(22 April, 2020 – Hong Kong) The Covid-19 pandemic is inflicting repercussions on all industries. China Aircraft Leasing Group Holdings Limited (Stock code: 01848) has issued a corporate update today to share view on repercussions from the Covid-19 pandemic.
In summary, the strategy of CALC has always been to pursue stable and sustainable growth in the relatively resilient aviation sector. CALC has nurtured unparallel edges in tackling challenges from the current market environment.
(1) CALC has been highly selective in engaging airline clients
Chinese clients comprise 65% of CALC's fleet of 139 aircraft (self-owned and managed)as of 31 March 2020, the majority of which are state-owned airlines with strong financial and liquidity strengths. These shield CALC from impacts of disruptions in international traffic given the strong domestic demand. The majority of CALC’s non-Chinese clients are flag-carriers or backed by strong shareholders.
(2) CALC has also been very selective in identifying aircraft assets
92.8% of CALC’s fleet are narrow-body aircraft, a very liquid asset class and an aircraft type poised to be highly sought-after for domestic and regional routes once the market recovers. CALC has also been maintaining one of the industry’s youngest and most modern fleet with long remaining lease tenors. This has alleviated the pressure on CALC for remarketing of aircraft assets in the coming years.
(3) CALC has developed a diversity of different financing channels
CALC has also developed a diversity of different funding sources both in China and offshore, including Pre-Delivery Payment (“PDP”) syndicated loans, aircraft project loans, US dollar bonds, Renminbi medium-term notes, corporate bonds and others, on top of its asset-light business model. In March 2020, CALC showcased its strong funding capability as it secured a RMB1 billion borrowing in China priced at only 3.65%. The Company has a strong financial position with its cash and bank balances totaling HK$3.8 billion and undrawn borrowing facilities of HK$4.3 billion as of 31 March 2020.
The global aviation industry is established with partnerships and cooperation. Underscoring CALC’s success is its flexibility in adapting to the rapidly-changing market environment, with the support from airline clients, aviation industry partners, financiers and shareholders. At CALC, we are proud to stand with all our stakeholders during these unprecedented challenging times and we have pledged to walk through all difficulties with our partners together.