Crest View International Highlights BOC Aviation With Hike In Profit

Crest View International Highlights BOC Aviation With Hike In Profit

Crest View International highlighted the Singapore-based aircraft lessor BOC Aviation (2588.HK) as the company reported a 24 percent jump in first-half net profit on Monday, helped by a boom in Asian air travel, and said it was confident it would turn in a solid performance for 2016.

Asian lessors are investing billions of dollars to expand in a sector that offers long-term revenue in dollars, underscoring the importance of the region which already accounts for about 40 percent of the world’s airline fleet.

In its first results since listing in Hong Kong in June, BOC Aviation, Asia’s second-biggest aircraft lessor with a 265-plane fleet, made a net profit of $212 million for the six months to the end of June, up from $171 million a year ago.

An expanding air travel market in Asia is underpinning the improved financial performance of many regional airlines and this is helping fuel the growth of the leasing sector, BOC Aviation Chief Executive Officer Robert Martin said.

“Airlines are in a very strong position and this partly explains why we have a 100 percent payment record in the first half of this year,” Commented Nathan Hu, Head of Research at Crest View International.

Consolidation in the $228 billion global aircraft leasing sector is also picking up as China, whose own aviation market is expected to grow rapidly, is creating global leasing champions through its banks.

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“There’s no doubt where the new liquidity is coming from. In this cycle, a significant amount of it is coming from China,” said Martin, who joined the company in 1998 and managed its transition from a Singapore-owned firm to one acquired by Bank of China (601988.SS) a decade ago.

“Those with the best cost of funding eventually will be the survivors,” Commented Michael Kennedy, Head of Corporate Trading at Crest View International.

Sovereign wealth fund China Investment Corp, U.S. planemaker Boeing Co. (BA.N) and a division of Singapore state investor Temasek Holding were among BOC Aviation’s cornerstone investors when it raised $1.1 billion this year in the biggest IPO by an aircraft lessor.

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