| March 13
March 13 China's CDB Aviation Lease Finance may
place further jet orders and make selective acquisitions as it
expands globally after going public with an order for 30 Boeing
Confirming a Reuters report, the Dublin-based arm of China
Development Bank identified itself as the buyer for 30 Boeing Co
737 MAX 8 aircraft.
It was the first such announcement since leasing veteran
Peter Chang became chief executive in December with a remit to
"Our model is very clear: we will become a global leasing
platform, which means international, including non-Chinese and
Chinese (activities)," Chang told Reuters.
It comes as Boeing and Airbus face a slowdown in
the aerospace business cycle. Several airlines are talking of
postponing taking jets due to economic concerns.
"To a certain extent it has already started, and it is good
for us as a long-term player. It could very well mean that it is
an opportunity for us to place another order," Chang said.
"We do not want to be aggressively big for the sake of it,
but we are aggressive and we are going to grow," he added.
"We will be looking at $3 billion to $4 billion a year
growth ... not to the point of being too risky, but we will have
a basic skyline (sequence of deliveries) from manufacturers and
we will have a healthy order book," he said.
"And on top of it we will have a small budget for pop-ups,
and that is flexible," he added, using a term for aircraft that
become available when original buyers retreat.
Asked whether CDB, which has not entered an auction for
Irish lessor AWAS, would also grow through acquisitions, he
said, "Yes, in normal circumstances ... We can only digest so
much and have to be diligent about that."
Chang was fishing in New Zealand when he was asked to run
the huge Chinese bank's aviation leasing arm and said he would
not have heeded the call if it had come from a short-term fund.
"We are long-term players. Our investors don't have a
six-year exit strategy. We are not going to sell up our aviation
portfolio and start renting bicycles. We are going back to the
old-fashioned way of working with airlines, rather than trading
aircraft. We are more traditional in that sense."
Chang last week attended the ISTAT Americas air finance
conference, whose record attendance underscored a flood of
investors looking for higher returns amid low interest rates.
The influx has put pressure on lease rates and spurred talk
that some will exit as the cycle turns lower. Financiers say
there are more than 50 leasing companies in China alone.
"There are lots of reasons why there are so many lessors
from China. They have limited capital investment alternatives, a
similar reason why so many investors went overseas," Chang said.
"I think that once the capital investment market is normal
in China, when they have similar investment instruments to those
abroad, then a lot of this money will leave aviation because
they are not getting the yields."
(Reporting by Tim Hepher; Editing by Bill Rigby)