Japan Airlines - Orient Aviation

BUSINESS ROUND-UPChinese bankbuys SALEBank of China Ltd (BOC)has bought Singaporebasedaircraft l e s s o r ,S i n g a p o r e A i r c r a f t LeasingEnterprise (SALE) for a reportedUS$965 million. The state-ownedmainland institution, which operatesthe largest international network ofall Chinese banks and is listed onthe Hong Kong Stock Exchange,acquired the lessor in Decemberfrom shareholders SingaporeAirlines Ltd (35.5%), WestLB AG(35.5%), and two government ofSingapore investment companies,Temasek Holdings (14.5%) andSingapore Investment Corp. (14.5%).SALE had assets of US$3.1 billion atSeptember 30 last year and a worldwideclient list that included China SouthernAirlines, JetStar Asia and low-cost carrier,easyJet. Chief executive Robert Martincontinues to head up SALE under the newownership.Briefly …China Southern is onSALE’s client listA BOC statement issued to the HongKong Stock Exchange when the sale wasannounced said: “The acquisition forms partof the company’s overall corporate strategyin expanding its scope of diverse financialservices and increasing its diversificationinto non-interest income.”In January, SALE ordered 20 A320airliners and exercised an option to purchase20 B737-800 next generation airplanes.The new orders are the first made since thecompany was acquired by BOC. SALE hasa current portfolio of 75 aircraft. In addition,the lessor now has 67 airplanes on order:20 A320s referred to earlier and 47 B737-800s.The launch of Golden Dragon Airlines, a cross-bordercommuter carrier based in Macau and to be managed byHong Kong Express, is on hold. The airline’s shareholdersled by casino tycoon and chairman of Hong Kong Express, StanleyHo, are concerned about the limitations of the market since thelaunch of Viva Macau last year and the planned start up of AirMacau’s low-cost carrier, Macau Air Asia Express, by mid-year.– By Charles Anderson.• Cathay Pacific Airways executives, in a recent briefing toanalysts, said they plan annual capital expenditure of HK$9.5billion (US$1.217 billion) to HK$10 billion up to 2009, mainly toexpand the carrier’s fleet.• Malaysia Airlines (MAS) has announced a rights issue of418 million shares, valued at the time of the announcement at 1.6billion ringgit (US$455.2 million), to improve cash flow at the flagcarrier. The rights issue will provide funds for fleet purchases whenthe airline implements its new hub and spoke policy in 2008. MAShas said it lost 620 ringgit last year, but will report a 50 millionringgit profit in 2007.• Shareholders in Indian low-cost carrier, SpiceJet, haveapproved the sale of 50 million shares, or 24% of the total valueof that carrier, at US$1.17 a share to investors including the TataGroup, Goldman Sachs and BNP Paribas.The carrier, which started flying from its New Delhi base inmid-2005, raised US$80 million two years ago with a sale ofconvertible bonds. Executive director, Ajay Singh, said it believedthis was all the money it needed for now. “With the expandingmarket and our expanding share in the market, we do not want todilute any more than we are doing,” he said.10 ORIENT AVIATION February 2007