02 Sep 2019

China Aviation Industry Newsletter 2 September

Air China and Cathay Pacific extend framework agreement by three years Air China announced an extension of the framework agreement between Air China and Cathay Pacific from October 2019 to December. The broad agreement includes codesharing, joint operation, aircraft leasing, frequent flyer programme, catering service and ground services. ARJ21 Regional Passenger Jetliner Showcases High-Altitude Performance The ARJ21, China's first homebuilt regional passenger jetliner, is undertaking three-day demonstration flights in Southwest China, to showcase its performance in plateau areas and further explore market opportunities in the region. Last week the ARJ21 will flew several routes between eight airports, including Kunming, Lijiang and Dali airports in Yunnan province. During the period, Commercial Aircraft Corp of China, its developer, also held a seminar with its customers to discuss the operations and potential of China's highland aviation regional market. Beijing's New Airport Completes Second Round of Test Flights Five aircraft completed the second round of test flights at Beijing Daxing International Airport last week according to Beijing News. The successful flight tests took place in low visbility, demonstrating the new airport's ability to maintain operation in difficult flying conditions, which can reduce delays due to bad weather such as fog and smog. An A320 from China Eastern Airlines, A330 from Beijing Capital Airlines, two Boeing-737s from China United Airlines and Hebei Airlines, and an ARJ21 from Chengdu Airlines, China's first homemade regional passenger jetliner, finished their test flights. BOC Aviation Signs Purchase-And-Leaseback Agreement With Middle East Airlines For Up to Ten New Airbus A321NEO Aircraft BOC Aviation announced 2^nd September that it has signed a purchase-and-leaseback agreement with Middle East Airlines (“MEA”) for a minimum of five, and up to ten new Airbus A321NEO aircraft. The aircraft are powered by Pratt & Whitney’s PurePower^® PW1100G-JM engines, and are expected to deliver in 2020 and 2021. “We are very pleased to be working with Middle East Airlines once again on their fleet and network expansion plans, building on a long-term relationship that dates back over 20 years,” said Robert Martin, Managing Director and Chief Executive Officer, BOC Aviation. CALC expands portfolio and managed aircraft fleet to 364 as of 1H2019 China Aircraft Leasing Group (CALC) reported the following portfolio and operational highlights for 1H2019. At the end of the period CALC had 115 owned with 227 aircraft in its order book to be delivered by 2023. Managed aircraft totaled 137, an increase of 19.1% year-on-year. CALC Issues RMB800 Million Medium Term Notes CALC completed the issuance of RMB 800 million medium term notes (“MTN”) with a term of three years at a coupon rate of 4.93%. The proceeds will be used for aircraft acquisition. China Picking Up the Pace in Civil Aircraft Development As Demand Soars As the world's second-largest civil aviation market, China has continually achieved growth in the civil aviation industry amid economic growth and rising air transport demand. China has committed to developing two trunk airliner models and two regional airplane models, respectively the C919 narrow-body and the CR929 widebody jetliners, as well as the ARJ21 regional jet and MA60 series turboprop aircraft. China is now the world's second-largest civil aviation market. The International Air Transport Association forecast that China is expected to become the world's largest by the mid-2020s. As of June, China had a total of 3,722 civil aircraft, based on the latest statistics released by the Civil Aviation Administration of China. Passenger demand keeps Air China’s first half profit up Air China’s operating profit rose 1.5% to CNY6.7 billion ($935 million) in the first half of 2019 as significant losses in the cargo segment dampened stronger healthy passenger demand reported Flightglobal 29^th August. Acumen Aviation © 2 September August 2019 All Rights Reserved.