Southern - China Southern Daxing

During Year 2021, China Southern thoroughly implemented its strategy of serving the nation, serving the coordinated development of the Beijing-Tianjin-Hebei region, the construction of the Xiongan New Area and regarded “comprehensively improving the operational quality of Beijing Daxing International Airport” as one of the seven tough battles.

Decisive efforts were made during Year 2021 to build up China Southern’s Beijing hub brand of “Daxing China Southern - China Southern Daxing” as well as “comprehensively improving the operational quality of Beijing Daxing International Airport” which has become a protracted battle that requires long-term investments and in-depth cultivation in the deepening operation stage of the airline’s Beijing hub, which is a challenge earned by all of China Southern Airlines team members and also serves as a comprehensive improvement of all factors such as market, transportation capacity, basic support and mechanism construction.

“Daxing China Southern - China Southern Daxing” is the new brand of China Southern hub construction which has achieved remarkable positive results.

Voice of Stakeholders

“”Beijing-Guangzhou Express Line’ runs every half an hour or an hour, you don’t have to wait, you can fly when you arrive and there is a dedicated check-in and security check channel which I have found to be very convenient. It feels like taking a bus or subway in the city.”

• Mr. Zhang, passenger

•

Improving Beijing Daxing International Airport Operational Quality

The opening of the “Beijing-Guangzhou Express” and “Beijing-Shenzhen Express” flight service has become an exciting new, two-core air express business at Beijing Daxing International Airport, which will provide passengers with a convenient and comfortable travel experience. At present, China Southern has carried out nearly 68,000 flights safely on the routes at Beijing Daxing International Airport. The network spans 47 domestic destinations and the average daily flight volume exceeds 300 to form a new route network radiating outward from Beijing-Tianjin-Hebei and Xiongan New Area to nearly every part of the nation.

•

Launching Daxing “Multi-point Check-In”

Launched a new “multi-point check-in” at Beijing Daxing International Airport required the addition of self-service kiosks as well as new sales counters to meet the needs of rail transit passengers when making their airport check-in as well as a consignment ticket change booth, itinerary printing and other services … all focused on reducing valued time at multi-point check-in.

•

Building Daxing Goods Station

Building an aviation hub and “urban cargo terminal” requires the active rights of international airlines and efficiently transporting temperature-controlled pharmaceutical goods as well as actively opening up domestic and international logistics air channels in North China. This dramatically has worked to build up the Daxing Cargo Terminal into an important facility for the coordinated development of Beijing, Tianjin and Hebei.

On September 25, 2021, China Southern Beijing Daxing-Vancouver general cargo passenger-to-cargo flight successfully launched its maiden flight, signifying China Southern Daxing Cargo Terminal becoming the only cargo terminal that offers international passenger-to-cargo general cargo transportation at the international port of Beijing Daxing International Airport.

Corporate Governance

China Southern implemented the “Two Consistency”, strictly implementing a three-year action program for the reform of state-owned enterprises which has as its core the strengthening of party leadership in improving corporate governance.

The Company complied with national laws and regulations while improving its corporate governance systems, articles of association and other governance systems, and revised the “Articles of Association”, “Procedure Rules of the Board of Directors” and formulated corporate governance documents such as the “Administrative Measures for the Authorization of the Board of Directors”, “Procedure Rules for the Chairman’s Office Meeting” and promoted the group and subsidiaries at all levels to formulate a list of major business management matters that will be studied and discussed in advance by the party organization and clarified the boundaries of rights and responsibilities of each governance body.

The Company comprehensively standardized the governance of the Board of Directors, strengthened the construction of the Board of Directors, implemented the functions and powers of the Board of Directors, promoted that the Board of Directors should be fully established, and ensured that external directors in the Board of Directors occupy the majority in principle, ensured that the management performs their powers and duties in accordance with the law, and strove to ensure the standardized and stable operation of the Company.

LOGO

Information Disclosure and Investor Relations Management

China Southern Airlines followed the regulatory requirements of listed companies to carry out information disclosure, revised the “Information Disclosure Management System of Listed Companies of China Southern Airlines Co., Ltd.”, and expanded online and offline information disclosure channels and established good investors communication mechanisms with dedicated shareholder communication to protect the interests of small and medium investors and fully protected investors’ “Right to Know”.

Received the Shanghai Stock Exchange’s A-level evaluation for information disclosure for eight consecutive years

Party Building

China Southern adheres to the leadership of the party, thoroughly studied and implemented Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and continuously improved the quality of China Southern’s party building and maintained an “A” grade in the assessment of the Party Building Work Responsibility System of the SASAC of the State Council for four consecutive years. The Company promulgated the “China Southern’s Opinions on Guaranteeing High-Quality Development with High-Quality Party Building” and the “Outline of China Southern’s “14th Five-Year Plan” Leadership and Cadre Team Building Planning Outline to ensure the high-quality development of China Southern Airlines and is dedicated to building a world-class air transport enterprise as it transformed into a streamlined state-owned enterprise.

•

Strengthening Political Leadership

The Company carried out high-quality party history learning and education, organized a series of activities to celebrate the 100^th Anniversary of the founding of the CPC, carried forward the great spirit of party building, and carried out in-depth “I do practical things for the masses” to boost spirit and unite the entrepreneurial efforts of officers. The Company’s higher-level steering group applauded China Southern’s party history learning and education programs that achieved remarkable results.

•

Strengthening the Construction of Party Style and Good Government

The Company promoted normalization of political supervision, deepened the reform of the discipline inspection and supervision system, focusing on building an integrated system and mechanism to promote the “do not dare to be corrupt, cannot be corrupt and do not want to be corrupt”, improved the supervision of “top leaders” and leading groups at all levels; consolidated the effectiveness of central inspections and rectifications, further improved the reporting system for important matters of party committee inspections in secondary units and established a special inspection mechanism for inspections and rectification.

•

Improving the Quality of Party Building Work

Implemented the requirements of the “Year of Innovation and Expansion of Party Building in Central Enterprises” and introduced systems to strengthen the party building work in mixed-ownership enterprises and the assessment and evaluation of the responsibility system for party building work; continued to strengthen the “Three Base Construction” vigorously carried out “Party Member Pioneer Action” and creatively created and delivered a “Four Dimensions” party organization of the Headquarters functional department with high theoretical study and ideological work, vigorous promotion of development and bright organizational activities.

•

Strengthening the Training of Outstanding Young Cadres

Created a talent pool of outstanding cadres and formulated a management plan for the construction of China Southern’s talent team; completed the first phase of “Pearl Talents” management trainee internal and external recruitment and selection and promoted management trainees to rotate in the service system and marketing system.

•

Promoting the Integration of Party Building into Production and Operation

Built an effective organizational system and improved the system and mechanism, and carried out in-depth research, assistance and guidance on the work of the party building integration center; optimized the party building assessment of “one enterprise, one policy” and strengthened the standardization of branches.

The Party Committee of the Cabin Department earned the title of “National Advanced Grassroots Party Organization”.

•

Strengthening Publicity and Ideological Work

The Company continued to strengthen theoretical study and strengthened positive publicity, actively promoting media integration. The total exposure of the entire network reached 8.3 billion person-times, of which 1,609 were reported by key Chinese media. The brand of Sunshine China Southern has been streamlined, the corporate culture system has been improved and the incident of the boy with a broken arm in Xinjiang became a national social media phenomenon with 1.6 billion exposures and featured the Beijing Daxing International Hub, “Affinity and Refinement” and Green Flight were all well-publicized.

•

Deepening the Reforms of the Cadre and Personnel Systems

The Company hired a professional cadre talent team and implemented the “Six Haves” guidance on selecting and employing personnel while actively promoting the exchange of cadres. The exchange rate of cadres between the group-level Headquarters and the grassroots offices throughout China reached 9.8%.

The allowed for rectification of challenges of “Institutionalization of Central Enterprise Headquarters” and penetrated downwards, increasing the intensity of competitive selection, organized and implemented the competitive induction and open selection work for more than 250 positions at the group level as the proportion of personnel quitting exceeds five percent.

•

In-Depth Group Work

The Company actively organized and carried out team building activities and invested 34.5 million to care for isolated personnel dur to COVID-19 as well as front-line duty personnel and other groups. Activities such as the first “China Southern Craftsman” selection, “Innovation and Effectiveness—Heroine’s Action” and “Youth Model Project” were carried out to consolidate China Southern’s characteristic poverty alleviation achievements and promoted the completion and operation of the Moyu Pearl Primary School.

Board Statement

Board Oversight of ESG Matters

As the highest decision-making body for ESG management, the Board of Directors has overall leadership in decision-making on ESG management, assesses the potential risks of environmental, social and governance issues to the Company’s business model, participates in and is ultimately responsible for formulating the Company’s environmental, social and governance strategies and goals and ensure that environmental, social and governance issues, social and governance strategies are incorporated into the business decision-making process; Regularly monitor and review the achievement of goals and propose improvement suggestions and approve the importance, quantification, consistency and balance of ESG reports.

Board of Directors ESG Management Policy and Strategy

Corporate Social Responsibility Management

China Southern senior managers strictly implemented:

•

The requirements of the State-owned Assets Supervision and Administration Commission of the State Council, the Shanghai Stock Exchange and the Stock Exchange of Hong Kong on the airline’s Corporate Social Responsibility efforts

•

Formulating the “Corporate Social Responsibility Management Manual”

•

Established and improved the Corporate Social Responsibility governance structure

•

Further refined the Corporate Social Responsibility management functions and integrated ESG matters, included responsibilities at all levels, and

•

Reported ESG matters decided by the Corporate Social Responsibility Steering Committee to the Board of Directors, emphasizing the board’s participation in ESG management

China Southern continued to:

•

Improve its Corporate Social Responsibility management mechanisms

•

Regularly conducted Corporate Social Responsibility report preparation training

•

Established a Corporate Social Responsibility demonstration base

•

Formulated the “Administrative Measures for China Southern’s Corporate Social Responsibility Demonstration Base”

•

Established a Corporate Social Responsibility day, and

•

Held Corporate Social Responsibility day activities every year

Activities related to green flight, energy saving and emission reduction were held on the ground as well as on fight from time to time and passengers and employees were invited to participate actively to enhance communication with stakeholders.

LOGO

China Southern’s Corporate Social Responsibility Governance Framework

Corporate Social Responsibility Steering Committee

Corporate Social Responsibility Office (News Department)

Corporate Social Responsibility Working Group

Office of the Board of Directors

Strategic Planning and Investment Department

Organization and Personnel Department

Human Resources Department

Safety Supervision Department

Legal Standards Department

Finance Department

Deepening Reform Leading Group Office

Disciplinary Inspection and Supervision Team Office

Group Work Department

Marketing Management Committee

Operation Command Center

Information Center

Ministry of Defense

Aviation Services Department (Aviation Service Company)

•

Corporate Social Responsibility Steering Committee

The Corporate Social Responsibility Steering Committee is headed by the chairman and the general manager of China Southern Airlines.

The secretary of the Board of Directors is the leader in charge of Corporate Social Responsibility efforts of China Southern Airlines including:

•

Establishing effective Corporate Social Responsibility and ESG risk management and internal monitoring systems

•

Making decisions, leading and promoting Corporate Social Responsibility efforts, and

•

Regularly report to the board on ESG matters to gain board support. ESG-related matters mainly include monitoring the formulation of corporate ESG strategies, goals, risks and strategies, regularly reviewing the progress of ESG goals, and making suggestions for improvement.

•

Corporate Social Responsibility Office

The Corporate Social Responsibility Office:

•

Is physically located within the China Southern News Department

•

Cadres are responsible for implementing the resolutions of the Corporate Social Responsibility Steering Committee which coordinates the construction and implementation of the Company’s Corporate Social Responsibility management system

•

Formulate and promote the implementation of Corporate Social Responsibility phased plans and annual work plans, and regularly research, summarize, and improve Corporate Social Responsibility work

•

Coordinate and manage Corporate Social Responsibility information disclosure, Corporate Social Responsibility demonstration base construction, Corporate Social Responsibility training and communication, Corporate Social Responsibility research, Corporate Social Responsibility evaluation activities and other special Corporate Social Responsibility work, and

•

Supervise relevant functional departments and subordinate units to carry out Corporate Social Responsibility work, and provide professional support

•

Corporate Social Responsibility Working Group

The Working Group is composed of functional departments of the Headquarters and subordinate units, participates in the preparation of Corporate Social Responsibility reports and is responsible for the management of Corporate Social Responsibility and ESG issues, formulates ESG management goals and work plans, implements ESG management according to the work plans, regularly reports the progress of ESG goals and assists in ESG information disclosure.

Analysis of Material Issues

Based on the internal and external social and economic environment, the Company’s development strategy and the investigation and communication of stakeholders, China Southern senior managers analyzed and adjusted important issues based on the identification and analysis of important issues in Year 2020, and clarified 21 important issues of Year 2021 involving key areas such as safety, environment, service, employees, society, and economy, which have been determined, reviewed and managed by the Board of Directors.


Safety		Ensuring Safe Flight

		• Continued to promote the “strong system, strict work style and risk control” safety management • Established a long-term safety mechanism from various aspects such as flight, maintenance, operation control and even technological innovations

		Passenger Health and Safety

		• Formulated standards and requirements for personnel protection, environmental disinfection and food safety

		Employee Occupational Health and Safety

		• Regularly carried out employee health examinations and training lectures • In-depth examination of aircrew mental health

Environment		Combating Climate Change

		• Set up a leading group for ecological • Environmental protection work to focus on identifying risks and opportunities brought about by climate change • Formulated the “China Southern Group’s Green Development Work Plan” • Integrated green development into the entire production and operation process of enterprises from the aspects of aircraft energy saving and carbon reduction, ground energy consumption reduction and passenger green travel

		Waste Disposal

		• Formulated a work plan for pollution prevention and control and issued the “China Southern Airlines Group’s 2021-2025 Plastic Pollution Control Work Plan” • Compliant disposal of production and domestic waste • Promoted plastic pollution elimination

		• Sustainable Use of Resources

		• Steady promotion of clean energy replacement • Accelerate research and development and actively promote advanced and applicable plastic substitute products


Service		Reducing Flight Delays

		• Continued to promote the construction of large-scale flight operations

		• Carried out the normal flight improvement project

		Protecting Passenger Privacy

		• Formulated the “Administrative Measures for the Protection of Personal Privacy Data of China Southern” • Compliance and lawful collection and use of passenger personal information

		Convenient Business Management

		• The first domestic airline to launch the whole “luggage home” product • Launched “One ID” full-process face-scanning travel service

		Optimizing the Passenger Experience

		• “China Southern e-Travel” provided door-to-door service for the whole process of air travel • Built platforms, found partners, activated points, attracted customers and integrated resources to accelerate the construction of China Southern’s ecosystem • Special Needs and People with a Disability

		Passenger Rights Protection

		• Responsible for product knowledge promotion • Continued to optimize omni-channel refund and correction services • Carried out the key activities of “providing services and minimizing complaints”

Staff		Supporting Employee Training and Education

		• Organized and implement curriculum development • Strengthening the construction of teaching staff • Established a management training mechanism

		Diversity and Equal Opportunity

		• Adhered to equal pay and equal benefits for equal work • Signed the “Special Collective Contract for the Protection of Female Workers’ Rights and Interests”

		Employee Compensation and Benefits

		• Established a sound salary system and provided competitive salary • Paid five insurances and one housing fund and optimized supplementary medical insurance

Society		Overseas Responsibility

		• Strengthening international cooperation with New Zealand, integrated into local communities and promoted local development

		Rural Revitalization

		• Formulated the “China Southern Group’s Fixed-point Assistance Work Plan” • Carried out cultural assistance

		Pandemic Response

		• Upgraded COVID-19 prevention and control measures • Transported COVID-19 vaccines to support the global fight • Communicated pandemic prevention policies in a timely manner through multiple channels • Carried out “Defense and Escort” volunteer action


Economy		Anti-Corruption

		• Formulated and issue relevant systems for rectifying the “four bad styles” • Strengthening the supervision of the “top leaders” and the leadership team

		Promoting Suppliers’ Responsibility

		• Adhered to the honest procurement and degradable green materials procurement • Standardized supplier management and promoting suppliers to assume social responsibilities

		Innovative Development

		• Carried out the top-level design of digital transformation • Carried out “Cloud T” digital talent training • Fully integrated digitalization into information management, aviation safety, marketing services and green development

		Legal Compliance

		• Improved comprehensive risk management • New intellectual property protection

Analysis Matrix of China Southern’s Materiality Issues

LOGO

Stakeholder Communication

China Southern has attached great importance to the expectations and demands of various stakeholders and has been committed to building a diversified communication mechanism using multiple channels to communicate with stakeholders, effectively safeguarding the rights of stakeholders to know, participate and supervise as well as responding to stakeholders’ expectation and demands.


	Expectations and Demands	Communication Channels and Methods
Investor	Participated in corporate governance Protected shareholders’ rights and interests Control risks ROI - return on investment Important information disclosure	Board of Directors Shareholders’ Meeting Supervisory Board Regular disclosure reports, and temporary announcements

Environment	Energy saving and emission reduction, addressing Climate change Protected ecology and reduce pollution Noise abatement	Carried out green flight, saved energy and reduced emissions Promoted environmental protection on the ground Applied noise reduction measures Public disclosure of environmental information


Client	Continuous safety and quality service Quickly replied to customer comments or complaints Protected customer privacy	Information disclosure Safety management system Customer relationship management, online services

Government	Abided by the law and paid taxes according to the law Implemented national strategies and deepened reforms Maintenance and appreciation of state-owned assets safe flight Promoted employment Improving people’s livelihood	Communication channels and methods Daily report, special report Research visit Project cooperation, working meeting Statistical report

Staff	Safeguard the rights and interests of employees established communication channels Strengthened employee training Continuously improved employee compensation and benefits Employee care Open, transparent, healthy and upward human policy	Employee representative meeting Diversity employee training Remuneration system reform Employee integrated management Employee activity

Supplier	Integrity management and common development Open, fair and just procurement	Transparent procurement Training and technical exchange meeting Daily communication

Financial institution	Improved solvency Reduced business risks	Strengthened compliance management Strengthened risk management and control

Expectations and demands	Helped rural revitalization and development carried out volunteer service Community communication and exchange	Promoted rural revitalization Charity and public welfare activities Information disclosure Public communication

Media	Established information release channels to deliver the messages of China Southern Airlines to the domestic and international public	Press conferences News releases

Peers	Fair competition and friendly cooperation information communication and exchange Healthy and harmonious industry development	Strengthened cooperation Organized exchanges and learning, forums and meetings

Board Management of ESG Progress

In accordance with the new ESG guidelines of the Hong Kong Stock Exchange, the “Consultation Summary Document”, the Board of Directors identified the important areas that are most closely related to the Company’s business and that the Company can make a significant contribution to in combination with the Company’s strategy and the United Nations 2030 Sustainable Development Goals, setting energy conservation, emission reduction and environmental protection , “Dual Carbon”, plastic pollution control and other aspects of ESG annual goals or mid-term and long-term goals, and regularly evaluated and reviewed their implementation and completion, and put forward suggestions for improvement on the Company’s ESG performance to ensure that ESG policies be accurately implemented.

Focus 2021:

Loyal to the CPC - Celebrating the 100^th Anniversary of the CPC

Year 2021 marked the 100^th Anniversary of the founding of the Communist Party of China. From the little red boat that sowed the seeds of revolution, to the majestic giant ship that steered the great cause of rejuvenation, the Communist Party of China has united the nation and led the people to create development achievements that “Surprise the World” in the course of its century of struggle, leaving behind precious experience and spiritual wealth.

Standing on the precipice of an exciting new starting point towards the second centenary goal, China Southern bravely undertakes the mission of the times, inherits the “red” gene, and leads the majority of cadres and employees to learn history to understand rationale; learn history to increase trust; learn history to honor morality; learn history to practice; draw forward strength from a century of party history and transform that people power into concrete actions that can overcome and challenge and lead businesses, like China Southern Airlines in building a world-class air transport enterprise with global competitiveness.

China Southern won the Outstanding Organization Award in the finals of the “National Party History Knowledge Contest” jointly organized by the Party History Learning and Education Official Website and People’s Daily Online

Learn, Think, Practice and Comprehend to Build Consensus

Learning and Sharing - Members of the Central Propaganda Group were twice invited to give special lectures as the central group of the party group carried out numerous concentrated study seminars and the central group of party committees at all levels carried out more than 600 special studies.

Learning “July 1 Speech” - The party committee and the center group of party were organized to study the spirit of the “July 1^st” important speech and more than 1,000 sessions of various thematic study, symposiums and lectures were held to share study materials that spanned each branch and every party member.

Themed Activities - Held a symposium to celebrate the 100^th Anniversary of the founding of the party, and led party members and cadres to strengthen their beliefs; carried out the “Party Flag flutters for a hundred years, Party History Recalls Profound Years” micro-party class competition, and held live online singing performances; walking to learn the party history; calligraphy as well as a painting and photography exhibition with more than 35,000 employees participating.

Carry Forward the Spirit - Serving the People

Created “red route” products - Optimized the routes and flights of Jinggangshan, Yan’an, Nanchang, Ganzhou, Zunyi, Linyi and other “red” cities that share the revolution footprint; launched “Red Tour” themed products and carried out themed activities such as “Check-in Red Footprints” to provide passengers with new opportunities to learn key educational perceptions.

Implementing “I do Practical Things for the Masses” - In response to the common needs and challenges every citizen of China, some 21 key livelihood projects were offered such as expanding the coverage of China Southern’s award-winning On Demand Dining in-flight meal selection as well as marketing the airline’s “green flight” brand products that directly benefit more than 42 million passengers, and solving the urgent problems of 19.172million passengers with package and the long-awaited problem of more than 568,000 employees.

Working Hard - Inheriting the Glory

Between Years 1921 to 2021, generations of Chinese Communists have overcome significant difficulties and forged ahead, opening up the great cause of socialism with Chinese characteristics. Between Years 1995 to 2021, every staff member of China Southern worked tirelessly, contributing wisdom and strength to the high-quality development of China Southern.


		Zhu Deci 42 year party member As “the first person in the capital operation of China Southern”, this 100-year-old hero worked hard for the development of China Southern, the civil aviation industry and the cause of Communism until he was nearly 80 years old.

		Feng Yunwu 50 year party member During Year 1983, as the navigator and the crew, he calmly handled challenges as they emerged and worked tirelessly to ensure the safety of all passengers. The crew was awarded the title of “Heroic Crew of Chinese Civil Aviation”.

		Liu Yuhui 23 year party member As the winner of the “National May 1^st Labor Medal”, Liu developed the first “aircraft remote diagnosis and real-time tracking system” in China’s civil aviation industry, providing technical support for the flight safety of civil aviation aircraft.

		Tang Huizhong 13 year party member During the continuous rescue and treatment of children with broken arms in Hotan, Xinjiang, Tang contacted the airport as soon as possible to apply for the aircraft to be return to the gate which opened a “door of hope” for the treatment of this young boy with a broken arm.

Focus 2021:

Green Flying Towards the “Dual Carbon” Era

Achieving peaking carbon dioxide emission and carbon neutrality is a major strategic decision made by the Party Central Committee with Comrade Xi Jinping at its core after careful consideration. It is related to the sustainable development of the Chinese nation and the building of a community with a shared future for mankind. In order to help achieve peaking carbon dioxide emission and carbon neutrality and build a beautiful China, China Southern integrated green development into the entire process of its ground handling and flight operations - starting from aircraft energy saving and carbon reduction, reducing ground energy consumption, and green travel for passengers. The green development model from air to ground, from on-site to off-site, and from operation to management to push forward green development to reach the domestic leading level and the international First Class.

Drawing the “Dual Carbon” Blueprint

During the “14th Five-Year Plan” period, China Southern actively:

•

Responded to the requirements of the national “Peaking Carbon Dioxide Emission Action Plan before 2030”

•

Compiled the “China Southern Group Peaking Carbon Dioxide Emission and Carbon Neutrality Target and Achievement Path Report”

•

Improved the green operation and management standard system, optimized aircraft weight reduction and fuel saving measures

•

Strengthened the reserve of environmental protection and energy saving technology, and

•

Promoted the utilization of recyclable resources and the application of clean energy, continued to reduce fuel consumption per ton-kilometer and carbon emissions, implemented green and low-carbon actions in transportation through actions in seven major areas

The fuel consumption per ton-kilometer maintains the best level of the three major airlines, leading the low-carbon development of the aviation industry.

China Southern’s Carbon Neutral Action Principles

Aiming at peaking carbon dioxide emission, taking overall consideration to reduce energy consumption

Steady neutralization to boost the high-quality development of China Southern

Green operation, leading the low-carbon development of the aviation industry

Seven Carbon Neutral Actions

Fleet Structure Optimization

Application of evolutionary technology improved on original aircraft

Innovation of flight structure configuration to improve flight efficiency

Innovation and Exploration

Developing carbon neutral routes

Exploring supply chain carbon neutrality

Negotiating with upstream companies to clarify emission reduction targets

Actions to Build Specialized Systems such as Carbon Emissions Trading

Strengthening institutional innovation; deepening energy conservation and emission reduction

Developing carbon footprint offset products.

Industry Chain Coordinated Promotion Action

Strengthening the coordination of upstream and downstream industries

Research and attention on sustainable alternative fuels for aviation, exploring the promotion and use of new energy products

Green Product Image Building Action

Developing multi-scenario green products of “food, accommodation, travel, entertainment, travel and shopping”

Spreading the concept of green and sustainable development and the brand image of “Affinity and Refinement” service

Aviation Material Recycling Action

Adopting green advanced processing technology and technological innovation

Ground Emission Reduction Actions

Adopting energy-efficient ground equipment

Enhancing solid waste utilization and treatment

Promoting “Dual Carbon” Practice

Aircraft Energy Saving and Carbon Reduction

•

Route Optimization

Adjusting the route direction - China Southern Airlines optimized the direction of air routes in the direction of Sanya and adjusted the use of land routes as main routes and sea routes as backup routes which also included optimizing air routes in combination with airspace adjustments in the southwest region and added Shenzhen-Nairobi, Pudong-New York City routes to save voyage distance that would reduce flight time and fuel consumption.

The accumulated flight distance saved about 6.67 million kilometers

Flight time saved 1,026 minutes

Fuel consumption reduced by 3,077 tons

Establishing an Optimization Mechanism – Company officials sorted out airspace rules and practiced the shortest route optimization mechanism as well as civil aviation cost rules and established a minimum airspace cost optimization mechanism; Completed mathematical modeling, established an airway optimization model and operation process based on airspace rules and operating costs, and reduced ineffective fuel consumption.

Dynamically Adjusting the Center of Gravity - Evaluated the actual impact of adjusting the cruise center of gravity parameters on flight, formulated a dynamic adjustment plan for the cruise center of gravity and improved flight performance by optimizing the cruise center of gravity.

Fuel saved about 1,200 tons

•

Jet Fuel Management

Developing “Fuel e-Cloud” - Developed the aviation fuel big data management application platform “Jet Fuel e-Cloud”, integrated flight refueling data through the Internet of Things technology, realized management standardization and value creation, promoted the intelligent transformation of the aviation fuel refueling industry, and provided big data support for scientific decision-making.

17% savings inflight refueling time

Promoting Digital Fuel Economy - Developed a fuel-saving big data platform and pilot EFB fuel-saving assistant, and refined the management precision to every flight and every fuel-saving application through digitization; innovated the fuel-saving technology of the whole operation chain, implemented single-engine slide-in, fuel-saving wheel release, 19 innovative fuel saving points including cruising altitude.

Innovated the fuel-saving technology of the whole operation chain, saving about 83,000 tons of jet fuel in total

Strengthening High-Level Management and Control. For international long-haul routes, the actual wind temperature was considered. For short-haul routes, by referring to the QAR historical flight data, the route altitude information fed back by dispatchers and pilots was analyzed daily, and the deviation between the planned altitude and the actual altitude of the flight route was monitored monthly to determine the optimal flight altitude.

Average cruising altitude increased by approximately 846 feet

The total fuel saving is 32,800 tons

•

Aircraft Modification

Reducing Aircraft Weight - Lightweight equipment such as thin seats and dining cars were used for wire installation and modification. Lightweight carbon brakes were used for new aircraft. The idle coffee machine was removed from the aircraft, and paperless operation in the cockpit was fully implemented to “reduce the burden” of aircraft, improve fuel economy and save flight costs.

Fleet weight reduction of 22 tons

2,227 tons of fuel saved every yearr

Improving Flight Performance - Wire-mounted and modified winglets can reduce aircraft resistance and fuel consumption; performed engine modification to improve engine performance; monitored Boeing B777F engine performance degradation in real time and actively performed aircraft engine water washing to effectively reduce aircraft fuel consumption.

Reducing Floor Energy Consumption

Use of New Energy Vehicles - In accordance with the annual review requirements of the Airfield Management Department of Baiyun Airport and the Traffic Management Detachment of Baiyun Airport Public Security Bureau and the requirements of the “blue sky defense” document, the vehicles with emissions below the national level 3 were scrapped and new energy vehicles were purchased to replace non-new energy vehicles to improve clean energy use ratio.

Purchased 219 new energy vehicles

APU Management. Monitored the startup status and fuel consumption of APU (auxiliary power unit), formulated APU usage specifications, strengthened the use of ground power supply, air conditioners and other equipment, regulated the improper operation behavior of flight and maintenance personnel, and further reduced APU use time and aircraft fuel consumption.

Green Travel for Tourists

In the four major links of ticket purchase, travel, boarding and after travel, China Southern provided passengers with a green and low-carbon full journey experience and called on passengers to do their part to protect the earth.

Launched the “China Southern e-Travel” one-stop service platform - Spanning more than 300 travel nodes including ticket booking, payment, check-in, security check and flight boarding and promoted online processing of electronic invoices to realize the “paperless” process of passenger travel.

Accumulated 15 million person-times participating in ”green full journey” services such as paperless boarding and electronic invoice processing

Launched Meal Carbon Labeling Project - Carried out carbon footprint analysis for Economy Class meals and obtained third-party carbon label certification, provided passengers with low-carbon meal choices, and guided and led passengers to practice carbon reduction with actions.

A total of 1.4 million electronic invoices have been issued

Advocating Green Flight “On Demand Dining” - Passengers can choose not to dine in advance through the China Southern Airlines APP, WeChat, customer service hotline and other channels six hours before travel, and in return earn a specific China Southern Sky Pearl Club FFP mileage reward.

Cumulatively, more than 3.71 million passengers participated in the green flight “On Demand Dining” service

That saved more than 1,762 tons of meals

Meeting the Realization of “Dual Carbon”

China Southern is the first airline in China’s civil aviation industry to begin “dual carbon” research as Company directors moved quickly to market the “plastic restriction order” of civil aviation.

The Company was also the first airline to:

•

Self-develop a domestic aviation fuel big data management system

•

The first to carry out bio-jet fuel research and development projects

•

The first to innovative a practical jet fuel saving management model, and

•

The first to develop an intelligent monitoring system for on-site vehicles

The Company’s annual comprehensive energy consumption is 8,963,974 tons of standard coal and the comprehensive energy consumption per 10,000 yuan of income is 0.8726 tons of standard coal per 10,000 yuan

Honors

Successfully achieved NDRC’s “13th Five-Year” target on “double control” of energy consumption total and intensity as well as the assessment target of “100” key energy-consuming units’ energy-saving target.

“Green Flight” On-Demand Dining Meal Service

Won the Champion Award of the first “Golden Key - SDG-oriented China Action”

Included as a model for creating a low-carbon “source” in the “Action to the Future - The Golden Key Shaping Chinese Enterprises’ Low-Carbon Action Leadership Report” and released this program to the world at China Enterprise Pavilion 2019 at the 26^th Conference of the Parties (COP26) of the United Nations Framework Convention on Climate Change

Selected as the “Carbon Neutrality Typical Case” of the 2^nd Green Economy Development Forum 2021 co-hosted by People’s Daily Online, China Environmental Protection Federation and the Publicity and Education Center of the Ministry of Ecology and Environment

Awarded the “Environmental Airline of the Year” by “China Civil Aviation” magazine, maintaining a leading position in China’s civil aviation industry, and

Won the “Annual Quality Service Airline” by the Beijing News


Emission of Greenhouse Gases

		2019		2020		2021
Fuel consumption per ton-kilometer (ton/ton-kilometer)	Wide body model		2.24		2.23		2.00
Fuel consumption per ton-kilometer (ton/ton-kilometer)	Narrow body model		3.10		3.43		3.40
Carbon dioxide emissions (10,000 tons)			2,852.77		1,946.49		1,924.38
	Category 1		2,836.03		1,931.80		1,910.86
	Category 2		16.74		14.69		13.52
CO2 emissions per ton-kilometer (ton/ton-kilometer)			8.69		9.29		8.98

Energy Consumption

Aviation fuel (10,000 tons)			900.33		613.27		605.31
Gasoline (tons)			4,869.11		3,922.78		3,452.12
Diesel (tons)			8,598.59		7,282.09		6,384.37
Coal (tons)			550		0		0

Focus 2021:

Digital Transformation Enabled High-Quality Development

In response to the call for accelerating the development of the digital economy during the “14th Five-Year Plan”, China Southern has continued to explore diversified digital paths, gradually marketing the construction of a digital management and control system and regarded “strongly promoting digital transformation” as one of the seven tough battles during Year 2021 to comprehensively enhance its competitiveness, to drive comprehensive changes in management, technology, services and products through digital transformation, and supported the construction of a world-class air transport enterprise.

Honors

Earned the “2020 Digital Honorary Pioneer of Government Affairs and People’s Livelihood”

Won the DAMA2021 Data Governance Best Practice Award

Digital transformation work won IDC “2021 Digital Transformation Future Enterprise Award”

One-stop information service platform won the 2021 “Jointly Build a Community of Shared Future in Cyberspace” Excellent Case Award

The one-stop information service platform won the “Top Ten Achievements of Enterprise Digital Transformation in 2021” at the First Central Enterprise Digital Transformation Summit

“BNS-based airport vehicle personnel dispatching system, optimizing resource allocation and improving management efficiency” was rated as “Typical Case of Digital Transformation of State-owned Enterprises” by the State-owned Assets Supervision and Administration Commission

China Southern’s “Internet of Things Global Container Management and Control Platform System” won the “Silver Award for Innovative Application of Satellite Navigation and Positioning Science and Technology” issued by China Satellite Navigation and Positioning Association

The official website of China Southern Airlines has passed the assessment of the Ministry of Industry and Information Technology of the People’s Republic of China and has become the first website to pass the assessment of aging-friendly and barrier-free renovations

Developing a Digital Path to Practice

China Southern senior managers insist on innovative development, constantly exploring digital transformation as an important path to achieve high-quality development, carried out top-level design for digital transformation, striving for the goal of building a world-class air transport enterprise.


Strategic Leadership		Promoted the construction of “three networks” and “four modernizations” to help China Southern Airlines develop with high quality Built a social Internet that continuously interacts with customers around touch points, built a consumer Internet that creates value for customers around products and services, and built a win-win industrial Internet around internal operating units and external ecological partners; Strengthened the deep integration of new generation information technology and business and realized digital customers, digital employees, digital processes, and digital companies

Management Assurance		Improved organizational structure and mechanism construction and enhanced digital awareness and capabilities Adopting the first-in-command responsibility system, China Southern’s senior managers took the lead personally and set up the enterprise structure and process management committee at the Headquarters, set up the scientific and technological information and process management department, strengthened the top-level design and overall management of digital construction; coordinated processes, IT and data to promote business transformation and upgrading; With the help of the “Cloud T” digital talent training project, cultivated compound talents who understand both business and technology

Business Innovation		Built a new IT architecture, implemented the EA methodology, and promoted the deep integration of technology and business Continued to strengthen IT infrastructure, network security and computing power support; introduced enterprise architecture (EA) methodology, strengthened the integration from intelligent vision planning, business architecture design, technical architecture specification to project implementation, and led the architecture to layered construction and service-oriented and consistent user experience development


Technical Support		Accelerated industrial digitalization, built up the China Southern Airlines ecosystem, and explored business model changes With the help of a new generation of information technology, promoted the transformation of passenger transport to a modern service integrator and freight transport to a modern logistics integrator; opened up the upstream and downstream industrial ecology, build a platform for China Southern’s ecological circle, established a supply chain system around the whole process of passenger travel, connected high-quality partners, and provided passengers with one-stop comprehensive solutions and promoted business model changes

Skill Building		Relied on the new IT architecture, creating new capabilities to quickly respond to business changes Based on the new generation IT architecture planning of “one cloud (China Southern Airlines Cloud) + one data center (China Southern Airlines Data Center) + two middle stations (data middle station, business middle station) + N front-end applications based on new IT architecture”, realized resource sharing and capability platformization

Adept in Using the Cloud and Data to Empower Wisdom

China Southern insisted on innovative development, constantly explored digital transformation as an important path to achieve high-quality development, carried out top-level design for digital transformation, moved towards the goal of building a world-class air transport enterprise. China Southern has continued to improve its information management system, strengthened its digital management and control capabilities, carried out “Cloud T” digital talent training, steadily promoted the cloud-based use of data and empowered intelligence, comprehensively improved digital management and control and injected new momentum into digital transformation.

Cultivating Digital Talents

The “Cloud T” digital talent training project took China Southern Airlines Pearl Innovation Studio as the carrier, and through innovative management methods, it continued to build a digital talent team to realize the “Five Ones”: a new talent training model, a group of combined talents that understand both business and IT, a unified set of enterprise architecture method and language, a set of enterprise architecture assets and enterprise architecture governance system, and a batch of value creation and subject research projects helping China Southern digital transformation and intelligent transformation.

Going to the Cloud and Empowering Wisdom with Numbers

•

Computing Power Sharing

Complying with the national development concept of “new infrastructure” and based on the hybrid cloud strategy, China Southern has steadily promoted the cloudification of its information systems and the rate of resource cloudification has reached 66%. By introducing a multi-cloud management platform, China Southern Airlines’ technicians applied cloud-native technologies, optimized operation management process, improved the efficiency of R&D, deployment and operation as well as the agility of the system which fully supported the digital transformation of China Southern.

•

Data Integration

China Southern Data Center has covered data from 16 data domains and more than 131 systems, with a storage capacity of 1,200T and has provided 159 services, 444 indicators, and 540 tag data services. With the help of data collection and application to feed back the business, the level of production intelligence was further improved and a virtuous circle came into being. In terms of technology, the authority of data middle-stage analysis tools was opened to all employees to satisfy the self-construction of data models and reports, so that the flow of data created value, offering a new impetus for internal innovation.

•

Intelligent Application

With the help of a new generation of information technology, applications such as block chain mileage points, real-time vehicle tracking in the field, augmented reality intelligently assisted maintenance and other applications were realized. Using sensor technology, Internet of Things technology, 5G network technology, cloud computing, big data analysis, AI and edge new technologies such as computing, we have created comprehensive solutions such as smart operation, smart factories and smart cargo stations empowering front-line production which greatly improved labor productivity.

Improving the Quality of Development

From the perspective of customers, China Southern created a safe, punctual, caring and green air travel experience for passengers through digital transformation.

•

Ensuring Aviation Safety with Digitalization

Through the development and application of digital technology in key links, precise training, fine management, and lean flight were realized. At present, China Southern has continuously guaranteed flight safety for 266 months and air defense safety for 331 months. The safety level continued to maintain a leading position in China’s civil aviation industry.

•

Improving Operational Efficiency with Digitalization

Created a unified operation command information platform to continuously improve operation efficiency. China Southern’s flight punctuality rate has been among the best among major domestic airlines for six consecutive years. In 2021, the flight punctuality rate reached 89.89%, 1.9 percentage points higher than the industry average.

•

Improving Service Quality through Digitalization

Created a one-stop service platform for the whole process of “China Southern e-Travel”, covering more than 300 service points, to achieve “one machine in hand, worry-free throughout the process”. The “China Southern e-Travel” APP has been downloaded and activated more than 77.7 million times with more than 3.32 million monthly active users, ranked first among Chinese airlines. “China Southern e-Travel” was displayed on site at the 2021 World Internet Conference as a boutique case.

•

Promoting Green Development with Digitization

The first in-flight On Demand Dining meal service of “green flight”; the first domestic airline company to independently develop the aviation fuel big data management system and rated as an advanced unit in the three-year action of “Winning the Blue Sky Defense War” by the Civil Aviation Administration; Winning the champion award of the first Golden Key—China Action for SDG (Sustainable Development Goals)”.

•

Fighting the COVID-19 Pandemic with Digital Support

Realized all-round digital management and control such as “real-time location tracking, muti-temperature control”, and delivered 130 million doses of China-made COVID-19 vaccines to 16 international countries and 20 domestic cities; launched one-stop ticket purchase services at an international venue and created and delivered omni-channel ticketing quick refunds and changes which have greatly eased the travel troubles caused by the uncertainty of the pandemic.

Focus 2021:

The “Lifeline” in the Anti-Pandemic Escort Aviation

During Year 2021, the spread of the COVID-19 plague surged around the world as the domestic pandemic situation was intertwined and superimposed by sporadic and local clustered outbreaks. On the basis of summarizing the effective experience of pandemic prevention and control during 2021, China Southern senior directors paid close attention to various prevention and control measures, and adhered to “taking all vaccinations as needed”, strictly implemented the strategy of “defense of overseas input, defense of domestic rebound and personal defense”, did a good job in employee self-protection and passenger service management, built a solid air defense line, and went all out in fighting the COVID-19 scourge.

Preventing International Import

During Year 2021, China Southern organized a special rectification team for preventing the import of overseas pandemics, general manager of the Company serving as the team leader.

The team consisted of four special classes for inbound crews, inbound passengers, inbound cargo and inbound aviation waste. We established a three-level supervision and inspection mechanism of post-supervision, department inspection, and unit inspection, and comprehensively rectified all aspects of the Company’s prevention of overseas input, eliminated hidden risks, ensured that protective measures were in place, and guaranteed the safe travel of passengers.

Preventing Domestic COVID-19 Proliferation

Since May 2021, local COVID-19 pandemic has rebounded in many parts of the country and the domestic medium and high-risk areas have been continuously updated, sounding the alarm for pandemic prevention and control. China Southern directors acted quickly and made careful arrangements to prevent and control outbreaks of COVID-19 and comprehensively upgraded pandemic prevention and control measures to ensure the safety and health of all passengers and employees.

Employee Safety

Focusing on Key Population Groups - Company officials formulated differentiated COVID-19 prevention and control measures for key groups such as crew members, flight attendants, ground service personnel and freight transporters and provided detailed protection guidelines for employees in different positions; carried out pandemic prevention and control training for all employees and strengthened the supervision and inspection of key units, key positions and key links … and effectively achieved an effective closed-loop management scheme.

Line of Defense Against Pandemic - Encouraged employees to take all vaccination needed.

During Year 2021, 89,599 people were vaccinated against COVID-19 as the vaccination rate reached 99.96% (except for contraindications). The vaccination rate of on-the-job staff and aircrews in high, medium and low-risk positions reached 100%; strictly implemented nucleic acid screening and carried out nucleic acid testing for airline employees in different positions in accordance with the requirements of the Civil Aviation Administration and local pandemic prevention departments.

Passenger Health

•

Boarding Service

The Company took preventive measures including the use of non-contact temperature detection equipment to conduct temperature detection of all departing passengers, disinfecting passengers’ hands, and required all passengers to complete health declaration cards to minimize the risk of spreading COVID-19 via air travel.

•

Cabin Service

Additional hygiene and anti-pandemic kits were provided, and each flight was equipped with N95 masks, disposable surgical masks, hand sanitizers and other anti-pandemic materials; flights in key domestic control areas were required to be disinfected after short-term stops and connecting flights, and other domestic flights were subject to post-flight disinfection.

•

Medical Support

All aviation doctors stayed at the front line of anti-pandemic measures and assigned medical professionals to the Company’s AOC seats to deal with the information of passengers with fevers on any given flight in a timely manner, and designated specialized aviation doctors to provide 24-hour online health consultation and medical advice for sick passengers.

Maintaining “zero infection” for passengers on all international and domestic China Southern Airlines flights

LOGO

Provided hand sanitizers for all passengers

Assisting the Global Fight against COVID-19

Facing the dire challenges of the international pandemic, China Southern actively responded to the clarion call of the state, supporting the global fight against the pandemic and created the “China Southern Vaccine Safe Delivery” procedures to help China’s COVID-19 vaccine be delivered to the world safely and quickly.

Actively participated in the nation’s clarion call to build a global community with a shared future for mankind and delivered three categories of COVID-19 vaccines to 16 international countries including Cambodia, Tajikistan, Ukraine and Serbia as well as 20 domestic cities.

The transportation volume of the COVID-19 vaccine exceeded 130 million doses, ranking first in China’s civil aviation.

Actively participated in “COVAX” - the implementation plan of dispersing COVID-19 vaccines and served international organizations such as UNICEF as part of its Corporate Social Responsibility service.

Vigorously developed aviation logistics, relying on the largest Boeing B777 freighter fleet in China; completed 19 intercontinental freight routes, organized 7,023 passenger-to-cargo flights and made significant efforts to ensure the safety and stability of the national industrial supply chain.


China Southern COVID-19 Vaccine Transportation Guarantee Process

1		Receipt inspection

2		Cargo assembly

3		Warehousing & monitoring

4		Out for uploading

5		Notifying the captain

6		Flight

7		Inbound sorting

8		Inbound reception

9		Warehousing & monitoring

10		Cargo delivery

Case The First Charter Flight of China’s Civil Aviation of COVID-19 Vaccines in North Macedonia

On June 27, China Southern Airlines flights CZ8083 and CZ5077, carrying 500,000 doses of Sinovac’s COVID-19 vaccine, departed from Beijing Daxing International Airport to Skopje, the capital of the Republic of North Macedonia.

This marked the first time that Chinese civil aviation has carried COVID-19 vaccines to a non-navigable point in Europe. In order to successfully complete this chartered transport of the COVID-19 vaccine in North Macedonia, China Southern established a special transport working group, and formulated work checklists and emergency plans for many links including vaccine packaging, security check entry, cold storage, outbound installation, and destination station unloading. Concurrently, a smooth communication channel with the North Macedonian government, vaccine manufacturers and logistics operators was established, a “housekeeper-style” tracking and service guarantee was tailored to ensure the safe escort of China’s COVID-19 vaccines.

Heart-Warming Anti-Pandemic

Love Prevails - In light of numerous changes in the COVID-19 pandemic, China Southern directors actively optimized and adjusted its flight services and encouraged employees to actively participate in the “Anti-Pandemic Escort” volunteer service action to share personal time with passengers and related personnel during the normalization of the pandemic.

Swift Delivery of Pandemic Prevention Policies

The Company utilized news announcements, online ticketing flow reminders, online smart Q&A, text messages and other social media methods to immediately convey its pandemic prevention and control policies to passengers, guiding the completion of refund and modification operations such as air tickets, products and services, and reduced passenger complaints and the risk of unused seats to ensure smooth travel for passengers.

More than 200,000 notifications SMS related to the pandemic and prevention and control policies were transmitted

Online customer service pandemic-related Q&A presented more than 900,000 times

Successful Completion of Isolation Crew Service

In order to ensure the orderly and safe management of COVID-19 pandemic prevention and control of crew members, the Company conscientiously implemented a centralized isolation of aircrews and the management of home health monitoring. Meal arrangements were adjusted monthly and “box lunch quality” isolated meals and healthy light meals were introduced to meet the crew’s dietary needs.

For staff units that were isolated due to the COVID-19 pandemic, the Company provided conducted video centralized “one-on-one” communication and heart-to-heart chats so that isolation from other people did not mean separation from love and the psychological challenges of isolation.

During Year 2021, China Southern quarantined more than 67,000 aircrews with the longest personal quarantine period lasting 293 days.


The video views exceeded 639,000 times Thumb-ups more than 19,000 times		Scan to watch the video “Behind the Isolation Crew, It is the Mission of the Aviation Service Personnel”

“Anti-pandemic Escort” Volunteer Service Action

Organized and mobilized young volunteers to fully support on-site guidance, code scanning assistance and order maintenance at nucleic acid testing points such as Guangzhou Baiyun International Airport.


“Anti- Pandemic Escort” Volunteer Service Action A total of 6,210 volunteers participated		Serving 585 nucleic acid tests		Serving more than 1.5 million people		The total volunteer service time exceeded 30,000 hours

1. Building a Strong Line of Defense - Setting Sail for a Safe Future

Safety is the lifeblood of the civil aviation industry.

China Southern Airline has always taken ensuring aviation safety as its primary task of practicing “aviation of the people and for the people”, and made every effort to ensure the safety of every passenger; the health and safety of all employees and guarantee the safe situation is stable and controllable as it continues to maintain the best airline safety record in China … as well as contributing to the UN 2030 Sustainable Development Goals.

Consolidating Safety Management

China Southern senior managers continued to tackle the tough safety battles of “strengthening the system, keeping strict work style, and controlling risks” by continuously deepening the three-year special rectification of safety production, further promoting the construction of seven major safety systems, consolidating the safety foundation, and preventing and controlling safety risks so as to create a good safety culture atmosphere and fundamentally improve safety management and control capabilities. During 2021, China Southern had no production safety incidents.

Safety System Construction

Deepening the Construction of Seven Major Safety Systems

The Company adhered to its tried-and-true system concepts and focused on safety with rules and manuals, drills and training, process control, risk management and control, safety culture, and technological innovation as the core, to further the transformation of safety management to institutionalization, structure, systemization, and informatization, and continuously improved its safety levels of modernization of governance systems and governance capabilities.

Serious Safety Responsibilities

The Company further clarified the main responsibilities, leadership, supervisory and post responsibilities; revised, improved and implemented the main responsibilities list and its post responsibilities list to ensure that safety responsibilities were not in vain and not virtual, and can easily be implemented.

Construction of Style and Discipline

Promoting Safety Culture

The Company launched the “Three Awes” and safety culture presentations to promote the “Three Awes” to be deeply rooted in the hearts of the people and achieve positive results; comprehensively used cultural publicity, special lectures, online micro-classes and other social media means to effectively strengthen safety education; formulated and applied “four forms of comprehensive and strict public security” and continued to strengthen the construction of its work culture.

Strengthening Aircrew

Ideological and political construction helped to improve the professional team’s work style and behavior norms as Company officials built a systematic and efficient ideological and political work system for the air crew, and carried out the “Year of Consolidating the Ideological and Political Work of the Air Crew”.

Implementing Quantitative Management Style

China Southern Airlines’ officials strengthened QAR data application, cabin sound monitoring, route safety assessment, remote video monitoring and other means to further the corporate work culture and stove to make work challenges “visible and manageable”.

Security Risk Management

Tackling Key Points of Safety

The Company stayed with its “zero tolerance” policies to look out for potential safety hazards, continued to promote “zero potential problems”; dynamically updated and controlled the “two lists” and revised and improved system regulations and procedures including the launch of the “Hundred Days Action” campaign to ensure a stable security environment.

Improving System Risk Management and Control Capabilities

The Company implemented a dual prevention mechanism of safety risk classification management and control and hidden danger investigation and management which added to joint risk prevention and control and improved the ESMS (safety management system) platform and emergency plans which included the full use of the i-ORCS risk management and control system which connected the professional risk management and control functions of each unit and managed and controlled complex cross-unit risks.

Practicing the Original Intention and Doing Good Works

Special Plan

Promoting the I-CARE Voluntary Reporting System

China Southern’s I-CARE (Information Confidential Report) voluntary reporting system collected voluntary reports from grassroots employees on hazards, potential safety hazards and safety risks. The purpose was to call on all China Southern staff and management around the world to care about safety and encouraged all employees to participate in the Company’s safety management schemes to sort out varied challenges, investigate potential safety hazards and alleviate safety risks.

During Year 2021, China Southern promoted the I-CARE system, practiced the mass line of safety work, listened to the voices of the masses and responded to their concerns as it continuously optimized the user experience. This, combined with the activity of “I offer my true words for safety”, based on more than 28,000 reports collected … more than 170 manuals, systems and procedures were revised, 51 issues of safety warnings were issued, and seven technical renovations were initiated to effectively solve the safety issues concerned by employees and improved safety levels to creating a cultural culture of “active management, full participation, team mutual assistance, and continuous improvement”.

Revised more than 170 items of manuals, systems and procedures

Issued 51 safety warnings

initiated seven technical reforms

Adhering to Aviation Safety

China Southern established a long-term safety mechanism covering all aspects of flight, maintenance, operation control and even technological innovation and practically implemented the management of safety risk prevention and failure in every link of each flight to ensure flight safety and air defense safety and guarantee the safety situation in the fields of dangerous goods and public health.

This high safety level continued to maintain a leadership position in China’s civil aviation.

2.111 million hours of safe flight time

Accumulated safe flight time of 26.7 million hours

Safely executed 843,000 flights

266 months of continuous flight safety

Maintained air defense safety for 331 consecutive months

Company liability reasons transport aviation symptom rate 0.0047

Civil aircraft 10,000 hours rate 0

General aviation sign 10,000 sorties rate 0

The rate of 10,000 flights on the ground for transport aviation is 0

Note: The statistical scope of accumulated safe flight time did not include Xiamen Airlines and non-China Southern Airlines holding subsidiaries.

Aircrew Management

China Southern has continuously strengthened the management of aircrews from the aspects of capability improvement training, promotion of safety performance management of fatigue risk, to improve safety awareness and safe aircrew operation levels.

Competence Building

The Company was the first in China to:

•

Carry out EBT pilot work

•

Explored CRM (crew resource management) courses for key inflight personnel, operation control, maintenance and other key positions

•

Carried out “Flight Lecture” training to improve the qualifications and capabilities of flight personnel

•

Organized seasonal learning seminars and complex state recovery training to improve aviation safety

•

Fully utilized online training, VR training and practical drills to carry out special training on hatch door controls, and

•

The proper use of emergency equipment to improve on-board safety operations and emergency response capabilities

Case The Largest Air Crew Training Center in Northwest China was Placed into Operation

On February 4, 2021, the largest comprehensive aircrew training center in Northwest China - China Southern Xinjiang Aircrew Training Center - was officially opened. As one of the three major training bases of China Southern, Xinjiang Air Service Training Center was mainly responsible for flight attendant training, daily air security training and regular recurrent training.

More than 20,000 hours of practical training and recurrent training was guaranteed throughout the year to meet the training needs of local airline pilots, flight attendants, air police and safety officers in emergency survival, air security, and cabin simulation exercises.

Case The First Cabin VR Multi-Person Collaborative Training System in China

In order to effectively improve the emergency response and decision-making response capabilities of front-line personnel, China Southern Airlines has innovatively applied VR technology to the aviation field.

The first domestic VR multi-person collaborative training system in the cabin broke the VR operation limitation of single person and single task and realized the simultaneous completion of firefighting training by three people. A series of emergency situations that could occur after a cabin fire was simulated and collaborative fire-fighting training was carried out; the indicators of each link of fire-fighting disposal were quantitatively analyzed, and detailed fire disposal analysis reports and comparison of previous disposal data were provided; multi-person interactive LED large screen teaching improved the effectiveness of the training of simulation cabin trainees.

Case Holding the First Flight SOP Competition

In order to further test and enhance professional knowledge and practical skills, China Southern held the first flight SOP competition during Year 2021, closely following the reality, focusing on the key and difficult points of flight safety and integrated the skills competition with flight work.

From the flexible application of SOP knowledge, strict implementation of procedures to proficiency of regulations, and accurate judgment of decision-making, comprehensively tempered the ability of pilots, this program fully demonstrated the superb skills, rigorous style and tacit cooperation of China Southern pilots, helping to promote safety quality.

Supervision Assessment

The Company directors formulated normative documents such as “Simulator Subject Development Management Plan” and “Flight Examiner Management Measures”; carried out special rectification of SOP (Standard Operating Procedures) and improved the management ability and implementation level of flight standards. This established a differentiated supervision and supervision mechanism that centrally promoted safety performance management and further standardized process control to effectively reduce safety risks.

Fatigue Management

The Company senior managers implemented the regulations and requirements of the Civil Aviation Administration, introduced and activated the Fatigue Risk Management System (FRMS) which continuously monitored and controlled fatigue risks, limiting flight and duty time, reduced crew operating fatigue and reduced safety risks caused by pilot fatigue.

Operation Control

China Southern has continuously strengthened the identification and management of safety risks during flight operation, improved emergency response capabilities and the efficiency of fault diagnosis and handling, ensuring safe and stable flight operation.

Operational Command

The Company regularly carried out risk assessment of new routes, compiled and issued safety risk reminders, and gave key warnings to potential challenges such as severe weather, small and medium-sized special airport operations, airspace adjustment and fire safety to ensure that dispatchers could grasp the operation risk reminder information of the day and deal with flight system alerts in a timely manner.

All these and many more procedures lead to impact the Company’s security guarantees as officials adhered to incident investigation, safety inspection, operation safety supervision and statutory self-inspection and focused on supervision and rectification of issues such as dispatcher qualifications, released explanations for small and medium-sized special airports and fire safety to ensure that hidden dangers can be rectified in place.

Air Defense

The Company carried out joint air-ground exercises. On the basis of on-the-spot training and rehearsal, airline officials carried out joint air-ground drills to fully prepare for actual emergency response scenarios and effectively improve the response capability to deal with emergencies.

China Southern maintained safety and order on board all flights and pushed forward the construction of the airline’s “safe civil aviation” which improved security sensitivity during and after important periods and events, strengthened the ability of crew members to exercise security rights and perform security duties in accordance with the law, further standardized the handling process of in-flight security incidents, and effectively maintained standard in-flight security order.

Maintenance

The Company established a health management platform which provided real-time and multi-directional monitoring of the health status of the engine during flight, development of sound and light warning devices for engine performance monitoring, real-time alarm function for important engine monitoring and warning which allowed for immediate response.

Extended model failure map as airline officials carried out engineering investigations on attendance failures, important failures and key events in the world fleet, continuously enriched and improved the “Fleet Medical Code”, expanding the failure maps of various aircraft types, improved the efficiency of failure judgment and processing, and provided reliable capacity guarantees for on-site operations.

By the end of Year 2021

China Southern has obtained 23 national civil aircraft maintenance licenses

Has 23 maintenance sites

19 maintenance hangars

Fleet release reliability ranks first among the three major airlines

Airbus A330, A350; Boeing B777, B787 fleet release reliability ranked first in the world

The technical branch team has become the only enterprise team in the air transport industry that has been promoted to the Top 10 in the country since the launch of the China Industrial Internet Competition

In the field of maintenance and repair, China Southern earned eight national, provincial and ministerial-level industry-level science and technology awards - making it the airline with the most awards in this field.

Technology Escort

China Southern Airlines escorted safe flights with technological innovation and constantly explored research and application of information technology in the field of safety.

Digital Control

The Company increased its research and development of the integrated dispatch management system – iFOS – which can integrate core management functions such as announcements, airborne data, routes, and aircraft performance, promote the digital integrated management of flights, aircraft, and airports, realize automatic calculation of flight plans and digital control of dispatch and release processes, and effectively reduce air routes, navigation data, performance weight limit and other core risks and human errors and comprehensively improve the level of risk control.

Visual Monitoring

The Company promoted the application of personal flight data visualization (FDV) projects to achieve immediate APP playback of QAR landing; established a risk radar system to structure flight risk assessment, prediction and control; carried out Route Operation Safety Assessment (LOSA), analyzed operational challenges through non-intrusive route observation and recording, putting forward effective suggestions and improved training, safety and operation in a targeted manner.

Intelligent Maintenance

The Company upgraded its remote diagnosis system, strengthened the big data analysis method, and shared the aircraft operation status in real time. Promoted lean management of the entire engine life cycle and reduced engine maintenance costs. This included the development of a remote cooperation platform for engine hole detection to realize rapid damage judgment and treatment as well as the application of AR, VR, 5G and other information technology, focused on building a “smart workshop” to continuously improve the intelligence level of aircraft maintenance.

Ensuring Passenger Safety

China Southern Airlines has always placed the safety and health of passengers first and formulated relevant standards and requirements for personnel protection, environmental disinfection, and food safety to comprehensively guarantee the safety and health of passengers during flight.

Food Safety

The Company continued to promote the ISO 9001, ISO 22000, HACCP system construction and certification of the aviation catering system, established a “three-level inspection system”, carried out special rectification and improvement actions for food hygiene and safety to manage the entire production chain, and monitor food hygiene and safety risks to ensure air catering safety and quality.

Medical Support

The Company designated specialized aviation doctors to provide 24-hour online health consultation and review for sick passengers. During Year 2021, aviation physicians provided medical advice to 2,230 sick and/or people with a disability among which 139 ill passengers were deemed unfit to fly.

Cabin Safety

The Company strengthened safety risk management to deal with special situations such as potential lithium battery smoke and ensure safe and stable operation during peak seasons with high air turbulence; made service plans and ensured timely reporting and disposal of special information.

Managing Occupational Health

China Southern Airlines has always attached the greatest importance to the physical and mental health of every employee, strictly abiding by the Labor Law, the Law on the Prevention and Control of Occupational Diseases and other laws and regulations that enhance the identification and assessment of occupational health and safety risks for employees while providing mental health services to protect the physical and mental health of all employees.

Physical Health

The Company regularly carried out employee health examinations and offered training seminars to target health management according to different types of employees.

All Employees

The Company worked to improve employee health management and optimized physical examination work for all employees by arranging for online and offline health lectures and emergency first aid training

Special inspections on food hygiene and safety at all employee cafeterias

Air Crew

Adopted the aircrew health classification management model to implement individualized health management

Doing a good job in managing health risk controls

Organizing the convalescence of aircrews

Female Staff

Invited experts from tertiary hospitals to carry out medical knowledge popularization

High-Risk Job Groups

Doing a good job of caring and caring for people in isolation

Mental Health

In-depth development of aircrew mental health promotion services, through psychological “salon group” counseling, one-on-one professional consultation and psychological crisis intervention to improve the mental health and well- being of all employees. A psychological counseling and care policy for quarantined persons was introduced, and an unlimited number of free psychological counseling hotlines and individual counseling services were provided.

Case Actively Promoting Flight Health and Safety Management

In order to ensure the quality of life as well as the physical and mental health of aircrews and to ensure the safety of flight operations, China Southern Airlines actively promoted the construction of a flight health management system and incorporated health management into employees’ entire career cycle.

Improving System Management

The Company revised and improved the “Pilot Health and Safety Operation Risk Management Regulations” and “Pilot Health Classification Management Regulations” to provide supporting guidelines for standardizing health and safety management.

Building a Pyramid Model of Flight Safety Management System

The Company strengthened health knowledge education and disease prevention reminders, improved the dynamic management of health interventions for key personnel, and optimized pilots’ individualized health management.

Pilots’ Mental Health Promotion

China Southern Airlines’ senior leaders promoted the implementation of pilots’ mental health promotion plan, the introduction of mental health awareness, studied pilots’ psychological assessment and pilot psychological selection “three steps” psychological support work, and built “three care lines”, namely organizational care line, family warmth line, professional support line … and implemented the “three-piece set” practice of psychological anti-pandemic and improved the mental health of pilots throughout the chain.

Case Caring for Isolation Personnel

In order to provide humanistic care and good service to the centralized isolation personnel, China Southern Airlines has established a leading group to take good care of the centralized isolation personnel, starting from the psychological health of the isolated employees, life service guarantee and pandemic prevention and control, built three working lines, with organizational care, family warmth and professional support as its core. Created a “home” atmosphere of isolation through measures such as enriching meals, festive condolences, family care, and purchasing fitness equipment.

Mental health questionnaire surveys were carried out and 248 sessions of online group assistance, micro-classes and other mental health special counseling sessions were conducted for quarantined persons, with 14,000 participants. 30,000 copies of 24-hour psychological counseling hotline reminder cards and EAP brochures were produced and distributed to all quarantined persons.

These and many other positive efforts were made to help the quarantined people feel valued, cared for at all times from the moment they stay in the quarantined hotel. The joint expert team developed mental health promotion products, carried out continuous learning on 14 antennas and relieved the psychological pressure of quarantined personnel.

During Year 2021, the Company provided 252 consultations for quarantined persons, with a total consultation hours of 360.17 hours.

2. Low Carbon Environmental Protection - Setting Sail Towards

a Green Future

China Southern Airlines corporate culture has continually adhered to the guidance of Xi Jinping’s ecological civilization thought, unswervingly implementing the concept of green development, establishing and improving energy and environmental management systems while continuously promoting energy conservation and emission reductions … to fight the good fight of pollution prevention and control and led the green and low-carbon development of the aviation industry as the Company builds a community with a shared future for aviation green development and makes contributions to building a beautiful China and making significant contributions to the UN 2030 Sustainable Development Goals

Improving Environmental Management

China Southern attaches great importance to the identification and prevention of environmental risks, and actively took countermeasures to mitigate, adapt and resist climate change by reducing the impact of business operations on climate change, and comprehensively improved the resource efficiency of business operations.

During Year 2021, the preparation of China Southern’s emergency strategy for environmental crises was completed and included plans for environmental challenges, enterprise risk assessment reports and environmental and investigation reports on available resources during real world scenarios.

With reference to the TCFD recommendations, the climate-related financial information of China Southern is as follows.

Governance

Governance Measures for Climate-Related Risks and Opportunities

A leading team for ecological and environmental protection work was established with senior managers from the Company serving as team leader and the members of the party organization as deputy team leaders to organize, plan and supervise the energy conservation and emission reduction work, coordinate and resolve major problems and promote the implementation of varied measures.

The Board of Directors of China Southern Airlines also participated in the determination of important environmental issues such as climate change, waste disposal and sustainable resource utilization … as well as regularly summarizing, supervising and reviewing the performance of key performance indicators for energy conservation, carbon reduction and pollution control.

Strategy

Actual and Potential Impacts of Climate-Related Risks and Opportunities on Business, Strategic and Financial Developments

China Southern senior managers recognized that the issue of climate change was constantly evolving and attached great importance to identifying risks and opportunities brought about by climate change in order to reduce the environmental footprint of the Company’s production and operations.

Climate risks such as increased frequency, severity and uncertainty of extreme weather may lead to increased frequency of flight delays and cancellations, as well as global temperature and the rise of sea levels which may also have long-term strategic and operational implications for the entire aviation industry.

Risk Management

Identifying, Assessing and Managing Climate-Related Risks

The Company carried out work in strict accordance with the requirements of environmental impact assessment and environmental protection “three simultaneous”.

This included:

•

Formulating energy conservation and emission reduction management methods, development and annual work plans, and incorporating energy conservation and emission reduction throughout the entire process of enterprise reform, structural adjustment and optimization and management improvement

•

Building an environmental management system that integrated data reporting, pollution prevention and control, training, publicity and budget management, and conducted statistical analysis and reporting on a regular basis

•

An accountability system was established to supervise and audit the energy conservation and emission reduction work of 24 secondary units every year

•

Designated airlines officials served on the IATA Sustainability and Environment Advisory Committee, and actively participated in working groups such as carbon emissions and aviation sustainable fuels and carried out research on civil aviation carbon emission policy response strategies and actively explored the sale of excess carbon allowances, and

•

Company officials paid close attention to the technological progress and commercial operation of sustainable aviation fuel and jointly studied airworthiness certification, sustainable certification, commercial operation and other issues with relevant domestic institutions.

Metrics and Goals

Metrics and Targets for Assessing and Managing Climate-Related Risks and Opportunities

The Company formulated the “China Southern Group Green Development Work Plan” to clarify the overall work goals of green development, and put forward three key work goals of energy conservation, emission reduction and environmental protection, “dual carbon” and plastic pollution control.

In terms of energy conservation, emission reduction and environmental protection, the Company is pledged to strive to achieve a fuel consumption of no more than 0.28 kg per ton per kilometer by the end of the “14th Five-Year Plan” period, and prevent the occurrence of environmental pollution liability incidents.

In terms of “Dual Carbon”, according to the “Dual Carbon” path schedule of higher-level units such as the Civil Aviation Administration, “China Southern Group Peaking Carbon Dioxide Emission and Carbon Neutrality Targets and Achievement Path Report” was prepared.

In terms of plastic restriction, the Company will no longer offer disposable non-degradable plastic straws, stirring sticks, meal/cup sets and packaging bags on international passenger flights by the end of Year 2022 and realize non-degradable plastic tape, disposable non-degradable plastic rain cloth, wrapping film and other cargo packaging use by the end of Year 2024 as supply usage has dropped significantly.

Implementing Energy Saving and Emission Reduction

Throughout Year 2021, China Southern senior leaders paid great attention to energy conservation and utilization, steadily promoted the replacement of clean energy, reduced energy resource consumption and waste discharge during production and operation to minimized the impact on the environment.

Saving Energy

Through measures such as route optimization, aviation fuel management, “aviation fuel e-cloud” management, and aircraft weight reduction, green flight was comprehensively promoted, fuel consumption was reduced and energy utilization efficiency was improved.

This provided a new emphasis on new energy resources, the use of electric ground service vehicles, increasing the proportion of clean energy use and gradually replaced carbon-burning gasoline vehicles with new energy efficient electric vehicles.

Conserving Water

The Company also took great care with its precious water resources by transforming aircraft water supply trucks and promoted the water truck spray methods for aircraft disinfection, saving 5,408 tons of water throughout the year.

This included dry cleaning to replace traditional wet cleaning of its aircraft to optimize the cleaning process, improving cleaning efficiency and reducing the adsorption of dust and dirt to reduce water consumption.


Water Saving Comparisons

Model	Wet Wash Water Volume	Dry Cleaning Water
A380	100,000 liters	400 liters
A330	50,000 liters	200 liters
A321	30,000 liters	60 liters
A320	30,000 liters	60 liters
B787	50,000 liters	200 liters


A777	50,000 liters	200 liters
B767	50,000 liters	200 liters
B757	30,000 liters	90 liters
B747	100,000 liters	400 liters
B737	30,000 liters	60 liters

Green Packaging

The Company increased its scientific research investments in degradable alternatives, accelerated the development of advanced and applicable plastic alternatives and designed new packaging materials for paper cups and cutlery. The included:

•

Actively promoting recyclable and foldable packaging products and reduce the supply of plastic products

•

Sourced supplies that meet the criteria for the compostable alternative category

•

Issued the “China Southern Group 2021-2025 Action Plan for Plastic Pollution Control” and formulated the goals for plastic pollution control and carried out the target decomposition and task arrangement, and

•

By the end of Year 2021, China Southern Airlines had stopped all use of single-use non-degradable plastic straws, stirring sticks, meal/cup sets, and packaging bags in terminals, lounges and with domestic passenger flights.

Strengthening Pollution Prevention and Control

In accordance with the “Water Pollution Prevention and Control Law of the People’s Republic of China” and the “Air Pollution Prevention and Control Law of the People’s Republic of China” and other regulations, China Southern senior managers formulated a work plan for pollution prevention and control, and issued the “China Southern Group’s 2021-2025 Plastic Pollution Control Work Plan” for staff to handle production and domestic waste in compliance with regulations, fully promoted the control of plastic pollution, and continuously improved pollution prevention and environmental protection management plans to reduce environmental impact.

During Year 2021, the budget for the disposal of three types of waste was 21.7 million.

Waste Gas Treatment

The Company senior managers directed its engineering staff to construct glass fiber secondary purification filters which featured honeycomb activated carbon adsorption purification devices, bag filters and other treatment facilities. The generated waste gas was collected and treated and discharged after reaching specific standards.

These actions strengthened aviation fuel management, increased investment in technological transformation, improved energy utilization efficiency, and minimized the impact of exhaust emissions on the environment and society.

260.8 million cubic meters of waste gas treated

Waste Water Treatment

Production Waste Water

The sewage treatment system facilities using the “oil separation + air flotation + sedimentation” treatment process was used for production waste water treatment. According to the requirements of the Company’s environmental impact assessment, qualified testing units were hired to conduct sampling tests and the water could be discharged after reaching specific standards.

Medical Waste Water

The included disinfecting medical waste water generated during the COVID-19 pandemic and invite a third-party environmental sanitation testing agency to conduct monitoring to prevent environmental pollution caused by medical waste water.

Industrial Waste

The Company set up industrial waste water discharge outlets in accordance with environmental protection requirements and installed metering equipment on sewage treatment equipment. Special personnel were responsible and operated environmental protection treatment facilities of the sewage treatment station and track the sewage treatment volume in real time.

Treated 12,987 tons of industrial waste water

Treated 93,000 tons of production waste water

100% treatment rate of industrial waste water and production waste water

Waste Disposal

Non-Hazardous Waste

Staff and air crew collected paper towels, office and domestic waste and kitchen waste generated during flight activities in a centralized manner and handed them over to a professional management company qualified for recycling.

Hazardous Waste

This included the disposal process of waste disinfection, collection, temporary storage, transfer and handover of waste to a professional management company to reach 100% harmless treatment of in-flight waste on international flights and key controlled flights.

704.903 tons of hazardous waste treated

In-flight service non-hazardous waste disposal volume of 11,063 cubic meters

Noise Control

According to the requirements of the Law of the People’s Republic of China on the Prevention and Control of Noise Pollution, China Southern organized a meeting on December 31 to start the noise pollution prevention and control work and discuss how to manage noise pollution.

This included:

•

Investing in the construction of noise control infrastructure and control noise emissions in strict accordance with national standards, and

•

Introduction of a low-noise fleet, equipped with high-performance engines and narrowing the noise trajectory

Advocating Green Environmental Protection

China Southern Airlines advocates a low-carbon and environmentally-friendly way of life and has implemented:

•

Green office methods such as a “paperless office” setting

•

Reasonable setting of air-conditioning temperatures

•

Closed water taps

•

Organized environmental protection public welfare activities

•

Promoted industry exchanges

•

Actively disseminated green and low-carbon concepts, and

•

Worked in harmony with varied stakeholders to protect green homes

LOGO

“ Dual carbon leads green flight; plastic limit starts from me” was the theme activity of National Energy Conservation Publicity Week

LOGO

“Join ‘Green Flight’ to Create a Better Life” themed flight event

Case Holding the first aviation environmental protection exchange meeting of Chinese mainland airlines

On May 7, China Southern and IATA North Asia jointly held the first aviation environmental protection exchange meeting for Chinese mainland airlines with 50 key decision makers from mainland airlines and related institutions in attendance. Important international topics such as “Air Transport Industry and Carbon Market” and “Sustainable Jet Fuel” were shared and discussed. At the meeting, China Southern representatives focused on sharing work experience in energy and environmental protection, such as strengthening top-level design, issuing guidance, identifying six major areas of airline environmental protection, promoting 10 important tasks, and proposed emission reduction targets to IATA and aid programs to formulate two environmental protection work proposals.

The conference provided a solid communication platform for China Southern Airlines to play a positive role in promoting the internationalization process of mainland Chinese airlines and assist other Chinese mainland airlines to learn more about and participate in the formulation of international carbon market rules.

Case Launch of a Series of Themed Flights of “Biodiversity Conservation”

The 15^th meeting of the Conference of the Parties to the Convention on Biological Diversity (COP15) was held in Kunming from October 11 to 15, 2021.

From September 24^th to October 17^th , China Southern, together with the China Environmental Protection Foundation, held a series of themed flights on “Biodiversity Conservation” from Beijing to Kunming, provided channels and platforms for the public to understand COP15 and biodiversity knowledge, and participated in biodiversity conservation practices to further enhanced public awareness of ecological civilization and environmental science literacy which aided in guiding and mobilizing all sectors of society to participate in biodiversity conservation, and created a good public opinion atmosphere for the successful holding of COP15.

3. Affinity and Refinement - Setting Sail for a Warm Future

China Southern continues to adhered to the principle of “People’s Airlines for the People” by creating a “friendly and refined” service brand that provided passengers with friendly and refined air-to-ground services, convenient passenger and cargo ground handling services convenient and projected the love of flight to every passenger … while contributing to the UN 2030 Sustainable Development Goals.

Guaranteeing Safe Flight Operations

China Southern has continued to promote its large-scale flight operations and carried out numerous projects to improve flight punctuality with operation efficiency increasing year by year as flight punctuality rate maintaining an industry-leading position.

Optimizing Flight Management

The Company continued to market the construction of large-scale flight operations, uniformly allocating core resources such as transport capacity and flight crew, strengthened cross-departmental coordination and linkage, and improved information transmission and response speed. This included optimal flight operations that is linked to China Southern Airlines flight guarantees and focused on rapid rollout and response, ground taxiing, internal and external coordination, quick stopovers and flight delays to work in harmony in ensuring normal flight service.

Launching Flight Regularity Enhancement Actions

The Company continued to optimize its route structure, adjusted flight plans according to the impact of the COVID-19 pandemic and market demand; optimized the boarding process in different time zones, refined the manual standards, managed late arriving passengers and the card control process for oversized luggage; optimized the flight closing section and launch period of aircraft relevant work flow as staff carried out site efficiency improvement work in different regions.

Creating a Digital Work Platform

The Company created a large-scale operation digital work platform, continued seeking new and exciting ways to improve its independent research and development capabilities and technological innovation level of the operation system; launched 19 applications such as flight dynamic query; China Southern weather and handheld flight tracking capabilities … and promoted the launch of “China Southern Smart Travel” and “Mobile Flight Support Module” mobile apps. The flight group building function has been promoted on multiple routes to realize the entire flight operation process and multi-scenario coverage.

During Year 2021, the flight regularity reached 89.89%

1.9 percentage points higher than the average level of civil aviation

The top three airlines ranked first among the major domestic airlines for six consecutive years

Smart Travel

China Southern provides passengers with a complete portfolio of smart travel services including ticket purchase, flight check-in, boarding, baggage refunds and modification services as it strives to offer passengers the best air travel experience.

Smart Baggage Service

The Company enhanced its information inquiry channels to reach out to all passengers through the exclusive China Southern e Travel app, mini programs, WeChat public account and SMS push and making the luggage transportation status completely transparent.

This also included oversized baggage to place a smartphone “palm view”, “real-time view” and “one-click” declaration of abnormal baggage, and worked tirelessly to create a “one-stop” convenient service for all forms of baggage.

Baggage transportation error rate decreased by 6.15% year-on-year

(Guangzhou + Beijing) hub transfer baggage missed rate of 9.85/10,000

The passenger coverage rate of smart luggage service was approximately 70%

The information access rate of the whole baggage process was 71%

More than 90% of routes now offer baggage tracking services

The full-process baggage tracking function has served passengers’ baggage more than 100 million times

Case The First “Luggage to Home” Service was Launched in China

On July 28, 2021, China Southern senior managers launched the new “luggage to home” product at six airports … specifically at Guangzhou Baiyun, Beijing Daxing, Shenzhen Baoan, Wuhan Tianhe, Chongqing Jiangbei, and Chengdu Shuangliu International Airports, becoming the first company to provide “luggage door to door” baggage service and the first to launch the “air-subway” luggage intermodal service.

Through the China Southern mobile app, WeChat official account and other social media channels, The Company actively pushed the visibility of the baggage process to passengers. “Luggage to Home” is a logical extension of China Southern’s transparent baggage tracking service which further enriches the civil aviation baggage transportation service model and brings a more efficient and convenient new baggage service experience to passengers.

“One ID” Travel Service

In conjunction with Guangzhou Baiyun International Airport, the “One ID” full-process face-scanning travel service was launched in which passengers no longer needed to present their ID cards, boarding passes or QR codes. Self-service check-in and other services propelled China Southern Airlines to a new stage in digital and contactless passenger check-in.

Note: Due to the needs of COVID-19 pandemic prevention and control, this face-scanning service was temporarily suspended during self-check-in.

“China Southern e-Travel”

“China Southern e-Travel” integrated the upstream and downstream industry resources of air travel, covering service needs such as “in-flight cuisine, accommodation, ground transportation, entertainment and shopping”, and provided passengers with exceptional door-to-door services; launched the “Omni-channel ticket refund function in seconds” on domestic routes, realizing “no restrictions on the place where the ticket was purchased, rescheduled processing in seconds, and refunds arriving in seconds”, providing convenient services for passengers traveling during the COVID-19 pandemic.

Honors

•

Awarded as “2021 Excellent Case of Jointly Building a Community of Shared Future in Cyberspace”

•

Earned the “Top Ten Innovative Projects” Award of the Central Enterprise E-commerce Alliance

•

Captured the “Enterprise Informatization Construction Innovation Achievement” Award

•

Won the first prize of “National Transportation Enterprise Management Modernization Innovation Achievement”

AI Intelligent Customer Service Platform

China Southern’s intelligent “robot” customer service system was built to accurately perform semantic analysis, intention judgment and question-and-answer searches to realize a full robot anthropomorphism and dialogue interaction with passengers, guiding air travel consultation and handling services which ultimately improved service efficiency.

The number of visits to the intelligent customer service platform exceeded 7.3774 million

The number of visiting users exceeds 6.4341 million

Providing Warm Service

China Southern continues to focus on its service concepts of “warm service, heart touching”, by building a large service pattern of “affinity and refinement, perfect system, synergy and efficiency, intelligence and precision, and value-driven”, continuously making upgrades to its service quality, accelerated the construction of China Southern’s ecosystem, and optimized the travel experience of special needs passengers.

Upgraded Quality Service

Centering on the value concept of “customer-centric”, China Southern is focused on providing warm and attentive service and regularly carried out product staff training to improve its customer experience by empowering front line staff. To meet these goals, China Southern created and delivered six exclusive service brand business cards, including:

•

“China Southern e-Travel” Business Card (one machine in hand, worry-free throughout the journey)

•

“Customer Exclusive” Business Card (exclusive account manager providing one-stop exclusive service)

•

“Luggage Privilege” Business Card (full-process baggage tracking, online baggage service, door-to-door service)

•

“Transit Enjoy” Business card (transit butler service)

•

“Warm Service 360” Business Card (two-class high-end full-service)

•

“Food Fashion of China Southern” Business Card (in-flight cuisine concepts such as“Nutrition and Health” and “Hometown Taste).

At this intersection of fighting back against COVID-19, the entire China Southern Airlines team stood tall to protect People’s life safety by improving its brand of affinity and refinement so that passengers can enjoy the Company’s warm and harmonious service during every flight.

Honors

•

Ranked 12^th in Skytrax’s “2021 Top 100 Global Airlines” list, ranking first among major domestic airlines

•

Earned “Green Flight 2020 CAPSE Innovative Service Award”

•

Obtained the AAA-level certification of the highest level of market quality credit, and

•

Awarded the “Best Airline Award” by the Civil Aviation Resource Network for the fourth consecutive year

Case Opening up a “Channel of Life” for a Xinjiang Boy with a Broken Arm

On April 30, 2021, China Southern urgently transported a five-year-old Uyghur child with a broken arm in Hotan, Xinjiang, to Urumqi for treatment. To rescue the boy with the broken arm, China Southern instructed its departing flight crew to return to the gate and slide back the jetway and accept the injured child and his parents, regardless of conditions or cost which fully embodying the service concept of “people first, life first”.

This social hot spot publicity became one of the most widely reported news on China Southern in recent years, with the largest number of readings most social attention, and the largest number of likes … and the cumulative total exposure of the central and major mainstream media exceeded 1.6 billion. This event won the first prize of the 2021 SASAC “Excellent Story of Central Enterprises” and a Top 10 placement case of social value. Currently, the film “Ordinary Hero”, adapted from this story and with cooperation of China Southern, has been listed as one of key theme films in during Year 2022.

Scan to learn more

Case National Nutrition Week

From May 17 to 23, 2021, China Southern, together with the Guangdong Provincial Health and Health Commission and the Guangdong Provincial Nutrition Society, launched the “Rational Diet and Nutrition Benefiting Thousands of Homes” aerial publicity on the China Southern CZ3099 Guangzhou-Beijing Daxing flight which kicked off a week-long 2021 National Nutrition Week air campaign, advocating green flight and reasonable diet.

LOGO

China Southern attaches great importance to the nutrition and health of passengers’ in-flight meals, and the On Demand Dining cuisine introduced by China Southern such as large bowls of porridge and four-season health soup was widely welcomed by passengers.

Case Immediate Domestic Ticket Refunds

During Year 2021, China Southern realized the automatic processing of domestic passenger tickets sold through all channels could be self-refunded and changed through the official airline channels. This new flexible configuration function improved passenger options as throughout the year, more than 11.7 million passengers were provided with online self-service refund and correction services.

Ninety five percent of all ticket refunds were shortened from the original three days - a new industry standard.

Case Launch of the Tourism Product “Happy Travel in China”

On October 8, 2021, China Southern’s “Happy Travel in China” product, with the theme of “unlimited flight, check in to a beautiful China”, provided passengers with a variety of new travel products to maximize their travel plans.

Building China Southern Airlines’ Ecosystem

China Southern senior leaders took advantage of the Company’s main business brand and customer scale to build new platforms with new airline partners that jointly created new opportunities to promote the implementation of China Southern’s ecosphere strategy and provide passengers with one-stop travel solutions.

Established Platforms

The Company built a multi-party cooperation platform to achieve precise interaction of customers, products and data in the ecosystem.

Finding New Partner

This included expanded upstream and downstream partners, expanded cooperative enterprises around customer needs and offered customers with new air travel options.

Redeeming FFP Points

Expanded the application opportunities of the Company’s award-winning Sky Pearl Club FFP mileage.

Strengthening capabilities to attract customers

Cooperated with partners to bring in streams of customers , continuously enhance customer relationship and gradually increase income from the main business, fulfilling all-win cooperated goals.

Information Integration

Worked to meet the travel needs of customers with an integrated flow of information about new Company products.

Serving Special Needs Passengers

China Southern senior leaders paid great attention to the travel needs of people with a disability and upgraded the “age-friendly” barrier-free access during flight boarding and disembarkation which included personal document inspection and inquiries for special needs passengers such as unaccompanied minors and the elderly. This included the launch of a new “customs clearance guidance” and other convenient service products to meet the travel needs of people with a disability.

Practicing the Original Intention and Doing Good Work

Special Plan

Caring for Special Needs Travelers

Air travel for seniors, children, unaccompanied minors and people with a disability is something that families always care about. China Southern is focused on People’s “urgency and worries” and fully practice the concept of “serving the people wholeheartedly” with emphasis on the travel needs of special needs passengers by paying attention to every service detail and provide personalized services to make travel more convenient.

Stakeholder Voices

“It’s really convenient now, this electronic self-service can do everything quickly”.

•

A senior flyer handling consignment

“Thanks to China Southern Airlines for helping me and my wife change our bookings, and the follow-up flight has gone smoothly!”

•

Ms. Su, passenger

Upgrading “Age-Friendly” Barrier-Free Barriers

The Company pays the utmost care to its senior passengers and have created special service counters just for them!

The “Notice on Doing a Good Job in Facilitating Travel Services for the Elderly” was issued, requiring all working staff to set up service counters for senior passengers to provide services such as health code inspection, ticketing, check-in, ticket service, priority boarding and baggage inquiry.

This also included:

•

Upgrades to the website experience of senior travelers and marketed a new “age-friendly” renovation of China Southern Airlines’ official website and the China Southern mobile app, to make it easier to understand and operate, and set up a special layout and auxiliary tools for the official website

•

Large font size and color matching were provided as well as on-line tools such as page zoom, voice link reading and support screen reading tools to solve the difficulty of using intelligent information technology for senior passengers

•

Actively upgraded the ticketing service for senior travelers and for those who are not familiar with new smartphone technology, China Southern staff was always on hand to offer assistance

•

A new “Jingxing Transit Card” was launched, using the airport internal boarding map behind the card, and the on-site check-in staff became “safety patrollers” who are always available to provide convenient travel guidance throughout the process.

•

For senior travelers who arrive early at the airport are provided private tours of the public airport facilities, and

•

While solving the challenges in using of intelligent information technology, China Southern staff provided extended time to enhance the travel experience of all senior passengers

Enhancing the Travel Experience of People with a Disability

China Southern senior managers stived to improve the ability of employees to serve people with a disability and offered staff presentations on the “Service Demands of People with a Disability”, so that all staff can understand the service needs of people with a disability.

The Company also developed cooperation with the guide dog base to gain an in-depth understanding of the work and habits of guide dogs, and created a charity service project of “Guide Dogs in the Air”, making the journey of visually impaired people more convenient.

Optimizing the Service Process for Unaccompanied Minors

Parents can apply for and purchase air tickets for unaccompanied minors through the China Southern app, mobile website and other electronic channels and can filled in the application once and have no worries throughout the whole process.

During Year 2021, the on-site processing time was reduced from 10-15 minutes to 5-8 minutes including seat reservation and information communication for parents and launched service measures such as “Kapok Open, Sunshine Follows” for unaccompanied minors who now enjoy five privileges such as special person care, special check-in counters, special security check channels and priority boarding.

During the COVID-19 pandemic, hand sanitizers were provided at all check-in counters for unaccompanied minors as well as at the rest area within the security check area. Hand disinfection and guidance assistance were implemented in the three links of check-in, waiting and boarding by specially designated personnel.

During check-in, parents were reminded to prepare their children’s anti-pandemic supplies and oversized luggage was checked so that children could travel without concern. Also at the security check area and during flight boarding, unaccompanied minors were guided to use the special airport passenger security check channels and take advantage of exclusive waiting areas for people with a disability and priority registration service channels to quickly board their flight.

Maintaining Customer Relations

Throughout Year 2021, China Southern earnestly protected the rights and privacy of all its customers, unblocked passenger feedback channels and carefully listened to customers’ voices. This feedback included actively promoting after-sales service for refunds and changes and managing customer complaints in a timely manner to maintain a good relationship with all customers.

Passenger Rights Protection

China Southern senior managers established a complete information security mechanism and passenger service evaluation system, collected passengers’ opinions through multiple channels and directed staff to handle customer complaints in a timely manner.

Customer Privacy Protection

China Southern attaches the greatest importance to the protection of passengers’ personal information and encouraged all members of the Board of Directors to actively participate in customer data protection as well as concrete steps to ensure customer privacy and security through institutional guarantees, technical precautions and information auditing.

Board of Directors Participation

The Company’s board-level committee attached great importance to network security and in Year 2021 established a network security and technology informatization leading group, headed by the Company’s executive director, who regularly participated in and continually guides work related to privacy protection and data security.

Information Technology

The entire China Southern security management process was realized in the development process of the information system, and the online business system undergoes the strictest security testing. The Company’s security team continuously improved the test coverage, closely tracking the latest security vulnerability situations and promptly handle various hidden challenges.

Strong System Guarantee

The Company strictly follows all requirements of the National Cybersecurity Law, Personal Information Protection Law, Data Protection Law and the international EU General Data Protection Regulation in the collection and use of passenger’ personal information. This has led to the forming of internal “Network Security Management Measures”, “Personal Privacy Data Protection Management Measures” and “Information Security Management System Documents” regulations to ensure data security.

Information Security Audit

Key information systems must pass the level protection security assessment of authoritative institutions. Airline technicians actively implement the network security level protection requirements as the Company hired national authoritative network security testing agencies to conduct security testing of all business systems and concurrently closely cooperated with public security organs to combat potential telecommunication fraud and cyber-attacks.

Handling Customer Complaints

In order to improve the travel experience, China Southern staff has compiled a collection of complaint cases and established an “early-warning” mechanism that allowed for providing services and managing complaints by actively responding to refund requests and air travel changes during the COVID-19 pandemic.

The Company established a special project team that provided a new automatic refund and change service and efficiently responded to passengers’ needs to improve the overall customer experience. The general score of the Bureau’s complaint management and control throughout the year was the best among China’s three major airlines.

Satisfaction Survey

China Southern Airlines continually seeks the satisfaction of its travelers and the feedback of passengers’ perception is of key importance. The Company attaches great importance to customer experience and dynamically tracked and analyzed passenger satisfaction in real time to learn how to consistently improve its services.


Satisfaction Project	Year 2021		Year-on-Year Increase
Overall Flight Experience		4.428		1.01	%
Ticket Service		4.605		1.22	%
Ground Service		4.563		2.08	%
Cabin Service		4.673		1.92	%
Food Quality		4.267		5.20	%
Catering Services		4.561		6.23	%
Inflight Entertainment		4.151		5.94	%
In-flight Cleaning		4.541		2.03	%
Intelligent Travel		4.494		5.14	%

Passenger satisfaction score 4.428 points

Customer Satisfaction 98.83%

Skytrax Cabin Service Score 4.76

Received 18,539 passenger commendation letters

A year-on-year increase of 55.71%

Quality Logistics Service

China Southern senior managers accelerated the pace of innovation in its freight/cargo products, provided multi-channel and intelligent freight transportation to meet the rising demand for high-quality air logistics of China’s mid-to-high-end manufacturing industries, and concurrently fully guaranteed the global transportation service of China’s COVID-19 vaccines … to provide customers with high-quality and professional cargo transportation services.

Freight Products

Senior managers from China Southern’s Cargo Division worked throughout the year to improve its product innovation and extended its service chain to successively launch six major products:

•

China Southern Express

•

China Southern Special Transport

•

China Southern Special Transport

•

China Southern Standard Transport, and

•

China Southern Intermodal Transport to provide customers with the best logistics services

19 international cargo routes

Realized 7,023 passenger-to-cargo flights

Smart Freight Service

Direct efforts were made to build China Southern’s logistics e-line online sales platform, IoT global container management and control system, cargo operation control platform and full-process tracking management system to enhance the intelligence of China Southern’s cargo services.

One-stop Logistics Service

Senior managers from the China Southern Cargo Division created an online sales platform for China Southern Logistics e-line, covering numerous business scenarios such as online sales, product booking and omni-channel access. This served to offer customers electronic waybills, paperless transportation documents and appointment pick-up availability with one-stop “booking and picking-up one network” service for cargo owners.

Numerous Cargo Information

Using the concept of “big operation”, the China Southern Cargo Division built a visual control center for the COC operation monitoring platforms, and made every effort to create a “one screen for cargo operation”. To do so, the airline’s Cargo Division utilized the Internet of Things, BeiDou and other technology applications, as well as mobile PDA to realize the whole process operation and process record of the cargo terminal and the apron, accelerated the digitalization of production factors, and completed the “flight, cargo, container, warehouse area operation, apron operation, vehicle personnel, map positioning, video surveillance”, a total of eight types of freight logistics big data collection, to promote the paperless and electronic operation of cargo terminals, apron operations and personnel scheduling.

One-Click Information Control

Through the combination of the Internet of Things, handheld mobile devices (PDA), fixed scanners and the actual business on site, with the application of barcode scanning and data exchange technology, the entire cargo process operation and process record of the cargo station and the apron were realized. Customers could take advantage of the processing process of goods in real time through the system and WeChat.

Integrated Smart Cargo Station

By integrating the indoor high-precision positioning technology of Bluetooth AOA with the BeiDou satellite positioning system, an indoor and outdoor integrated hybrid positioning container monitoring and dispatching system, based on the needs of the air cargo logistics business scenario, was built. In this way, the production factors such as goods, personnel, vehicles, containers and documents in the air cargo terminal could be digitally transformed, and the Internet of Things and 5G network technology could be used to realize the interconnection of everything, smart supervision and collaborative operation to realize a smart cargo terminal.

Practicing the Original Intention and Doing Good Works

Special Plan

I do Practical Work for Lychee Farmers

“The color of lychee changes in one day, and the taste changes in three or five days”.

Since June, lychees in various production areas in Guangdong entered the peak market period but the transportation out of the province has been hindered by the COVID-19 pandemic. The income of lychee farmers was seriously impacted which caused widespread concern in the society. China Southern quickly responded to the clarion call of “Doing Good Works for lychee farmers” with airline staff coordinating with all parties to build a “hump route” for lychee sale and making every effort to safeguard the income of lychee farmers.

Setting-Up a “Lychee VIP Line”

In order to meet the urgency of lychee farmers, China Southern established a Special Group for Lychee Transportation and urgently set up a “Special Lychee VIP Line”.

In response to the mixed billing of lychee and other express shipments the China Southern Airlines Logistics Co., Ltd., Guangzhou Cargo Station created new safeguard measures for lychee product to move from farm to province by cooperating with various agents which picked out lychee at the port of the aircraft to affix a special “urgent” label on key shipments by opening a green process for the assembled containers.

Implementing “Narrow to Wide” Flights

The Special Group for Lychee Transportation created and delivered the emergency coordination and implementation of 320 “narrow-to-wide” flights on 20 domestic routes departing from Guangzhou and Shenzhen to ensure that large containers of Guangdong lychees could be transported on a mass scale.

During Year 2021, China Southern carried more than 54 tons of lychees through international routes from Guangzhou to Amsterdam, Frankfurt, London, Dubai, Bangkok, Kuala Lumpur, Jakarta and Vancouver to help Guangdong lychees “go global”.

Realizing “Passenger-to-Cargo” Lychees Transportation

For the first time, China Southern successfully transported lychees from Guangzhou via Qingdao to Toronto on a “passenger-to-cargo” flight with the finest quality and freshness - opening up a new channel for lychees from Guangdong to depart from the province to the international community on the “Guangdong Lychee World Tour”.

Great Efforts to Ensure the “Excellent Freshness” of Lychees

These special efforts by the entire China Southern Special Group for Lychee Transportation Team quickly moved these precious produce through a “premium fresh” guarantee program with cold chain services and assigned personnel to quickly handle handover and priority loading to ensure the freshest lychees were shipped.

Concurrently, transportation information was released in advance every day to consignment shippers as lychees were received for on time arrival. After the lychees arrived at the designated destination station, product was tallied and handed over to the customers as soon as possible to convey the freshest taste.

“Escorting Lychee out of Guangdong” Was a Great Success

The 2021 Guangdong Lychee “12221” Market System Construction Summary Conference organized by the Guangdong Provincial Department of Agriculture and Rural Affairs was held in Guangzhou as the conference commended a group of outstanding units that have contributed to “I do practical things for Lychee”.

China Southern earned a Special Contribution Award for “Escorting Lychee out of Guangdong, I do practical work for lychee with Guangdong Speed”.

China Southern Logistics continued to make meaningful efforts to open a green channel to facilitate the delivery of agricultural products, assigned special personnel to solve problems in the transportation process, and built a direct channel for production and sales of agricultural products through “Xiaonan Direct Selection Platform” to cooperate with farmers in Guangdong and related industrial chains, continued to expand the influence of agricultural shipping and logistics, served the economic construction of Guangdong, and helped the domestic and international “dual circulation”.

4. Innovation and Efficiency - Setting Sail for a Prosperous Future

China Southern continued to improve its management level, ensured the preservation and appreciation of state-owned assets, deepened cooperation with the government, enterprises, suppliers, etc., and joined hands with all parties to promote the sustainable development of the aviation industry and promoted the Company to steadily move towards a prosperous future.

Contributed to the achievement of the UN 2030 Sustainable Development Goals

Compliant and Stable Flight Operations

China Southern senior managers insist on operating in compliance with laws and regulations, continuously deepening the construction of the rule of law that enhances the airline’s management system risk management and control to conducted clean government construction and supervision. This in turn aids the airline’s intellectual property protection, and carried out in-depth cost control work to ensure the stable operation of the Company.

100% review rate of major business decisions, rules and regulations and economic contracts

Risk Management

China Southern has always adhered to the goal of “strengthening internal control, preventing risks, and promoting compliance”, improved comprehensive risk management, built “three lines of defense” for risk prevention and control, strictly controlled the legal review of major business decisions, paid close attention to the risk prevention and control of major projects and created a comprehensive, full-staff, full-process, and full-system prevention and control mechanism. China Southern Airlines’ senior managers worked diligently to improve the compliance management working mechanism and independently developed and launched a compliance management system; strengthened compliance review and supervision; formed a closed loop of compliance management and effectively prevented and controlled violation risks.

Perfecting Risk Management Systems

The Company formed a “1+N” risk control compliance management system that was supported by a series of management regulations, with the “Comprehensive Risk and Internal Control Management System” as the guideline, the “Implementation Measures for Internal Control System Evaluation”, “Comprehensive Risk Management Regulations”, “Internal Control Management Regulations” and “Illegal Operation and Investment Responsibility Investigation Implementation Measures (Trial)” as its pillars.

Building a “Three Lines of Defense” Risk Management Mechanism

This required the Company to establish a comprehensive risk management mechanism including the risk management organization and the three lines of defense for risk management. The highest decision-making body for risk control management was the Company’s Board of Directors, responsible for the establishment, improvement and effective implementation of the Company’s risk control system and mechanisms.


“Three Lines of Defense” Risk Management Mechanisms

Board of Directors

Risk Control Department	Risk Management Department	Audit Department
• The first line of defense • Daily management of risk control	• The second line of defense • Risk control organization and coordination	• The third line of defense • Risk control supervision and evaluation

Top-Level Decision-Making Risk Prevention and Control Processes

The Company implemented the “Three 100%” comprehensive review requirements of the SASAC by streamlining the work process, review requirements and embedding legal reviews into the Company’s operation and management process to achieve the deep integration of legal review and business management.

Anti-Corruption

China Southern conscientiously implemented the deployment of the Fifth Plenary Session of the 19^th Central Commission for Discipline Inspection and the requirements of the SASAC Party Conduct and Clean Government Construction and Anti-Corruption Work Conference, took the “top leader” and the leadership team as the focus of supervision, insisted on “do not dare to be corrupt, cannot be corrupt, and do not want to be corrupt, creating a clean and upright atmosphere”.

All staff conducted 2,831 anti-corruption training sessions

Adhering to the System

The Company pushed forward the implementation of the “Opinions on Building a System and Mechanism of China Southern” to promote “Do not Dare to be Corrupt, Cannot be Corrupt and Do Not Want to be Corrupt” by the Party Organization of the Group which served to consolidate, expand and deepen special rectifications and carried out centralized rectification of challenges in the procurement field.

Airline officials regularly carried out integrity education reminders, and kept a clear focus on grassroots practices to deal seriously in accordance with regulations, disciplines and laws.

Correct Supervision and Governance

The Company supervised the “top leaders” and the leading group, and applied specific measures for implementing the “Opinions of the Central Committee of the Communist Party of China on Strengthening the Supervision of the ‘Top Leaders’ and the Leading Group”; Issued “Several Regulations on Promoting the Integration and Integration of Various Supervisions of China Southern to Enhance the Efficiency of Supervision and Governance” and used personal methods such as unplanned visits, investigations, inspections and heart-to-heart conversations to promote the implementation of supervision.

Discipline Inspection and Supervision

The Company clarified its reform of the grass-roots discipline inspection and supervision system, the grass-roots discipline inspection force and inspection force, and promoted the full coverage of training at different levels and categories through higher-level training, self-organized training and expert teaching.

These and other actions served to improve the ability of discipline inspection, supervision and inspection personnel to perform their duties.

Resolutely Rectifying “Four Bad Styles”

The Company issued relevant systems to rectify “four bad styles”, and carried out a special survey on “implementing the spirit of the eight central regulations to correct the “four bad styles and create new working style”.

These actions served to cleaned up the deliberation of coordination bodies, and carried out special governance of official vehicles.

The Company was diligent in implementing the requirements of “”three distinctions” and establishing a list mechanism for business and investment exemptions, and encouraged cadres to perform their duties in a transparent manner and always act responsibly.

Intellectual Property Protection

China Southern attached great importance to intellectual property protection, continuously improved relevant systems, trademark management, and provided a firm guarantee for intellectual property protection.

Intellectual Property Protection Systems

According to the “Trademark Law of the People’s Republic of China”, “Patent Law of the People’s Republic of China” and other laws and regulations, formulated the “General Book of Intellectual Property Management Manual” and “Trademark Management Sub-Volume”, “Patent Management Sub-Volume”, “Commercial Secret Management Sub-Volume” and “Computer Intellectual Property Management” Booklet”, “Brand Management Booklet”, “Internet Live Event Management Measures” and other intellectual property protection systems, the Company fully implemented unified management of intellectual property rights, division of labor between professional departments, and standardized management of the Company’s trademarks, patents, software copyrights and other intellectual property rights and the Company’s brand image.

A Complete Trademark Management System

Based on the trademark management system of “centralized examination and approval and decentralized management”, the Company has formulated standardized trademark management measures, clarified the specific operation methods and procedures for trademark registration, use, management and protection, and assigned full-time and part-time trademark management personnel to provide organizational guarantee for trademark management, which effectively enhanced the brand value of China Southern.

Zero trademark infringement incidents in 2021

65 new authorized patents

An increase of 80% year-on-year in 2020

Accumulated effective patents reached 318

Lean Cost Control

China Southern senior managers have resolutely fought the tough battle of “establishing a long-term mechanism for lean management and control of costs” by establishing a sustainable cost competitive advantage which continuously improved the level of refined management.

A Long-Term Mechanism for Lean Cost Control

China Southern Airlines stays close to the concept of “all costs can be reduced” by focusing on the Company’s revenue sources as well as structural and strategic cost issues through the establishment of five mechanisms. The Company carried out five lean cost projects, built a lean cost management and control system which favored cost reductions to gradually established costs comparative advantage.

Creating a Golden Idea Benefit Project

The Company carried out a special activity entitled the “Building Golden Idea Benefit Project” which projected deep into core aviation resources to extend the industrial service chain as staff worked diligently to generate income, and extensively collected “golden ideas” such as measures, suggestions and typical case studies to increase income and reduce expenditures. A total of 2,342 “golden ideas” were collected, and 1,120 “golden ideas” were implemented that directly helped improve operational efficiency.

Resource Integration and Business Cooperation

During Year 2021, China Southern created and delivered:

•

The aviation medical identification center

•

Financial sharing center

•

Housing management department

•

Comprehensive business center, and

•

Employee service center that actively organized and integrated internal resources, coordinated and contacted external units through multiple channels and strove for resources and business cooperation to generate income


Building a Lean Cost Control System

Building Five Mechanisms		Five Lean Cost Projects to Implement
• Standard Management Working Mechanism • Full-Process Management Mechanism for Medium and Long-Term Resource Investment • Market-Based Accounting PDCA Working Mechanisms • Lean Flight Decision Support Mechanism • Lean Cost Project Management Mechanism		• Lean operation • Lean flight • Lean Maintenance • Lean in-flight passenger service • Lean Procurement

Deepening Reforms

China Southern has solidly promoted a three-year action for the reform of state-owned enterprises, implementing the “Two Consistency” principle”, and exceeded the planned three-year action task of the reform of state-owned enterprises by more than 70% ahead of schedule.

These positive efforts served to strengthened the construction of governance bodies, promoted the tenure system and contractual management, carried out the benchmarking of world-class management improvement actions, promoted competition for employment, final adjustment and incompetent exit, upgraded the assessment system and steadily promoted the maintenance reform to inject development momentum into the enterprise.

Strengthening the Construction of Governance Bodies

These efforts required the revision and improvement of the Company’s decision-making system and the leadership system of “two-way entry and cross-serving” was implemented for the dual-level Board of Directors of the group’s shares and standardized the procedures and checklists for the party group (party committee) to study and discuss major business management matters as well as the downward penetration of governance reform.

This served to clarify the boundaries of rights and responsibilities of various governance entities as the Company formulated a management system for the Board of Directors to authorize the management and continued to strengthen the leadership role of the party group (party committee) in guiding the direction.

Benchmarking of World-class Managers

China Southern pushed forward its task completion rate of improving the benchmarking its world-class management team to a substantial 93%.

Zhuhai Motianyu and lean operation projects were selected as benchmarking enterprises and benchmarking projects respectively.

At the 2020 World-Class Enterprise Evaluation Benchmarking Study conducted by the State-owned Assets Supervision and Administration Commission of the State Council, China Southern ranked first among 15 airlines in the comprehensive evaluation results.

Upgrading the Assessment System

The Company evaluated the assessment results of each secondary unit, set up an assessment system research project team, established an assessment counterpart liaison system for assessment tracking and comment and enhanced the iterative upgrade of the annual assessment system.

Promoting the Tenure System and Contractual Management

The airline completed the formulation of its tenure-based assessment plan and signing of contracts for key units, with a coverage rate of 90% of tenure-based and contractual management contracts.

Promoting Competitive Induction and Final Adjustments

China Southern deepened the reform of its cadre and personnel system. Among the newly appointed management cadres, 34.4% of the newly appointed cadres were recruited through competition and openly selected for employment as 7.6% of the cadres, directly under the management of the party organization, left the Company.

China Southern completed the reforms of its internal institutions of the functional departments of its Guangzhou Headquarters. All management personnel of the functional departments of the Headquarters stood to compete for their respective employment, and the number of internal institutions and management personnel was reduced by 44% and 43%, respectively.

Promoting the Reform of Maintenance Management Systems and Mechanisms

China Southern Airlines senior officials were diligent in promoting the reform of the maintenance management systems and mechanisms to establish an engineering technology branch, and deeply its available integrate maintenance resources.

In accordance with the development direction of “marketization, integration, industrialization and internationalization”, China Southern established a market-oriented operation mechanism that featured integrated resource allocation, industrialized maintenance layout and international development space, an operation and management entity for the maintenance industry which jointly served to promote the high-quality development of the maintenance industry.

Case Fully Supporting the National Rural Revitalization Vocational Skills Competition

On September 15, 2021, China Southern Airlines Co., Ltd. Engineering Technology Branch was officially established, becoming the integrated operation and management entity of China Southern’s aviation maintenance business and a major measure in the implementation of China Southern’ maintenance reform. With Guangzhou Baiyun International Airport at the center, the Company has established maintenance bases in 18 large and medium-sized cities such as Beijing and Shanghai … spanning more than 300 regional terminals and over 1,000 routes around the world and is committed to building itself into a pillar industry of the Company’s aviation maintenance.

LOGO

China Southern Engineering Technology Branch was officially established

Sustainable Supply Chain

China Southern adhered to responsible procurement and continued to improve the supplier management mechanism that promoted suppliers to fulfill their own Corporate Social Responsibilities and built a sustainable supply chain.

Responsible Procurement

China Southern strictly abided by the state as well as the Company’s own management regulations on tendering and non-tendering procurement to ensure that procurement activities were conducted in a fair, just and open format.

The Company actively cooperated with the implementation of the government’s policy requirements on optimizing the business environment in an effort to safeguard the legitimate interests of the Company, purchasers and bidders in accordance with laws and regulations.

Airline officials consciously strengthened the supervision, inspection and management of procurement business with emphasis on developing special training on legal risk prevention of procurement contracts that were implemented for honest procurement contract by adhering to green procurement that built a sustainable supply chain.

100% of major issues of procurement were subject to legal review

Honest Procurement

China Southern Airlines continually improves its procurement supervision.

The Company carried out “Honest Procurement” integrity education activities to enhance integrity awareness, risk awareness and normative awareness, ensuring suppliers’ right to know and equal participation rights by seeking out the management of suppliers’ adverse behaviors and special procurement inspections and further restricted suppliers with challenging business practices from participating in procurement activities.

Strengthening the standardized management of procurement. Identified environmental and social risks in each link of the supply chain, strengthened management risk and integrity risk control in the procurement field, and regulated cooperation with suppliers in terms of operation, society and environment.

Improving the procurement risk prevention system. Formulated the procurement risk control sub-volume, built the procurement risk prevention and control system, established the procurement business risk database, published 76 risks in 27 categories through the manual, completed the risk rating, and embedded the risk prevention measures into the entire procurement management process, in which the procurement platform automatically Identified 8 types of risks.

Green Procurement

China Southern Airlines kept its commitment to purchase “green” materials.

According to the “China Southern Group’s Management Standard for Prohibition and Restriction of Disposable Plastic Products”, the airline company formulated a timetable for the complete replacement of degradable materials and implemented a bonus point system for suppliers using degradable and environmentally friendly materials during the procurement process to guide bidders to use new environmentally friendly materials and realize the gradual replacement of degradable materials.

The significantly clarified the standardized procurement measures. Airline officials actively responded to the deployment of the Group’s plastic pollution prevention and control efforts and invited a number of suppliers to its Guangzhou Headquarters to discuss the use of specific items such as degradable raincoats … as well as seeking the regularly participation in the Group’s special work for plastic pollution control and sought out reasonable suggestions for the formulation of standards for degradable alternatives for standardized procurement.

Pushing Suppliers to Fulfill their Responsibilities

During Year 2021, China Southern continued to promote the construction of a supplier management system, standardized supplier management and clarified its management requirements such as supplier storage, graded use, evaluation and rating and promoted suppliers to fulfill their own Corporate Social Responsibilities.

Economic contract performance rate of 100%

The number of suppliers whose cooperation has been suspended due to unqualified Corporate Social Responsibility was zero

The number of suppliers included in the ““List of Seriously Illegal and Untrustworthy Enterprises (Blacklist) Information” in business activities was 22

The total number of suppliers reached more than 21,600

Supplier Selection

The Company established - and later improved - the standards for the selection of suppliers of varied categories, realized a closed-loop management of product quality through the three-acceptance links of factory inspection, optimization and improvement and delivery and production, and evaluated suppliers according to the acceptance data.

Supplier Performance Assessment

The Company centered on the dimensions of “business, technology, delivery, quality and service” and other dimensions to carry out dynamic assessment and evaluation of contracts, acceptance, payments and after-sales implementation stages for project transaction suppliers to realize information-based dynamic evaluation to improve the supplier’s “quality file”.

Supplier Hierarchical Management

This was combined with supplier complaints, reward management, restricted transaction supplier management, supplier activity performance management, graded management of suppliers, and divided suppliers into excellent, qualified, registered and restricted transaction suppliers and created a list of enterprises prohibited from trading.

Supplier Capacity Improvement

Under the duress of intensive COVID-19 restrictions, airline directors communicated regularly with suppliers through video conferences, website presentations, online questionnaires, text messages and other social media methods.

The China Southern Procurement and Tendering website released the “Notes on Preparing Bidding Documents” to standardize the preparation of suppliers’ bidding documents and remind them of common mistakes in bidding which aided in improving suppliers’ capabilities.


Specific Supplier Data

Indicator		2021
Suppliers by Region	Central South / each	10,368
	Northeast / each	2,315
	East China / each	3,130


	North China / each	3,248
	Northwest / each	1,271
	Southwest / each	1,082
	Hong Kong, Macao and Taiwan / each	10
	Other areas/each	212
Total number of suppliers		21,636
The number/number of supplier evaluations carried out		21,636

Strengthening Exchanges and Cooperation

China Southern actively served China’s national strategies by assisting regional coordinated development which strengthened exchanges and relationships between domestic and foreign industries and shared development results with the industry.

Supporting Regional Development

During Year 2021, China Southern leveraged its aviation advantages to serve regional development, actively integrated into the construction of the Guangdong-Hong Kong-Macao Greater Bay Area; served to integrated construction of the Yangtze River Delta and the construction of the Hainan Free Trade Port … and promoted the domestic and international dual circulation … a vital part of the implementation of China’s national strategy.

Serving the Development of the Guangdong-Hong Kong-Macao Greater Bay Area

Increasing Investment in Transport Capacity

The Company further expanded China Southern’s origin route network in the Greater Bay Area and opened new routes from Guangzhou to Wuhu/Heze/Ankang/Diqing/Dunhuang/Jiuzhai/Yibin/Shangrao/Zhangjiakou and Shenzhen to Ankang/Kashgar.

China Southern further encrypted the domestic trunk lines in the Greater Bay Area and continued to encrypt flight schedules in the routes of Chengdu/Chongqing/Hangzhou/Xi’an.

Enriching Aviation Products

In a concentrated effort to enriched the Bay Area Pass product system, China Southern focused on the travel challenges of passengers in the Bay Area such as origin airport pick-up and light rail products. The airline added specific marketing products such as hotel coupons, dining coupons, valet parking coupons and other products to meet the needs of high-value members in various travel scenarios.

The Company likewise upgraded the flexible change products available to passengers in the Bay Area and enabled travelers to freely change their travel time and destination on the 30 main business routes of Guangzhou, Shenzhen and Zhuhai.

Optimizing Passenger Services

The Company opened self-service check-in kiosks at ticket offices directly under the auspices of China Southern Airlines in Guangzhou as well as launching passenger and baggage check-in services at the terminal buildings of 18 major cities throughout the Pearl River Delta.

The Integrated Construction of the Yangtze River Delta

An in-depth study of the overall design and framework structure of China Southern’s ecosystem construction is the determination to build the Yangtze River Delta ecosystem project with the three major starting points of China-Taiwan system construction … namely customer systems and service process construction. Airline officials carried out “demand collection, service confirmation, ticket booking, service guarantee, feedback collection”, a critical five link test that provided strong support for the construction of the Yangtze River Delta ecosystem.

Serving the Construction of Hainan Free Trade Port

The Company signed a strategic cooperation agreement with the Hainan Provincial Government to jointly carry out multi-field and in-depth cooperation that focused on the key direction of Hainan Province’s economic development and the active participation in the construction of the Hainan Free Trade Port. These efforts increased transport capacity and overall investments in domestic and foreign airline networks which also increased upstream and downstream investment in the aviation industry.

Case China Southern Service Supporting Hainan Consumer Fair

On May 7, the first Consumer Expo was opened in Haikou, Hainan.

China Southern provided “Affinity and Refinement” Chinese-style boutique services for the Consumer Expo and exhibitors to ensure the smooth opening of the Consumer Expo. It was an important measure for China Southern to serve the national strategy for and construction of the Hainan Free Trade Port and help the national recovery from COVID-19 and growth of the international community.

LOGO

China Southern actively supported the Hainan Consumer Fair

Promoting Domestic and International Dual Circulation

China Southern senior managers directed the construction of an aviation hub to support the new development pattern of domestic and international dual circulation. The new Beijing Daxing International Cargo Terminal relies on China Southern’s significant domestic and international route network to establish a global cargo transportation network.

At present, cargo can be transported to major domestic destinations including Guangzhou, Shanghai and Shenzhen … as well as international destinations such as Amsterdam, London and Dubai through China Southern Airlines’ belly cargo and dedicated freighter route network.

Promoting Industry Development

Throughout Year 2021, China Southern actively participated in industry exchanges and furthered cooperation with government, enterprises and universities, and joined hands with airline partners around the globe for win-win development to jointly promote the continued growth of China’s aviation industry.

Case Participating in the 4^th CIIE

On January 6, at the signing ceremony of the China Southern Group’s trading sub-group at the 4^th China International Import Expo, as a “core supporting enterprise” and “designated air carrier”, China Southern senior managers signed purchase agreements with 14 large-scale international manufacturers and suppliers in the global aviation service field to further the growing industry exchanges.

Case Participating in the 13^th China Airshow

On September 28, the 13^th China International Aviation and Aerospace Expo opened at the Zhuhai International Air Show Center in Guangdong.

As the official strategic partner and special air carrier of the 2021 China Air Show, China Southern displayed its first painted aircraft jointly painted with the Zhuhai Municipal Government, vividly illustrating the Guangzhou-Beijing “dual hub” and China Southern Great Bay and Beijing Daxing district, as well as China Southern’s “ecosphere”, “green flight” and other key brand projects.

China Southern officials also signed a number of cooperation agreements with domestic and international partners to support the aviation industry.

LOGO

China Southern participated in the 13^th China Air Show

Case The First Batch of National Industry-Education Integration Enterprises

On July 22, 2021, the National Development and Reform Commission and the Ministry of Education jointly announced the list of industry-education integration enterprises and pilot cities for integration of industry and education. China Southern became one of the first 63 companies to enter the list, and was the only company in the air transport sector to successfully make the list.

To actively deepen school-enterprise cooperation, the Company contracted with 20 colleges and universities to carry out 24 training projects spanning professional positions such as pilots, flight attendants, and maintenance personnel.

When focusing on building innovative platforms, China Southern again took the industry lead in building a big data platform, accelerating the application of new technologies such as cloud computing, big data, artificial intelligence and blockchain use to establish the Pearl Innovation Studio and organized the “five small” innovation work.

The Company further explored the whole chain integration system by creating and delivering the China Southern’s Guangzhou Industry-Education Integration Training Base and China Southern’s North China Industry-Education Integration Training Base with emphasis on the establishment of a “production”-based, “learning” at the core and the “use”-oriented innovation service chain.

05. Moving Forward Hand in Hand - Setting Sail Toward a Wonderful Future

China Southern adhered to people-oriented, attached great importance to the growth and development of employees, carried out social welfare activities based on its own professional advantages, enthusiastically gave back to the society, helped rural revitalization, and joined hands with all sectors of society to create social value and set sail for a bright future.

Helping Employees Flourish

China Southern senior leaders worked diligently to protect the legitimate rights and interests of all employees in accordance with the law, helping to improve their professional skills while providing a broad development stage for employees to balance their work and life and helped employees realize their professional value.

Employee Rights

China Southern strictly abides by national labor laws and regulations, providing diversified and equal opportunities, avoiding forced labor and prohibits child labor while improving salary and welfare guarantees. The Company also expounds on its democratic management with comprehensive inspections and investigations on violations while respecting and protecting the privacy rights of all employees and fully protected their rights and interests.


By Gender

Female		39,205

Male		58,893


By professional composition

Pilots		11,305

Flight attendants (including part-time safety officers)		21,216

Air Force Security Officers		3,685

Maintenance system		15,979

Flight system		2,319

Passenger system		7,887


Cargo system		5,572

Ground service system		11,475

Information system		1,788

Financial System		1,782

Other		15,090


By Region

Guangzhou		25,167

Domestic (except Guangzhou)		72,029

International		902


By Age

30 and under		38,941

31-40		35,113

41-50		35,113

51 and above		6,059


Employee Training Data

		Employee Training Coverage/Person	Training Time - Per Employee/Hour
By Gender	Male	46,879	81.65
By Gender	Female	34,374	63.54

By Employment Type	High level	772	61.87
	Middle level	8,422	73.71
	Basic level	72,059	74.76

Employee labor contract signing rate reached 100%

100% social security coverage for all employees

3,976 new employees recruited

697 foreign employees

25.3% percentage of female managers

14.2 vacation days per employee

1 employee died due to work (sudden illness during work)

12,839 working days lost by employees due to work-related injuries

Diversity and Equal Opportunity

Adhered to the employment of diversity and anti-discrimination and protecting the rights of foreign employees, China Southern Airlines senior leaders put forth and signed the “Special Collective Contract for the Protection of the Rights and Interests of Female Workers” during Year 2021 to ensure that the recruitment, assessment, promotion, promotion, evaluation of professional and technical positions, enjoyment of benefits and implementation of the nation’s national retirement system.

The Company respects employees from different countries, regions, creeds, races, genders and educational backgrounds. While continuously developing its domestic business, China Southern Airlines is committed to the localization of its international market operations, and actively strove throughout Year 2021 to promote the training of local employees in overseas institutions and the localization of management talents, with a localized employment ratio of 84%.

Salary and Benefits

China Southern adheres to equal pay and benefits for equal work and established and improved its salary system, as well as a post-based salary scheme which strengthened salary incentives for key positions and high-level talents, and provided employees with market-based salaries.

A series of special subsidy policies such as front-line subsidies, isolation subsidies, centralized management subsidies, and communication subsidies were introduced during Year 2021 and the standards for meals during COVID-19 isolation periods and the standards for condolences for quarantined personnel have been clarified to help employees solve their difficulties.

In addition to honoring national statutory holidays, employees can also enjoy:

•

Paid annual leave

•

Family visit leave

•

Marriage leave

•

Birthday leave, and

•

Female employees can take advantage of maternity and breastfeeding leave periods

Every year, China Southern provides employees with free health examinations; five paid insurance programs and two housing funds; supplemental medical insurance policies; upgraded multiple guarantees and a streamlined medical reimbursement policy.

During Year 2021, the Company put forth a new supplementary medical insurance policy that increased the number of people covered by supplementary medical insurance to 123,000.

Democratic Management

Airline staff:

•

Regularly held employee representative meetings

•

Printed/distributed a trial program entitled, “Opinions on the Proposal Work of China Southern Airlines Group Employee Representatives”

•

Studied and formulated the “China Southern Group Employee Representative 2021 Proposal Work Project Plan”

•

Launched the China Southern Employee Representative Proposal Work Platform

•

Actively carried out democratic management training courses

•

Organized and carried out inspections of employee representatives

•

Required employee representatives to inspect labor protection and employee rights collective contracts and the signing and implementation of labor contracts, and

•

Continued to promote the democratic management of employees

Employee Development

Throughout Year 2021, China Southern was committed to the career development channels of all employees, building a “strategic, pioneering, and platform-based” training system.

By carrying out training opportunities for its employees, the Company helped staff improve their professional skills to realize their personal value with additional services themed to internationally-posted staff with new opportunities to study in China as well as a wealth of available online training courses.

Implementing Curriculum Development

The Company completed the curriculum development of the “TTT Adjunct Faculty Teaching Enhancement Project”, covering leadership, flight attendant, language and business courses.

Management Training Mechanism

China Southern Airlines launched the first batch of management trainee programs and arranged for a global recruitment management trainee program. This first-time worldwide effort focused on management trainee competency models, assessment plans, training and development plans as well as improving Company supporting policies that enhanced the airline’s brand recognition of its new management trainee program.

Strengthening the construction of teaching staff

Standardized the management of the Company’s part-time teachers, and conducted training and assessments on flight attendant teachers, language teachers, and business teachers.


Conducting Diversity Training

Training Type	Training Projects	Training Participants
Leadership Training	Young and middle-aged class, Qihang flight, Hongmiao class Special training courses on four major business systems Training course for senior and deputy management cadres	153 74 377

Full-Cycle Cadre Training	Party building training Management training	580 821

Crew Training	On-the-job training Territorial training	37,021 3,232

Language Training	Language training (including “Double Hundred English” program)	1,108

Business Training	Security Information Management Training Course International Lecture Hall Legal Lecture Hall Cloud T Project	685 673 206 60

Exam Appraisal	Pilot English Test Flight Attendant English Test Flight Attendant and Security Check Skills Appraisal Theory Test Flight Attendant and Security Check Skills Practical Test	2,790 7,759 737 1,304

Caring for All Employees

China Southern senior leaders truly care about the health and welfare of all 100,000+ employees and directed staff to create and deliver various recreational and sports activities for employees and to enriched employees’ spare time. Concurrently, China Southern worked to strengthened the assistance available to female employees and employees facing varied challenges during the COVID-19 pandemic.

Work-Life Balance

Company directors focused on building the 1+e employee service system and shared service platform to improve the support facilities available in the flight crew dormitory area, adding new gymnasiums and supermarkets as well as special catering services as well as varied cultural and sports activities.

LOGO

Staff reading activities

LOGO

The theme of “Revisiting the Red History, Celebrating the 100^th Anniversary of the Founding of the Communist Party”

LOGO

Employee Calligraphy Exhibition

Caring for Female Employees

To fully support all female and model workers, the Company senior managers directed staff to provide reading activities of “A Century of Dreams, Happiness Sailing - Scholarly 38” and participate in the national online legal knowledge competition for “Love Female Workers, Law is Aside” … which focused on the needs of pregnant and breastfeeding female employees who stuck to their posts throughout the COVID-19 crisis and worked together to solved time-sensitive issues for female employees.

LOGO

“Love Female Workers, Law is Aside” Women’s Volunteer Service Team Propaganda Knowledge of Law

LOGO

“Hundred Years of Dreams, Happiness” Setting Sail - Scholarly 38” Reading Activity

During Year 2021, the Company mobilized more than 48,000 staff to participate in mutual fundraising

Provided critical illness assistance services for 882 employees

Hospital visits by more than 210 people received medical care

Helping Needy Employees

The Company mobilized employees via the “Management Regulations of China Southern Employee’s Critical Illness Mutual Aid Fund” to voluntarily participate in the collection of critical illness mutual aid funds. These monies provided employees with critical illness mutual assistance services and allowed needed medical services for critically ill employees, their spouses and children.

Practicing the Original Intention and Doing Good Work

Special Plan

“Double-Flying” Families

Air crews are one of the most important human resources of China Southern Airlines and “double-flying families” are a special group among them. Compared with ordinary families, they face many challenges and sacrifices.

China Southern senior leaders have always attached the greatest importance to the harmonious construction of the “double flying family.”

During Year 2021, the Company has taken it as a key livelihood project of “I do practical things for the masses”, by starting the “Flying Together, Kapok Concentric” care project.

From completed information surveys, question collection, analysis and sorting, interviews and research, introduction of measures and other online formats of EAP group support structures came important family-centric projects, including:

•

“Double-Flying Family Care Camp”

•

“Kapok Caring for “Double-Flying Family”

•

“Meet You - Fly Together”

•

“Double-Flying Family” Selection

•

The most beautiful “Double-Flying Family” Photo Exhibition, and

•

A collection of family stories, as well as parent-child summer camps, seminars and condolences nearly 40 times, creating a good atmosphere of caring for “double-flying families”

This led to the issuance of the “China Southern Double Flying Family” Care Project

The Many Voices of the “Double-Flying Family”

China Southern currently has 1,510 “Double-Flying Families” that involve 3,020 employees. Through e-mails and interviews, airline staff conducted extensive research on the outstanding difficulties of the “Double-Flying Family”, collecting a total of 101 questions in 23 categories in four aspects, including operation scheduling, vacation and rest, family support and service guarantee, and carried out 10 project investigations.

At 21 territorial units, airline staff encountered 109 project problems, solved 79 territorialization challenges, held more than 50 work coordination meetings, interviews and research symposiums, and conducted 1,103 person-times interviews. All survey and interview results showed that scheduling, vacations and childcare were the most concerning issues for “double-flying families”.

Building a Normalized Care Mechanism

Making Suggestions

The three major matrix systems of flight, cabin, and security were suggested and opinions put forward with suggestions on common issues such as personnel duty scheduling, vacation and rest arrangements and employee caring as well as exploring the opportunity of a caring mechanism.

Special Project Team

Senior Company officials set up a special project team which drafted a work plan and launched the “Flying Together, Kapok Concentric” project to solve specific issues and challenges.

Project Research Meetings

Airline staff hosted “Double-Flying Family” project research meetings that allowed for the collection of discussions on operation scheduling, vacation and rest and effectively implemented the party organization ‘s care and concern for the “Double-Flying Family” and the air crew.

LOGO

Hainan Branch Launched “Double-Flying Family” Care Camp

LOGO

Xinjiang Branch “Double-Flying” Happy Family Day

LOGO

Henan Branch “Meet You, Fly Together” Double-Flying Family EAP Growth Camp

“Now, during the annual birthday holiday, parents or children’s birthdays can be used instead of their own birthdays. Female flight attendants (over the age of 45 or breastfeeding) can choose their own flight time limit within a certain range every month. The current system is more flexible than that of a decade ago.”

• Tang Minyuan, front-line employee

Contributing to a Harmonious Society

China Southern Airlines has actively leveraged its professional advantages to help rural revitalization and development, carried out special flight missions, enthusiastically participated in public welfare and charitable activities to actively meet and exceed its Corporate Social Responsibilities in the building of a harmonious society.

Rural Revitalization

During Year 2021, China entered a first year of full implementation of its rural revitalization strategy. China Southern, as a responsible state-owned enterprise, continued to increase resource investment and through the formulation of the “China Southern’s Fixed-point Assistance Work Plan”, the Company clarified its overall plan to provide fixed-point assistance and assist rural revitalization.

Consolidation

The first stage of the China Southern Airlines’ strategy was primarily aimed to preventing a large-scale return to poverty. The Company continued to (first) consolidate and (second) expand the achievements of poverty alleviation, helping people who may return to poverty, introduced new projects and assistance policies to make the results of poverty alleviation more sustainable.

Articulating

The second stage of the China Southern Airlines’ strategy connected the rural revitalization work to rural construction actions and gradually realized the planned positive transformation from focusing on capital investment to management, cultural and idea output. Temporary and village cadres were changed from specific assistance to ideological tempering, quality improvement and spiritual guidance. The planned indicators were also changed from project-based formulation to integration into local long-term development plans.

Hematopoiesis

The third stage was committed to creating a “hematopoietic” function that is to sum up experience and forming a long-term effect, with the “five revitalization” as the goal, gradually improving the long-term mechanism for poverty alleviation achievements, rural revitalization, publicizing and strengthening the influence of China Southern’s high-quality development and continuously deepening market concept, brand awareness and cultural concept contributing to the realization of the agricultural and rural modernization.

Promoting “Three Steps”

Industrial Revitalization Talent Revitalization Cultural Revitalization Ecological Revitalization Organizational Revitalization

Starting with the preparation of China Southern’s fixed-point assistance to rural areas, establishment of China Southern’s characteristic industrial ecosystem, the China Southern’s “Kapok Classroom” with emphasis on improving education, rural infrastructure construction and grass-roots party organizations that led to a rural industrial, talent, cultural, ecological and organizational revitalization.

“Five Helps”

Adjusting the Organization

According to the requirements of the central government, China Southern senior managers established a fixed-point assistance work system, adjusted and optimized China Southern’s Fixed-Point Assistance Work Leading Group, and clarified its responsibilities, tasks, offices and rules of procedure, laying a firm organizational foundation for the targeted assistance and rural revitalization efforts.

New Revitalization Project

The Company directed an investment of 17.2 million in assistance funds to carry out 40 rural revitalization projects in Moyu County, Pishan County and other venues in Xinjiang which made positive contributions in the improvement of local living standards, consolidation of industrial development and improvements in educational curriculum.

Cadre Guarantee

According to the requirements of the Organization Department of the CPC Central Committee and the State-owned Assets Supervision and Administration Commission which rotated the deputy magistrates of Moyu and Pishan in two designated counties and dispatched new village-based work teams in North, Shenzhen, Hunan, Guizhou, Chongqing and other branch companies to carry out a new round of counterpart assistance work.

China Southern assisted thousands of residents of Pishan and Moyu counties through innovative industry support and job transfers that directly helped move more than 40,000 impoverished people out of poverty.

During its poverty alleviation phase, 21 villages and more than 20,000 thousand of residents under China Southern’s direct counterpart poverty alleviation scheme have been lifted out of poverty.

In the evaluation of the effectiveness of fixed-point poverty alleviation by central units, the China Southern Group earned the highest level of “good” for three consecutive years and successfully completed the task of the “responsibility letter for fixed-point poverty alleviation by central units”

Donations Amounted to 17.28 million

LOGO

The cadres of China Southern’s village team and local villagers in Pishan planted “Kapok Red” sweet potatoes together

Practicing the Original Intention and Doing Good Works

Special Plan

Cultural Assistance

During Year 2021, China’s poverty alleviation battle achieved many comprehensive victories.

In accordance with relevant policy requirements of the State-owned Assets Supervision and Administration Commission of the State Council and the National Rural Revitalization Bureau, the China Southern Group, on the basis of completing the finishing work of poverty alleviation, began its fixed-point assistance work including “increasing targeted and characteristic cultural assistance, deepening poverty alleviation and promoting rural revitalization” into the first batch of list of key livelihood projects “I do practical things for the masses”.

A series of cultural assistance activities have been carried out to effectively connect the achievements of consolidating and expanding poverty alleviation with rural revitalization.

Cultural Assistance Helping Thousands of Households

China Southern senior staff implemented a “Spread the Party’s Voice into Ten Thousand Homes” cultural assistance project, donated five million to purchase 5,617 TV sets, and evenly distributed them to households without TV sets in Moyu and Pishan counties.

Cultural Assistance Lighting up Primary School

The Moyu China Southern Pearl Primary School, constructed with an investment of 58 million, was officially opened for use on September 14 and welcomed 1,206 new students, which greatly met the educational needs of local schools and academic degrees in Moyu County.

The Company directed staff to help set up a rural dance team and choir in Brakebexi Village, Xinjiang, a new village-level library and the renovation of toilets and kitchens under a total investment of more than 2 million towards poverty alleviation in Xinjiang.

The Company supported the listing of Rural Revitalization Park in Guojia Town, Xingcheng City, Liaoning Province to build the park with features from local industries, education and training and the beloved rural lifestyle.

In the future, China Southern senior leaders will bravely assume the responsibility of a central enterprise, perfect the aviation-specific poverty alleviation model, gradually build China Southern’s characteristic assistance model, effectively connect the consolidation and expansion of poverty alleviation achievements with rural revitalization, and resolutely complete fixed-point assistance tasks and make contribution to rural revitalization.

Case Fully Supporting the National Rural Revitalization Vocational Skills Competition

The National Rural Revitalization Vocational Skills Competition was held from September 26 to 28 in Urumqi, Xinjiang Uygur Autonomous Region. In the early stage of the competition, China Southern staff worked hard to overcome the impact of the COVID-19 pandemic to contact the Xinjiang branch to open up a green travel channel for the Guangdong delegation, and set up an exclusive arrival team from the China Southern Xinjiang branch to hold the “National Rural Revitalization Vocational Skills Competition” pick-up card. Airline officials arranged special staff members to arrange arrival greetings and the presentation of flowers at the door of the cabin.

Additionally, China Southern staff from the Xinjiang Branch arranged for an exclusive vehicle to ensure the effortless participation of all members of the Guangdong delegation with “Affinity and Refinement” service.

LOGO

China Southern Xinjiang Branch picked up the Guangdong delegation

Special Flight

During Year 2021, China Southern actively carried out special flight missions and used its aviation advantages to assumed the responsibility of a central enterprise for the maintenance of social harmony.

Case Escorting the Son of a Volunteer Veteran Back Home

The ancestral home of one very special Volunteer Army veteran is Jieyang City, Guangdong Province. In 1951, he participated in the Volunteer Army’s entry into the DPRK and later returned home with honors after a harrowing escape from a brutal battlefield death. Later, he again responded to his nation’s call to support the construction of the Great Northwest and worked for the Lueyang Railway Bureau, Hanzhong City, Shaanxi Province until retirement.

On February 9 this year, the old man passed away and in order to satisfy his dying wish to return to his hometown, his children decided to send his ashes back in Guangdong.

On February 18, China Southern escorted the urns of this volunteer veteran from Hanzhong to his hometown in Shenzhen. The staff of China Southern were deeply moved by hearing of heroic deeds for the Motherland. Airline staff sorted out all aspects of ticket purchase, check-in and boarding, and reached out to officials at Hanzhong Airport many times to provide seamless guarantees throughout the whole process, and assisted the families of the aged veteran to carry the ashes of the hero to board CZ3676 Hanzhong-Shenzhen flight “back home”.

LOGO

China Southern escorted the son of a volunteer veteran to his hometown

“A big thank you to China Southern for terrific help so we could send our father, one of the volunteer armies, back home to us!”

• Mr. Li, son of a volunteer veteran

Case The Shenzhen Blue Sky Rescue Team on the Job in Henan!

On July 24, a group of 15 staff from the Shenzhen Blue Sky Rescue Team departed on the airline’s CZ6478 to Henan Province to participate in flood relief. China Southern arranged special check-in counters and security check channels, priority checked baggage and guided the Team members to the boarding gate, securing the transportation of medical relief supplies including three lifeboats and medical supplies and rescue equipment totaling 480 kilograms.

In addition to providing complimentary transportation services for public welfare goods, China Southern also opened a green channel and specially dispatched a ground services team to unload the rescue equipment upon arrival to ensure the smooth arrival of rescue materials in Henan.

LOGO

Blue Sky Rescue Team consigning medical relief supplies

Charity

China Southern met and exceed the Corporate Social Responsibility of a substantial central enterprise by actively carried out numerous public welfare and charity activities, organized voluntary services, and gave back to the society with practical actions. During Year 2021, China Southern’s award-winning “Ten Fen” Care Foundation donated 100,000 yuan to the “Love Knows No Borders” international charity sale event of the Ministry of Foreign Affairs, and 10,000 yuan to the “Guangdong Province Let Love Go Home Public Welfare Promotion Association” that provides meaningful caring for children during distress.

Honor

China Southern Volunteer Association was awarded the “Four 100” Best Volunteer Service Organization in the National Learning from Lei Feng Volunteer Service in 2020”

LOGO

China Southern Training Center Launching Public Welfare Research Activities

LOGO

“Guide Dog Air Home” Charity Public Service Activity

Practicing the original intention and Doing Good Works

Special Plan

Carrying out Diverse Youth Volunteer Service Projects

China Southern has thoroughly implemented the spirit of General Secretary Xi Jinping’s important instructions on learning from Lei Feng’s volunteer service by cultivating China Southern’s outstanding youth volunteer service projects where there was a positive atmosphere for volunteer service with service achievements that have inspired many young people to devote themselves to voluntary activities and contribute to the construction of a harmonious society.

LOGO

“Highland Kapok Blooms” Student Aid Project

LOGO

“Kapok Kids Fly” Project

Impressive Volunteer Service Platform

The China Southern Group Volunteer Service Steering Committee was established to issue relevant implementation opinions and guidelines for volunteer service and to continuously strengthen the organization, team, project, mechanism and cultural construction of China Southern Airlines’ volunteer service efforts.

Promoting Information Management

The China Southern Group Volunteer Service Steering Committee also put forth efforts to market its volunteer service platforms such as Volunteer Exchange and i-Volunteer within the Company’s 100,000 staff and managers, and provided detailed information for volunteer registration, project development, and volunteer service time records.

Multidimensional Review

For the projects participating in the competition evaluation, the evaluation focused on six dimensions – “featured project content”, “standard project management”, “guaranteed project team”, “response to social evaluation”, “on-site display” and “response performance”.

Marketing the “Affinity and Refinement” Brand

The categories of projects included warm winter action, major transportation guarantee, volunteer service in peak season, civil aviation knowledge into campus and other volunteer service projects with the special “Affinity and Refinement” characteristics of China Southern, as well as projects in rural revitalization, environmental protection, large-scale competitions, emergency rescue and other aspects.

LOGO

Pilots “Send Students to Exams with Love” project

Overseas Responsibility

China Southern took the initiative to undertake its international Corporate Social Responsibilities by adopted various measures to promote the development of local communities and helping to build a community with a shared future for mankind.

Case Serving Auckland Community Residents

The “Chinese Community Service Center” established in 1998, is a charitable professional community service organization serving new Asian immigrants and Asian communities in Auckland, New Zealand. Starting from June 2021, the Auckland Sales Office participated in a weekly Chinese community service volunteer activity which included arranging COVID-19 vaccinations, mutual assistance and assisting help seekers to make hospital appointments. At the Chinese Community Service Volunteer Commendation Event in August 2021, five employees of the China Southern Auckland sales department were rated as outstanding volunteers of the year.

LOGO

Serving Auckland Community Residents

Honor

China Southern’s international publicity case “Culture Going Global, Beauty in Communion” won 4^th Place in the SASAC 2021 Excellent Case of “Cross-Cultural Integration” in International Image Construction of Chinese Enterprises

Case Sponsored New Zealand “Chinese Week”

New Zealand Chinese Week is a Chinese language learning activity initiated by local New Zealanders to encourage more local people to learn Chinese.

Since 2014, China Southern has supported this activity and during Year 2021, China Southern and officials from the Chinese Language Week jointly launched the “Five Days Five Phrases Challenge” online event. Chinese Language Week staff created a dedicated webpage page for the “Five Days Five Phrases Challenge” event on the official website, and launched an event on its Facebook and Instagram, which received 99,931 exposures and 61,064 people were participants.

LOGO

Sponsoring New Zealand “Chinese Week”

Case Promoting Economic Development in New Zealand

In the face of the sudden COVID-19 pandemic, New Zealand’s economic development has been impacted. China Southern has always maintained the normal operations of the Guangzhou-Auckland route to ensure that passengers can return home, and the safe transportation of anti-pandemic materials, production and live materials. As the largest airline in the People’s Republic of China, China Southern was and continues to be uniquely positioned to make significant contribution in maintaining trade between New Zealand and China during extremely challenging times, and fulfilled the promise of “Sino-New Zealand Ties” with practical actions.

LOGO

Shipping supplies to New Zealand

Outlook

During Year 2022, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, China Southern Airlines will thoroughly implement the general requirements for party building in the new era and the party’s organizational line in the new era, and anchor the Company’s “14th Five-Year” development goals and “5566” development goals to guarantee the high-quality development of China Southern with high-quality party building, highlighting the political, leadership and cohesive nature of party building which provides for a strong guarantee for building a world-class air transport enterprise and becoming a stronger and better state-owned enterprise which remains true to the original intention, keep in mind the mission and setting sail for a new journey to a beautiful blue sky.

Adhering to Safe Development

The Company has remained steadfast to its overriding principle of Safety First with emphasis preventing and resolving potential safety risks, improving safety quality and ensuring that the safety situation continues to be stable.

Adhering to High-Quality Development

The Company scientifically grasped the relationship between “quantity” and “quality” to enhance the awareness of input and output and correctly handle the relationship between scale, speed and efficiency which improved the efficiency of resource allocation.

Adhered to Innovative Development

The Company vigorously promoted technological, management, product and service innovations that worked in unison to accelerate the digital and intelligent transformation of China Southern Airlines.

Adhering to Cooperative Development

The Company continued to deepen its cooperation with domestic airlines to jointly cope with the current challenge of the COVID-19 situation; continued to explore pathways of international cooperation and accelerated the establishment of new international cooperative relations by strengthening the cooperation between the upstream and downstream of the industrial chain and accelerated the creation of the new China Southern ecosystem.

Adhering to Shared Development

The Company actively undertook the responsibility and mission of a central enterprise to bring returns to shareholders, benefits to employees, value for passengers, actively gave back to the society, as it strengthened energy conservation and emission reduction, consolidated the achievements of poverty alleviation and promoted the sharing of development achievements.

List of Policies and Regulations


ESG Indicators	Internal Policies of Year 2021	Relative Law and Regulations of Year 2021
A1 Emissions	Management measures for verification of the annual carbon emission data monitoring report of China Southern Airlines flight activities China Southern Group Anti-pollution and Pollution Control Work Plan.	Law of the People’s Republic of China on the prevention and control of water pollution Law of the People’s Republic of China on the Prevention and Control of Air Pollution Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste
A2 Resource usage	Energy conservation and emission reduction management manual Business process of energy and environmental protection management Work plan for plastic pollution control of China Southern Airlines Group from 2021 to 2025

	Management standard for prohibition and restriction of China Southern Airlines disposable plastic products	Law of the People’s Republic of China on the prevention and control of noise pollution


A3 Environment and Natural Resources	Guidance on comprehensively strengthening ecological and environmental protection. Work plan for green development of the China Southern Airlines Group	Interim Measures for the administration of verification of carbon dioxide emission monitoring report of civil aviation flight activities of Civil Aviation Administration Requirements plan for plastic pollution control in civil aviation industry (2021-2025)

A4 Climate Change	Notice on strengthening charging management of new energy vehicles Emergency response plan for accidents of new energy vehicles Notice on further controlling the use time of APU Notice on promoting the implementation of the work flow of optimization and guarantee of ground power supply and air conditioning equipment Work plan for green development of China Southern Airlines Group Report on China Southern Airlines Group’s peaking carbon dioxide emission and carbon neutrality goal and realization path

B1 Employment	Regulations on labor contract management of China Southern Airlines Co., Ltd. Regulations on labor contract management Regulations on labor dispatch management Regulations on the administration of part-time employment	Labor law of the People’s Republic of China Labor contract law of the People’s Republic of China Regulations on the implementation of the labor law of the People’s Republic of China

B2 Health and Safety	General emergency management plan of China Southern Airlines (Co., Ltd.) Guidance on style construction of safety practitioners of China Southern Airlines Standard code of conduct for pilots of China Southern Airlines (flight operation)	Labor law of the People’s Republic of China Law of the People’s Republic of China on the prevention and control of occupational diseases Civil aviation law of the People’s Republic of China. Production safety law of the People’s Republic of China.

100


		Emergency response law of the People’s Republic of China. Anti-terrorism law of the People’s Republic of China Fire protection law of the People’s Republic of China

B3 Development and Training	China Southern Airlines training master Plan (2018-2025) Regulations on the Management of Ground Positions Administrative Measures for Crew Qualification Evaluation and Employment Administrative Measures for Aviation Safety Officer Grades Classification Management Measures for Captains

B4 Labor Code	Special collective agreement for the protection of the rights and interests of female employees Management measures for interns Regulations on honor recognition management Regulations on employee punishment List of typical negative behaviors of employees Management measures for sick leave of employees Employee leave management measures Management measures for staff waiting for post Internal talent market management measures	Labor law of the People’s Republic of China Provisions on the prohibition of child labor Law of the People’s Republic of China on the protection of minors

B5 Supply Chain Management	Supplier management measures Management measures for video and audio data of bidding monitoring Procurement management manual Implementation rules for confidentiality of procurement information Code for honest employment of employees Manual of procurement management department (import and export trading company)	Bidding law of the People’s Republic of China Regulations for the implementation of the bidding law of the People’s Republic of China Government procurement law of the People’s Republic of China

101


B6 Product Responsibility	Safety audit manual Regulations on management of dishonesty Regulations on supervision and management of cockpit sound Regulations on the administration of comprehensive smoking ban on aircraft Flight technology management manual Pilot training program Operation manual Aviation health management manual Aircraft public health manual Emergency control plan for public health emergencies	Civil aviation law Rules for operation qualification certification of large aircraft public air transport carriers Rules for certification of civil aircraft pilots

B7 Anti-Corruption	Regulations on regulating the wedding and funeral celebrations of leading cadres of China Southern Airlines Group Administrative measures for incorruptible government archives of leading cadres of China Southern Airlines Group Notice on publishing the reporting methods of letters and visits Objectives and measures for grass-roots burden reduction during Year 2021 Supervision measures for the group’s implementation of the spirit of the eight provisions of the Central Committee List of exemption items for operation and investment of China Southern Airlines	Criminal law of the People’s Republic of China. Company law of the People’s Republic of China. Anti-money laundering law of the People’s Republic of China Anti-unfair competition law of the People’s Republic of China Interim Provisions on the prohibition of commercial bribery Anti-monopoly law of the People’s Republic of China Bidding Law of the People’s Republic of China Supervision law of the People’s Republic of China Law of the People’s Republic of China on administrative sanctions against public officials

B8 Community Investments	Implementation opinions on further strengthening China Southern Airlines’ voluntary service	Charity law of the People’s Republic of China

102

Notice on the establishment of China Southern Airlines Group Voluntary Service Steering Committee

Guidelines of China Southern Airlines Group system on further strengthening the orderly participation of volunteer service teams in pandemic prevention and control and resumption of work and production

Notice on organizing and mobilizing volunteers to fully support and participate in pandemic prevention and control

Voluntary Service Ordinance

Performance Data


A. Environment
ESG Indicator		Unit	2019	2020	2021
A1. Emissions

A1.2	Carbon dioxide emissions（scope I）1, 2	10,000 tons	2,836.03	1,931.80	1,910.86
	Carbon dioxide emissions（Scope II）1, 2	10,000 tons	16.74	14.69	13.52
	Carbon dioxide emissions 1, 3	10,000 tons	2,852.77	1,946.49	1,924.38
	Carbon dioxide emission per ton kilometer	Ton / 10,000-ton km	8.69	9.29	8.98

A1.3	Hazardous waste (maintenance)	ton	615.205	471.508	704.903

A1.4	Non-hazardous waste (onboard service)	m3	7,909.5	8,896.0	11,063.0

103


A1.6	Waste gas treatment (maintenance)	10,000m3	22,560	28,800	26,080
	Industrial waste water treatment (maintenance)	ton	16477.0	11025.9	12987.0
	Treatment of aviation food production waste water	10,000 tons	22.4	8.6	9.3
	Treatment rate of aviation food production waste water	%	100	100	100
	Hazardous waste treatment rate (maintenance)	%	100	100	100
	Harmless waste disposal rate (onboard service)	%	100	100	100

A2. Resource Consumption

A2.1	Aviation fuel consumption	10,000 tons	900.33	613.27	605.31
	Fuel consumption per ton kilometer	Ton / 10,000-ton km	2.76	2.95	2.85
	gasoline	ton	4869.11	3922.78	3452.12
	diesel oil	ton	8598.59	7282.09	6384.37
	coal	ton	550	0	0
	electric	10,000 kWh	28,190.80	27,873.09	25,651.38
	natural gas	10,000 m3	2,537.49	965.80	930.83
	liquid gas	ton	195.14	167.17	215.68

A2.2	Total water consumption	10,000 tons	696.65	612.20	477.97
A2.2	Water consumption intensity 4	m3/ 10,000 yuan	0.4514	0.6585	0.4653

104


A2.5	Consumption of packaging materials (air food)	ton	881.03	566.66	419.99

B.Society

ESG Indicator		Unit	2019	2020	2021

B1. Number of Employees: by gender, type of employment, age group and region

B1.1	Number of Employees	Person	103,876	100,431	98,098

Gender	Male	Person	60,882	52,883	58,893
Gender	Female	Person	42,994	47,548	39,205

Region	Guangzhou	Person	25,979	25,215	25,167
	Domestic (except Guangzhou)	Person	76,588	74,219	72,029
	International	Person	1,309	997	902

Education	Postgraduate and above	Person	4,404	4,399	4,283
	Undergraduate	Person	50,660	51,494	52,160
	Junior college	Person	31,194	29,780	28,201
	High school and below	Person	17,618	14,758	13,454

Age	Under 30	Person	49,954	43,831	38,941
	31-40 years old	Person	30,986	32,149	35,113
	41-50 years old	Person	18,033	19,079	17,985
	Over 51 years old	Person	4,903	5,372	6,059

B2. Health and Safety

B2.1	Work related deaths: 5	Person	1	1	1
B2.1	Proportion of employees died at work	%	0.0010	0.0010	0.0010

B2.2	Working hours lost due to work	Working day	17,508	12,242	12,839

105


B3 Development and Training

B3.1	Proportion of Trainees: by Gender
	Total number of trainees	Person	63,665	68,630	81,253
	Male	Person	35,049	38,397	46,879
	Female	Person	28,616	30,233	34,374

B3.2	Average Training Hours of Employees: by Gender
	Average training hours of employees	Hour	134.36	128.25	74.57
	Male	Hour	153.55	128.81	81.65
	Female	Hour	103.39	128.74	63.54

B5 Supply Chain Management

B5.1	Number of Suppliers: by Region
	Total number of suppliers	Company	13,479	14,431	21,636
	Central South	Company	4,473	6,900	10,368
	Northeast	Company	1,260	1,596	2,315
	East China	Company	1,323	1,926	3,130
	North China	Company	1,330	2,288	3,248
	Northwest	Company	861	834	1,271
	Southwest	Company	742	739	1,082
	Non-Mainland China	Company	3,490	148	222

B6 Product Responsibility

B6.2	Number of Complaints Received about Products and Services
B6.2	Complaint rate	‰	0.3071	0.1320	0.4394

106


B7 Anti-Corruption

B7.1	Number of Corruption Lawsuits
B7.1	Litigation cases involving corruption, bribery, extortion, fraud and money laundering	Case	0	0	0

B8 Community Investments

B8.2	Resources Used in the Focus Area
	Number of volunteer service participants	Person time	3,500	15,000	18,000
	Working time	10,000 hours	3.6	1.5	1.8
	Perform important charter tasks	Shift	54	321	74
	Transport personnel for important charter flights	Person time	4,915	42,705	7,288

Note: Unless otherwise specified, the data coverage of this report is consistent with the 2021 Financial Report of China Southern Airlines

1. Carbon dioxide emission factors and calculation methods refer to civil aviation comprehensive statistical reporting system (average carbon dioxide emission factors of China’s regional power grid during Years 2011 and 2012)

2. Category 1 carbon dioxide includes direct emissions from aviation kerosene, gasoline, diesel, coal, natural gas and liquefied gas; Category 2 includes indirect carbon dioxide emissions caused by outsourcing power

3. Carbon dioxide emission = category I carbon dioxide + Category II carbon dioxide

4. Water consumption intensity = total water consumption / total output value

5. The number of work-related deaths in Year 2021 was the sudden illness of employees during work

107

Index of Indicators

ESG Index of Indicators


The Environment
Main Category		Content	Location
Level A1: Emissions	General Disclosure	Information on exhaust and greenhouse gas emissions, pollution to water and land, generation of hazardous and non-hazardous wastes: (a) policies and (b) compliance with relevant laws and regulations that have a significant impact on the issuer	P24-25, P50-54, P102, P104
	A1.1	Emission types and relevant emission data	P24-25, P104
	A1.2	Direct (range 1) and energy indirect (range 2) total greenhouse gas emissions (in tons) and (if applicable) density (in units of production, per facility)	P24-25, P104
	A1.3	Total amount of hazardous waste generated (in tons) and (if applicable) density (in units of production and facilities)	P54, P104
	A1.4	Total amount of harmless waste generated (in tons) and (if applicable) density (in units of production and facilities)	P54, P104
	A1.5	Describe the emission targets set and the steps taken to achieve them	P21-23, P51
	A1.6	Describe the methods for handling hazardous and non-hazardous wastes and the waste reduction goals set and the steps taken to achieve these goals	P21-23, P51

Level A2: Resource use	General Disclosure	Policies for the efficient use of resources (including energy, water and other raw materials)	P20-25, P102, P104-105
Level A2: Resource use	A2.1	Total direct and / or indirect energy consumption (i.e., electricity, gas or oil) and density (i.e., per unit of production, per facility) by type	P24-25, P104
	A2.2	Total water consumption and density (i.e., per unit of production, per facility)	P105

108


	A2.3	Describe the energy efficiency goals set and the steps taken to achieve them	P21-23, P51

	A2.4	Describe any issues that may arise in obtaining the applicable water sources, the water use efficiency objectives set and the steps taken to achieve these objectives	P52-53

	A2.5	The total amount of packaging materials used in the finished product (in tons) and, if applicable, the percentage per production unit	P105

Level A3: Environment and Natural Resources	General Disclosure	Policies to reduce the significant impact of Issuers on the environment and natural resources	P20-25, P50-55
Level A3: Environment and Natural Resources	A3.1	Describe the significant impacts of business activities on the environment and natural resources and actions taken to manage the impacts	P20-25, P50-55

Level A4: Climate Change	General Disclosure	Identify and respond to policies on mitigation measures related to major climate related issues that have and may have an impact on the issuer	P50-51, P102
Level A4: Climate Change	A4.1	Depict material climate-related issues that have and may have an impact on the issuer and corresponding actions to take.	P50-51, P102

B. Society - Employment and Labor Practices

Main Category		Content	Location

Level B1: Employment	General Disclosure	Information on: (1) policies on remuneration and dismissal, recruitment and promotion, working hours, holidays, equal opportunities, diversification, anti-discrimination and other treatment and benefits; and (2) compliance with relevant laws and regulations that have a significant impact on the issuer	P84-86, P102

109


	B1.1	Total number of employees by gender, type of employment, age group and region	P84-85

	B1.2	Turnover rate by gender, age group and region	Involves commercial secrets, not disclosed yet
Level B2: Health and Safety	General Disclosure	Information on: (1) policies for providing a safe working environment and protecting employees from occupational hazards; and (2) compliance with relevant laws and regulations that have a significant impact on the issuer	P31, P46-47, P88-91, P102
	B2.1	Number and rate of deaths due to work	P85
	B2.2	Number of working days lost due to work injury	P85
	B2.3	Describe the occupational health and safety measures adopted, as well as relevant implementation and monitoring measures	P31, P46-47, P88-91, P102
Level B3: Development and Training	General Disclosure	Policies on improving employees’ knowledge and skills in performing their duties. Describe training activities	P38, P41, P46, P85, P87, P102
	B3.1	Percentage of trainees by gender and type of employees (i.e., senior management, middle management)	P85
	B3.2	Average number of training hours per employee by gender and type of employee	P85
Level B4: Labor Standards	General Disclosure	Information on: (1) policies to prevent child labor or forced labor and (2) compliance with relevant laws and regulations that have a significant impact on the issuer	P84, P86, P102
	B4.1	Describe measures to review recruitment practices to avoid child labor and forced labor	P84
	B4.2	Describe the steps taken to eliminate violations when they are identified	P84, P102

110


B. Society - Business Practice

Main Category		Content	Location
Level B5: Supply Chain Management	General Disclosure	Environmental and social risk policy of supply chain management	P103
	B5.1	Number of suppliers by region	P78
	B5.2	Describe the practice of employing suppliers, the number of suppliers to whom the practice is implemented, and the implementation and monitoring methods of the practice	P77-78
	B5.3	Describe the management, implementation and monitoring methods for identifying environmental and social risks in each link of the supply chain	P77, P103
	B5.4	Describe the practices for promoting the use of environmentally friendly products and services when selecting suppliers, as well as the relevant implementation and monitoring methods	P77, P103
Level B6: Product Responsibility	General Disclosure	Information on the health and safety, advertising, labelling and privacy of the products and services provided and remedies: (1) policies; and (2) compliance with relevant laws and regulations that have a significant impact on the issuer	P38-45, P66-67, P74, P103
	B6.1	Percentage of the total number of products sold or delivered that need to be recovered for safety and health reasons	Not applicable
	B6.2	Number of complaints about products and services received and how to deal with them	P66-67
	B6.3	Describe practices related to the maintenance and protection of intellectual property rights	P74
	B6.4	Describe the quality verification process and product recovery procedure	Not applicable

111


	B6.5	Describe the consumer data protection and privacy policy, as well as the relevant implementation and monitoring methods	P66
Level B7: Anti-Corruption	General Disclosure	Information on: (1) policies to prevent bribery, extortion, fraud and money laundering; and (2) compliance with relevant laws and regulations that have a significant impact on issuers	P73, P103
	B7.1	Number and outcome of corruption lawsuits brought and concluded against the issuer or its employees during the reporting period	P107
	B7.2	Describe preventive measures and reporting procedures, as well as relevant implementation and monitoring methods	P73
	B7.3	Describe the anti-corruption training provided to directors and employees	P73
Level B8: Community Investments	General Disclosure	Policy on community involvement to understand the needs of the communities in which they operate and to ensure that the interests of the communities are taken into account in their business activities	P30-35, P69, P92-99, P103
	B8.1	Focus on areas of contribution (i.e. education, environmental issues, labor needs, health, culture, sports)	P30-35, P69, P92-99
	B8.2	Resources (such as money or time) used in the area of focus	P30-35, P69, P92-99

112

Report Benchmarking


Content		GRI Standards Benchmarking	CASS-CSR4.0 Benchmarking
About the Report		102-50, 102-52, 102-53, 102-54	P1.1, P1.2, P1.3, P4.5, G2.4

Letter from the Chairman		102-14, 102-15	P2.1, P2.2, P3.2, G2.2

About Us		102-1, 102-2, 102-3, 102-4, 102-5, 102-6, 102-7, 102-16, 102-17,102-18, 102-22, 103-2, 205-2 205-3, 417-1, 417-2	P4.1, P4.2, P4.3, P4.4, G1.1, G1.2, M1.1, M1.4, M1.5, M1.6, A3

Board Statement		102-20, 102-21, 102-29, 102-31, 102-32, 102-33, 102-34, 102-40, 102-42, 102-44, 102-47, 103-2, 205-2, 205-3	G2.1, G2.3, G3.1, G3.2, G3.3, G4.1, G5.1, G6.1

Focus 2021		103-2, 203-1, 413-1, 415-1	P3.1, M2.4, M2.10, M2.12, E1.3, E1.7, E1.9, E1.10, E1.11, E2.1, E2.3, E2.4, E2.5, E2.6, E2.11, E2.21, E2.24

Build a Strong Line of Defense - Setting Sail for a Safe Future	Consolidating Safety Management	103-2	S3.1, S3.2, S3.3, S3.6
	Adhering to Aviation Safety	103-2, 416-2	—
	Ensuring Passenger Safety	103-2, 416-1	—

	Managing Occupational Health	403-2	S2.11, S2.13

Low Carbon Environmental Protection - Setting Sail Towards a Green Future	Improving Environmental Management	103-2, 302-1, 302-3, 305-4	G6.3, E1.1, E1.2, E1.3
	Implementing Energy Saving and Emission Reduction	302-4	E1.3, E2.8, E2.13, E2.15, E2.17, E2.19, E2.23

	Strengthening Pollution Prevention and Control	301-3, 306-1, 306-2	E1.3, E1.8, E2.11

113


	Advocating Green Environmental Protection	—	E1.3, E1.5, E3.1, E3.4, E3.6

Affinity and Refinement - Setting Sail for a Warm Future	Guaranteeing Safe Flight Operations	103-2	M2.4
	Smart Travel	—	M2.1, M2.4
	Providing Warm Service	103-2	M2.1, M2.2, M2.8, M2.9, M2.14
	Maintaining Customer Relations	418-1	M2.13, M2.15, M2.16, M2.18
	Quality Logistics Service	—	M2.4

Innovation and Efficiency - Setting Sail for a Prosperous Future	Compliant and Stable Flight Operations	102-30, 103-2, 205-2, 205-3	M1.3, M2.6, M3.1, M3.5, S1.1, S1.2
	Deepening Reforms	—	M1.2, S1.4
	Sustainable Supply Chain	102-9, 103-2, 414-1, 414-2	M2.11, M3.2, M3.3, M3.7, M3.8, M3.9, M3.10, M3.11, M3.12, M3.13, M3.14, M3.15, E1.6, E2.2
	Strengthening Exchanges and Cooperation	—	M3.4, M3.6

Moving Forward Hand in Hand - Setting Sail Toward a	Helping Employees Flourish	103-2, 401-1, 401-2, 401-3, 404-1, 404-2, 405-1, 406-1	S1.5, S1.6, S2.1, S2.2, S2.3, S2.4, S2.5, S2.6, S2.7, S2.8, S2.10, S2.12, S2.13, S2.14, S2.15, S2.16, S2.17, S2.18, S2.20, S3.7, S4.2, S4.3
Moving Forward Hand in Hand - Setting Sail Toward a	Contributing to a Harmonious Society	103-2, 203-1, 413-1	G2.4, S1.5, S4.1, S4.5, S4.6, S4.7, S4.8, S4.9, S4.10, S4.11, S4.12, S4.13, S4.14

114


Wonderful Future

Report Appendix	Outlook	102-15	G2.2, A1
	List of Policies and Regulations	—	S2.16
	Performance Data	102-8, 102-9, 302-1, 305-1, 303-5, 306-3	M1.6, E2.7, E2.9, E2.10, E2.12, E2.14, E2.16, E2.18, E2.20, E2.25, A2
	Index of Indicators	102-55	E1.4, A5
	Report Rating	—	A4
	Feedback Form	102-53	A6

Feedback Form

Dear Reader:

Hello and thank you for reading this Corporate Social Responsibility Report.

To further improve our work and make the next CSR Report more in line with your interests, please write to us!

Our address is: China Southern Airlines Company Limited. No.68 Qixin Road, Baiyun District, Guangzhou

Postal code: 51040

Your feedback and suggestions are greatly appreciated.

Your identity is:

•

Customers

•

Investors

115

•

Government

•

Staff

•

Partners

•

Environmental Protection Agency

•

Community

•

Media

•

Peer

•

Other

Optional Question:

1. Are you satisfied with this report?

☐ Yes ☐ No ☐ Normal

2. Is the information you are concerned about reflected in this CSR report?

☐ Yes ☐ No ☐ Normal

3. Do you think this Corporate Social Responsibility report truly reflects the content of China Southern’s Corporate Social Responsibility work and its impact on stakeholders?

☐ Yes ☐ No ☐ Normal

4. Can you easily find the information you are seeking in this report?

☐ Yes ☐ No ☐ Normal

5. Are you satisfied with the layout design of this CSR report?

☐ Yes ☐ No ☐ Normal

Open Question:

6. Are there any shortcomings of this report?

7. What would you like to see on a regular basis in this report?

8. What opinions and suggestions do you have on our future Corporate Social Responsibility work and reports?

116

China Southern Airlines Co., Ltd.

Report Preparation: Publicity Department of Corporate Social Responsibility Management Committee of China Southern Airlines Group Co., Ltd.

China Southern Airlines Headquarters Address: Address: No.68 Qixin Road, Baiyun District, Guangzhou

Postal code: 51040

China Southern Airlines official website: www.csair.com

Contact: Huang Kun

E-mail: [email protected]

Report publishing environment

Paper: This report is printed on environmentally friendly paper.

Ink: The printing ink adopts environmentally friendly soybean ink to reduce air pollution.

Design and production: Ptroc

117

Exhibit 99.3

LOGO

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1055)

ANNOUNCEMENT

IN RELATION TO PROVISION FOR IMPAIRMENT

This announcement is made by China Southern Airlines Company Limited (the “Company”) pursuant to Inside Information Provisions (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rules 13.09 and 13.10B of the Listing Rules.

On 30 March 2022, the fifth meeting of the ninth session of the board of directors of the Company (the “Board”) has considered and approved the Proposal on the Provision for Impairment of the Company and its Subsidiaries. The details are as follows:

I.	PROVISION FOR IMPAIRMENT

In order to objectively and fairly reflect the Company’s financial position and operating results, the Company performed impairment tests on relevant assets within the scope of consolidation in accordance with the PRC Accounting Standards for Business Enterprises and the International Financial Reporting Standards based on the principle of prudence. Due to obsolescence of aircraft, discontinuation of models, high operating costs and other reasons, the Company made a provision for impairment of aircraft, spare engines, aviation equipment and long-term deferred expenses for the year of 2021 in accordance with the relevant requirements of the Accounting Standards for Business Enterprises No.8-Asset Impairment and the Accounting Standards for Business Enterprises No.1-Inventory, of which the provision for impairment of aircraft, spare engines and aviation equipment amounted to RMB2.596 billion, and the provision for impairment of long-term deferred expenses amounted to RMB18 million.

II.

DECISION-MAKING PROCEDURES

The plan of the provision for impairment of the Company and its subsidiaries has been reviewed by the Audit and Risk Management Committee of the ninth session of the Board of the Company, and has been considered and approved by the fifth meeting of the ninth session of the Board and the fifth meeting of the ninth session of the Supervisory Committee of the Company. The independent directors of the Company have given independent opinions on the provision for impairment.

The Audit and Risk Management Committee of the ninth session of the Board of the Company has reviewed the plan of the provision for impairment of the Company and its subsidiaries, and is of the view that the plan of the provision for impairment of the Company and its subsidiaries has sufficient basis, complies with the Accounting Standards for Business Enterprises and other relevant requirements, and is in line with the actual condition of the Company’s assets. After making a provision for impairment, the consolidated financial statements for the year of 2021 could more fairly reflect the financial position and operating results of the Company for the year of 2021. The plan does not prejudice the interests of the Company and its shareholders, especially the minority shareholders. The Audit and Risk Management Committee thus agrees with the plan of the provision for impairment of the Company and its subsidiaries, and submits the matter to the Board for consideration.

Upon consideration, the ninth session of the Board of the Company is of the view that the plan of the provision for impairment complies with the Accounting Standards for Business Enterprises and other relevant requirements, and fairly reflects the asset value and financial position of the Company, thus agrees with the plan of the provision for impairment of the Company and its subsidiaries.

The ninth session of the Supervisory Committee of the Company has given review opinions on the plan of the provision for impairment of the Company and its subsidiaries, and is of the view that the aforementioned proposal has been considered at the fifth meeting of the ninth session of the Board of the Company, and the decision-making procedures are in compliance with the laws and regulations. The plan of the provision for impairment complies with the Accounting Standards for Business Enterprises and other relevant requirements, and fairly reflects the asset value and financial position of the Company. The ninth session of the Supervisory Committee of the Company thus agrees with the plan of the provision for impairment of the Company and its subsidiaries.

The independent directors of the Company have given independent opinions on the plan of the provision for impairment of the Company and its subsidiaries, and are of the view that the plan of the provision for impairment of the Company and its subsidiaries has sufficient basis, complies with the Accounting Standards for Business Enterprises and other relevant requirements, and is in line with the actual condition of the Company’s assets. The approval procedures for the provision for impairment are in compliance with the laws and regulations. After making a provision for impairment, the consolidated financial statements for the year of 2021 could more fairly reflect the financial position and operating results of the Company for the year of 2021, which is conducive to providing investors with more authentic and reliable accounting information. The plan does not prejudice the interests of the Company and its shareholders, especially the minority shareholders.

III.

IMPACT OF PROVISION FOR IMPAIRMENT ON THE PROFIT OF THE COMPANY FOR THE YEAR OF 2021

The provision for impairment of the Company and its subsidiary for the year of 2021 will result in an increase in the impairment loss of assets with an amount of RMB2.614 billion in the consolidated financial statements of the Company, and an increase in the loss before tax with an amount of RMB2.614 billion in the consolidated financial statements of the Company.

By order of the Board

China Southern Airlines Company Limited

Xie Bing

Company Secretary

Guangzhou, the People’s Republic of China

30 March 2022

As at the date of this announcement, the directors include Ma Xu Lun and Han Wen Sheng as executive directors; and Liu Chang Le, Gu Hui Zhong, Guo Wei and Yan Andrew Y as independent non-executive directors.

Exhibit 99.4

LOGO

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1055)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is published pursuant to rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

As China Southern Airlines Company Limited has published the “Announcement on Resolutions Passed at the Fifth Meeting of the Ninth Session of the Board of Directors of China Southern Airlines Company Limited” and “Announcement on Resolutions Passed at the Fifth Meeting of the Ninth Session of the Supervisory Committee of China Southern Airlines Company Limited” on the Shanghai Stock Exchange, the full text of the announcements is set out below for information purpose.

By order of the Board

China Southern Airlines Company Limited

Xie Bing

Company Secretary

Guangzhou, the People’s Republic of China

30 March 2022

Stock short name: China South Air Stock Code: 600029 Notice No.: Lin 2022-013

Announcement on Resolutions Passed at the Fifth Meeting

of the Ninth Session of the Board of Directors of

China Southern Airlines Company Limited

The board (the “Board”) of directors (the “Directors”) of the Company and all of its members confirm that the contents of this announcement do not contain any misrepresentations, misleading statements or material omission, and jointly and severally accept full responsibilities for the truthfulness, accuracy and completeness of the information contained in this announcement.

I. Convening of the Board meeting

On 30 March 2022, the fifth meeting of the ninth session of the Board of China Southern Airlines Company Limited (the “Company”) was held at Meeting Room 3301, 33/F, China Southern Air Building, 68 Qixin Road, Baiyun District, Guangzhou and via video conference. Six Directors are eligible to attend the Board meeting and five Directors attended the Board meeting. Director Mr. Han Wen Sheng was absent at the meeting due to official duties and had authorized Director Mr. Ma Xu Lun to attend the meeting and vote on his behalf. The meeting was chaired by Mr. Ma Xu Lun, the Chairman of the Board. Supervisors and certain senior management of the Company also attended the meeting.

Notice and information of the meeting has been given by email on 18 March 2022. The convening, voting and other procedures of this meeting were in compliance with the relevant requirements of PRC Company Law and the articles of association of the Company.

II. Resolutions Considered at the Board meeting

The Directors who were present at the Board meeting considered and voted, and unanimously passed the following resolutions:

(I). The full text and summary of the 2021 annual report and 2021 annual results announcement of the Company (including financial statements prepared under the PRC accounting standards and the International Financial Reporting Standards, and the Directors’ Report);