China: Standard Chartered in talks on aviation finance venture

Standard Chartered is in advanced talks over a Chinese joint venture in aviation financing that will aim to help the country’s airlines pay for the $1t-worth of new aircraft they are set to buy in the next two decades. The Asia-focused bank will partner with either a state or a provincial entity to break into China’s aircraft lending market, said a person with knowledge of the plans. Standard Chartered’s Dublin-based aviation finance unit is a sizeable player in the global industry, with more than 100 aircraft on lease to 25 of the world’s leading airlines. But the Chinese market has proved difficult for foreign banks to crack, especially because the country’s own banks have plenty of money to lend to their airlines. Standard Chartered’s role in the new joint venture will be to “asset manage the portfolio” of planes leased to Chinese airlines, rather than providing finance, the person said. China is home to two of the 10 largest airlines in the world, and Boeing, the US aircraft maker, expects the country’s aviation industry to spend more than$1tn on new planes in the next 20 years. However, China also has homegrown aviation finance giants, led by HNA Group, which recently created the world’s third-biggest aircraft rental fleet byagreeing to pay $10bn for CIT Group’s aircraft leasing business.<br/>