中国航空工业第一集团公司

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.(Stock Code: 0696)CONTINUING CONNECTED TRANSACTIONSThe Company has entered into the Connected Airline Services Agreements in relation to the Continuing Connected Transactions set out in this announcement.As set out in the paragraph headed “Listing Rules Requirements” in this announcement below, the Exempted Continuing Connected Transactions are subject to the reporting, announcement but exempt from the independent shareholders’ approval requirements under the Listing Rules.As set out in the paragraph headed “Listing Rules Requirements” in this announcement below, the Non-exempt Continuing Connected Transactions are subject to the reporting, announcement and the independent shareholders’ approval requirements under the Listing Rules.The Company will establish the Independent Board Committee to advise the Independent Shareholders as to whether the Non-exempt Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the shareholders of the Company as a whole, and whether the Non-exempt Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the shareholders of the Company as a whole. The Independent Board Committee will advise the Independent Shareholders on how to vote at the EGM on the resolution in respect of the Non-exempt Continuing Connected Transactions and Non-exempt Annual Caps, after taking into account the recommendations of the independent financial adviser.In this connection, the Company will appoint an independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Non-exempt Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the shareholders of the Company as a whole, and whether the Non-exempt Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the shareholders of the Company as a whole.GENERALA circular containing, among other things, (i) further details of the Non-exempt Continuing Connected Transactions; (ii) a letter from the independent financial adviser containing its advice to the Independent Board Committee and the Independent Shareholders on the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps; (iii) the recommendation of the Independent Board Committee regarding the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps to the Independent Shareholders; and (iv) a notice of the EGM will be despatched to the shareholders of the Company as soon as practicable.CONTINUING CONNECTED TRANSACTIONSBackgroundAs set out in the 2007 Circular, the Company entered into the Existing Air China Airline Services Agreement with Air China pursuant to which the Group shall provide the Technology Services to Air China from 1 January 2006 to 31 December 2008. The Existing Air China Airline Services Agreement expired on 31 December 2008. The Company and Air China entered into the Renewed Air China Airline Services Agreement as set out in this announcement.The Company and China Joy entered into the China Joy Airline Services Agreement as set out in this announcement.THE CONNECTED AIRLINE SERVICES AGREEMENTSThe Renewed Air China Airline Services AgreementDate:30 December 2008 (Note)Parties:The Company (as provider of the Technology Services); andAir China (as recipient of the Technology Services).Term: 1 January 2009 to 31 December 2009Note:Though this agreement was signed by the parties on 30 December 2008, this agreement was approved, confirmed and ratified by the Directors on 5 January 2009.The China Joy Airline Services AgreementDate: 5 January 2009Parties:The Company (as provider of the Technology Services); andChina Joy Airlines (as recipient of the Technology Services).Term: 1 January 2009 to 31 December 2011Number of years:oneof renewalSERVICES TO BE PROVIDED UNDER THE CONNECTED AIRLINE SERVICES AGREEMENTSServices:The services to be provided by the Group to the Connected Airlines underthe Connected Airline Services Agreements will cover:(i)flight control system services which provide, among other services,the consolidated information, flight formation, flight control, flighttickets sales, automatic tickets sales and announcement of freightprice;(ii)electronic travel distribution system services which provide, amongother services, flight information display, real-time flight reservation,automatic tickets sales, tickets price display and other travel-relatedservices;(iii)airport passenger processing system services which provide check-in, boarding and load planning services; and(iv)civil aviation and commercial data network services which provide,among other services, the network transmission services andconnection services.Service fees:The service fees for the Technology Services payable by the ConnectedAirlines under the Connected Airline Services Agreements are currentlydetermined in accordance with the existing pricing schedule prescribedby CAAC, which is same as the one disclosed in the Company’s prospectusdated 29 January 2001.In accordance with CAAC’s prescribed prices, depending on the types ofsystem through which the transactions are processed, the ConnectedAirlines are required to pay the Company a per passenger booking feefor domestic routes ranging from RMB4.5 to RMB6.5 depending on themonthly booking volume and for international and regional routes rangingfrom RMB6.5 to RMB7.In addition, the fees payable by the Connected Airlines to the Companyfor the services include (i) fees for each boarding passenger handled bythe airport passenger processing system up to maximum allowable priceof RMB7 for international and regional routes and up to a maximum ofallowable price of RMB4 for domestic routes depending on the types ofthe route, volume, level of services etc, (ii) load balancing fees for eachflight handled by the airport passenger processing system up to maximumallowable price of RMB500 depending on the size of the aircraft, and(iii) fees for using the Company’s data network services such as physicalidentified device (PID) connection fees and maintenance fees dependingon type and quantity of equipment at the rate prescribed by CAAC.The service fees shall be calculated on monthly basis and shall be paidwithin 30 days after receipt of the invoice by cash. The invoice shall beissued by the Company on the 20th day of each month for the amountcharged for the immediately preceding month.The Directors are of the view that the basis of determination of the servicefees mentioned above is fair and reasonable.INFORMATION ON THE CONNECTED AIRLINESAir ChinaAir China is a subsidiary of CNA Holding, which is a promoter and a substantial shareholder of the Company holding about 10.07% of the entire issued share capital of the Company as at the date of this announcement. Air China is an associate of CNA Holding and therefore, a connected person of the Company.Air China (together with its subsidiaries) is principally engaged in the provision of air passenger, air cargo and airline-related services in the PRC.China JoyChina Joy is as to 60% by 中國航空工業第一集團公司 (China Aviation Industry Corporation I) and 40% by Eastern Airlines. Eastern Airlines is a subsidiary of Eastern Holding, a promoter and a substantial shareholder of the Company holding about 12.32% of the entire issued share capital of the Company as at the date of this announcement. China Joy is an associate of Eastern Holding and thus a connected person of the Company.China Joy is principally engaged in the operation of civil airlines in the PRC.HISTORICAL TRANSACTION RECORDSSet out below is a summary of the amount of the transactions between Air China and the Company for the three years ended 31 December 2007:Year ended 31 December200520062007Air China RMB202,532,000RMB226,965,000RMB241,469,000(equivalent to(equivalent to(equivalent toapproximately approximately approximatelyHK$230,150,000)HK$257,915,000) HK$274,397,000)The Group did not provide any Technology Services to China Joy during the three years ended 31 December 2007.The transactions between Air China and the Company for the three years ended 31 December 2007 mentioned above did not exceed the annual caps for such transactions as set out in the 2007 Circular.Based on the unaudited management accounts of the Group for the ten months ended 31 October 2008, the transactions between Air China and the Company for the ten months ended 31 October 2008 have not exceeded the applicable annual caps (“2008 Annual Caps”) set for the year ending 31 December 2008 as set out in the 2007 Circular, and the Directors expect that such transactions for the year ended 31 December 2008 will not exceed the 2008 Annual Caps. The Group did not provide any Technology Services to China Joy during the year ended 31 December 2008.The Directors expect that, barring unforeseen circumstances, the Continuing Connected Transactions with Air China from 1 January 2009 to the date of the EGM (assuming that it will be held by 31 March 2009) may exceed the de minimis threshold under Rule 14A.34 of the Listing Rules.ANNUAL CAPSSet out below is a summary of the Annual Caps of the Continuing Connected Transactions contemplated under the Connected Airline Services Agreements:Year ending 31 DecemberConnected Airlines200920102011China Joy RMB3,960,000RMB6,930,000RMB9,900,000(equivalent to(equivalent to(equivalent toapproximately approximately approximatelyHK$4,500,000)HK$7,875,000)HK$11,250,000)Air China RMB347,716,000N/A N/A(equivalent toapproximatelyHK$395,132,000)The Annual Caps are determined by reference to (i) in respect of Air China, the historical transaction amounts of the Continuing Connected Transactions between Air China and the Company for the three years ended 31 December 2007 and the ten months ended 31 October 2008; (ii) in respect of China Joy, the estimated transaction volume for the three years ending 31 December 2011 provided by China Joy, as China Joy has not yet commenced commercial operation as at the date of this announcement and it is expected that China Joy will start commercial operation in first half of 2009; and (iii) the estimated growth of the transaction volume taking into account of the anticipated growth of the China’s aviation and travel industry as well as the increasing frequency of business trips. The Directors estimate that the Continuing Connected Transactions will increase by about 15% to 20% per annum and 20% is used in determining the amount of the Annual Caps.The Directors are of the view that the Annual Caps are fair and reasonable.REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONSThe Group is principally engaged in provision of aviation information technology services in the PRC.The provision of the Technology Services to the Connected Airlines is in the ordinary and usual course of business of the Group. The Group will receive service fees for the Technology Services from the Connected Airlines under the Connected Airline Services Agreements and thus, will increase the total revenue of the Group.The Continuing Connected Transactions have been and will be conducted in the ordinary and usual course of business of the Group.The Directors are of the view that the Continuing Connected Transactions are on normal commercial terms and the terms of the Continuing Connected Transactions are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.LISTING RULES REQUIREMENTSGiven that the Connected Airlines are connected persons of the Company as mentioned above, the Continuing Connected Transactions constitute continuing connected transaction for the Company under Chapter 14A of the Listing Rules.Exempted Continuing Connected TransactionsAs China Joy is an associate of Eastern Holding, the Continuing Connected Transactions contemplated under the China Joy Airline Services Agreement will be aggregated with the continuing connected transaction contemplated under the Renewed Eastern Wuhan Airline Services Agreement and the continuing connected transactions contemplated under the CE Airline Services Agreement pursuant to Rule 14A.26(1) of the Listing Rules. As set out in the Company’s circular dated 10 October 2007, the estimated maximum fees payable by Eastern Airlines to the Company under the CE Airline Services Agreement for the year ending 31 December 2009 is RMB502,585,000. As set out in the Company’s announcement dated 31 December 2008, the estimated maximum fees payable by Eastern Wuhan Airlines to the Company under the Renewed Eastern Wuhan Airline Services Agreement for the three years ending 31 December 2011 are RMB21,245,000, RMB25,494,000 and RMB30,593,000.The Percentage Ratios for the aggregate of the Continuing Connected Transactions contemplated under the China Joy Airline Services Agreement will be aggregated with the continuing connected transaction contemplated under the Renewed Eastern Wuhan Airline Services Agreement and the continuing connected transactions contemplated under the CE Airline Services Agreement on an annual basis exceed 2.5%. However, the Company has complied with the independent shareholders’approval requirement under Rule 14A.48 of the Listing Rules in respect of the continuing connected transactions entered or to be entered into between the Company and Eastern Airlines under the CE Airline Services Agreement and the Percentage Ratios for the aggregate of the Continuing Connected Transactions contemplated under the China Joy Airline Services Agreement and the continuing connected transaction contemplated under the Renewed Eastern Wuhan Airline Services Agreement on their own, on an annual basis, are less than 2.5%.Based on the above, since the Percentage Ratios for the aggregate of the Continuing Connected Transactions contemplated under the China Joy Airline Services Agreement and the continuing connected transaction contemplated under the Renewed Eastern Wuhan Airline Services Agreement, on an annual basis, is less than 2.5%, the Exempted Continuing Connected Transactions are subject to the reporting, announcement but exempt from the independent shareholders’ approval requirements under the Listing Rules.Non-exempt Continuing Connected TransactionsSince the Percentage Ratios for the Non-exempt Continuing Connected Transactions with Air China on an annual basis exceed 2.5%, the Non-exempt Continuing Connected Transactions are subject to the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules.The Company will establish the Independent Board Committee to advise the Independent Shareholders as to whether the Non-exempt Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the shareholders of the Company as a whole, and whether the Non-exempt Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the shareholders of the Company as a whole. The Independent Board Committee will advise the Independent Shareholders on how to vote at the EGM on the resolution in respect of the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps, after taking into account the recommendations of the independent financial adviser.In this connection, the Company will appoint an independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Non-exempt Continuing Connected Transactions are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the shareholders of the Company as a whole, and whether the Non-exempt Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the shareholders of the Company as a whole.The Company will disclose information in relation to the Continuing Connected Transactions in its subsequent published annual report and accounts in accordance with Rule 14A.45 of the Listing Rules.GENERALA circular containing, among other things, (i) further details of the Non-exempt Continuing Connected Transactions; (ii) a letter from the independent financial adviser containing its advice to the Independent Board Committee and the Independent Shareholders on the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps; (iii) the recommendation of the Independent Board Committee regarding the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps to the Independent Shareholders; and (iv) a notice of the EGM will be despatched to the shareholders of the Company as soon as practicable.DEFINITIONSIn this announcement, the following expressions shall have the meaning set out below unless the context requires otherwise:“2007 Circular”the Company’s circular dated 7 March 2007 in relation to,among other things, the Existing Air China Airline ServicesAgreement“Air China”Air China Limited (中國國際航空股份有限公司), a subsidiaryof CNA Holding and a company listed on the Main Board of theStock Exchange“Annual Caps”the expected maximum amount of fees payable by theConnected Airlines under the Connected Airline ServicesAgreements for the term of the respective Connected AirlineServices Agreement“associate(s)”have the same meaning ascribed to it under Chapters 1 and19A of the Listing Rules“Board”the board of the Directors“CAAC”中國民用航空局 (Civil Aviation Administration of China),the administrative authority in the civil aviation industry in thePRC“CE Airline Services the agreement dated as of 30 June 2007 entered into between Agreement”Eastern Airlines and the Company in relation to the TechnologyServices, the particulars of which are set out in the Company’scircular dated 10 October 2007“China Joy”China Joy Air Co., Ltd (幸福航空有限責任公司)“China Joy Airline the agreement dated 5 January 2009 and entered into between Services Agreement”the Company and China Joy in relation to the TechnologyServices“CNA Holding”China National Aviation Holding Company (中國航空集團公司), a promoter of the Company“Company”TravelSky Technology Limited, a company incorporated underthe laws of the PRC whose Shares are listed on the StockExchange and whose American depositary shares are tradedon the over-the-counter market in the United States“Connected Airline the Renewed Air China Airline Services Agreement and the Services Agreement”China Joy Airline Services Agreement“Connected Airlines”China Joy and Air China“Continuing Connected the transactions contemplated under the Renewed Air China Transactions”Airline Services Agreement and the China Joy Airline ServicesAgreement“Directors”the directors of the Company“Eastern Airlines”China Eastern Airlines Company Limited (中國東方航空股份有限公司), a subsidiary of Eastern Holding (a promoter ofthe Company)“Eastern Holding”China Eastern Air Holding Company (中國東方航空集團公司), a promoter of the Company“Eastern Wuhan Airlines”China Eastern Air Wuhan Company Limited (中國東方航空武漢有限責任公司), a promoter of the Company“EGM”extraordinary general meeting of the Company to be convenedfor the purpose of, among other things, approving the Non-exempt Continuing Connected Transactions and the Non-exempt Annual Caps by the Independent Shareholders, andthe notice of which will be set out in a circular to be despatchedto the shareholders of the Company“Exempted Continuing the transactions contemplated under the China Joy Airline Connected Transactions”Services Agreement“Existing Air China Airline the agreement dated 1 December 2006 and entered into between Services Agreement”the Company and Air China in relation to the TechnologyServices, particulars of which are set out in the 2007 Circular“Independent Board the independent board committee of the Company to be formed Committee”by the Company to advise the Independent Shareholders inrespect of the Non-exempt Continuing Connected Transactionsand the Non-exempt Annual Caps“Independent Shareholders”the shareholders of the Company, other than Air China and itsassociates“Listing Rules”the Rules Governing the Listing of Securities on the StockExchange“Non-exempt Annual Caps”the expected maximum amount of fees payable by Air Chinaunder the Renewed Air China Airline Services Agreement forthe year ending 31 December 2009“Non-exempt Continuing the transactions contemplated under the Renewed Air China Connected Transactions”Airline Services Agreement“Percentage Ratios”the percentage ratios, other than the profits ratio and equitycapital ratio, under Rule 14.07 of the Listing Rules as calculatedon an annual basis“PRC”the People’s Republic of China“Renewed Air China Airline the agreement dated 30 December 2008 and entered into Services Agreement”between Air China and the Company in relation to theTechnology Services“Renewed Eastern Wuhan the agreement dated 31 December 2008 and entered into Airline Services Agreement”between the Company and Eastern Wuhan Airlines in relationto the Technology Services, particulars of which are set out inthe Company’s announcement dated 31 December 2008“RMB”Renminbi, the lawful currency of the PRC“Share(s)”H share(s) of RMB1.00 each in the capital of the Company“Stock Exchange”The Stock Exchange of Hong Kong Limited“Technology Services”various aviation information technology services and ancillarysupport to be provided by the Group to the Connected Airlinesas set out in the paragraph headed “Services to be providedunder the Connected Airline Services Agreements” aboveFor the purpose of this announcement, unless otherwise indicated, the exchange rate at RMB1 = HK$0.88 has been used, where applicable, for the purpose of illustration only and not constitute a representation that any amount have been, could have been or may be exchanged.By the order of the BoardTravelSky Technology LimitedXu QiangChairmanBeijing, the PRC, 5 January 2009As at the date of this announcement, the Board comprises:Executive Directors:Mr Xu Qiang (Chairman), Mr Cui Zhixiong,Mr Xiao Yinhong and Mr Zhu Xiaoxing;Non-executive Directors:Mr Wang Quanhua, Mr Luo Chaogeng,M r G o n g G u o k u i,M r R o n g G a n g,Mr Sun Yongtao, Mr Liu Dejun, Mr Xia Yi andMr Song Jian;Independent Non-executive Directors:Mr Yick Wing Fat, Simon, Mr Yuan Yaohui andMr Chua Keng Kim.。