BOC Aviation a good proxy to the airline industry

SINGAPORE (July 18): Aircraft manufacturers Boeing and Airbus Group expect even stronger demand for aircraft over the next 20 years as air travel continues to grow, particularly in Asia. A proxy for that growth could be newly listed aircraft lessor BOC Aviation as it offers investors an alternative to airlines and their typically whisper-thin profit margins.

In fact, analysts at DBS Group Research have highlighted Hong Kong-listed BOC Aviation as an “outstanding proxy” for investors to tap into the robust growth of air travel. Given that it is the region’s largest lessor, “BOC Aviation offers investors a firm alternative to airlines [and] the continued growth of air travel globally and, in particular, in Asia,” Paul Yong and Nicole Wu write in a recent initiation report.

BOC Aviation is a unit of Bank of China, which bought over Singapore Aircraft Leasing Enterprise for nearly US$965 million cash in 2006 and renamed the company. Its shareholders later included Temasek Holdings, and GIC. The company currently owns 230 aircraft, with 41 others under management. It has a further 232 jets on order.

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