EVA Applies for Taiwan’s Approval to Re-invest in Shanghai Airlines Cargo
Carrier to be major shareholder in Shanghai-based airfreight venture

TAIPEI, TAIWAN (13 June, 2006) – The EVA Air Board of Directors approved a resolution to re-invest in a newly formed company, Shanghai Airlines Cargo International Co., Ltd., at a specially called meeting on 12 June, 2006.  On 13 June, EVA formally applied to the Minister of Economic Affairs of Taiwan for government approval of the investment in the Shanghai-based freighter operation.  EVA plans to invest US$3,880,000 in capital and own 25 percent of the equities and Shanghai Airlines 55 percent.

Shanghai Airlines Cargo International Co., Ltd. is based at Pudong International Airport outside of Shanghai.   It is operating one McDonnell Douglas MD-11 and two Boeing 757-200 freighters now, and is scheduled to take delivery of a Boeing B747-200 and a MD-11 toward the end of 2006.  Shanghai Airlines Cargo is providing dedicated freighter services to Frankfurt, Macau, Hong Kong, Osaka, Bangkok and Ho Chi-Minh City.  It will add cargo flights to Singapore, Bombay, Los Angeles and Xiamen by end of this year. In addition to providing international airfreight transportation, Shanghai Airlines Cargo plans to own and operate

its own ground-handling business.  It currently leases a cargo terminal from Shanghai Pudong Airport Authority and is building a brand-new, state-of-the-art facility to service both its own flights and other carriers.  The new cargo terminal is being developed as part of Pudong Airport expansion.  Re-investment in the newly established company is complementary to EVA’s current operations and establishes the logistics framework for a strategic worldwide network of air and marine cargo transportation.  EVA has worked with Shanghai Airlines and used Macau as a hub for transporting cargo shipments between Shanghai and Taipei since August 2003.  The existing cooperative arrangement has proven to be an effective and successful business model, and served as the impetus for working with Shanghai Airlines to establish Shanghai Airlines Cargo International Co., Ltd.  The new venture will aggressively explore cargo business opportunities throughout mainland China and will be equipped to even more promptly and reliably provide cargo services to consignees and forwarders worldwide. In recent years, numerous Taiwanese industries have moved their manufacturing facilities to mainland China, significantly shrinking the local export market.  At the same time, Taiwan’s exceptional geographic location and far-reaching air cargo service network preserved its position as a major shipping hub.  In contrast, economic development and industry in China are booming while its cargo infrastructure and capacity have not kept pace.  The Chinese government has responded by cultivating its own air cargo industry and granting operating approval to carriers such as Shanghai Airlines Cargo International Co., Ltd.