Financial Blog

A Dragon's Appetite: China's Airplane Finance Market

Recently, the Irish lessor, AWAS, announced the sale of its portfolio of 100 aircraft, worth approximately $5bn. China's Hong Kong Air travel Capital (HKAC) and Cheung Kong Holdings (CKG) are presumably among the primary bidders for the deal. Should this prove real, 2014 might turn a page in the development of global aviation as Chinese investors want to end up being a pillar of the aeronautics finance market.

The rise of Chinese finance

Regardless of the tendency for financial markets to remain calmer during the summer period, that was not the case this year. Chinese investors were particularly active in issuing statements about new deals, which showed their growing ambitions in the aviation market.

For instanceFor example, China's largest domestic aircraft lessor, ICBC Financial Leasing, revealed plans to double its fleet by providing over 300 airplane to various clients by 2017.

Apart from the previously mentioned AWAS proposal, HKAC had actually already spoken about putting orders for 70 Airbus aircraft worth over $7bn. Similarly, another Chinese lessor, BOC Air travel, has actually simply announced its order for a total of 80 737s.

"While Western leasing companies have actually typically controlled the worldwide aircraft renting play ground, such a particular market as China is being controlled by regional players. The situation has actually normally advanced from strict market regulation, in addition to the reality that both significant airplane lessors and lessees are government-owned," Tadas Goberis, the Chief Executive Officer of AviaAM Leasing, explains.

"Nevertheless, the success in flight development within the country has actually opened brand-new chances for Chinese leasing companies and investors wishing to expand their presence in the leasing section."

He includes: "Moreover, these chances are being backed by the Chinese authorities. They have actually recently declared support for the requirement to increase the inexpensive air travel section. As an outcome, we may see a need for additional airplane, which would assist in the development of the upcoming inexpensive jobs. At the exact same time, there are apparent signs that China is eagerwants to push its major aircraft leasing companies into the international market."

Following the financial regulatory authority's approval back in 2007, Chinese financial organizations have actually actively established their leasing activities in the air travel market, topping about 75 to 80 per cent of the local market share today.

Had by the Industrial and Commercial Bank of China, ICBC Leasing has alone enlarged its fleet six times (up to about 380 airplane) over the previous a number of years. On the other hand, the leasing subsidiaries of China's continuing to be 'Big four' banks - CCB Financial Leasing Corporation (China Construction Bank), ABC Financial Leasing Co. (Agricultural Bank of China) and BOC Air travel (Bank of China) - in addition to other major gamers such as CDB Leasing Company and China Aircraft Leasing - are actively observing brand-new chances outside their home market.

Marching, stepping in

Back in 2011 and 2012, government-backed export credit companies such as the UK's ECGD, the United States' Ex-Im Bank, France's Coface and Germany's Hermes held about 30 per cent of the airplane financing market. Nevertheless, today now that the monetary markets are far more stable and ECA charges are on the rise airplane operators and owners are eager to check out larger chances with regard to financing their deliveries.

As a result, the market is taking pleasure in both the growing self-confidence of conventional investors (primarily, European banks which are re-entering the market after leaving it throughout the financial decline) and the development of other financial sources, such as capital markets.

In 2014, Boeing expects the airplane market to require about $112bn worth of funding. At the exact same time, almost every carrier prevents spending for new shippings in cash, either to support its monetary versatility, or due to the absence of its own funds. Hence, lessors, banks, capital market providers and so forth are additional permeating the market.

"Being a Warsaw Stock Exchange-listed company, we ourselves see the growing importance of capital markets and their institutional investors in the market," says Tomas Sidlauskas, senior job manager at AviaAM Leasing.

"We also see that these players, together with commercial banks, are revealing an increasing interest in our market, specifically in the segment of aircraft financial investment. Generally, it offers a 10 to 15 per cent return on investment versus the positive four to five per cent in airline company."

The know-how

Nevertheless, one must comprehend that, regrettably, the bulkmost of non-aviation investors and commercial banks - which are anticipated to money almost half of this year's deliveries - don't have sufficient aviation expertise in order to handle the prospective risks successfully. And, the risks are a lot of. The list includes property values, upkeep, registration and insurance coverage, but it does not stop there.

"Naturally, specific monetary gamers from Europe, and partly from Japan, have already accumulated significant experience in airplane financing," says Goberis. "However, the majority of financiers from the Asia-Pacific - very firstprimarily China - still lack experience due to the relatively brief duration of activity in the segment.

"So, in their goal for asset diversification and greater yields with lower risks, banks and institutional investors from the emerging nations are progressively discovering three-party offers. Those are between a financier (lessor), an operator (lessee) and a mediator with long-standing expertise in aircraft management. The latter function as an advisor in developing and, if required, handling the airplane portfolio on behalf of the owner, along with auditing its exploitation."

Goberis concludes: "All in all, the need for the funding of airplane shippings will increase by around one-third by the end of the years. Attracting such funding from outside of the industry is important for the market's long-lasting development. Hopefully, with partnership and experience sharing, market gamers will be able to secure the trust and confidence of non-aviation financial organizations."

Spanish Stocks - Elements To Watch On Tuesday

The following Spanish stocks could be impacted by newspaper reports and other aspects on Tuesday. Reuters has actually not validated the paper reports, and can not vouch for their accuracy:


Spanish bank Santander has arised as the frontrunner to purchase a stake of as much as 50 percent in Italian bank Unicredits asset management division Pioneer, sources close to the matter told Reuters on Monday.


Mexico has actually gotten its first quote from a consortium to build a $10 billion state-owned mobile network. If effective, the state-owned network would help No. 2 mobile carrier Telefonica and third-ranked Iusacell to compete with Carlos Slims America Movil by offering them much better protection without needing to bear the expense of constructing the network.


Spanish contractor Sacyr is taking a look at offering part of its Repsol stake before the end of the year to pay for more than 10 percent of its 2.3 billion euro financial obligation pile, Growth reported pointing out monetary sources.


Spanish lender Banco Popular said on Monday it had signed a. definitive arrangement to purchase Citis retail banking and. credit card company in Spain for 238.5 million euros.


The foreign-owned operator of a northern Indiana toll road. submitted for bankruptcy on Sunday as traffic fell short of the. forecasts that underpinned the 2006 groundbreaking offer to. privatize the highway.

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State Auditor Launches Evaluation On Monetary Regulator For Allowing ...

SEOUL, Sept. 3 (Yonhap)-- South Koreas state audit agency has actually introduced an evaluation on the financial regulator for its decision giving regional life insurance companies access to personal wellness records for use as credit details, monetary sources stated Wednesday.

According to the sources, a group of inspectors from the Board of Audit and Inspection (BAI) has been at the Financial Services Commission (FSC) because Monday for a probe expected to continue approximately 15 days.

The BAI sees the FSCs idea as somewhat problematic, the sources said.

Local insurance companies had acquiredaccessed to and got approval to collect clinicalcase histories of people based on the conclusions by the regulatory authority that such records can be considered as monetary credit details.

The Korea Life Insurance Association has collected even unneeded personal medical records. Dealing with criticism, it has actually disposed of a few of the data, said among the sources. The BAI inspection is targeting the FSCs choice on the interpretation of the status of clinical records.

Civic groups, including the Korea Finance Consumer Federation, had actually lodged a petition with the BAI, arguing that the FSC misinterpreted the principle of clinical records being made use of as monetary info.

They state that a people clinical records are unimportant to his or her solvency, and that health records are not financial information.

The BAI has actually already carried out 2 audits on the FSC since the start of the year after the regulator failed to keep track of and oversee irregularities and huge data breaches at monetary business that prompted public anger and confusion. The information of more than 100 million customers were leaked from 3 significant charge card business earlier this year, leading to the resignations of the heads of the companies and a three-month business suspension for each business.

lt; All rights booked by Yonhap News Agencygt;

5 Free Tools to Manage Your Freelance Writing Business

As your freelancing career grows and you take on more work, you may find it increasingly difficult to manage all of those pitches, assignments, incoming payments, and article ideas. In order to stay on top of all this information, its important to have a system that keeps your writing business in order. The right tools can not only help you keep better records and improve your organization--they can also boost your productivity.

Here are five free tools I use to help manage my thriving freelance writing business:

1. Evernote for Capturing Story Ideas

This popular cloud-based software suite lets users collect and organize all sorts of information. While there is a variety of paid subscription options with Evernote, Ive been using the free version for over a year and find it more than adequate to record article ideas and pitch notes.

As I carry a BlackBerry with me at all times but write articles and blog posts on my laptop, I like Evernotes ability to sync all notes I take across the multiple devices I use. Sometimes inspiration strikes when Im away from my desk, such as when Im eating lunch and reading a print business magazine (yes, I still subscribe to print newspapers and magazines).

I used to keep a notepad and pen nearby to write down story ideas, but recording them on Evernote with my BlackBerry cuts out the step of transcribing my written notes onto my laptop. Im primarily a business and personal finance writer, so I label each idea with either BI or MI, for business idea or money idea. I will also tag each note with the names of potential publications to pitch once Ive massaged and expanded the idea. I do this on my laptop, where I can access the notes I had input previously on my BlackBerry Evernote app.

2. Toggl for Time Tracking

One thing Im really keen on in managing my freelance writing business is tracking how much money Im making per hour and per project. This helps me to determine which projects and subjects earn better hourly rates--in addition, I can use my tracker to make decisions about accepting future projects. Time tracking can expose surprises as well: What seems like a low-paying assignment may actually yield a better hourly rate than an assignment that pays more but takes longer to write due to interviews and/or extensive research.

Ive been using the free version of Toggl to track my writing time for over two years. I input clients and projects, and time myself as soon as I start working. I track the time it takes to find sources, carry out research (reading reports, statistics, etc.), outline the article, draft it, prepare the final version, and--occasionally--complete revisions. At any time I can see how much time Ive spent on a project or worked for a client, and how many hours Ive worked during the week.

3. Gmail for Organizing Sources

Ive found Gmail to be the most efficient way for me to organize source emails. As my freelance writing business has progressed, I sometimes field twenty or more emails per day from business, enterprise, and financial sources responding to my requests for experts on various topics. After a couple of instances where I was frantically combing through my cluttered inbox, I recalled the advice of Linda Formichelli, a well-known writing mentor and freelance writer. Linda suggested setting up a secondary email address just for accepting emails from potential sources. Gmails robust tagging and tracking systems organize them into categories for future reference. This is what I did, and its working like a charm.

4. Google Calendar for Scheduling Due Dates and Works in Progress

Another handy, free tool from Google helps me schedule deadlines: Google Calendar. Google Calendar keeps my entire life in order. I use it to color code everything, including my household responsibilities, each childs activities and appointments, and all of my writing deadlines. I set deadlines as tasks within my calendar, so they appear at the top of each day in red preceded by the word DUE so I dont miss them. I also use Google Calendar to schedule and monitor my works in progress (WIPs), working backward from the due date. And, since I have a large, busy, and unpredictable household, I try to allow one extra day as a cushion prior to due dates to accommodate various kid-related, time-consuming mishaps. Google Calendar and Gmail are also accessible from both my laptop and my BlackBerry.

5. Excel Spreadsheets for Tracking Freelance Writing Business Finances

At the moment, Im using two different Excel spreadsheets to track my monthly and year-to-date freelance writing income against my monthly and annual goals. The first spreadsheet is based on a template a fellow writer, Tracey Sandilands, emailed me three years ago.

Column A lists each day in the year, grouped into twelve months with a row below each month for Company Totals. Columns B through F (and sometimes G or H) are allocated to each of my current freelance clients, and how much Ill earn from each client each day. Column I shows my daily total, J shows my monthly total, and K shows the amount still needed to meet my monthly goals.

My husband created the second spreadsheet, which tracks my year-to-date total, billing date for each article, and when the payment was received. This helps me spot overdue accounts. Though this was easy to monitor when I first started freelancing, it became more difficult as I began to make steady money with a full freelance editorial calendar.

Are there more efficient or alternative ways for freelance writers to manage and organize their workload? Undoubtedly. Just as each writer has a different writing style and niche, we each have a different way of processing information and arranging our work schedules. The key is to experiment, ask other writers, and try different tools to find what works best for you.

Ready to take your writing career to the next level? Join Skywords community of contributing writers!

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