BOC Aviation Aims to Buy More Planes From Airlines

BOC Aviation, Bank of China Ltd.'s aircraft-leasing unit, aims to buy up to $2 billion worth of planes that airlines have ordered and are unable to finance with bank loans because of the global credit squeeze.
Asia's biggest lessor plans to more than double aircraft purchases from airlines next year from the $700 million it bought in 2007, said Chief Executive Officer Robert Martin. The Singapore-based company received a $1 billion credit facility, its largest loan, from Bank of China this month at a rate lower than it would get from other banks, he said.
A surge in borrowing costs that prompted the Federal Reserve and four other central banks to add cash to the financial system has squeezed airlines. Record fuel prices and a possible slowdown in the U.S. has made sale-and-leaseback arrangements more attractive to carriers to finance new planes.
Airlines such as Tiger Airways Pte, a budget carrier part- owned by Singapore Airlines Ltd., and Easyjet Plc, Europe's second-biggest discount airline, have funded aircraft acquisitions by selling the planes and then leasing them back. Jet Airways (India) Ltd. said it made a profit from the sale and leaseback of four Boeing Co. 737 aircraft in September.
14/12/07 Chan Sue Ling and Denise Kee/Bloomberg

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Categories: Foreign Dec 2007, Jet Airways Dec 2007