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Growth, MRO Capacity Still Biggest Challenges in China

CBD says lease transitions well in hand with preparation and dedicated teams.

CDB Aviation, a unit of China Development Bank Leasing, has been doing well in the booming Chinese aviation market, and the long-term outlook for Chinese airlines as a whole remains very healthy. But rising fuel prices and trade skirmishes between the U.S. and China show there can be hiccoughs even during a long boom. Fortunately, moving aircraft among specific Chinese airlines should that become necessary is getting easier, as experience grows.  

“Preparation is always key in any lease transition, whether in China or elsewhere in the world,” stresses CDB’s Chief Technical Officer Lucas Mollan. CBD always tries to start working with the current lessee about 12 months ahead of lease expiration to ensure expectations are aligned and preparations are sufficient on both sides. “A properly timed approach in managing redelivery enables us to address a variety of issues ahead of lease end and avoid unnecessary problems.”

Digitizing maintenance and operating records is also important, Mollan says, and CDB works with FLYdocs in this area. “The essential element is and always will be to ensure the records are complete and well organized.”

In dealing with the Chinese market, Mollan says it is essential for a lessor to have technical personnel who are fluent in Mandarin and familiar with both Chinese airlines and MROs. “There is a great benefit from having our own CDB Aviation Chinese technical staff on the ground. Our team is well versed in the Chinese airline industry.” The CBD exec says his Chinese team has critical relationships and understanding of cultural challenges necessary to communicate effectively for timely aircraft transitions.

Many Chinese airlines, especially major carriers, now have teams dedicated to manage returns. So, “the return process has become less of a strain, as they are more efficient and better able to anticipate what is required,” Mollan says. But he does see major hurdles in another direction: “The key challenge going forward is the increasing number of aircraft in China. Can the balance of these aircraft increases be matched with new hangar capacity and technical engineering staff to support such rapid growth?"

TAGS: Asia Pacific
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