MTU Maintenance Zhuhai Receives 50th Engine Shop Visit;
China Southern JV Making Major Step Forward For Aero Engine Overhaul

ZHUHAI, China - July 22, 2004 - China Southern Airlines (NYSE: ZNH) (HKSE: 1055), - www.csair.com/en - the largest airline in The People¡¯s Republic of China is pleased to announce that MTU Maintenance Zhuhai saw its 50th shop visit since it started operation in 2003.

Located on a more than 156,000 square meter site beside a canal with Hong Kong and Macau in the far distance, the MTU Maintenance Zhuhai - www.mtu-zhuhai.com - is a brand-new, state-of-the-art aircraft engine overhaul facility - a 50/50 joint venture partnership between China Southern Airlines and MTU Aero Engines, the Germany¡¯s largest engine manufacturer and one of the largest commercial engine MRO (Maintenance, Repair and Overhaul) provider worldwide.

¡°This is a milestone for the company as it has made a step forward to build up full overhaul capability for IAE V2500 and CFM56-3 engines,¡± said Mr. Walter Strakosch, President & CEO of MTU Maintenance Zhuhai. He added that, ¡°The engine with series number V11081, coming from China Northern Airlines (wholly owned by China Southern Air Holding Company), becomes the lucky 50th engine. It will be completely overhauled in Zhuhai.¡±

MTU Maintenance Zhuhai started to ramp up its operation in the post SARS environment
in the second half year of 2003 though it already announced the inauguration in beginning of this year. Just in one year, MTU Maintenance Zhuhai was internationally certified by CAAC, JAA and FAA. By developing the know how and technology, implementing stringent quality management policy and aggressively exploring the market, MTU Maintenance Zhuhai has been accepted and acknowledged as a center of excellence for engine overhaul.

From module split down to piece part and part repair, MTU Maintenance Zhuhai has established a complete process for entire engine overhaul deep to level 2 and level 3. The state of art technology, such as non-destructive testing, surface treatment, welding and machining give the shop repair capabilities to the highest industry standards. To develop its repair capability, the shop imported advanced equipment from Europe. Its high-speed grinding machine, for instance, grinds compressor and turbine blade tips at suitable speeds for the engine type involved.

Its non-destructive testing equipment is the finest to be found anywhere in the world. It handles eddy current, fluorescent penetrant, ultrasonic and magnetic particle inspections.

¡°Now, the next target is to launch a new engine type CFM56-5B by the end of 2004 and all the preparation is on progress,¡± said Mr. Strakosch.

He added that MTU¡¯s expertise roots in comprehensive technology transfer programs among the shops worldwide. ¡°These allow MTU Maintenance Zhuhai to deliver the uncompromising quality that is the common hallmark of MTU maintenance shops everywhere. So far, MTU Aero Engines has sent more than 80 technical experts to Zhuhai for on-site support and on-job instruction,¡± said Mr. Strakosch. Additionally, more than 100 technical staff from Zhuhai has been trained in MTU Hannover (the sister shop) for a 6-8 month extensive workshop experience which combines theory and on-job practice.

¡°After one year technology support, now many important technical functions have been transferred to Chinese staff. For example, the foreign technical experts from test cell contractor just handed over all the jobs to the Chinese staff and left in early April. It means that our test cell ¨C one of the most advanced and largest in the world, can be operated independently by Chinese staff. The Chinese colleagues are smart, learning fast and hard working,¡± added Mr. Strakosch.

Supported by the marketing strategy, ¡°Focus on China, Expand in Asia and Target the world¡±, MTU Maintenance Zhuhai has already set its ambitious target to tap into the third party work in parallel to satisfy its shareholder China Southern Airlines as its launch customer. ¡°Chinese and Asian network is taking shape by building up extensive contacts with the third party airlines,¡± said Mr. Strakosch.

As a competitive maintenance Shop, MTU Maintenance Zhuhai will further attract engine operators as it can provide many advantages: short transportation time, low custom duty, simplified custom procedures and payment in RMB instead of foreign currency.

The largest airline in The People¡¯s Republic of China for the past 25 years, China Southern Airlines - www.csair.com/en - connects more than 80 cities around the globe. Major business and vacation destinations served in China include: Beijing, Chengdu, Guangzhou, Guilin, Hong Kong, Kunming, Shanghai, Shenzhen and Wuhan and as well as international service, including: Amsterdam, Bangkok, Fukuoka, Hanoi, Ho Chi Minh City, Islamabad, Kuala Lumpur, Jakarta, Los Angeles, Manila, Melbourne, Moscow, Osaka, Paris, Penang, Phnom Penh, Seoul, Singapore, Sydney and Tokyo.

For China Southern Airlines reservations and information, please contact your local travel agent.