Tuesday, March 11, 2008

Bank of China aviation unit targets leaseback deals

BOC Aviation, the aircraft leasing arm of the Bank of China, said on Friday it will not order any new aircraft this year but will focus on buying from airlines unable to finance their orders due to a credit crunch.

The company has concluded purchase and leaseback deals for 2 B777s and is in discussions for another 19 A320s, all from U.S.-based airlines, its chief executive Robert Martin told Reuters in an interview.

"Purchase and leaseback in the past two years were very quiet for us simply because there was very high liquidity in the market. That has changed rapidly over the last three months and we expect to be very busy this year," Martin said.

The company has a $1 billion credit line from parent Bank of China and another $500 million in loans and cash that it is able to tap on for the purchases, Martin said.

But the Singapore-based firm, acquired by China's top foreign exchange lender in late 2006 from Singapore Airlines, will not order new planes this year because of the huge order backlogs at planemakers Airbus and Boeing.

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