By Clement Tan
China is making the aircraft-leasing business a popular destination for mergers and acquisitions.
Plane-leasing companies in China have been involved in more than $16 billion worth of acquisitions since last year, according to figures compiled by Bloomberg. In addition, billionaire tycoons such as Li Ka-shing, Hong Kong’s richest man, have entered the industry during that period.
Behind the recent flurry of activity is the Chinese government’s call in mid-2014 for local leasing companies to expand overseas and benefit from rising travel demand. Renting out planes to airlines has shown to be a stable business and is often more profitable than the carriers themselves.
“They want to grow big — and fast,” said Dewey Yee, head of aerospace finance and leasing advisory at Bridge Partners Capital in Hong Kong. “Aviation is really the only very, very long-term investment that you can make that gives you these really solid, steady returns.”