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Feature: China sets the pace
23 February 2012
Foreign aircraft lessors are taking a closer look at China’s free-trade zones to stay competitive.
China’s aircraft leasing industry is growing fast. State-owned ICBC Leasing and China Development Bank Leasing, which were established when China authorized its state banks to set up leasing companies during the last decade, are approaching fleets of 100 aircraft.
In an aircraft leasing market once dominated by foreign lessors, state-owned leasing companies are taking a greater share of new deliveries under finance lease or operating lease.
China’s free-trade zones, special economic areas that are more business friendly than mainland China, have accelerated the growth of domestic lessors in the past two years. They have made aircraft leasing a viable business in China by allowing domestic lessors to sidestep heavy taxes on the import of aircraft – taxes that foreign lessors did not have to pay. In the two years since the first aircraft lease structured through a free-trade zone, using free-trade zones has become the industry standard, and legacy...
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