[6 November 2014 – Hong Kong] China Aircraft Leasing Group Holdings Limited (“CALC” or the “Group”, stock code: 01848.HK) is pleased to announce that on 6 November 2014 the Group entered into a Memorandum of Understanding (“MOU”) with European aircraft manufacturer Airbus S.A.S (“Airbus”) in relation to the proposed purchase of 100 Airbus A320 series aircraft in order to respond to increased demand from the airline industry in China as well as other growth markets and to further establish the Group’s growth momentum.

MOU to Acquire 100 A320-200 Aircraft from Airbus
 

CALC has entered into a MOU with Airbus to acquire 100 A320 series aircraft on 6 November 2014, revising up its target fleet size by the end of 2016 substantially from 68 to 100 aircraft to satisfy the strong demand for aircraft with the latest available technology.

CALC intends to acquire 16 Airbus A320-200 current engine option (“CEO”) aircraft, 10 Airbus A321-200 CEO aircraft and 74 Airbus A320 NEO series aircraft with a combined list price of US$10.2 billion. The current-generation A320 CEO aircraft is the most popular narrow-body aircraft in China at present. The A320NEO, which had its maiden flight last September, will come with the latest-generation powerplant choices from Pratt & Whitney and CFM International and offers 20% fuel savings per seat compared with current-generation CEO aircraft, along with two tonnes more payload, up to 500 nautical miles additional range, lower operating costs, and reductions in engine noise and emissions.

Over the past few years, the Group has been expanding aggressively in the Chinese aircraft leasing market and has successfully entered into numerous aircraft lease agreements with domestic and international airline customers. As of 3 November 2014, the Group owned and managed a fleet of 38 Airbus and Boeing aircraft.

“When a leading leasing company, CALC, serving customers in the world’s fastest growing, dynamic aviation market, orders more of our popular A320 Family aircraft, we take that as a strong signal of the continuing long-term success of our best-selling product line,” said John Leahy, Airbus Chief Operating Officer, Customers. “The A320 Family is the ideal investment for lessors thanks to its wide operator base, excellent operating economics and strong residual values.”

Dr. Mike POON, Chief Executive Officer and Executive Director of CALC, said, “We are excited about our new purchase as this further strengthens our business relationship with Airbus and lays down part of our promising roadmap. Comparing to the fleet size target of 64 aircraft as stated at our listing 4 months ago, I am very proud to set our target fleet size to 100 aircraft by the end of 2016 and to announce the purchase of additional 100 aircraft. CALC is very optimistic about the development prospects of China's aviation industry. Riding on the steady economic growth and improved domestic living standards in the country, China has been growing with a CAGR of over 15% in the number of air passengers from China and China's total import and export value over the past 10 years. In view of the capital need in promoting our growth, we have entered into a framework agreement with the Export-Import Bank of China for credit facilities of RMB 10 billion, paving the long-term business relationship with the financial institution. With all the support and continual effort, CALC Group will further expand in Greater China and beyond to foster the Group’s sustainable business growth.”

Framework Agreement of RMB10 billion Credit Facilities with Export-Import Bank of China
 

To sustain the rapid development of the Group, CALC has entered into a framework agreement with Export-Import Bank of China for credit facilities of RMB10 billion (or in an equivalent currency) on 4 November 2014, including various types of financing, consultancy services and other financial services. The framework agreement has secured additional capital source for the Group’s business development and this demonstrated the Group’s extensive and diversified financing channels to ensure effective implementation of its development plans.