China’s leasing executives are now the jetsetters of the industry, while their counterparts elsewhere relinquish their road warrior status and adapt to work-from-home conditions due to lockdowns and travel restrictions.

“I’m going to take off in several minutes,” says a Chinese leasing executive in a recent message to Cirium on WeChat, China’s popular instant messaging service.

Another Guangzhou-based leasing executive Cirium messaged at the start of April said he could not speak right then because he was travelling in Haikou, the capital of China’s Hainan province.

“It’s the strongest aviation market now globally. China is the most stable place for airlines to fly and for lessors to do business,” says the Shanghai-based chief executive of a Chinese lessor.

“A couple of my friends and lots of other people are flying. They don’t have any problems.”

In normal times, Chinese leasing executives are used to having their travel limited – it is common practice in state-owned enterprises for human resource departments to confiscate employee passports and monitor and limit the number of overseas trips per year, including personal vacations.

With lockdowns behind them, Chinese lessors are now on the road but face challenges caused by the financial fallout of the coronavirus pandemic.

Sources say they will likely take a conservative approach, focusing on domestic deals and doing what they can for their lessees in order to be seen as contributing to the revitalisation of “China Inc”.


Ryan Guo, vice general manager at Zhengzhou-based Zhongyuan Aviation Leasing, returned to his office from lockdown at the start of March.

“For our company, the airlines are getting affected, but most of our customers have government backing, so they have a relatively strong ability to maintain their cash flows,” he says.

“They can get money from the banks or from other ways, so for most of our customers the rent is not affected by coronavirus, but some other airlines have maybe a weak situation and they could not pay the rent.”

The Shanghai-based lessor chief says: “The Chinese banks are keen to help Chinese companies. They are reluctant to trigger default. If they do that, they will be in the spotlight. No one is going to punish them, but they will be exposed to the public and they may gain a very bad reputation.”

Guo had plans to grow Zhongyuan’s portfolio in 2020, but market turmoil caused by the Covid-19 outbreak has led him to take a more conservative approach. His company now has seven aircraft – comprising one Boeing 737-700, three 737-800s, two Airbus A320s and one A330-300 – all on lease to Chinese airlines.

He says: “This year we planned to do more business, but the virus is a special time, so now we are focused more on Chinese airlines, especially better credit airlines like the government-backed airlines. We are seeking some opportunities, but the combination is very intense, very high in China, so it’s very hard to get deals right now.”

Airlines are trimming back on aircraft acquisitions, Guo says, and at the same time most Chinese lessors are focusing on the domestic market, leading to an oversupply of leased aircraft in the Chinese market.

Thomas Kaplan, senior valuations analyst at Ascend by Cirium, agrees that Chinese lessors are likely to focus on domestic deals for now.

“While the pandemic has affected every region, the Chinese market, at least its domestic market, is recovering ahead of the rest of the world. Also, Chinese airlines are getting state aid and, unlike elsewhere, there is no news of imminent of airline bankruptcies,” he says.

“While a downturn usually means aircraft repossessions and remarketing, Chinese lessors may have less exposure to [Chinese] airline bankruptcies in the coming months. Many of the Chinese lessors are also state-owned, so are less vulnerable to liquidity issues.”

Cirium has also observed some activity in the used aircraft market in China.


A senior executive at a Beijing-based lessor says he is seeing trading activity for used aircraft and has bid for some used A330s with one of the Big Three (Air China, China Eastern, China Southern) carriers. He would not specify with which airline.

“Compared to the new aircraft deliveries, the aircraft trading levels may be higher than before. The airlines need cash inflow, so they maybe want to sell aircraft,” he says.

Like Zhongyuan’s Guo, this lessor is also not too worried about the financial health of his lessees.

“All of our clients are state-owned airlines, so even with such a huge crisis there is no default risk compared to overseas airlines or some privately owned airlines,” he says.

“We don’t worry; we just need to balance our clients’ requests with the negotiations with our financiers.”

Johnny Lau, chief consultant, aviation business services at PwC Hong Kong, believes Chinese lessors will maintain their conservative market outlook for some time.

“It may be interesting who will take the lead, but as far as I understand most Chinese leasing companies do a lot of report writing and cautious analysis. Whether they will be aggressive enough do some interesting transactions, I doubt. They will be very conservative.”

Analysis by Michael Allen of Cirium