Reuters reported on Aug. 4.
Malaysian low-cost airline AirAsia Berhad (MYX: 5099) reportedly received an offer valued at $1 billion for its aircraft-leasing business, according to CEO Tony Fernandes. AirAsia plans to divest its aircraft leasing subsidiary Asia Aviation Capital Ltd, Fernandes told Bloomberg TV during an interview at the end of May. The move comes a day after CIT Group Inc. (NYSE: CIT), a leading US provider of commercial lending and leasing services, was said to be speeding up the sale process of its own CIT Aerospace global commercial air business, to advance the company’s strategic initiatives first announced by its former chairman and CEO John A. Thain, upon his retirement on October 21, 2015. Moreover, BOC Aviation, an arm of Bank of China, the country’s fourth-largest lender by assets, launched an initial public offering in Hong Kong for its aircraft leasing business, targeting HK$8.7 billion ($1.13 billion) from the sale of both new and existing shares, FinanceAsia reported. BOC International and Goldman Sachs are the joint sponsors of the IPO. Similar to other recent billion-dollar IPOs in Hong Kong, BOC Aviation has lined up local and foreign cornerstone investors to subscribe for $583 million, or 52% of the deal before the order book was opened to public institutional and retail investors BOC Aviation will be the second aircraft leasing company listed in Asia after China Aircraft Leasing Group (CALC) floated its shares in Hong Kong two years ago, says FinanceAsia. BOC Aviation’s fleet is nearly four times bigger than CALC’s though, at almost 230 planes, while its expected market capitalization is over six times greater. BOC Aviation is a leading global aircraft operating leasing company and the largest aircraft operating leasing company headquartered in Asia, as measured by the value of owned aircraft. BOC Aviation has delivered 22 years of unbroken profitability, with a portfolio of owned aircraft has an average age of less than four years, weighted by net book value, making it one of the youngest in the aircraft operating lease industry. With shares scheduled to begin trading on June 1, BOC Aviation looks set to steal a march on rivals CDB Leasing and Minsheng Financial Leasing, which are both also preparing to list in Hong Kong later this year, FinanceAsia added. As airlines serving Asia Pacific are attempting to expand their fleets, they’re finding that the leasing business can be more lucrative than operating an airline, which has prompted conglomerates led by Hong Kong billionaires Li Ka-shing and Cheng Yu-tung to enter the industry, says Bloomberg. CIT Aerospace owns, finances and manages a fleet of more than 350 commercial aircraft serving approximately 100 customers in 50 countries. CIT Aerospace offers an array of industry-leading services, supported by our fleet of Airbus, Boeing, Embraer and Bombardier aircraft. CIT Aerospace has seven aircraft leasing, advising and syndication offices in Dublin, Ireland; Ft. Lauderdale, Fla.; Los Angeles, Calif.; New York, N.Y.; Seattle, Wash.; Singapore; and Toulouse, France. More than a dozen entities were invited to submit first-round bids for CIT Aerospace by next month. Given the growing Asian demand and shifting balance of the global aviation industry to Asia, a strong line-up of Chinese and Japanese suitors are expected to bid for the unit, including China’s HNA Group, Industrial and Commercial Bank of China’s ICBC Leasing, and Japan’s Orix Corp. AirAsia is engaged in the provision of air transportation services. The company’s segments include Malaysia, Thailand, Indonesia, Philippines, India and Japan. AirAsia was founded in 1993 by DRB-Hicom, a government-owned conglomerate, and began operations in 1996. In December 2001, the heavily-indebted airline was acquired by former Time Warner executive Tony Fernandes, though his company Tune Air Sdn Bhd, for a token sum of one ringgit (about USD 0.26 at the time), and the assumption of USD 11 million (MYR 40 million) in debts. In 2001 Fernandes started with 2 old aircraft, and turned the company around, generating a profit in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as MYR 1 (US$0.27). Born in the aftermath of 9/11 and coming through the global financial crisis, AirAsia has faced some of the most turbulent times in the airline industry. In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. It subsequently started its Thai AirAsia affiliate, and began flights to Singapore and Indonesia, Macau, mainland China (Xiamen), the Philippines (Manila), Vietnam, Cambodia, Brunei and Myanmar, the latter by Thai AirAsia. the cairline kept growing by continuously adding new routes and aircraft. The company’s subsidiaries include AirAsia Investment Ltd, engaged in investment holdings; AirAsia Go Holiday Sdn Bhd, engaged in the tour operating business; AirAsia Corporate Services Ltd, which facilitates business transactions for AirAsia Group with non-resident goods and service providers; Ground Team Red Sdn Bhd, which provides special purpose vehicles for financing arrangements required by AirAsia; AirAsia (Mauritius) Ltd, which provides aircraft leasing facilities to Thai AirAsia Co. Ltd, and AirAsia Aviation Capital Ltd, which provides aircraft leasing services, among others. AirAsia is headquartered near Kuala Lumpur, Malaysia.]]>