After the loss at Ba Sing Se, Team Avatar stole a Fire Nation ship, and are traveling in disguise. Aang had been badly wounded by Azula when he was shot with lightning.

Katara had been healing him ever since, but Aang didn't like pretending to be dead. (The world thinks he's dead)

"Hey, how are you feeling now?" she said as she entered the room and sat on the bedside, waiting for Aang's response.