In a sign of cautious optimism, BOC Aviation is reporting that most of its airline clients have resumed rental payments after accepting deferred instalments from clients when Covid-19 reared its head this year, the Asian lessor’s top executive told Reuters in an interview.
BOC has completed repayment negotiations with the bulk of its customers, and airlines in markets such as China and the US are recovering well after the industry was brought to a near stand-still by Covid-19, CEO Robert Martin told the agency.
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“Already, we’ve been repaid a lot of the deferrals that were put in place,” he said after the company reported flat first-half net profit at $323m, while total revenue and other income rose 11%.
“Experienced airlines clearly moved very quickly to react to the situation. The guys at the other end of the spectrum tended to be the entrepreneur-led airlines with big orders in emerging markets, and some of those have still got to come to the table,” said Martin, an industry veteran of over 30 years.
BOC Aviation is one of the world’s biggest lessors, with a fleet of 571 planes, including those on order. This year, it struck big deals with airlines to buy and leaseback aircraft.
Airlines have deferred payments to lessors, which have shored up funding and delayed taking deliveries from Airbus and Boeing, after expanding furiously in an industry boom over the past few decades.
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By GlobalDataBOC Aviation took a $12m asset impairment on five Boeing aircraft already delivered and repossessed three other planes.
“Things generally are getting better. I judge that from our internal cashflows but there are specific situations that will need to be worked out in the second half,” he said, adding that BOC had no unplaced new aircraft until 2023.
BOC Aviation is listed on the Hong Kong Stock Exchange and has its headquarters in Singapore with offices in Dublin, London, New York and Tianjin, China.
