BOC Aviation announces record earnings for 2019

The company ended the year with a solid balance sheet and as of mid-March had more than US$5 billion in available liquidity

BOC Aviation Limited has announced record results for the full year ended December 31 2019, with profits before tax of US$775 million, and a net profit after tax of US$702 million. Both represent an increase of 13% year-on-year.

Analysts say that 2020 is likely to be a very challenging one for the big global aircraft lessors, as airlines cut back on fleet size in response to a dramatic fall in demand because of the coronavirus.

Nonetheless, they point out that the strong performance in a buoyant market in 2019 puts the lessors in a strong position as they work their way through the crisis.

BOC Aviation is a subsidiary of Bank of China. As at December 31 2019, BOC Aviation had a total fleet of 523 aircraft owned, managed and on order, with an average aircraft age of 3.1 years and an average remaining lease term of 8.4 years for the 317 owned aircraft fleet, weighted by net book value. It leases aircraft to 93 airlines in 41 countries.

In January, BOC Aviation announced an order for twenty Airbus A320NEO aircraft, and in March committed to acquire 22 new Boeing 787-8 aircraft for lease to American Airlines, making this the largest lease commitment in the company’s history.

On March 16 BOC Aviation announced that it has signed a purchase-and-leaseback agreement with Cathay Pacific for six Boeing 777-300ER aircraft. All six aircraft will be placed on long-term leases with Cathay.

Robert Martin, managing director and chief executive officer, said that the company delivered a return on equity of 16%, exceeding its average return on equity of 15.1% since 2007.

He added that the company ended the year with a solid balance sheet and as of mid-March had more than US$5 billion in available liquidity.

Date

18 Mar 2020

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