Hainan Air to buy major leasing firm

Hainan Airlines Co Ltd, China's largest private airline, and a subsidiary of conglomerate HNA Group, has agreed to buy CIT Commercial Air, US commercial lender CIT Group Inc's aircraft-leasing unit and a leading player in the segment, for $10 billion.


The transaction is expected to close by the first quarter of 2017 after regulatory and shareholder approval. Chen Feng, chairman of Hainan Airlines, will control the largest Chinese-owned fleet of leasable aircraft.


HNA's Avolon Holdings Ltd will expand its fleet to 910 aircraft valued at more than $43 billion, according to a statement issued on Thursday by Ireland-headquartered Avolon Holding Ltd, an international aircraft-leasing company and a wholly owned subsidiary of Shenzhen-listed Bohai Capital Holding Co Ltd, a subsidiary of HNA Group.


Li Xiaojin, a professor at Civil Aviation University of China in Tianjin, said: "As a diversified enterprise, acquiring an aircraft-leasing and lease management services company will help HNA Group expand its global aircraft leasing business coverage."


China has become the most dynamic market for international air travel, due to strong domestic and overseas travel demand, and a rising middle class. In the next two decades, China is likely to become the first country with an aviation market exceeding $1 trillion, according to a recent report by Boeing Co.


By the end of June, CIT Group held total assets of $11.1 billion and liabilities of $1.7 billion.


The article transsshipment from China Daily