Asia’s biggest aircraft lessor may buy narrow-body planes

BOC Aviation Pte, Asia’s biggest aircraft lessor, may buy more single-aisle planes as economic growth spurs travel demand.

The company, owned by Bank of China Ltd., is deciding between Airbus Group SE’s A320neo and Boeing Co.’s 737Max, Managing Director Robert Martin said in an interview in Singapore. The order won’t be large and there is no timeline for the purchase, he said Monday.

“We have some gaps in 2018 because it’s when most of the new technology comes in, and we decided to wait,” Martin said. “Will we top up? Yes, if the right opportunity comes and if the price is right. It’s all down to the price.”

Growth in air travel, especially in Asia, is lifting orders for Boeing and Airbus, with China forecast to surpass the US as the largest plane market within 20 years. Economic growth is making air travel more affordable in China, prompting carriers such as Air China Ltd. and China Southern Airlines Co. to boost their fleets, while Martin said aircraft demand also is increasing in countries such as Mexico and Japan.

Boeing estimates single-aisle jets will account for almost three-quarters of future demand in China. Low-cost carriers will account for as much as 30 percent of aircraft demand by 2034, up from 8 percent currently, the planemaker said last week.

BOC Aviation’s first-half net income rose 5 percent from a year earlier to $171 million and sales increased 3 percent to $535 million, the company said in a statement Monday. As of the end of June, it had 256 aircraft in its portfolio and 195 on order, with deliveries scheduled through 2021.

The lessor has placed all its planes with airlines this year, Martin said. For next year, all Airbus planes have been placed and BOC Aviation is in talks with airlines for a couple of Boeing planes.

China’s “One Belt, One Road” project to develop ties along the land and maritime routes of the old Silk Road is expected to boost air traffic for passengers and trade, Martin said.

India is one market that would benefit from China’s plan if India takes steps to ease regulations in its aviation industry, Martin said.