Airfinance Journal’s establishment of a permanent editorial base in Hong Kong in April 2016 has allowed the publication to widen its coverage in Asia. The magazine and online platform are breaking more stories, conducting more interviews and absorbing more market intelligence than ever before.

Here we present some month-by-month highlights of our Asia-Pacific coverage over the past year.

January

The start of 2017 marked the end for one Asia-Pacific carrier as defunct Transasia Airways’ (TNA) last leased aircraft left Taiwan and returned to lessors. From the perspective of TNA’s leasing partners, it was a relatively stress-free process compared with some other repossessions in the region (further reading: Kingfisher).

By the fourth quarter of 2017, Transasia had managed to sell some of its owned aircraft to Colombian flag carrier Avianca.

While the market continues to debate whether it was two fatal crashes that felled the carrier, or whether more underlying financial issues (BOC Aviation’s Robert Martin points to concerns about a $75 million bond) were to blame, one thing remains certain: Taiwan’s post-Transasia aviation landscape will see China Airlines, EVA Airways and their subsidiaries gobble up Transasia’s routes.

Also in January, Hong Kong lessor CALC’s chief executive officer, Mike Poon, re-took the helm of the company after his 2015 disappearing act. He gave a short interview to Airfinance Journal at this year’s Paris air show, in which he emphasised that CALC wants to be a “solution provider for the entire value chain”.

Meanwhile, in Hong Kong, a paper was presented to legislators outlining a proposed tax break for lessors domiciled in the city. A version of that would pass later in the year (see ‘June’). 

February

February saw several new mainland Chinese and Hong Kong lessors introduced to the market via interviews with Airfinance Journal.

Century City, part of a Hong Kong real estate company which had been quietly accumulating a portfolio of aircraft since 2012, revealed how a softness in the property market had led the company to invest in aircraft to generate good returns over a shorter period of time. The company’s involvement in the industry is interesting because it has maintained a lower profile than Cheung Kong and Chow Tai Fook, the owners of Accipiter and Goshawk Aviation, respectively.

Also in Hong Kong, Asia Pacific Aviation Leasing’s chief financial officer said the company was hedging its bets on Hong Kong. The company closed a two-A320 sale and leaseback with Chongqing-based West Air later in the year – but via its Tianjin platform, not its one in Hong Kong.

On the mainland, Kunlun Financial Leasing, a lessor owned by oil and gas giant CNPC (China National Petroleum Corporation), said it was aiming to have 30 aircraft by the end of 2017.

Guangzhou-based Legend Financial Leasing completed some engine leasing transactions, keeping its eye on the aircraft leasing market. However, as of 19 December the company has yet to enter that market, according to a source.

And a mysterious lessor that goes by the name of Xin Silu (Tianjin) Leasing (probably a special purpose company) placed three aircraft into Pakistan with a new carrier called Serene Air. Not much else is known about this company at the time of writing. 

March

With a May deadline looming, Japanese Jolco equity market players grew increasingly frustrated over the fate of 23 aircraft leased to Malaysia Airlines using Jolcos.

Malaysia Airlines, which is undergoing a restructuring following two air disasters in 2014, had been looking for concessions on lease rentals, while creditors were trying to protect their profits as best they could.

One source threatened to exclude the carrier from the Japanese market, saying: “All of the equity underwriters have taken the same position. If they terminate the lease, we will repossess the aircraft and they will never come back to the Japanese market.”

On a separate note, Jolco market veteran Shiro Kambara went into retirement after 23 years’ service at Nomura Babcock and Brown (NBB). However, later this year he popped up in a new role arranging Jolco equity for French bank Natixis.

April

Hong Kong flag carrier Cathay Pacific shuffled its management, appointing Rupert Hogg as chief executive officer to replace Ivan Chu.

Utilising our powerful Financial Ratings product, we showed how Cathay – which at the end of 2016 had swung to an annual loss of HK$575 million ($74 million) compared with a HK$6 billion profit in the year-earlier period – had an adjusted net debt to Ebitdar at a record high.

On the mainland, Tao Wang left CCB Leasing to join new Chinese lessor Tibet Financial Leasing.

Airfinance Journal looked at how the Chinese government’s One Belt One Road project applies to aircraft leasing, and how domestic Chinese lessors are quietly supporting it.  

May

Lessors complained that lease rate factors were falling to what some described as “unhealthy” levels.

One source put this trend down to the pressure on certain new Asian lessors to rapidly grow their portfolios, and their willingness to sacrifice returns for scale.

Another said that the “ball has moved squarely into the airline’s court in terms of negotiating power on lease deals”.

Separately, BOC Aviation spoke to Airfinance Journal one year after its Hong Kong IPO.

June

In a much anticipated move – which was only slightly delayed by opposition filibustering – Hong Kong’s legislature passed a bill significantly reducing tax for aircraft lessors domiciled in Hong Kong.

The passing of the bill sparked interest on the mainland from Chinese lessors looking to set up in the city. The managing director of new lessor Zhongyuan Aviation Leasing said his company was eyeing a new home in Hong Kong.

Meanwhile CALC, which in June placed an order for 50 737 Max 8s, terminated the leases of two Airbus A321s with Harbin-based LJ Air. Airfinance Journal reported on how repossession cases are relatively rare in China.  

Also in China, Minsheng Financial Leasing concluded the refinancing of two A380 aircraft on lease to Asiana Airlines, tapping into the Export Import Bank of China for the financing.

Airfinance Journal also published its China Supplement 2017, which you can download here.

July/August

Airasia established an Irish leasing unit for its leasing arm Asia Aviation Capital, giving the company a leasing platform and marketing presence in Europe. However, as of 20 December, the lessor still has not been sold, and Airasia CEO Tony Fernandes now says he hopes to sell it by March 2018.  

China’s Communist Party tightened its grip on state-owned aircraft leasing companies, writing ‘party committees’ into the articles of association of these companies. One western lessor described how the move makes the market “more uncomfortable”.  

September

At least a dozen Thai airlines temporarily lost their permission to fly international routes ahead of an ICAO safety assessment of the country.

Airfinance Journal examined why the Thai government invoked a controversial Section 44 order to reinforce the ban.

Meanwhile, lessor Avolon tapped the Korean market for $320 million-worth of lease financing.  

October

The CEO of Australian carrier Alliance Airlines explained how he is introducing 21 Fokker aircraft to his airline’s fleet.

Separately, Peter Bellew resigned as CEO of Malaysia Airlines, the second foreign chief executive to quit the job after Christoph Mueller left in 2016.

An embarrassed Kobe Steel admitted falsification of data about the quality of products supplied for the Mitsubishi Regional Jet, but Mitsubishi insisted to Airfinance Journal the issue would not further delay the new aircraft’s development schedule.

Airfinance Journal made its first reporting trip to Taiwan for several years, interviewing flag carrier China Airlines. We also went to Chengdu to visit ARJ launch customer Chengdu Airlines, which will be looking for financing for 50 aircraft between now and 2023.

November

Airfinance Journal’s 18^th Annual Asia Pacific Airfinance Conference took place at the Conrad Hotel in Hong Kong. In case you missed it, you can find our comprehensive coverage of the event here.

Later that month, we broke the news about how HNA-linked airlines in the Chinese mainland have been delaying lease payments to their lessors.

Shortly before he was dismissed and replaced by Zhong Guosong, HK Express’ then-CEO Andrew Cowen gave an interview to Airfinance Journal in which he discussed issues with the carrier’s Pratt & Whitney engines on its A321neos.

German bank Helaba and German airline Germania told Airfinance Journal about their plans to drum up business in the Asia-Pacific region.  

Qatar Airways bought a 9.6% stake in Hong Kong flag carrier Cathay Pacific, a move that netted the seller of the shares, Kingboard Chemical, a cool HK$800 million ($102.2 million).

December

Airfinance Journal revealed details of two previously undisclosed Jolco transaction by Chinese lessors. CCB Leasing closed a deal for three Airbus A321s, and CMB Leasing for two A320s.  

Fellow Chinese lessor ICBC Financial Leasing placed an order with COMAC for the in-development C919 aircraft.

In Japan, the manufacturer of the in-development Mitsubishi Regional Jet admitted it could lose up to 40 orders from Eastern Air Lines following the US carrier’s acquisition by Swift Air. Separately, sister company Mitsubishi Heavy Industries Aero Engines mandated an aircraft remarketer to sell two Orient Thai Airlines 737-300s to recoup debts incurred from an engine shop visit.

In Korea, ACG closed a 777-300ER refinancing with the lease attached to China Airlines. Meanwhile, Korea Development Bank’s aviation finance head bemoaned the “crazy pricing” in the market and geopolitical risk in the Middle East.