The Company's core business is the procurement of jet fuel from overseas markets for distribution to the PRC civil aviation industry.

Following completion of the Company's restructuring in March 2006, the Company focused on re-establishing and growing its jet fuel procurement business. From December 2004 to May 2006, CAO operated its jet fuel procurement business as an intermediary. Since then, the Company has been procuring jet fuel under a principal model. Procuring jet fuel as a principal gives the Company greater control over operational matters which translate into better customer service.

The number and diversity of suppliers participating in the open tenders have improved materially since the Company resumed its operations on a principal basis. This efficient and transparent tender model helps the Company achieve its goals of providing quality products with smooth physical delivery at the lowest possible prices to customers. Participating suppliers usually include oil majors, trading houses, Chinese oil companies with trading operations outside China, refineries and financial institutions. Annual volumes of jet fuel supplied by the Company from 2003 to 2006 are as follows:

 The "Periodic Tender Cover & No. of Suppliers" graph illustrates the increased tender participation and the cover ratios for tenders conducted in 2006 under the principal model. Seven periodic tender exercises and nine spot tenders were conducted in 2006 under the principal model.