CHINA SOUTHERN AIRLINES COMPANY

243 Pages·2017·6.79 MB·English

H Share Stock Code: 1055 A Share Stock Code: 600029 ADR Code ZNH
BOOSTING
ANNUAL REPORT
UP
2017

SURPASSING THE LIMIT
ABOUT US
China Southern Airlines Company Limited, a member of the
SKYTEAM, with its headquarter located in Guangzhou, and the
logo of which is a red kapok on the blue vertical stabilizer, ranked
the first among all Chinese airlines in terms of the largest fleet,
the most developed route network, the largest passenger capacity.
By the end of the reporting period, the Company had a fleet
of 754 passenger and cargo aircraft, ranking the first in Asia
and the fourth worldwide in terms of fleet scale,
and is the first airlines that operating both Airbus A380 and
Boeing 787 throughout the world.
RELEASING THE POTENTIAL
CONTENTS
ABOUT US CORPORATE GOVERNANCE FINANCIAL REPORT
4 Definitions 77 Report of Directors Financial Statements Prepared under International
6 Important Information 95 C hanges in the Share Capital, Shareholders’ Financial Reporting Standards
7 Company Profile Profile and Disclosure of Interests 144 Independent Auditor’s Report
8 Corporate Information 101 D irectors, Supervisors, Senior Management and 150 Consolidated Income Statement
10 Company Business Summary Employees 151 Consolidated Statement of Comprehensive
120 Corporate Governance Report Income
OPERATING RESULTS 152 Consolidated Statement of Financial Position
130 CORPORATE BOND
20 P rincipal Accounting Information and Financial 154 Consolidated Statement of Changes in Equity
Indicators 155 Consolidated Cash Flow Statement
134 RISK MANAGEMENT AND
22 Summary of Operating Data INTERNAL CONTROL 156 Notes to the Financial Statements
27 Summary of Fleet Information
30 Highlights of the Year 138 SOCIAL RESPONSIBILITY 237 SUPPLEMENTARY FINANCIAL
INFORMATION
34 Management Discussion and Analysis
240 FIVE YEAR SUMMARY
68 SIGNIFICANT EVENTS
China Southern Airlines Company Limited DEFINITIONS
ANNUAL REPORT 2017
4
Definitions
Unless the context otherwise requires, the following terms should have the following meanings in this report:
Company, CSA, China Southern Airlines China Southern Airlines Company Limited
Group China Southern Airlines Company Limited and its subsidiaries
CSAH China Southern Air Holding Limited Company, formerly known as China Southern Air
Holding Company
Xiamen Airlines Xiamen Airlines Company Limited
Guizhou Airlines Guizhou Airlines Company Limited
Zhuhai Airlines Zhuhai Airlines Company Limited
Shantou Airlines Shantou Airlines Company Limited
Chongqing Airlines Chongqing Airlines Company Limited
Henan Airlines China Southern Airlines Henan Airlines Company Limited
SAGA Southern Airlines General Aviation Co., Ltd.
Hebei Airlines Hebei Airlines Company Limited
Jiangxi Airlines Jiangxi Airlines Company Limited
Finance Company Southern Airlines Group Finance Company Limited
GSC China Southern Airlines Group Ground Services Co., Ltd.
CSAGPMC China Southern Airlines Group Property Management Company Limited
Nan Lung Nan Lung Holding Limited
SACC Shenzhen Air Catering Co., Ltd.
SACM Southern Airlines Culture and Media Co., Ltd.
SPV China Southern Airlines No. 1 Lease (Tianjin)
China Southern Airlines No. 2 Lease (Tianjin)
China Southern Airlines No. 3 Lease (Tianjin)
China Southern Airlines No. 4 Lease (Guangzhou)
China Southern Airlines No. 5 Lease (Tianjin)
China Southern Airlines No. 6 Lease (Tianjin)
China Southern Airlines No. 7 Lease (Tianjin)
China Southern Airlines No. 8 Lease (Tianjin)
China Southern Airlines No. 9 Lease (Guangzhou)
China Southern Airlines No. 12 Lease (Tianjin)
China Southern Airlines No. 13 Lease (Tianjin)
China Southern Airlines No. 14 Lease (Tianjin)
American Airlines American Airlines, Inc.
Sichuan Airlines Sichuan Airlines Corporation Limited
PRC The People’s Republic of China
CSRC Commission China Securities Regulatory
NDRC National Development and Reform Commission
China Southern Airlines Company Limited DEFINITIONS
ANNUAL REPORT 2017
5
S
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T
U
O
B
A
SASAC State-owned Assets Supervision and Administration Commission of the State Council
CAAC General Administration of Civil Aviation of China
SkyTeam SkyTeam Alliance, one of the three major airline alliances in the world. Please refer to
the website http://www.skyteam.com/ for more details about the SkyTeam Alliance
SSE Shanghai Stock Exchange
Stock Exchange The Stock Exchange of Hong Kong Limited
Articles of Association Articles of Association of China Southern Airlines Company Limited
Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited
Model Code The Model Code for Securities Transactions by Directors of Listed Issuers as set out in
Appendix 10 of The Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited
Corporate Governance Code Corporate Governance Code as set out in Appendix 14 of The Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited
SFO Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)
Available Seat Kilometers or “ASK” the number of seats made available for sale multiplied by the kilometers flown
Available Tonne Kilometers or “ATK” the tonnes of capacity available for the transportation multiplied by the kilometers flown
Available Tonne Kilometers – passenger the tonnes of capacity available for passenger multiplied by the kilometers flown
Available Tonne Kilometers – cargo the tonnes of capacity available for cargo and mails multiplied by the kilometers flown
Revenue Passenger Kilometers or “RPK” i.e. passengers traffic volume, the number of passengers carried multiplied by the
kilometers flown
Revenue Tonne Kilometers or “RTK” i.e. total traffic volume, the tonnes of revenue load (for passengers and cargo) multiplied
by the kilometers flown
Revenue Tonne Kilometers – cargo or “RFTK” i.e. cargo and mail traffic volume, the tonnes of revenue load for cargo multiplied by the
kilometers flown
Revenue Tonne Kilometers – passenger the tonnes of revenue load for passenger multiplied by the kilometers flown
Aircraft Utilization Rate Flight hours that aircraft can service during specified time
Passenger Load Factor RPK expressed as a percentage of ASK
Revenue flight hours Flighting hours of commercial flying
Overall Load Factor RTK expressed as a percentage of ATK
Yield per RPK revenue from passenger operations divided by RPK
Yield per RFTK revenue from cargo operations divided by RFTK
China Southern Airlines Company Limited IMPORTANT INFORMATION
ANNUAL REPORT 2017
6
Important Information
I The board of directors (the “Board”) and the supervisory committee (the “Supervisory Committee”) of the Company
and its directors (the “Directors”), supervisors (the “Supervisors”) and senior management warrant the truthfulness,
accuracy and completeness of the content contained in this annual report, and which does not contain inaccurate or
misleading statements or have any material omission, and jointly and severally accept full legal responsibility.
KPMG issued the independent auditor’s report with unqualified auditor opinion to the Company.
II
Mr. Wang Chang Shun (Chairman and the responsible person of the Company), Mr. Tan Wan Geng
III
(person in charge of accounting, Vice Chairman and President of the Company), Mr. Xiao Li Xin (the
responsible person of the accounting department, Executive Vice President, Chief Accountant and
Chief Financial Officer of the Company) warrant the truthfulness, accuracy and completeness of
the financial statements contained in this annual report.
The Board recommends the payment of a dividend of RMB0.1 (inclusive of applicable tax)
IV
per share for the year ended 31 December 2017, totalling approximately RMB1,009 million
to the shareholders based on the Company’s 10,088,173,272 issued shares. A resolution for
the dividend payment will be submitted at the 2017 annual general meeting of the Company
for consideration. If approved, the dividend is expected to be paid to the shareholders by the
Company on or before Friday, 31 August 2018.
Forward-looking statements included in this report, including future plans and development
V
strategies, do not constitute a guarantee of the Company to investors. Investors shall be aware of the
risks of investment.
During the reporting period, neither the controlling shareholder of the Company, nor any of its connected
VI
persons has utilized the non-operating funds of the Company.
During the reporting period, the Company did not provide external guarantees in violation of any specified
VII
decision-making procedures.
During the reporting period, the Company did not have any material risks. The Company has detailed potential risks in this
VIII
report. Please refer to “Risk Factors Analysis” under “Management Discussion and Analysis”.
China Southern Airlines Company Limited CORPORATE PROFILE
ANNUAL REPORT 2017
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Corporate Profile O
B
A
The Group is one of the SKYTEAM, the Group connected
1,062 destinations in 177 countries
the largest airlines in the
and regions in the world. In 2017, the
PRC.
Group’s volume of passengers amounted
to nearly 126 million, ranking the Group
In 2017, the Group ranked the first
the first among Chinese airlines for 39
among all Chinese airlines in terms of
consecutive years, and maintaining its
its fleet, network and annual volume
top position in Asia.
of passengers. As of 31 December
2017, the Group had a fleet of 754
Based in Guangzhou, the Group has
passenger and cargo aircraft, including
16 branches, including Beijing and
the Boeing 787, 777, 747 and 737
Shenzhen and 6 majority-held civil
series, as well as the Airbus 380, 330
aviation subsidiaries, including Xiamen
and 320 series, ranking first in Asia
Airlines, Shantou Airlines, Zhuhai
and fourth worldwide in terms of fleet
Airlines, Guizhou Airlines, Chongqing
scale and number of passengers. The
Airlines and Henan Airlines. The
general strategic goal of the Group is to
Group has set up SAGA in Zhuhai and
develop itself into an international first-
established 22 domestic offices in cities
class aviation transportation enterprise
such as Hangzhou and Qingdao. It also
with an extensive route network and
established 68 overseas offices in cities
we have formed a developed network
including Sydney and New York.
covering China, and the rest of Asia, and
effectively connecting Europe, America,
Australia and Africa. As at 31 December
2017, the Group operated more than
2,000 flights daily flying to over 200
destinations in over 40 countries and
regions around the world, providing over
300,000 seats to the market. Through
close cooperation with members from
China Southern Airlines Company Limited CORPORATE INFORMATION
ANNUAL REPORT 2017
8
Corporate Information
Chinese Name: Place of Business:
中國南方航空股份有限公司 278 Ji Chang Road, Guangzhou, Guangdong Province, PRC

Chinese Short Name: Place of Business in Hong Kong:
南方航空 Unit B1, 9th Floor, United Centre,
95 Queensway, Hong Kong
English Name:
Website of the Company:
China Southern Airlines Company Limited
www.csair.com
English Short Name:
Authorized Representative under the Listing Rules of
CSN
the Stock Exchange:
Legal Representative: Tan Wan Geng and Xie Bing
Wang Chang Shun
Controlling Shareholder:
Board and Company Secretary: China Southern Air Holding Limited Company
Xie Bing
Principal Bankers:
Securities Affairs Representative: Agricultural Bank of China
Xu Yang China Development Bank
Bank of China
Shareholder Enquiry: Industrial & Commercial Bank of China
China Construction Bank
Company Secretary Bureau
Designated Newspapers for Information Disclosure
Telephone:
(A Shares):
[phone]
China Securities Journal, Shanghai Securities News, Securities
Times
Fax:
[phone] Designated Website for Information Disclosure
(A Shares):
E-mail:
www.sse.com.cn
[email protected]
Designated Website for Information Disclosure
Address: (H Shares):
278 Ji Chang Road, Guangzhou, Guangdong Province, PRC www.hkexnews.hk
Registered Address: Annual report Available for Inspection:
Unit 301, 3/F, Office Tower Guanhao Science Park Phase I, Company Secretary Bureau
12 Yuyan Street Huangpu District, Guangzhou, Guangdong
Province, PRC WeChat QR Code
APP:
China Southern Airlines
WeChat Official Account:
China Southern Airlines
Sina Weibo:
http://weibo.com/csair