Aircraft lease soars during economic downturn - BOC Aviation
Airlines are opting more often to lease aircraft than to buy them as
the global economic slowdown puts a squeeze on firms' purse strings, a
Singapore based leasing company said Tuesday.
BOC Aviation, an aircraft leasing firm owned by the Bank of China,
said it signed 52 leases last year, making it the "busiest year ever"
since the company was formed in 1993.
A quarter of the transactions were completed in December, it said in
a statement.
Twenty of the 52 aircraft were acquired through the
purchase-and-leaseback (PLB) scheme, under which BOC Aviation buys the
planes from the airline and leases it back to them, the statement said.
The arrangement allows the airline to continue using the aircraft
without the debt obligation that comes with ownership.
This will free more capital for the airline amid a global credit
crunch.
Apart from having to cope with slowing travel demand, airlines also
must deal with volatility in foreign currencies, which will impact
hedging strategies, analysts have said.
"December was the busiest month ever in our company's history," BOC
Aviation managing director and chief executive Robert Martin said in the
statement.
"We view the current difficult economic condition as an excellent
opportunity to add good quality customers and aircraft."
Martin said BOC will remain active in the PLB market this year,
adding that "airlines are expressing a lot of interest in PLB
transactions as the global financial turmoil continues."
The aviation industry has been among the hardest hit by the economic
downturn as people cut back on business and leisure travel. Freight
volumes have also fallen as global trade weaken.
The International Air Transport Association has said it expects the
industry to lose 2.5 billion dollars in 2009 as a result of the economic
crisis after losses of some 5.0 billion dollars in 2008.
SINGAPORE, Tuesday, AFP
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