Chairman’s Statement
“Looking forward into 2009, the airlines industry will continuously face challenges such as a decrease in international market demand and an overcapacity in the domestic market. However, opportunities come along with challenges. The increase in the domestic market demand is worth expecting. The domestic airlines industry has also obtained various supports from the government to survive in the current tough economic environment such as capital injection and taxation exemption. With flight safety a prerequisite, the Group will endeavour to improve operating efficiency and service quality, to consistently implement the strategy of ‘Dual Hub of Guangzhou and Beijing’ and to rationalize the hub network, the sales and marketing network and the service assurance network. The Group is confident in an overall improvement of its business performance in year 2009.”
Si Xian Min
Chairman
During the reporting period, the Group strengthened its and VIPs, introducing high-end customer service system,
flight safety management as per the internal and external providing distinguished check-in services and an SMS
safety requirements. By July 2008, the Group’s continuous platform so as to improve its overall service. Through
safe flight span totaled to 5 million hours, for which the strengthened capital management and expanded means
Group received the “Five-Star Flight Safety Award” from of finance, the Group managed to mitigate liquidity
Civil Aviation Administration of China (“CAAC”), making pressure and lower finance costs. At the same time, we
it the first in the aviation industry to receive such a great strengthened budget control through a series of measures
honour. That set a new safe flight record in the aviation including pay-cuts of the management, cutting back
industry in China. investments and infrastructure projects and bettering
stock control of materials and spare components on During the reporting period, in order to survive in such a
the one hand, and seeking government’s subsidies and complicated and difficult environment, the Group aimed
preferential tax policies on the other, in order to achieve at establishing itself as an internationalized carrier with
the Company’s operation objectives for the year. a well-developed network by pushing on its “dual-hub”
strategy, completing its hubs network, optimizing its In 2008, the Group was accredited with the “Best Airline
service offerings, flight schedules and route networks of China” by Global Traveler, a world renowned magazine,
so as to fully utilize its capacity and improve operating and received the “Customer Satisfaction Award”, the
efficiency. The Group also tried to expand marketing highest award for services, in the “Passengers’ Appraisal
channels and attract high-end customers and thus of the Civil Aviation Industry” by CAAC following the
enhance its brand image by securing frequent flyers same accreditation in 2007.
6 ANNUAL REPORT 2008
Chairman’s Statement
As a company listed in Shanghai, Hong Kong and New York, the Group’s development will not be successful without its shareholders’ understanding and support. During the reporting period, the Company effectively promoted investor relations and communicated with investors through various ways for the benefits of our shareholders at large. Thanks to these efforts, the Company was rewarded as “the Best Listed Company of Investor Relations for Year 2008” by Hexun Network, a renowned financial website.
The share reform scheme launched in 2007 finished in June 2008. Following years’ effort in applying for state funding, in November 2008, China Southern Air Holding Company (“CSAHC”), the Group’s holding company, officially obtained RMB3 billion capital from the state government. In order to support the development of the Group, CSAHC proposed to subscribe the Company’s A shares and H shares, and to transfer all RMB3 billion of state funds to the Company. The resolution for the non-public issue of A shares and H shares was reviewed by the Board on 10 December 2008 and passed at the general meeting of shareholders with a large majority of affirmative votes on 26 February 2009. It is currently under review and pending approval by China Security Regulatory Commission.
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