On April 25, 08, Air China announced its 08Q1 financial report and held a conference call to promote the results. We accordingly collated and reviewed the situation as follows. Input-output level continued to improve and the company achieved pre-tax profit of 158 million yuan in 08Q1. The sustained profitability fully demonstrated its comparative advantages over other airlines. Difference between the current formula price of jet fuel and domestic price of jet fuel is nearly 1,400 yuan / ton and it is inevitable for domestic price to rise. If so, Air China will be relatively less damaged. Calculated according To passenger transport volume, in 08Q1, market share of Air China in Beijing was about 46.8 percent and will improve with the Olympics’ approaching and the rapid growth is expected to appear in June. Annual capacity in the next three years will continue to maintain a growth rate running at 10-12 percent, lower than the 12 -14 percent of the industry as a whole. Without considering the above factors as well as income tax adjustments, we expect Air China’s 08-09 EPS will be 0.59 yuan and 0.75 yuan respectively. "Overweight" rating is unchanged. Risks: economic factors; jet fuel prices; the company's performance adversely affected by the appreciation of the renminbi.