BOC Aviation buys five Airbus A320s as air travel demand soars
Asia’s largest aircraft leasing firm BOC Aviation said it has ordered five new Airbus A321-200 aircraft in one of its biggest deals this year as demand for air travel in the region continues to grow despite economic headwinds.
The Bank of China subsidiary, which raised HK$4.52 billion in its Hong Kong public listing in June, entered into the deal in the wake of a growing appetite among customers for larger aeroplanes.
It revealed in a statement that the money to be paid for the five Airbus aircraft was lower than the list price of about US$574.5 million (HK$4,481.1 million) following price adjustments, pending negotiations between the two parties. The planes are scheduled for delivery in 2017.
“We have increased our order for the A321 in response to the market trend and appetite for larger capacity single-aisle aircraft,” said Robert Martin, managing director and chief executive officer of BOC Aviation. “Our order reflects the continued popularity, confidence and reliability of the A320 family among our customers.”
The Airbus A320 range of single-aisle jets are among the best sellers of the European planemaker, which plans to boost production despite concerns over a sputtering economy.
Airbus has recently bagged a couple of orders of its A320 jetliners from Turkey and India and lifted its 20-year demand forecast by 500 in July as air travel demand in Asia continues to rise.
The latest move came after Singapore-based BOC Aviation, one of the world’s five largest aircraft leasing firms, booked a 24 per cent year-on-year increase in its first half profit. The surge in profits sparked the company’s biggest intraday gain since listing on the Hong Kong bourse on Tuesday.
Its lease rental income jumped 5.7 per cent to US$516 million, with the Asia Pacific market registering 12 per cent year-on-year growth to US$180.73 million.
BOC Aviation owns and manages a fleet of 270 aircraft, and has another 241 on order. The company said it planned to use the funds raised from its IPO to make pre-delivery payments and future purchases of additional aircraft.
Cornerstone investors in the IPO included Boeing and China’s sovereign wealth funds.