BOEING IS HELPING Taiwan Aerospace (TAC) with plans to establish a major new international aircraft-leasing company, specialising in placing narrow-body airliners into the Far East market.

The US manufacturer is understood to have dispatched consultant and former GPA head James King to Taiwan to prepare a business plan for TAC. King's plan is expected to be completed within the "next few months", according to a local source.

TAC is likely to be a major shareholder in the proposed new leasing company. It is tentatively planned to invite Taiwan's two existing domestic players, China Aircraft Leasing and Hwa Hsia leasing, to take smaller stakes.

According to an industry official, there has also been "some initial contact" with Singapore Technologies (ST). The source continues: "The main idea right now is to set up a company to co-operate with ST and to lease aircraft into China."

The Singapore group has been considering investing in a similar type of venture to finance and lease 100- to 150-seat aircraft to developing Asian markets, such as Vietnam and India (Flight International, 24-30 January).

The proposal has the strong support of the Taiwan Government, which has been trying to promote development of the island's commercial-aerospace industry. Changes to Taiwan's regulatory and taxation laws are being examined, to create a more favourable environment for international aircraft leasing.

Depending on tax treatment and incentives, however, the new venture might not necessarily be incorporated in Taiwan, says a source close to the plan. Registering the company offshore would also make leasing aircraft into China much easier, given the recent poor state of relations between Beijing and Taipei, suggest observers.

Initial planning calls for the company to acquire a fleet of as many as 50 to 70 narrow-body aircraft of differing types. Boeing is primarily interested in the venture serving as vehicle to place its 737 and 757 twinjets.

Discussions have also been held with McDonnell Douglas (MDC) on leasing out MD-80s and MD-90s, increasing numbers of which are in service, or on order, for Taiwanese and Chinese carriers.

The proposed establishment of the new Taiwanese leasing company is understood to have been indirectly linked with MDC's recent selection of Taiwan's Aero Industry Development Centre to develop and manufacture the MD-95's empennage.

Source: Flight International