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China Aircraft Leasing 2016 net profit up 68% to $82 million

Hong Kong-based China Aircraft Leasing Group (CALC) posted a 2016 net profit of 638.4 million Hong Kong dollars ($82.3 million), up 67.9% from the company’s HK$380.2 million net profit in 2015.

CALC’s revenues for the year totaled HK$2.4billion, up 58% over HK$1.5 billion in revenue for 2015.

In 2016, CALC signed lease agreements with five airlines, increasing its client base to 16. CALC made its first forays into the Japanese and North American markets during the year with ANA Holdings and Hawaiian Airlines, respectively.

The company received 17 Airbus A320 family-aircraft in 2016, and delivered 18 aircraft over the year. Those included two Airbus A320s to Turkey’s Pegasus Airlines, CALC’s first European client, and two A320ceos to Australia’s Jetstar Pacific Airlines, CALC’s first Southeast Asia client. CALC’s other clients during the year included Air Macau; China Eastern Airlines; Sichuan Airlines; and Chinese low-cost carriers (LCCs) Lucky Air and West Air.

CALC ended the year with a fleet of 81 aircraft (up 28.6% from 63 in 2015) with a net book value of HK$30.9 billion in total assets, an average age of less than four years and an average lease term remaining of nine years. The company maintained a 100% lease occupancy rate during the year.

CALC plans to deliver at least 19 aircraft in 2017. The company intends to grow its fleet to at least 173 aircraft by 2022, based on current order commitments. CALC has 92 Airbus aircraft in its order book, including 15 A320ceos; 73 A320neos; three A321ceos; and one A321neo.

CALC made strides with its downstream-aviation value-chain business in 2016. Its Hong Kong-based subsidiary Aircraft Recycling International (ARI) signed a sales and leaseback arrangement with Sichuan Airlines for four 12-year-old aircraft, the subsidiary’s first large-scale leasing transaction. ARI also won bids for six Boeing 737-700 aircraft from China’s Xiamen Airlines during the year, eventually closing the transaction in March 2017. ARI is building Asia’s first aircraft-recycling center in Harbin, China, with the first phase of the project scheduled to open this year.

According to CALC CEO Mike Poon, ARI recently completed the acquisition of a 100% equity interest in Memphis, Tennessee-based Universal Asset Management Inc. (UAM), a provider of commercial aviation asset management, aircraft recycling services and component sales.

“Looking ahead, we see the demand for full value-chain aircraft solutions increasing, as airline fleets continue to expand, age and retire,” he said. “With the aircraft disassembly center to commence operations soon, we are well placed to deliver profitable growth and create excellent shareholder value in the future.”

Mark Nensel


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