CHINA -- Drawing on local market knowledge, financial expert and respected industry professional, David Yu, Executive Director Asia Pacific from the International Bureau of Aviation, will be discussing the emerging market outlook as monitored by IBA at the 2nd China Airfinance Development Summit in Tianjin, China on September 26. Based in IBA’s Beijing office, which provides a range of support program including valuations, technical, and investor services, Yu provides insight to the region’s airlines, lessors, investors and banks as they prepare to meet the challenge of the Asian market’s anticipated growth trajectory.
According to the International Bureau of Aviation’s online commercial airline database, JetData, there are approximately 800 Boeing 737 Classics and next generation aircraft in China, along with 850 aircraft from the A320 family -- average age circa 7.5 and 4.8 years respectively. The majority of these aircraft are on an operating lease structure, and IBA predicts that the renewal of these existing aircraft leases in China is far more likely than the aircraft being returned to lessors. IBA estimates that more than 80% of those set to expire in the next five years will be renewed.
At the same time, IBA anticipates that the deliveries of new single aisle commercial jets will average at 65 Boeing and 90 Airbus aircraft per year across the period.
Speaking in Beijing, Yu comments: “Although the average aircraft age in China is relatively low, maintenance demand is increasing, and operators are focusing attention on the associated costs. Most leases do not provide for maintenance reserves in the typical operating lease structure so financial provisions for these leases rely solely with the airlines rather than the lessor – they cannot run to the lessor for access to maintenance reserves”.
“Lessors and the airlines are taking a much closer interest in maintenance costs now, compared to five years ago”, he adds. “We are seeing interesting strategic alliances between airlines and outsourced providers of MRO and component support with global reach and these are penetrating the Chinese aviation industry with tenacious purpose”.
The International Bureau of Aviation (IBA) was established in 1988 to provide independent expert business analysis to the aviation industry. IBA advises commercial and business aviation clients, aircraft/engine manufacturers and operators. Services include asset valuations, technical and engine management, consulting and commercial services, industry and sector research and analysis. Visit www.ibagroup.com.
JetData is IBA’s online commercial aircraft database, providing up-to-date data on narrowbody or widebody aircraft, regional jets, turboprops and large capacity inter-continental freighters. The database contains information on all aircraft manufacturers’ products including Airbus, ATR, BAE Systems, Boeing, Bombardier, Dornier and Embraer. Using its powerful search tools, JetData’s users can quickly and easily perform a wide range of customisable queries to generate reports for any or all of the commercial aircraft types that are covered within the online system. IBA’s intuitive interface gives users instant access to the latest details for commercial aircraft on any PC, MAC, tablet or mobile device.
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