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Lessor BOC Aviation says airline clients repaying delayed rentals

Most of BOC Aviation’s (BOCA) (2588.HK) airline clients have resumed rental payments, a sign of cautious optimism, after deferring payments when the pandemic struck this year, the Asian lessor’s top executive told Reuters in an interview.

BOCA has completed repayment negotiations with the bulk of its customers, and airlines in markets such as China and the United States are recovering well after the industry was brought to a near stand-still by COVID-19, CEO Robert Martin said on Thursday.

“Already, we’ve been repaid a lot of the deferrrals that were put in place,” he said after BOCA reported flat first-half net profit at $323 million, while total revenue and other income rose 11%.

“Experienced airlines clearly moved very quickly to react to the situation. The guys at the other end of the spectrum tended to be the entrepreneur-led airlines with big orders in emerging markets, and some of those have still got to come to the table,” said Martin, an industry veteran of over 30 years.

Singapore-headquartered BOCA is one of the world’s biggest lessors, with a fleet of 571 planes, including those on order. This year, it struck big deals with airlines to buy and lease back aircraft.

Airlines have deferred payments to lessors, which have shored up funding and delayed taking deliveries from Airbus (AIR.PA) and Boeing (BA.N), after expanding furiously in an industry boom over the past few decades.

BOCA took a $12 million asset impairment on five Boeing aircraft already delivered and repossessed three other planes.

“Things generally are getting better. I judge that from our internal cashflows but there are specific situations that will need to be worked out in the second half,” he said, adding that BOCA had no unplaced new aircraft until 2023.

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