Aither
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ILFC To Become Chinese?

Fri Dec 07, 2012 3:04 pm

According to sources a group of Chinese companies is in talks to buy ILFC. ILFC has a current portfolio of more than 1,000 owned or managed aircraft !

http://www.reuters.com/article/2012/...ig-ilfc-icbc-idUSL4N09H1SS20121207

The bidding group includes China Aviation Industry Fund, supporting the manufacturing of aircraft in China. One could wonder if behind this deal the main motivation is COMAC with ILFC becoming the commercial arm of COMAC to expand internationally ?
Never trust the obvious
 
Tommy525
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ILFC To Become Chinese?

Fri Dec 07, 2012 3:08 pm

China is the only one with the big bucks these days.
 
Aither
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RE: Ilfc To Become Chinese?

Fri Dec 07, 2012 3:12 pm

and Apple as well  
Never trust the obvious
 
Tommy525
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RE: Ilfc To Become Chinese?

Fri Dec 07, 2012 3:32 pm

Well Apple is not likely going to get into Jet financing but China most definitely wants to and is able to. ILFC can get bought or get out of the way.
 
LAXintl
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RE: Ilfc To Become Chinese?

Fri Dec 07, 2012 6:49 pm

Good for them.

Per this follow up article the announcement of sale might be made as soon as next week.

Basically Chinese consortium would acquire about 90% of ILFC from AIG which has been selling assets to pay back a $182 billion U.S. government bailout from 2008. ILFC's net book value as of September 30 was $7.9 billion.

Story:
http://finance.yahoo.com/news/chines...group-talks-buy-aig-172617425.html

=
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lightsaber
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RE: Ilfc To Become Chinese?

Fri Dec 07, 2012 7:47 pm

This is HUGE! ILFC can make or break the launch of a new aircraft. I suspect the Chinese will use this to enable the launch of their designs and discourage competition. Now there will still be GECAS, ALC, Wells Fargo, and others. But this is still a major deal.

Quoting Aither (Reply 2):
and Apple as well

   AAF? (Apple Aircraft Financing)

Would they only lease to hip airlines?  
Quoting LAXintl (Reply 4):
ILFC's net book value as of September 30 was $7.9 billion.

Less than $8 million per aircraft?!? That is one leveraged company.

Lightsaber
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holzmann
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RE: Ilfc To Become Chinese?

Mon Dec 10, 2012 2:57 am

Deal is done?

A Chinese group agreed to buy an 80.1 percent stake in the plane-leasing unit of American International Group Inc. (AIG) for $4.23 billion, the largest acquisition by that nation’s investors in the U.S.


http://www.bloomberg.com/news/2012-1...g-plane-unit-for-4-23-billion.html
 
Asiaflyer
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RE: Ilfc To Become Chinese?

Mon Dec 10, 2012 3:29 am

Quoting lightsaber (Reply 5):
I suspect the Chinese will use this to enable the launch of their designs and discourage competition.


Why so?
Has ILFC been promoting Boeing over Airbus because its been an American company you mean?
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LAXintl
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RE: Ilfc To Become Chinese?

Mon Dec 10, 2012 3:39 am

Yup, saw and email about it.

Consortium of New China Trust, China Aviation Industrial Fund and P3 Investments Ltd purchases 80.1% of ILFC up front with an option on another 9.9%.

Company to remain based in Los Angeles with existing management team.
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lightsaber
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RE: Ilfc To Become Chinese?

Mon Dec 10, 2012 3:42 am

Quoting Asiaflyer (Reply 7):
Why so?
Has ILFC been promoting Boeing over Airbus because its been an American company you mean?

No. I mean that they will be instructed to accept lower profit margins on Chinese aircraft to help spur the market. The same way GM and Ford use their financial arms to promote their own product. Nothing sinister... they will of course finance other aircraft, but perhaps not new entrants they do not want the competition from.

Before ILFC was an independent leasing company. They didn't promote anything, it was all on cold hard cash. I see nothing wrong with what I expect to happen... It would be only a wise policy to 'educate' the ILFC sales force on new product. I'm not proposing anything dramatic, but it will 'enable the launch of their designs' and it will enable the Chinese made aircraft to compete better.

Have the deal go through... There is only so much that can be done before Udvar-Hazy's new ALC, or GECAS, or Wells Fargo, or any of the myriad of other companies in aircraft leasing have their deal. If ILFC had promoted beyond their charter they wouldn't have grown as quickly as they did. But one reason ILFC gained deals over GECAS is their vendor neutral strategy while GECAS usually was a finance arm helping promote GE engines (with some notable exceptions such as EK's 773s).

To be clear I will rephrase: I don't care what ILFC does as if they favor one vendor over another that just opens market space for the large number of competing leasing companies. I'm not surprised the buyer is Chinese. As already noted, only they and Apple have the cash today.

Lightsaber
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Asiaflyer
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RE: Ilfc To Become Chinese?

Mon Dec 10, 2012 7:00 am

Quoting lightsaber (Reply 9):
I mean that they will be instructed to accept lower profit margins on Chinese aircraft to help spur the market.
Quoting lightsaber (Reply 9):
I'm not proposing anything dramatic, but it will 'enable the launch of their designs' and it will enable the Chinese made aircraft to compete better.
Quoting lightsaber (Reply 9):
To be clear I will rephrase: I don't care what ILFC does as if they favor one vendor over another that just opens market space for the large number of competing leasing companies.

Sounds we are down the same alley now.   
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Gipsy
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RE: Ilfc To Become Chinese?

Tue Dec 11, 2012 10:35 am

It is a move in the national interest no doubt about that. You can't compare what single commercial entities do to what China Inc does. See it like the US or EU government buying it to give its aviation industry a kickstart   I don't know why it should be forbidden to state the obvious as lightsaber did. Let's see how many Comacs compared to Bomabrdiers will be ordered.

[Edited 2012-12-11 03:01:09]

[Edited 2012-12-11 03:01:38]
 
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sturmovik
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RE: Ilfc To Become Chinese?

Tue Dec 11, 2012 11:04 am

Quoting lightsaber (Reply 5):
  AAF? (Apple Aircraft Financing)

iPlane is more likely  .. or simply change ILFC to iLFC.
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neutrino
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RE: Ilfc To Become Chinese?

Tue Dec 11, 2012 12:52 pm

Quoting sturmovik (Reply 12):

.. or simply change ILFC to iLFC.

...and have a whole slate of product types;
iJets> iRJ, iSA, iWB, iVLA
& also iProps

  
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Aither
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RE: Ilfc To Become Chinese?

Tue Dec 11, 2012 2:07 pm

Quoting lightsaber (Reply 5):
Now there will still be GECAS, ALC, Wells Fargo, and others. But this is still a major deal.

If ILFC order 100+ COMAC the others will follow quickly.

A clear message to those who believed it will take a decade before Chinese aircraft get sold to airlines outside China. Airlines will get cheap COMAC for lease. This will allow to create fast a large potential customer base (if the aircraft is good).

As Gipsy said, this is China Inc. against the other aircraft manufacturers. Boeing & Airbus will have to compete with a company having almost infinite financial and industrial resources...as we have seen in other heavy industries, usually the competition does not last against such powerful machine.

[Edited 2012-12-11 06:10:32]
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Byrdluvs747
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:13 am

Could this be an opportunity for GE, as ILFC will now be yet another puppet of the chinese govt.

Quoting Aither (Reply 14):
If ILFC order 100 COMAC the others will follow quickly.

That will only work for the chinese market. ChiLFC ordering a bunch of comacs will not force GECAS to order them for western markets.
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:49 am

Quoting Aither (Reply 14):
If ILFC order 100+ COMAC the others will follow quickly.

Only if the C919 delivers as promised. It is an advantage to have ILFC helping sell the C919, but the plane must first prove it meets Western standards of dispatch reliability, supply chain support, fuel burn, The ARJ-21...   

Someone please tell me what market niche the ARJ-21 does superior to the existing competition (E-jets, CRJ-700/900, and soon MRJ). I've been trying to figure that out for years...

Quoting Aither (Reply 14):
As Gipsy said, this is China Inc. against the other aircraft manufacturers.

   If the C919 delivers, it will speed adoption. But China Inc. is slow. Between the launch of the C919 and now we have seen the launch of the NEO slightly before the C919 and the MAX slightly after. There is still a first mover advantage for the C919's competition. ILFC will help the C919, but does not ensure a home run. (or is it iLFC)  

I'm sure the C919 will sell well in China.

Quoting sturmovik (Reply 12):
or simply change ILFC to iLFC.

   Good one. I'll have fun with that for years to come.   


Lightsaber
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dc1030cf
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:55 am

To:Byrdluvs747, If you have anything against the Chinese, please spell it out clearly. No need to call this company
"ChiLFC" or "yet another puppet of the chinese govt" This a simply a business deal. Do not politisize it.
 
Byrdluvs747
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 7:14 am

Quoting dc1030cf (Reply 17):
If you have anything against the Chinese

I have nothing against chinese people, but the govt of China is another story.

Quoting dc1030cf (Reply 17):
This a simply a business deal. Do not politisize it.

Its rather naive of you to believe that any company in China isn't or can't come under govt influence. Lets see how long it takes CITIC Pacific to "invest" in ILFC.

Quoting lightsaber (Reply 16):
It is an advantage to have ILFC helping sell the C919, but the plane must first prove it meets Western standards of dispatch reliability, supply chain support, fuel burn,

Even if it does meet requirements, how will a US carriers explain to the public their decision to purchase comacs(yes I know they have US components) over American made Boeing, and similar in the EU.
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LAXintl
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 11:42 am

Quoting Byrdluvs747 (Reply 15):
Could this be an opportunity for GE,

Like GECAS is not a biased company.

Try to get a non GE powered plane from GECAS and let me know how you do.
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Gipsy
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 2:06 pm

And GECAS is named GEcas for a reason. It is even their open stated policy to only buy GE engined a/c. But when you say ChILFC the racist card is drawn and you do not like chinese etc etc. And it is in no way any different. Naive to believe it were and forbidden to have some thoughts about it....I see I see...


The difference is that China Inc. exists and it goes this way in many fields. Profiting oftentimes from lax rules in the west while in contrary not offering any decent reciprocacy at their home market. In fact foreign investors get screwed like this one here

http://www.businessweek.com/articles...hinese-boom-in-corporate-espionage


ILFC was the worlds largest independent air lessor.

I also don't get it why it was so cheap? Just a few millions per aircraft?
 
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lightsaber
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 2:46 pm

Quoting Byrdluvs747 (Reply 18):
Even if it does meet requirements, how will a US carriers explain to the public their decision to purchase comacs(yes I know they have US components) over American made Boeing, and similar in the EU.

The same way NW explained buying Airbus.

And people care less today.

Quoting gipsy (Reply 20):
It is even their open stated policy to only buy GE engined a/c.

   Look at their engine portfolio. They are biased towards GE and give a slightly better deal with GE engines, but they are far from GE only for otherwise they would loose customers that are V2500 heavy or most A330 buyers.

http://www.gecas.com/en/engine/engavailability.html

Quoting gipsy (Reply 20):
I also don't get it why it was so cheap? Just a few millions per aircraft?

ILFC is leveraged. They do not own the aircraft perse, but rather are a higher credit rating borrower. There is a reason they were wedded to AIG: a cheap source of cash that needed a higher ROI. That is where the Chinese are today.

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dc1030cf
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 3:42 pm

Byrdluvs747: You may argue anyway you want. I standby my quoting your saying of ""ChiLFC" or "yet another puppet of the chinese govt" as racist, and unfriendly remarks to ALL Chinese people. So what if CITIC or BOC invest in ILFC? It's their money and they can do whatever they see fit. If there was another entity in the United States that wanted to purchase those 90% share, why didn't they? I don't see Boeing or Airbus voice any negative opinions on this deal. If you have personal objection to this entire ILFC case, write to the United States Dept of Justice or your local news media. Please do not politisize it here in this AVIATION FORUM.
 
justinlee
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:19 pm

Quoting Byrdluvs747 (Reply 18):
Its rather naive of you to believe that any company in China isn't or can't come under govt influence. Lets see how long it takes CITIC Pacific to "invest" in ILFC.

The CITIC even has a longer history than People's Republic of China. The founder of CITIC, Rong Yiren, is the son the richest people in the 1930's, Rong Desheng. Rongs' family is the richest family in China since 1922 (until 2008 maybe!). The Vice President title of Rong Yiren is kind of a reward for his status and influence in Shanghai's Capitalists.

Shanghai's Capitalists (or so-called Nationalism Capitalists by CCP's propaganda) made a huge distribution for the founding and rising of CCP, which is interesting. Because at that time, the leader of ROC, Chiang Kai-Shek was even a more serious enemy. As a former tycoon in Shanghai, Chiang Kai-Shek wanted to acquire all the companies out there while CCP just wanted them to be weaken.

You should learn more about Chinese history before you give some examples maybe.
 
Gipsy
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:36 pm

You mean the Citic founded together with Deng Xiaoping? And the red capitalist Rong Yiren who was Vice president of China in the 90s? Yup sounds totally apolitical to me. And I still fail to see the reason for accusing someone of racism because of the word China. What do you propose should be used instead???


Ah not talking about it and smile

I guess  
 
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RE: Ilfc To Become Chinese?

Wed Dec 12, 2012 4:44 pm

Quoting lightsaber (Reply 21):
Quoting Byrdluvs747 (Reply 18):
Even if it does meet requirements, how will a US carriers explain to the public their decision to purchase comacs(yes I know they have US components) over American made Boeing, and similar in the EU.

The same way NW explained buying Airbus.

And people care less today.

A) It's not going to matter to passengers and B) Non Chinese carriers have nothing to worry about until China makes a plane worth buying, which much like their cars, is not any time soon.
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Gipsy
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RE: Ilfc To Become Chinese?

Thu Dec 13, 2012 12:04 pm

Thanks Lightsaber for the clarification. I was just wondering about the alleged bargain.
 
LAXintl
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RE: Ilfc To Become Chinese?

Sat Dec 15, 2012 7:42 pm

Who cares is ILFC one day becomes a front for Chinese aviation products. Its really no different then GECAS heavily pushing GE powered frames today.

At the end of the day, its the market that will decide the future and if they want Chinese planes, and not the leasing firms ownership.
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