09 Mar 2020

China Aviation Industry Newsletter 9 March

Air Macau exercises option for A320neo from CALC Air Macau has exercised the option to purchase one Airbus A320neo from Hong Kong-based lessor China Aircraft Leasing (CALC). The flag carrier was granted the option on 11 March 2019 to buy one A320neo that it was set to take on operating lease from CALC by the end of 2019. CALC to Invest in Indonesian Airline Operating Company TAM CALC announced that it would be investing in an  Indonesian airline operating company, PT TransNusa Aviation Mandiri, through a subscription agreement with Aviation Synergy Limited under which the Company agreed to indirectly invest and acquire a 35.68% equity interest in TAM for a total cash consideration of $28 million (equivalent to approximately HKD 218.4 million) at completion. This is a significant move for CALC to expand its downstream footprint to cover the entire aviation value chain, aligning the Group’s business strategy in combining vertical integration and horizontal expansion. TAM operates the airline TransNusa based in Indonesia. TransNusa currently operates 30 domestic routes in 24 cities and one international route between Indonesia and Timor Leste and provides crucial “last-mile” air connectivity services between destinations within Indonesia and international aviation hubs. Carriers Restart Some Suspended Flights as COVID-19 Slows Down Chinese carriers have started resuming some of their domestic and international services that were suspended due to the novel coronavirus outbreak, while several global airlines have expressed optimism that the aviation market will see a strong rebound after the country brings the epidemic under control. "Our services have been growing steadily since 21^st February. We expect more than half of the suspended flights to be operational by the middle of this month," said Zhang Wu'an, spokesperson of Shanghai-headquartered budget carrier Spring Airlines. According to Zhao Chenxin, deputy secretary-general of the National Development and Reform Commission with the number of people returning to work increasing steadily, the aviation sector is seeing a gradual recovery. China Offers Airlines Financial Support amid COVID-19 Outbreak China's Ministry of Finance (MOF) and the Civil Aviation Administration of China (CAAV) jointly issued a notice on offering financial support to airlines amid COVID-19 outbreak. As per the notice, direct cash incentives will be poured into supporting domestic and foreign carriers which operate international flights to/from China, in an effort to help them proactively respond to the impact of the epidemic on the industry and encourage the resumption or continuous operation of their international flights. Dragon Aviation Delivered One A320neo To Indigo Dragon Aviation Leasing has delivered its first Airbus A320NEO to IndiGo. This aircraft is part of the purchase and leaseback transaction totaling five aircraft that was announced earlier. Acumen Aviation © 9 March 2020 All Rights Reserved.