New draft law to support aero-leasing industry

As part of regulatory authorities' efforts to create favourable conditions for the development of the aero-leasing industry in China, a new draft of the Financial Leasing Law has been produced. The draft law follows international guidelines and promotes investment in the aero-leasing industry.

Previously, China prevented banks from investing in the airplane leasing business because of the much higher capital risks compared with other industries, which has led to the industry's underdevelopment to date. Almost all leased airplanes in China's civil aviation sector are leased from foreign financial leasing companies. The sector is expected to be worth at least US$108 billion by 2024, by which time China is estimated to add 2,300 planes to its current 940 civil aviation fleet, reports China Daily.

Domestic financial companies face strong competition from foreign companies in the field, as many already have established aircraft financing backgrounds, enabling them to get capital or acquire planes at lower costs.