Singapore Airlines' leasing joint venture, Singapore Aircraft Leasing Enterprise (Sale), is in expansion mode and could have 50 aircraft in its portfolio within five years.

Current plans envisage 25 widebodied aircraft by 2001, but Sale is considering entry into the narrowbody market which could result in a doubling of this number. SIA's mega-order for 77 B777s includes six firm and 10 on option for Sale, which currently has six B767-300ERs on lease to Alitalia, China Southern and EVA Air. The lessor has no commitments for the B777s yet and is now looking at the A340 as well as narrowbodies from the three main manufacturers.

Chairman Mathew Samuel says Sale's biggest advantages are its access to capital and its ability to acquire aircraft at attractive rates. The company is capitalised at US$200 million and expects to operate at a debt:equity ratio of 80:20. Access to further capital is not a problem, given the financial strength of SIA and Sumitomo Bank subsidiary Boullioun Aviation Services, SIA's partner in the 50:50 joint venture.

Sale also benefits from Singapore's aircraft leasing incentive scheme, under which it is subject to corporation tax of only 10 per cent and pays no withholding tax on foreign borrowings, says managing director John Willingham.

But a move by Sale into the narrowbodied market means competition with Singapore's other leasing company, Region Air, which is to place 10 new Airbus A320s on 10-year leases with Vietnam Airlines. It has five A320s out on lease - two each with China Airlines and Oman Air and one with Vietnam Airlines.

Richard Whitaker

Source: Airline Business