News
AirAsia leasing unit sale imminent?
March 31st 2017
South Korean firm Korea Transportation Asset Management (KOTAM) has been named as the preferred bidder for a majority stake in AirAsia Group's leasing unit, Asia Aviation Capital (AAC), Reuters has reported. Read More »
KOTAM is part of Kukje Maritime Investment Corp., which specializes in shipping and logistics, with 46 owned vessels in its books. Funding, the report suggest, could come from South Korean state lender, the Korea Development Bank (KDB).
Apparently KOTAM is bidding against a Mainland Chinese investor for AAC, although industry analysts have suggested that a sale to a Mainland firm was currently not ideal, given China's recent measures to tighten controls on money moving out of the country.
Earlier this year, AirAsia Group confirmed it had received eight non-binding bids for full ownership of its AAC leasing unit. In one instance, it said it had received an offer for an 80% stake.
The sale is expected to be concluded in April.
A successful deal would mark South Korea's foray into the $256 billion global aircraft leasing sector, which in recent years attracted China's acquisitive HNA Group, CDB Leasing, China Aircraft Leasing Group (CALC), the Industrial and Commercial Bank of China, BOC Aviation and Japanese banks.
In related yet separate news, BOC this week reported an 18% increase in operating profit for 2016 to US$474 million on the back of 9% improved total revenues to US$ 1.19 billion. Net profit grew 22% to US$418 million.
In 2016, Singapore’s BOC Aviation took delivery of 67 aircraft, including 11 that were acquired by airlines on delivery and leased 68 aircraft. In addition, it sold 37 owned jets and one managed aircraft, while its ordered and committed purchases grew to 199 aircraft.
The lessor ordered 13 additional B737 MAX8s and two A320s this month.
Robert Martin, managing-director and CEO, said: "2016 was an outstanding year for BOC Aviation that included another year of record profitability, following a successful initial public offering, which was the largest aircraft operating lessor IPO in history. Our net profit after tax of US$418 million represented a 22% increase over 2015, itself a record year, and we generated a return on equity of 14.4% after raising US$550 million in new equity in conjunction with our IPO."
In comparison, smaller Hong Kong-headquartered CALC reported a 68% net profit increase to HK$638 million (US$82 million) for 2016 on total revenues of HK$2.4 billion, up 58% year-on-year.
In 2016, CALC signed deals with five carriers, increasing its client base to 16. It received 17 A320 Family aircraft during the year and delivered 18, including two A320s to Pegasus Airlines and two A320ceos to Vietnam’s Jetstar Pacific Airlines. It also leased aircraft to Air Macau, China Eastern Airlines, Sichuan Airlines, Lucky Air and West Air.
CALC plans to deliver at least 19 aircraft in 2017 and has plans to grow its fleet from 81 aircraft at the end of 2016 to at least 173 by 2022. The all-Airbus lessor has 15 A320ceo, 73 A320neo, three A321ceo and an A321neo on order.
