CIB Leasing in China orders five Challenger 605s from Bombardier
CIB Leasing orders five Challenger 605s from Bombardier to become the third Chinese leasing company to order business jets from a manufacturer.
CIB Leasing placed an order for five Bombardier Challenger 605s worth $160 million in August.
The Chinese leasing company will take delivery of all five aircraft before the end of 2014. The first aircraft has been placed with a customer and the leasing company is in talks with other possible lessees.
CIB Leasing closed its first business jet finance lease in May when it financed a Gulfstream G550 operated by Deer Jet.
The leasing company was approved for launch by China in August 2010 and is completely owned by Industrial Bank, which is Fuzhou City in Fujian Province. The bank was launched in 1988 and is one of the 10 largest banks in China. It is listed on the Shanghai Stock Exchange.
The order for the five Challenger 605s makes CIB Leasing the third leasing company in China to order aircraft directly from a manufacturer, following Minsheng Financial Leasing and CDB Leasing.
Although speculative orders are common for commercial aircraft leasing companies, few non-Chinese business jet financiers are prepared to take the risk of buying aircraft direct from manufacturers. This is partly because speculative business jet orders have not always worked in the past.
Minsheng Financial Leasing has ordered over 100 business jets and helicopters from almost all the business jet manufacturers and has taken delivery of more than 60 jets so far – roughly 30 per cent of the mainland Chinese fleet.
CDB Leasing, which is owned by China Development Bank, ordered five Global 6000 jets in December 2012.
The last non-Chinese financial institution to place an order for business jets was GATX which formed a joint venture – Gulfstream GATX Leasing – with Gulfstream in 1998. GATX owned 85 per cent of the new leasing company with Gulfstream owning the rest. The company offered short term leases of GIV-SPs, GVs and G550s (then known as GV-SPs).
Gulfstream GATX Leasing started with an order for six aircraft, worth $200 million at list prices. It took delivery of the first aircraft in 2000 and went on to order another 10 aircraft. When demand for business jets fell in 2001 – and after GATX had suffered losses in a commercial aircraft joint venture with Swissair which collapsed at the same time – Gulfstream GATX was closed and the aircraft were sold.