Panellists at the recent Airline Economics Growth Frontiers event in Hong Kong saw little prospect of consolidation in China's aircraft leasing sector despite growth in the number of participants.
Responding to a question from the floor, Bank of Communications Financial Leasing executive director Gao Sixiang said that the strength of the banks behind most lessors would block any attempt at consolidation for at least the next five or even 10 years.
"Everyone believes that there are so many Chinese lessors, but I do not agree with this. The reason is that all of the Chinese lessors are backed by the big banks," he says.
Given such a scenario, he adds, it would be hard to see a "white knight" player emerge to swallow up a number of other lessors.
Ping An Leasing managing director Huang Zhang agrees: "Simply, for these lessors, their parents are too big and too strong."
However, Gao indicates that the proliferation of lessors in China has made it difficult to compete in some markets, especially in sale-and-leasebacks.
He notes that BoComm leasing has not successfully bid for a sale-and-leaseback deal in two years, and does not intent to compete for any such business for at least another two years.
Instead, the lessor is focusing on placing Boeing 737s and Airbus A320s in China, while building up its portfolio-management skills to handle mid-life aircraft.
Source: Cirium Dashboard
