Bank of China plane unit’s US$1.1 bil IPO shows Asia shift

NEW DEHLI (May 30): The skies above Asia will get more crowded during the next 20 years as airlines acquire planes to fly more passengers from developing economies. That timing couldn’t be better for aircraft leasing company BOC Aviation Ltd.

BOC Aviation, an arm of Bank of China, is scheduled to debut on the Hong Kong exchange Wednesday after raising HK$8.7 billion ($1.55 billion) in an initial public offering. The company sold new and existing shares at HK$42 apiece in Asia’s second-biggest IPO this year, and it plans to use the proceeds to help pay for new planes.

As airlines serving Asia-Pacific move to triple their fleet, they’re finding it can be cheaper to lease jets instead of buying them from Boeing Co or Airbus Group SE. And for BOC, the leasing business can be more lucrative than running an airline, helping explain why conglomerates led by Hong Kong billionaires Li Ka-shing and Cheng Yu-tung are entering the field.

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