We have learned from our experience and by tracking historical data that some passengers make reservations but fail to pick up their tickets, or some who are ticketed fail to use their seats without informing us, resulting in a seat that could have been sold to someone else. Other passengers may have been unable to reserve for a flight because the seats were sold, even though they later were not used. In order to reduce the prospect of empty seats and in order to provide seats for those who wish to travel, Hainan Airlines employs an overbooking process to benefit both the passenger and the airline.
    We employ overbooking in a careful and sophisticated way, forecasting the number of likely wasted seats on domestic flights.. For passengers who have booked seats and are ticketed, it rarely happens that no seat is available at departure.

I. Channels of information of overbooking for a flight

We will publish this announcement at our ticket offices and on the website of HNA, including the details of overbooking through notices and broadcasting in relevant zones in the airport.

II. Volunteers and priority boarding order

If a flight is overbooked, we will first request passengers who may be willing to volunteer their seats in exchange for economic compensation if we are unable to accommodate them on the flight. In the event there are not enough volunteers, we will follow the procedures for the priority boarding order described below to reduce the number of passengers. The priority assurance boarding order shall be as follows:

1. VIP and CIP passengers;
2. Passengers for connecting to international flights;
3. First Class passengers and Business Class passengers;
4. Passengers holding HNA Golden Deer Cards, HNA Fortune Wing Gold Cards and HNA Fortune Wing Silver Cards;
5. Special assistance passengers (including the elderly, incapacitated, physically challenged, etc.) for whom the Company has made special arrangements;
6. Passengers who can present evidence of their urgency for travel;
7. Passengers with connecting flights with short connecting times at their transfer point;
8. Other passengers shall board following the order of the face value (fare class) of their tickets and passengers for the same class shall board on a first-come-first-served basis.

III. Passengers involuntarily refused boarding

1. If a passenger chooses to refund his or her ticket:
   (1) The ticket shall be refunded as a non-voluntary refund with no refund fee charged;
   (2)We shall compensate the passenger 30% of the face value of the ticket for flight section for which the flight is overbooked, provided that if the compensation is less than CNY200, CNY200 shall be paid .
   
2. If a passenger chooses to be transferred to another flight to continue his or/her journey:
   (1) We shall see to it that the ticket is endorsed for the earliest available flight;
   (2) The passenger is guaranteed a compensation of at least CNY200. The compensation shall be calculated in the following manner: If the passenger is transferred to a flight to arrive within 4 hours of the flight the passenger booked, we will compensate the passenger 30% of the face value of the ticket for flight section for which the flight is overbooked, provided that if the compensation is less than 200CNY200, CNY shall be paid. If the passenger is transferred to a flight scheduled to arrive within 4-8 hours of the flight the passenger booked, we compensate the passenger 60% of the face value of the ticket for flight section for which the flight is overbooked. If the passenger is transferred to a flight scheduled to arrive over 8 hours after the flight the passenger booked, we will compensate the passenger 100% of the face value of the ticket for flight section for which the flight is overbooked.
   (3) Other services
   We also provide complimentary food and drinks at meal times in addition to the free transfer endorsement and economic compensation described in previous (1) and (2) in this article. If the passenger is transferred to a flight arriving more than 4 hours after the flight the passenger booked, we provide free hotel accommodationss for the passengers.