Chinese push the aircraft leasing market
Toronto - It has been quite a while since low-cost airliners stirred up the aviation market. Now another area of the industry is affected by the price war: Aircraft Leasing.
The numbers speak for themselves. In 2008, capital from China accounted for about five percent of the global aircraft financing market. According to Flightglobal data, China's share of the $ 310.5 billion market is 28 percent this year. In 2022, it is expected to rise to over 35 percent. 51 percent of the market has grown in the past decade. Excluding the Chinese investors, it would only be 15 percent.
More and more companies from China and Hong Kong are opening branches in Ireland. 18 companies from the region now have representatives in Dublin
Leasing is gaining importance for airlines because it gives them flexibility. Around 40 percent of aircraft deliveries from the manufacturers are already going to leasing companies. It will be soon 50 percent, according to the leasing company Avolon. The Irish-based company is now in Chinese hands. It is part of the HNA Group, which is hugely invested in various airlines, airports and other companies in the industry.
The growth of Chinese suppliers is having an impact. "The new Chinese money lowers prices and creates an increasingly challenging environment for the other providers," quotes Rob Morris from Financial Times. "This not only changes the dynamics of the leasing market, but the entire aviation industry," he adds.
Ireland, place of birth of the aircraft leasing business
More and more companies from China and Hong Kong are opening branches in Ireland. 18 companies from the region now have representatives in Dublin, Ireland. This has to do with favorable tax conditions in the country, which is the birthplace of aircraft leasing.
Tony Ryan, the Iris businessman founded not only the internationally known Ryanair but also made the aircraft leasing acceptable. He founded the company Guinness Peat Aviation back in 1975 when he was still working for Aer Lingus. In the 1980s Guinness Peat became the largest aviation leasing group in the world. After a financial crisis, GE Capital Aviation Services (Gecas) bought Guinness Peat's business. The company is still based in Shannon, Ireland.