AirAsia and ICBC sign Memorandum of Agreement for aircraft financing facilities worth USD1 billion
KUALA LUMPUR, 4 October 2013
AirAsia Berhad (AirAsia) and ICBC Financial Leasing Co. Ltd (ICBC Leasing) signed a Memorandum of Agreement (MOA) today, witnessed by Prime Minister of Malaysia Datuk Seri Najib Tun Razak and the President of China, Xi Jinping.
The historical signing for aircraft financing facilities, worth USD1 billion, marks the close business relationship between AirAsia with ICBC Leasing and this is the largest financial cooperation between Malaysia and China to date.
AirAsia Group CEO, Tony Fernandes said, “This is another significant milestone for AirAsia and proudly, another innovation at work. The signing of the MOA establishes the level of confidence that ICBC Leasing has, as a global financial institution, on our current business and future potential. This USD1 billion financing facility agreement does not only reflect a successful bilateral business arrangement, but also underlines the excellent relationship between Malaysia and China.
“Being an airline with the highest capacity to China and provider of seamless connectivity between Malaysia and China, we will continue to do our part to serve the communities of these two countries via low fare flights to various destinations and through productive business collaborations like we are having with ICBC Leasing.”
Since the beginning of 2011, AirAsia has entered into a sale and leaseback, operating lease and finance lease arrangements for 10 A320s at the value of USD800 million with ICBC Leasing and ICBC overseas subsidiary.
According to the MOA between the two entities, ICBC Leasing or ICBC overseas subsidiaries will provide AirAsia with competitive financial facilities to acquire A320 aircraft for the airline’s operational needs, in the form of finance lease, sale and leaseback or commercial loans.
The number of aircraft should be no less than 10 aircraft the term of the Letter of Intent. AirAsia and ICBC Leasing will cooperate in operating lease of A320s in batches acquired from ICBC Leasing. Leased aircraft in this agreement will also consist of A320s assembled by Airbus (Tianjin) Final Assembly Co., Ltd.
Senior Excutive Vice President of ICBC Mr. Zhang Hongli, who signed the MOA on behalf of ICBC Leasing said, “As opposed to directly export the aircraft, by leasing the aircraft helps the balance of payments between China and Malaysia in terms of annual export statistics and this will further promote bilateral economic and trade ties.”
In September, AirAsia was honoured by the China Air-Finance Award Ceremony Awards Committee with ‘The First China Domestic A320 Aircraft Export Leasing Business Innovation Award’ at the 1st China Air-Finance Award Ceremony, in recognition of the airline’s groundbreaking aircraft leasing deal with the ICBC Financial Leasing Co., Ltd, the most innovative and globalized financial leasing company in China.
AirAsia started its winning combination with ICBC in 2011 with a sale and leaseback structure for 4 Airbus A320 aircraft, followed by an operating lease agreement in the same year for another 2 aircraft.
In December 2012, AirAsia and ICBC Leasing started a landmark operating lease agreement, in which the airline took delivery of an A320 aircraft assembled in Tianjin, China by Airbus (Tianjin) Final Assembly Co., Ltd.