Lessor CALC wants to be less dependent on China

Hong Kong-based lessor CALC is accelerating its strategy to capture a bigger market of overseas, non-Chinese customers and benefit from the strong recovery. The company has also entered the emerging passenger-to-freighter market, with work on the first aircraft underway since July. China Aircraft Leasing Group Holdings reported its HY1 2022 results on August 24. Lessor CALC wants to be less dependent on China.

Of the 138 owned aircraft in CALC’s portfolio at the end of June, 76.8 percent is leased to airlines in China, Macau, Hong Kong, and Taiwan. Although the lessor is seeing a gradual recovery of the Chinese aviation industry since June, the prolonged lockdowns have hurt its business model, resulting in delayed deliveries. CALC might have realized that it is over-dependent on China, at the same time witnessing a full rebound of international markets.

Hence a change of strategy was implemented earlier this year. Although it expects the growth momentum in China to pick up in HY2, CALC says of its revised strategy in the financial statements: “Since the beginning of this year, riding on the strong recovery in overseas markets, CALC has been accelerating its global market expansion, especially in regions with rapid economic growth and strong demand for air travel. All aircraft to be delivered in the next sixteen months after 30 June 2022 have been mandated for lease, of which more than half will be leased to overseas airline customers. As of 30 June 2022, CALC’s owned and managed aircraft were on lease to 38 airlines in seventeen countries and regions.” By comparison

: a year ago, this was 37 airlines in sixteen countries, so the diversification of its customer base is progressing at a slow pace until now.