2017 Chinese Lessor of the Year

Photo: [L-R] Peter Chang, CEO & President; Patrick Hannigan, Chief Commercial Officer; Julie Larrissy, Head of Risk; Chen Yu, Senior Vice President, Capital Markets; Hong Wu, Vice President, Trading; and Xipei Zhao, Assistant Vice President, Trading

CDB Aviation has undergone a transformation since chief executive officer Peter Chang took the helm in January 2017.

The wholly-owned Irish subsidiary of China Development Bank Financial Leasing is “built on a strong, secure and resourceful financial foundation”, according to the company’s submission for the Inaugural China Awards.

“CDB Aviation is a customer-centric, relationship-driven organisation where an industry-leading team understands an aircraft lease is not simply a single transaction of an airplane lease, [but] rather an engagement and understanding recognising airlines’ fleet needs are specific and ever-changing.”

In 2017, CDB Aviation executed transactions for 162 aircraft, including deliveries of 38 new aircraft to 15 airlines in nine countries. It sold 19 aircraft and placed orders for 105 new aircraft, including 45 Airbus A320neo family aircraft, 52 Boeing 737 MAX aircraft and eight 787s. At the end of 2017, its fleet comprised 215 owned and managed aircraft on operating or finance leases, as well as 184 committed aircraft in its forward order book with Airbus and Boeing.

Speaking to Airfinance Journal on 7 May, Chang says that in January 2018, when he was last interviewed by Airfinance Journal, everything was “conceptual”.

“There were a lot of inspirations and visions and things without real material substance. It was just a hope and wish list. Since that time, we have now achieved almost all of the important pieces and have clear sight on our next objectives,” he says.

Chang says CDB Aviation’s head-count has now reached 94, which includes senior executives appointed to head its Americas and Asia-Pacific teams. Its legal department has grown from one to seven lawyers.

Chang says that the goals of 2018 are “less tangible” than last year, and that 2017 was about “survival”.

“It’s kind of like Swiss Family Robinson. When they got stranded on the beach, the first order of the day is to build a house with a roof. So we’ve passed that: we have our roof, we have our team. The second year is not as tangible, but it’s just as important, if not more important, and that has to do with making sure that we put the people with the right skill set in the right places. I’ve found that’s tougher than it sounds. In the end we will succeed because of our ingenuity and teamwork.”

CDB Aviation has been boosting its operating lease business vis-a-vis its finance lease business in 2017. A filing by the lessor’s listed parent, CDB Leasing, shows finance lease income dropping 1.2% to RMB 224 million ($36 million) in 2017 from RMB 227 million in 2016. However, operating lease income for aircraft leasing rose 10.1% in 2017, with CDB Leasing reporting RMB 5.76 billion in operating lease income last year, compared with RMB 5.23 billion in 2016.

CDB Leasing says this is “due primarily to an expansion of the scale of aircraft for operating lease in light of the expansion of aircraft leasing business by the group and the stable gross lease yield of aircraft leasing business”.

Source: Airfinance Journal China 2018 Awards Dinner program book