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Some Chinese airlines seeking to delay aircraft payments due to virus crisis - lessor

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02/13/2020 | 05:29am EDT

Some Chinese airlines are asking to defer payments on aircraft rentals as they grapple with a fall in demand due to the coronavirus, the head of Asia's fifth-biggest aircraft leasing firm said in an interview with Reuters.

"A lot of clients are trying to seek help from all the industrial players, not only from lessors but also from banks, from regulators, airports and OEMs (airplane manufacturers)," said Mike Poon, founder and chief executive of China Aircraft Leasing Ltd.

The coronavirus pathogen was first identified in December. The Chinese province at the epicentre of the outbreak reported a record rise in deaths and thousands more cases on Thursday, suggesting a much bigger crisis facing China and the world.

UK-based consultancy Ascend by Cirium said the number of flights scheduled to operate to, from and within China had dropped by 34% from Jan. 23 through Feb. 11.

Poon this week attended the Singapore Airshow, where Boeing Co said some of its deliveries of 777 and 787 widebody jets to Chinese airlines had been delayed as a result of the crisis.

China's aviation regulator said on Wednesday it would support restructuring or mergers to help airlines cope with the outbreak, and that it would continue to lobby authorities to subsidise airlines hurt by travel curbs.

"I trust the Chinese government will try to find ways to support the whole industry," Poon said. "I definitely view it as a short-term problem."

He said banks could help provide more direct support to airlines than lessors if they had liquidity issues, as negotiations between carriers and lessors could take a few months to resolve.

Major aircraft lessor Avolon said on Wednesday it and peers could benefit from the coronavirus outbreak as airlines shore up cash by refinancing their planes.

By Anshuman Daga

Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE -5.69% 56.7 Real-time Quote.-56.55%
BOEING COMPANY (THE) -2.65% 145.85 Delayed Quote.-54.01%
CHINA AIRCRAFT LEASING GROUP HOLDINGS LIMITED -0.33% 6.09 End-of-day quote.-26.54%
CHINA EVERBRIGHT LIMITED 0.00% 10.86 End-of-day quote.-25.41%
WORLD CO., LTD. -3.03% 1567 End-of-day quote.-41.77%
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