ICBC Financial Leasing, China's biggest domestic aircraft lessor, aims to deliver more than 300 planes to customers by the end of 2016, nearly double current levels, a senior executive said.
ICBC's drive into a market still dominated by global players comes as Chinese leasing firms, backed by state lenders, play an increasingly important role in the growing domestic aviation business. Nearly 6,000 new commercial aircraft, worth USD$780 billion, are expected to be delivered over the next 20 years, according to Boeing.
"Local companies have been expanding quickly and the growth potential is huge," Mark Jiang, managing director of aviation finance at ICBC Financial, told Reuters news agency. ICBC Financial is backed by ICBC Industrial and Commercial Bank of China.
ICBC, which signed a USD$1.1 billion deal with Embraer for 20 E190-E2 jets during Chinese president Xi Jinping's visit to Brazil in July, owns and manages 384 planes currently, up from 60 three years ago, according to Jiang.
Even though ILFC and GECAS still dominate the market, local lessors led by ICBC and CDB Leasing have managed to win over a big chunk of new business in recent years.
Collectively, Chinese lessors now handle 80 percent of all new domestic leasing business, up from almost zero five years ago, said Jiang. ICBC now has 17 domestic clients and 34 overseas clients.
By 2018, they are expected to corner 55 percent of the Chinese market overall, up from 38 percent last year, according to industry consultancy Ascend.
"Chinese firms have shown the ability to go into the market in a very significant way," said Illya Ivashkov, senior director at Fitch Ratings. "Some of them have placed sizeable orders."
Growth prospects in China's expanding leasing market also helped China Aircraft Leasing raise nearly USD$100 million at an initial public offering in Hong Kong last month.
More IPOs are possible, industry observers say, but a more common approach for the leasing arms of big Chinese banks may be to set up subsidiaries in the recognised international aircraft financing hubs of Singapore and Dublin to raise funds.