10 Aug 2020

China Aviation Industry Newsletter 10 August

CALC completes a SLB transaction for two A330 with China Southern Airlines

CALC announced 31^st July that it has completed a sale and leaseback (SLB) transaction with China Southern Airlines Company Limited for two A330-200 aircraft. These aircraft will be returned to CALC at the end of the leases, and be handled by the Group with its established mid-aged to end-of-life aircraft solutions. CALC saw major shareholders chose to receive scrip dividend payment adding HK$220 million to the Company’s issued capital China Aircraft Leasing Group Holdings Limited announced its two major shareholders China Everbright Limited and the incumbent Executive Director and Chief Executive Officer Mr Mike Poon, through his jointly-controlled Friedmann Pacific Asset Management Limited and wholly-owned Equal Honor Holdings Limited, had opted for receiving 100% of their entitlements of 2019 final dividend in scrip shares. Together with other shareholders opting for receiving scrip shares, the Company will see HK$220 million being added to its issued capital. With the scrip shares being issued today, China Everbright Limited will see its interest in CALC increase from 35.83% to 36.61%, while Mr Poon’s interest will increase from 28.19% to 28.87%. The major shareholders’ decision has demonstrated their confidence in CALC’s long term growth and development prospects. China Southern Airlines moves into Heathrow T5   China Southern Airlines has temporarily moved into Heathrow T5 this week, joining an increasing number of carriers in BA’s hub terminal. The carrier switched from T2 to T5 effective from 5th August. Emirates to deploy its flagship A380 to Guangzhou Emirates has announced that it will deploy its iconic Airbus A380 aircraft to Guangzhou from 8th August. The airline has also restarted its A380 operations to Amsterdam and Cairo this week, and introduced a second daily A380 service to London Heathrow, serving market demand and offering customers more travel options. Fitch Affirms AVIC International at 'A-'; Outlook Stable Fitch Ratings has affirmed China-based AVIC International Holding Corporation's (AVIC International) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'A-' with a Stable Outlook. The company's senior unsecured rating and the outstanding senior unsecured notes issued by AVIC International Finance & Investment Limited and AVIC International Finance Limited have also been affirmed at 'A-'. Pressure on air cargo rates from China keeps increasing Outbound airfreight rates from China continued to rise for the fifth consecutive week, with pricing the strongest out of Shanghai as shipments increased for electronics, e-commerce orders, and hospital gear. The pricing trend is good for carriers. But it means higher costs for cargo owners, especially with a large amount of all-cargo capacity already committed to big gadget launches from Sony, Apple and Samsung in the next couple months. The premium pricing and congestion at major hub airports is leading more shippers to consider rail from China to Europe as a less expensive alternative to air for a range of goods, including clothing, paper, consumer goods, electronics, and industrial components. Acumen Aviation © 10^th August 2020 All Rights Reserved.