Ireland-based company aims to tap huge local demand with new platform

CDB Aviation expects to use its newly established global leasing platform to further strengthen its position in the Chinese market, its CEO said.

The company is the aviation leasing arm of the State-owned China Development Bank Financial Leasing Co Ltd.

"China has always been a pivotal market for us. We look forward to bringing our well-established global leasing services and platform to China to reinvigorate our presence in the market and help drive the growth of its quickly accelerating aviation sector," said Peter Chang, CEO of CDB Aviation, which is now based in Ireland and whose main line of business is global aviation leasing.

"The opportunities in China's aviation market are more than just airlines. It's most likely that China will become the third aircraft manufacturer very soon. So being part of CDB Aviation, we also have to be mindful of what our contribution toward the manufacturing part is, "he added.

The two major reasons for airlines leasing aircraft from other airlines or leasing companies are to operate planes without the financial burden of buying them, or to secure a temporary increase in their capacity.

Chang believes competition is good for the whole industry and he hopes C919's manufacturer, the Commercial Aircraft Corporation of China (Comac), to become a successful aircraft manufacturer.

Chang said CDB Aviation has not considered C919 at this time because the jet does not have international certification yet, and it may take five to seven years to obtain those certificates.

"We are looking forward to the day that the C919 becomes available on the international market," Chang said. "We will ready ourselves for its coming."

Chang has witnessed the tremendous changes of the Chinese aviation sector.

The Civil Aviation Administration of China (CAAC) said in the latest civil aviation industry development bulletin the country has seen rapid growth in the civil aviation industry with the commercial transport fleet reaching 3,639 by the end of 2018, up by 343 from the end of 2017.

As air passenger traffic volume in China has continued to expand and grow, China is expected to become the world's largest aviation market around 2022, industry experts said.

Demand for aircraft finance and leasing is seen remaining high after the International Air Transport Association (IATA) forecast China will serve 1.5 billion passengers by 2036 and airline giant Boeing predicted the country will need 7,690 new commercial aircraft over the next 20 years.

The aircraft leasing sector in the past decade has overseen a fleet of 3,325 aircraft by the end of 2017 given the rapid development of China's aviation industry, a report from Shenzhen-based Qianzhan Industry Research Institute said.

As much as 71.65 percent of the civil aviation fleet are operating leased aircraft (about 2,383), of which about 262 are business jets and 681 are helicopters, the report said.

CDB Aviation has rapidly developed into a global lessor with $8.8 billion in aircraft leasing assets at the end of 2018, providing aircraft fleet financing solutions to airlines in all the key markets of the world.

CDB Aviation said it executed 107 aircraft agreements and signed $3.2 billion worth of financial transactions in 2018, posting 20 percent growth in the number of aircraft in its fleet compared to the start of the year.

The leasing sector of the aviation industry is becoming more standardized and enterprises with strong capital and business scale will obtain more opportunities and expertise, which is key for their future development, wrote Chen Fu, an analyst with Guangfa Securities.