Chinese lessor orders ARJ-21 jets in $2.3 billion deal

Tue Jul 12, 2016 1:43am EDT
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By Siva Govindasamy

SINGAPORE (Reuters) - China Aircraft Leasing Group (CALC) (1848.HK: Quote) has bought 30 Comac ARJ-21 regional jets and signed options for 30 more in a deal potentially worth $2.3 billion.

The planes would be used by an unnamed Indonesian airline in which CALC's parent, Hong Kong-based investment firm Friedmann Pacific Asset Management, plans to invest in, the leasing company said in a statement late on Monday.

The 78-90 seater jets would be delivered over the next five years, and Chinese state-owned planemaker Commercial Aircraft Corporation of China Ltd (Comac) would set up maintenance and after-sales offices in Indonesia as part of the deal.

The leasing firm, which ordered 20 of Comac's larger C919 narrowbody planes in 2012, said the latest deal reflected its confidence in China-made aircraft, and allowed it more flexibility to provide leasing options for airlines.

CALC has 70 Airbus (AIR.PA: Quote) and Boeing (BA.N: Quote) aircraft and says that it has another 103 Airbus planes on order, allowing it to expand its fleet to 173 aircraft by 2022.

In a separate statement, Comac said it had also received another order for 30 ARJ-21 jets from AVIC Leasing, a subsidiary of Aviation Industry Corporation of China. It did not disclose the value of the deal.

The orders are a boost for the ARJ-21, which is more than 10 years behind its original schedule and had its first commercial flight with Chengdu Airlines in end-June.

It competes with similar small passenger jets produced by Brazil's Embraer SA (EMBR3.SA: Quote), Canada's Bombardier Inc (BBDb.TO: Quote) and the Russian Sukhoi Superjet.   Continued...

A model aircraft is displayed at the reception of the China Aircraft Leasing Group office in Hong Kong, China June 22, 2015.  REUTERS/Bobby Yip