On 29 April 2024 (after trading hours), the China Southern Airlines Company Limited entered into the Agreement with COMAC to purchase 100 C919 series aircraft from COMAC. The Agreement: Parties: The Company, as the purchaser. COMAC, a company incorporated in the PRC with limited liability, as the vendor.

Aircraft to be purchased: 100 C919 series aircraft. Consideration: According to the information provided by COMAC, the catalogue price of one C919 series aircraft is priced at USD 99 million. The catalogue price of the Aircraft in aggregate is approximately USD 9.9 billion.

Such catalogue price includes price for airframe and engine. The Agreement was negotiated and entered into with customary business and industry practice. The aggregate actual consideration for the Aircraft, which is determined after an arm's length negotiation between the parties, is lower than the catalogue price as provided by COMAC because of the price concessions granted by COMAC in relation to the Aircraft.

The Board (including the independent non-executive Directors) is of the view that there is no material impact of the price concessions obtained in the Purchase on the operating costs of the Group. In respect of the Purchase, the Agreement contains confidentiality provisions restricting, among other things, disclosure of the consideration of the Purchase. In addition, consistent with the customary practice of the local aviation industry, the consideration for the purchase of the Aircraft is not customarily disclosed to the public.

Disclosure of the actual consideration will result in the loss of the price concessions and hence a significant negative impact on the Group's cost for the Purchase and will therefore not be in the interest of the Company and its Shareholders as a whole. The Company has made an application to the Stock Exchange for a waiver from strict compliance with the relevant provisions under the Listing Rules in respect of the disclosure of the actual consideration for the Aircraft. The Board is of the view that the extent of the price concessions granted to the Group in the Purchase is comparable with the price concessions that the Group had obtained in the past under previous similar transactions.

The Company also believes that there is no material difference between the effect of the price concessions obtained in the Purchase and each of the previous similar transactions on the Group's operating costs taken as a whole. Payment and delivery terms: The aggregate consideration for the Purchase is denominated in US dollars and shall be settled by cash in RMB. According to the current delivery schedule, the Aircraft will be delivered in stages to the Company during the period commencing from 2024 to 2031.

The total consideration will be paid to COMAC in instalments according to the respective delivery schedule for each of the relevant Aircraft from 2024 to 2031. Source of funding: The Purchase will be funded partly by internal resources of the Group and partly through loans or other finance arrangement by banks or other institutions. Such banks are not and will not be connected persons (as defined in the Listing Rules) of the Company.

As of the date hereof, the Company has not entered into any agreement with any of these banks for financing the Purchase. The Company will follow the necessary legal procedures and will make the necessary disclosure in accordance with the Articles of Association and comply with the applicable Listing Rules when the Company enters into any agreement with any institutions for financing the Purchase. In addition, if the Company enter into any agreement for financing the Purchase with any institution which is the connected person of the Company, the Company will further comply with the relevant requirements of the Listing Rules.

The Purchase is subject to the Shareholders' approval, pursuant to the Listing Rules, the Articles of Association and the relevant rules and regulations of the Shanghai Stock Exchange. Reason For the Purchase: The purchase of Aircraft aligns with the strategy of our country and effectively meets the medium to long term fleet development needs of the Company. Under the overall layout of the national civil aviation development strategy, the domestic market demand for narrow-body aircraft is showing a significant upward trend.

The Company introducing 100 C919 series aircrafts between 2024 and 2031 could alleviate the Company's capacity demand pressure, achieve a balanced fleet structure and enhance the overall strength and brand image of the Company.