Form 6-K CHINA SOUTHERN AIRLINES For: Mar 31
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
Peoples 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 Exchanges 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 Companys 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.
(a joint stock limited company incorporated in the Peoples 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 Groups 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 |
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Operating revenue |
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Traffic revenue |
95,279 | 87,027 | ||||||||||
Other operating revenue |
6,365 | 5,534 | ||||||||||
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Total operating revenue |
4 | 101,644 | 92,561 | |||||||||
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Operating expenses |
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Flight operation expenses |
5 | 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 |
6 | 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 | ||||||||||
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Note | 2021 RMB million |
2020 RMB million |
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Total operating expenses |
116,340 | 109,111 | ||||||||||
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Other net income |
7 | 4,767 | 4,686 | |||||||||
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Operating losses |
(9,929 | ) | (11,864 | ) | ||||||||
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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 | ) | |||||||||
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Loss before income tax |
(13,910 | ) | (15,195 | ) | ||||||||
Income tax |
9 | 2,894 | 3,368 | |||||||||
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Loss for the year |
(11,016 | ) | (11,827 | ) | ||||||||
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Loss attributable to: |
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Equity shareholders of the Company |
(12,106 | ) | (10,847 | ) | ||||||||
Non-controlling interests |
1,090 | (980 | ) | |||||||||
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Loss for the year |
(11,016 | ) | (11,827 | ) | ||||||||
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Loss per share |
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Basic and diluted |
10 | RMB(0.75 | ) | RMB(0.77 | ) | |||||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
2021 RMB million |
2020 RMB million |
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Loss for the year |
(11,016 | ) | (11,827 | ) | ||||
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Other comprehensive income: |
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Items that will not be reclassified to profit or loss |
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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 | |||||
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Other comprehensive income for the year |
(143 | ) | (218 | ) | ||||
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Total comprehensive income for the year |
(11,159 | ) | (12,045 | ) | ||||
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Total comprehensive income attributable to: |
||||||||
Equity shareholders of the Company |
(12,189 | ) | (11,011 | ) | ||||
Non-controlling interests |
1,030 | (1,034 | ) | |||||
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Total comprehensive income for the year |
(11,159 | ) | (12,045 | ) | ||||
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2021
Note | 31 December 2021 RMB million |
31 December 2020 RMB million |
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Non-current assets |
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Property, plant and equipment, net |
12 | 91,186 | 86,146 | |||||||||
Construction in progress |
13 | 31,847 | 32,407 | |||||||||
Right-of-use assets |
14 | 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 | 92 | ||||||||||
Amounts due from related companies |
151 | | ||||||||||
Deferred tax assets |
15 | 12,823 | 7,739 | |||||||||
Other assets |
3,211 | 2,877 | ||||||||||
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285,345 | 287,398 | |||||||||||
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Current assets |
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Inventories |
1,652 | 1,760 | ||||||||||
Trade receivables |
16 | 2,858 | 2,525 | |||||||||
Other receivables |
17 | 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 | 85 | ||||||||||
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37,866 | 38,985 | |||||||||||
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Note | 31 December 2021 RMB million |
31 December 2020 RMB million |
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Current liabilities |
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Derivative financial liabilities |
18 | 1,222 | 3,148 | |||||||||
Borrowings |
19 | 57,913 | 40,099 | |||||||||
Lease liabilities |
20 | 20,805 | 20,930 | |||||||||
Trade payables |
21 | 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 | ||||||||||
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110,990 | 95,681 | |||||||||||
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Net current liabilities |
(73,124 | ) | (56,696 | ) | ||||||||
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Total assets less current liabilities |
212,221 | 230,702 | ||||||||||
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Non-current liabilities |
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Borrowings |
19 | 38,354 | 38,134 | |||||||||
Lease liabilities |
20 | 81,944 | 100,283 | |||||||||
Derivative financial liabilities |
20 | 53 | ||||||||||
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 |
26 | 80 | ||||||||||
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127,713 | 145,571 | |||||||||||
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Net assets |
84,508 | 85,131 | ||||||||||
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Capital and reserves |
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Share capital |
16,948 | 15,329 | ||||||||||
Reserves |
50,903 | 54,255 | ||||||||||
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Total equity attributable to equity shareholders of the Company |
67,851 | 69,584 | ||||||||||
Non-controlling interests |
16,657 | 15,547 | ||||||||||
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|
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Total equity |
84,508 | 85,131 | ||||||||||
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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 | ) | ||||||||||||||||||||||||
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Balance at 31 December 2020 |
15,329 | 38,541 | (35 | ) | 274 | 3,390 | 12,085 | 69,584 | 15,547 | 85,131 | ||||||||||||||||||||||||||
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Changes in equity for 2021: |
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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 | ) | |||||||||||||||||||||||||
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Balance at 31 December 2021 |
16,948 | 47,378 | | 156 | 3,390 | (21 | ) | 67,851 | 16,657 | 84,508 | ||||||||||||||||||||||||||
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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 Peoples Republic of China (the PRC) on 25 March 1995. The address of the Companys 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 Companys majority interest is owned by China Southern Air Holding Company Limited (CSAH), a state-owned enterprise incorporated in the PRC.
The Companys 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 Groups 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 |
a. | 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 |
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Revenue from contracts with customers within the scope of IFRS 15: |
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Disaggregated by service lines |
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Traffic revenue |
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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 | ||||||
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101,412 | 92,375 | |||||||
Revenue from other sources: |
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Rental income |
232 | 186 | ||||||
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101,644 | 92,561 | |||||||
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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.
b. | 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 Groups 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 Groups chief operating decision maker (CODM) monitors the results, assets and liabilities attributable to each reportable segment based on financial results prepared under the Peoples Republic of China Accounting Standards for Business Enterprises (PRC GAAP). As such, the amount of each material reconciling item from the Groups 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 Groups reportable segments as provided to the Groups 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 | ||||||||||||||
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Revenue from external customers |
100,419 | 1,225 | | | 101,644 | |||||||||||||||
Inter-segment sales |
550 | 3,450 | (4,000 | ) | | | ||||||||||||||
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Reportable segment revenue |
100,969 | 4,675 | (4,000 | ) | | 101,644 | ||||||||||||||
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Reportable segment loss before taxation |
(13,769 | ) | (111 | ) | 2 | (25 | ) | (13,903 | ) | |||||||||||
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Reportable segment loss after taxation |
(10,998 | ) | (67 | ) | 2 | 52 | (11,011 | ) | ||||||||||||
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Other segment information |
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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 | RMB million | RMB million | RMB million | 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. |
c. | Geographical information |
The Groups business segments operate in three main geographical areas, even though they are managed on a worldwide basis.
The Groups 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 Groups 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.
d. | 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 Groups 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 |
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 |
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 assets 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 Groups 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 Groups tax losses occurred in 2020 can be carried forward for 5-8 years, and the Groups 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 Company |
Equity attributable to equity shareholders of the |
|||||||||||||||
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 Companys 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. Chinas 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, Chinas 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 Companys 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 Companys 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 Companys 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 Companys 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 | |||||||||||
(%) | ||||||||||||
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 | |||||||||||
(%) | ||||||||||||
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 | |||||||||||
(%) | ||||||||||||
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) points |
|||||||||||
2021 | 2020 | |||||||||||
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 Groups 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 Groups 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 Groups 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 Groups 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 Groups 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 |
74 | 0.06 | 84 | 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 Groups 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 Groups 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 Groups 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 Groups 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 |
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 CSAHs 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 Groups 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 Groups 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 | |||||||||||||||
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|
|
|
|
|
|
|||||||||||
III. Total number of shares |
15,329,302,395 | 100 | 1,619,135,633 | 16,948,438,028 | 100 | |||||||||||||||
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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 Companys 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 Companys 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%.
Chinas 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 Chinas 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 auditors 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 Peoples 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
1
About the Report
This report is the 15th Corporate Social Responsibility report issued by China Southern Airlines Co., Ltd. It presents the Companys 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.
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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]
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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
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 Chinas 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 Chinas 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.
5
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 Chinas 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 Southerns 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 peoples 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 peoples urgent and long-awaited challenges. One is to serve the public. We always put the safety of peoples 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!
6
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 20th 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 Peoples 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
7
Ranked 12th in Skytraxs 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 4th China Centralized Supply Chain Leading Enterprise Award in 2021 |
Ranked 7th in Brand Finance Magazines 2021 Worlds 50 Most Valuable Airlines |
Claimed 41st place in Chinas 50 Most Valuable Brands by World Brand Lab in 2021 |
Selected as a Typical Case of Carbon Neutrality by Peoples Daily Online |
Ranked No. 1 in Chinas 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 SASACs 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 |
8
Company Culture
China Southerns corporate culture embraces Sunshine China Southern Convention as its precious spiritual wealth, accumulated during the continued Companys 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.
9
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 Southerns 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 airlines 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.
10
Voice of Stakeholders
|
Beijing-Guangzhou Express Line runs every half an hour or an hour, you dont 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 Chairmans 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.
11
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.
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 Exchanges A-level evaluation for information disclosure for eight consecutive years
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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 Southerns 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 Southerns Opinions on Guaranteeing High-Quality Development with High-Quality Party Building and the Outline of China Southerns 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.
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| Strengthening Political Leadership |
The Company carried out high-quality party history learning and education, organized a series of activities to celebrate the 100th 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 Companys higher-level steering group applauded China Southerns 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 Southerns 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.
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| 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 EffectivenessHeroines Action and Youth Model Project were carried out to consolidate China Southerns 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 Companys business model, participates in and is ultimately responsible for formulating the Companys 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 airlines 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 boards participation in ESG management |
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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 Southerns 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.
China Southerns 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 |
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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 Companys 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 |
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| 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 Companys 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 Groups 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 Groups 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 |
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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 Southerns 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 Groups 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 |
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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 Southerns Materiality Issues
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 |
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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 peoples 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 Companys business and that the Company can make a significant contribution to in combination with the Companys 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 Companys ESG performance to ensure that ESG policies be accurately implemented.
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Focus 2021:
Loyal to the CPC - Celebrating the 100th Anniversary of the CPC
Year 2021 marked the 100th 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 Peoples 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 1st 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 100th 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, Yanan, 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.
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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 Southerns award-winning On Demand Dining in-flight meal selection as well as marketing the airlines 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 1st Labor Medal, Liu developed the first aircraft remote diagnosis and real-time tracking system in Chinas 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. |
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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 Southerns 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
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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.
|
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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 |
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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.
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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 Chinas 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 Companys 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 NDRCs 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 |
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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 26th Conference of the Parties (COP26) of the United Nations Framework Convention on Climate Change |
Selected as the Carbon Neutrality Typical Case of the 2nd Green Economy Development Forum 2021 co-hosted by Peoples 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 Chinas 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 | ||||||||||||
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 Peoples Livelihood |
Won the DAMA2021 Data Governance Best Practice Award |
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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 Southerns 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 Peoples 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 Southerns 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 |
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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 Southerns 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.
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| 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 Chinas civil aviation industry.
| Improving Operational Efficiency with Digitalization |
Created a unified operation command information platform to continuously improve operation efficiency. China Southerns 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 KeyChina Action for SDG (Sustainable Development Goals).
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| 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 Companys 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.
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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 Companys 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 |
Provided hand sanitizers for all passengers
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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 Chinas COVID-19 vaccine be delivered to the world safely and quickly.
Actively participated in the nations 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 Chinas 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 Chinas Civil Aviation of COVID-19 Vaccines in North Macedonia
On June 27, China Southern Airlines flights CZ8083 and CZ5077, carrying 500,000 doses of Sinovacs 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 Chinas COVID-19 vaccines.
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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 crews 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 |
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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.
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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 teams 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
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China Southerns 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 Companys 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 Chinas 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
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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.
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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 Companys 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 airlines 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.
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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.
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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.
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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.
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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.
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2. Low Carbon Environmental Protection - Setting Sail Towards
a Green Future
China Southern Airlines corporate culture has continually adhered to the guidance of Xi Jinpings 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 Southerns 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.
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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 Companys 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.
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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 |
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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 Peoples Republic of China and the Air Pollution Prevention and Control Law of the Peoples Republic of China and other regulations, China Southern senior managers formulated a work plan for pollution prevention and control, and issued the China Southern Groups 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.
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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 Companys 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.
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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 Peoples 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 |
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Dual carbon leads green flight; plastic limit starts from me was the theme activity of National Energy Conservation Publicity Week
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.
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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 15th 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 24th to October 17th , 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 Peoples 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.
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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.
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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 Southerns 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.
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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 Southerns 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 Southerns 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) |
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| Food Fashion of China Southern Business Card (in-flight cuisine concepts such asNutrition and Health and Hometown Taste). |
At this intersection of fighting back against COVID-19, the entire China Southern Airlines team stood tall to protect Peoples life safety by improving its brand of affinity and refinement so that passengers can enjoy the Companys warm and harmonious service during every flight.
Honors
| Ranked 12th in Skytraxs 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.
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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.
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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 Southerns 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 Companys 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 Southerns 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 Companys 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.
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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 Peoples 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
Its 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 |
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| 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 childrens 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.
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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 Companys 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 Companys 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 Companys 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.
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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 Bureaus complaint management and control throughout the year was the best among Chinas 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%
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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 Chinas mid-to-high-end manufacturing industries, and concurrently fully guaranteed the global transportation service of Chinas COVID-19 vaccines to provide customers with high-quality and professional cargo transportation services.
Freight Products
Senior managers from China Southerns 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 Southerns 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 Southerns 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 airlines 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.
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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.
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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.
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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 airlines management system risk management and control to conducted clean government construction and supervision. This in turn aids the airlines intellectual property protection, and carried out in-depth cost control work to ensure the stable operation of the Company.
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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 Companys Board of Directors, responsible for the establishment, improvement and effective implementation of the Companys 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 Companys operation and management process to achieve the deep integration of legal review and business management.
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Anti-Corruption
China Southern conscientiously implemented the deployment of the Fifth Plenary Session of the 19th 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.
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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 Peoples Republic of China, Patent Law of the Peoples 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 Companys trademarks, patents, software copyrights and other intellectual property rights and the Companys 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 Companys 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.
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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.
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Strengthening the Construction of Governance Bodies
These efforts required the revision and improvement of the Companys 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 groups 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.
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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 Southerns 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 Companys aviation maintenance.
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 Companys 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 governments 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.
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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 Groups 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 Groups 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 Groups 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.
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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 suppliers 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 |
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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 Chinas 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 Chinas national strategy.
Serving the Development of the Guangdong-Hong Kong-Macao Greater Bay Area
Increasing Investment in Transport Capacity
The Company further expanded China Southerns 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/Xian.
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.
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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 Southerns 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 Provinces 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.
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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 Southerns 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 Chinas aviation industry.
Case Participating in the 4th CIIE
On January 6, at the signing ceremony of the China Southern Groups trading sub-group at the 4th 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.
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Case Participating in the 13th China Airshow
On September 28, the 13th 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 Southerns 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.
China Southern participated in the 13th 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 Southerns Guangzhou Industry-Education Integration Training Base and China Southerns 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.
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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 |
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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 | |||
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 |
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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 nations 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.
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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 airlines brand recognition of its new management trainee program. |
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Strengthening the construction of teaching staff
Standardized the management of the Companys 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.
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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.
Staff reading activities
The theme of Revisiting the Red History, Celebrating the 100th Anniversary of the Founding of the Communist Party
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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.
Love Female Workers, Law is Aside Womens Volunteer Service Team Propaganda Knowledge of Law
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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 Employees 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.
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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. |
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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. |
Hainan Branch Launched Double-Flying Family Care Camp
Xinjiang Branch Double-Flying Happy Family Day
Henan Branch Meet You, Fly Together Double-Flying Family EAP Growth Camp
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Now, during the annual birthday holiday, parents or childrens 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 Southerns 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 Southerns high-quality development and continuously deepening market concept, brand awareness and cultural concept contributing to the realization of the agricultural and rural modernization. |
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Promoting Three Steps
Industrial Revitalization Talent Revitalization Cultural Revitalization Ecological Revitalization Organizational Revitalization
Starting with the preparation of China Southerns fixed-point assistance to rural areas, establishment of China Southerns characteristic industrial ecosystem, the China Southerns 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 Southerns 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 Southerns 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
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Donations Amounted to 17.28 million
The cadres of China Southerns 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, Chinas 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 Partys 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.
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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 Southerns 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.
China Southern Xinjiang Branch picked up the Guangdong delegation
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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 Armys 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 nations 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.
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 |
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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 airlines 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.
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 Southerns 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 |
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China Southern Training Center Launching Public Welfare Research Activities
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 Jinpings important instructions on learning from Lei Fengs volunteer service by cultivating China Southerns 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.
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Highland Kapok Blooms Student Aid Project
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 Companys 100,000 staff and managers, and provided detailed information for volunteer registration, project development, and volunteer service time records.
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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.
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.
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Serving Auckland Community Residents
Honor
China Southerns international publicity case Culture Going Global, Beauty in Communion won 4th 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.
Sponsoring New Zealand Chinese Week
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Case Promoting Economic Development in New Zealand
In the face of the sudden COVID-19 pandemic, New Zealands 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 Peoples 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.
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 partys organizational line in the new era, and anchor the Companys 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.
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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 Peoples Republic of China on the prevention and control of water pollution
Law of the Peoples Republic of China on the Prevention and Control of Air Pollution
Law of the Peoples 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 Peoples Republic of China on the prevention and control of noise pollution |
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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 Groups peaking carbon dioxide emission and carbon neutrality goal and realization path |
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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 Peoples Republic of China
Labor contract law of the Peoples Republic of China
Regulations on the implementation of the labor law of the Peoples 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 Peoples Republic of China
Law of the Peoples Republic of China on the prevention and control of occupational diseases
Civil aviation law of the Peoples Republic of China.
Production safety law of the Peoples Republic of China. |
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Emergency response law of the Peoples Republic of China.
Anti-terrorism law of the Peoples Republic of China
Fire protection law of the Peoples 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 |
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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 Peoples Republic of China
Provisions on the prohibition of child labor
Law of the Peoples 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 Peoples Republic of China
Regulations for the implementation of the bidding law of the Peoples Republic of China
Government procurement law of the Peoples Republic of China |
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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 groups 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 Peoples Republic of China.
Company law of the Peoples Republic of China.
Anti-money laundering law of the Peoples Republic of China
Anti-unfair competition law of the Peoples Republic of China
Interim Provisions on the prohibition of commercial bribery
Anti-monopoly law of the Peoples Republic of China
Bidding Law of the Peoples Republic of China
Supervision law of the Peoples Republic of China
Law of the Peoples 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 Peoples Republic of China |
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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 |
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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 | |||||
Water consumption intensity 4 | m3/ 10,000 yuan | 0.4514 | 0.6585 | 0.4653 |
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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 | |||||
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 | |||||
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 |
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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 | |||||||||
Complaint rate | | 0.3071 | 0.1320 | 0.4394 |
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B7 Anti-Corruption | ||||||||||
B7.1 | Number of Corruption Lawsuits | |||||||||
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 Chinas 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
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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 | |||
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 | |||
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 | |||
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 |
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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 |
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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 |
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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 | |||
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.
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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.
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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
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.
(a joint stock limited company incorporated in the Peoples 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 Companys 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.
1
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 Companys 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 Companys 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.
2
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 Peoples 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.
3
Exhibit 99.4
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.
(a joint stock limited company incorporated in the Peoples 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 Peoples 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.
1
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);
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(II). The profit distribution plan of the Company for the year 2021;
Considering that the Company suffered an operating loss for year of 2021, which did 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 profit distribution plan is still subject to the consideration and approval of the shareholders general meeting of the Company.
2
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(III). The appointment of external auditors for the year 2022;
The appointment of KPMG Huazhen (Special General Partnership) as the external auditors of the Company for the year 2022, to provide professional services to the Company for its domestic financial reporting and internal control reporting, U.S. financial reporting and internal control of financial reporting for the year 2022, and the appointment of KPMG to provide professional services to the Company for its Hong Kong financial reporting for the year 2022 were agreed, and it was proposed to the general meeting to authorize the Board to fix their remuneration according to actual work conditions.
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(IV). The report of the deposit and use of proceeds raised by issuance of A shares for the year 2021;
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(V). The resolution regarding the procurement of the liability insurance for the Directors, supervisors and senior management of the Company;
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(VI). The plan of the provision for impairment of the Company and its subsidiaries;
Agreed to make a provision for impairment of aircraft and spare engines of RMB2.576 billion, a provision for impairment of aviation equipment of RMB20 million and a provision for impairment of long-term deferred expenses of subsidiary of RMB18 million. The relevant proposals complied with the Accounting Standards for Business Enterprises and other relevant requirements, and fairly reflected the asset value and financial status of the Company.
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(VII). The report on the Companys ongoing assessment of the risks of China Southern Airlines Group Finance Company Limited
3
China Southern Air Holding Company Limited is the controlling shareholder of both the Company and China Southern Airlines Group Finance Company Limited. The above resolution involves connected transactions in accordance with the listing rules of the places where the Company is listed. The connected Directors, Mr. Ma Xu Lun and Mr. Han Wen Sheng, have abstained from voting on the above resolution.
Details of Voting: there are 4 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(VIII). The internal control appraisal report of the Company for the year 2021;
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(IX). The corporate social responsibility report of the Company for the year 2021;
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(X). The performance report of the independent Directors for the year 2021;
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(XI). The proposal to be submitted to the general meeting to authorise the Board to issue shares under the general mandate;
The proposal to be submitted to the general meeting to authorise the Board to allot, issue and dispose additional shares of the Company under the general mandate, and to increase registered capital and amend the articles of association of the Company according to the results of the issuance under the authorisation, was agreed.
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(XII). The proposal to be submitted to the general meeting to authorise the Board to issue the debt financing instruments under the general mandate;
The proposal to be submitted to the general meeting to authorise the Board to issue the debt financing instruments in one or multiple tranches within the permitted size for bond issuance in accordance with the applicable laws and regulations under the general mandate was agreed.
4
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
(XIII). The authorisation granted to the Board Office to prepare the relevant matters regarding the annual general meeting for the year 2021.
Agreed to submit the aforesaid resolutions I, II, III, XI and XII to the annual general meeting for the year 2021 for consideration, and authorised the Board Office to prepare the relevant matters regarding the annual general meeting for the year 2021.
Details of Voting: there are 6 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
The Board of Directors of |
China Southern Airlines Company Limited
30 March 2022 |
5
Stock short name: China South Air Stock Code: 600029 Notice No.: Lin 2022-014
Announcement on Resolutions Passed at the Fifth Meeting
of the Ninth Session of the Supervisory Committee of
China Southern Airlines Company Limited
The Supervisory Committee (the Supervisory Committee) 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.
On 30 March 2022, the fifth meeting of the ninth session of the supervisory committee of China Southern Airlines Company Limited (the Company) was held on-site at Meeting Room 3510, 35/F, China Southern Air Building, 68 Qixin Road, Baiyun District, Guangzhou. Three supervisors (the Supervisors) are eligible to attend the meeting and three Supervisors attended the meeting. The meeting was chaired by Mr. Ren Ji Dong, the Chairman of the Supervisory Committee. Certain senior management of the Company also attended the meeting.
The 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, the Articles of Association of China Southern Airlines Company Limited and the Procedural Rules of the Supervisory Committee of China Southern Airlines Company Limited.
The Supervisors who were present at the meeting considered and voted, and unanimously passed the following resolutions:
I. Considered and approved the full text and summary of the 2021 annual report and the 2021 annual results announcement of the Company (including financial statements prepared under the PRC accounting standards and the International Financial Reporting Standards);
All members of the Supervisory Committee reviewed the Companys 2021 annual report, and expressed the opinion as follows:
(1) The preparation and review procedures of the Companys 2021 annual report are in compliance with the laws, regulations, the Companys articles of association and various regulations of the Companys internal management system;
(2) The content and format of the Companys 2021 annual report comply with the relevant requirements of the China Securities Regulatory Commission, the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited. The information disclosed can truly reflect the Companys operating management and financial conditions, and does not contain any misrepresentations, misleading statements or material omission;
6
(3) As of the date of this opinion, no personnel involved in the preparation and review of the annual report have been found to have violated confidentiality regulations, conducted insider dealing, or other violations of laws and regulations.
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
II. Considered and approved the profit distribution plan of the Company for the year 2021;
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
III. Considered and approved the report of the deposit and use of proceeds raised by issuance of A shares for the year 2021;
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
IV. Considered and approved the plan of the provision for impairment of the Company and its subsidiaries;
All members of the Supervisory Committee expressed the opinion on the plan of the provision for impairment of the Company and its subsidiaries as follows: the 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 Supervisory Committee thus agrees with the plan of the provision for impairment of the Company and its subsidiaries.
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
V. Considered and approved the report on the Companys ongoing assessment of the risks of China Southern Airlines Group Finance Company Limited
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
VI. Considered and approved the internal control appraisal report of the Company for the year 2021;
7
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
VII. Considered and approved the corporate social responsibility report of the Company for the year 2021;
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
VIII. Considered and approved the report of the supervisory committee of the Company for the year 2021 and submitted to the annual general meeting for the year 2021 for approval.
Details of Voting: there are 3 affirmative votes, 0 dissenting vote and 0 abstaining vote. Result of Voting: Passed.
The Supervisory Committee of |
China Southern Airlines Company Limited
30 March 2022 |
8
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