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China aviation boom brings first aircraft lessor IPO in Asia

Published on Jul 11, 2014 6:09 PM
 
China Eastern Airlines Boeing 737-800 planes are seen at an airport in Taiyuan, Shanxi province on April 6, 2014. As China's aviation market booms, local aircraft leasing companies are raising funds in finance hubs like Hong Kong and Singapore in a bet they can win market share from the international players that dominate the industry. -- PHOTO: REUTERS

SINGAPORE/BEIJING (Reuters) - As China's aviation market booms, local aircraft leasing companies are raising funds in finance hubs like Hong Kong and Singapore in a bet they can win market share from the international players that dominate the industry.

With the country's growing middle class fueling a surge in travel, Boeing Co estimates Chinese airlines will need nearly 6,000 new jets over the next 20 years, valued at US$780 billion.

Many of those aircraft will be leased rather than bought as carriers seek to cap long-term commitments: China's 800-plane leasing market is set to grow 50 percent by 2018, according to consultancy Ascend.

Friday's market debut in Hong Kong of Asia's first listed plane lessor, China Aircraft Leasing Group Holdings, is the clearest example so far of local players chasing expansion. CALG said the nearly US$100 million it raised in its initial public offering will be mostly spent on acquiring aircraft to try to expand its 3 percent share of the market.

 
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