Hainan Airlines Leasing Five A320neo Aircraft from Avolon

Hainan Airlines Holding (HAH) has signed an agreement with aircraft leasing giant Avolon for the operating lease of five Airbus A320-200N (A320neo) aircraft, which are expected to be delivered before the end of 2025. This deal, confirmed through a filing with the Shenzhen Stock Exchange on August 31, 2024, aims to bolster Hainan Airlines’ fleet and enhance its operational capacity.

Under the terms of the agreement, the five A320neo aircraft will be leased for a period of 12 years, with a total lease value amounting to approximately USD 252.72 million. This translates to monthly payments between USD 345,000 and USD 360,000 per aircraft. Avolon Ireland 3, a Special Purpose Vehicle (SPV) under Avolon, will maintain ownership of the aircraft. Avolon is a subsidiary of Bohai Leasing, which itself is closely aligned with Hainan Airlines Holding.

Bohai Leasing highlighted the significance of this transaction in its 2024 semi-annual report, stating that the deal strengthens its relationship with Hainan Airlines and expands its presence in the Asian aircraft leasing market. “This transaction will strengthen the company’s cooperative relationship with Hainan Airlines Holding, help Avolon expand its share of the Asian aircraft leasing market, and positively impact the company’s future annual performance and profits,” the report stated.

While the notice did not explicitly specify which of HAH’s subsidiary airlines will receive the new A320neos, industry sources suggest that the aircraft will most likely be placed with Hainan Airlines (HU, Haikou). The airline currently operates only one A320-200N in its fleet of 220 aircraft. Adding these five new A320neos would significantly enhance Hainan Airlines’ fleet modernization and fuel efficiency, aligning with the airline’s broader strategy to operate more environmentally friendly aircraft.

Hainan Airlines Holding manages a vast network of airlines across China, including Air Changan, Air Guilin, Capital Airlines (China), Deer Jet Beijing, Deer Jet Shanghai, Fuzhou Airlines, GX Airlines, Hong Kong Airlines, Lucky Air (China), Suparna Airlines, Tianjin Airlines, Urumqi Air, and West Air (China). The inclusion of the new A320neos could potentially benefit any of these airlines, but it is widely expected that Hainan Airlines itself will operate the aircraft.

According to the ch-aviation fleets module, Avolon already has a significant presence within Hainan Airlines Holding, leasing eleven aircraft to Hainan Airlines, nine to Capital Airlines, one to Fuzhou Airlines, seven to Lucky Air, and seven to Tianjin Airlines. Among these, two A320-200Ns have been placed with Lucky Air. This existing partnership between Avolon and Hainan Airlines Holding demonstrates a strong collaborative relationship, and the new lease agreement will further cement Avolon’s role in supporting the group’s fleet expansion and modernization efforts.

The A320neo aircraft, known for their fuel efficiency and advanced technology, are a key part of many airlines’ strategies to reduce operational costs and minimize their environmental impact. For Hainan Airlines, the addition of these new planes will not only help meet growing passenger demand but also align with the airline’s sustainability goals as it strives to modernize its fleet.

With the planned delivery of these five A320neo aircraft by 2025, Hainan Airlines is poised to enhance its operational capabilities and offer a more efficient, environmentally friendly travel experience for passengers. This deal reflects both Hainan Airlines’ commitment to fleet renewal and Avolon’s strategic role in the rapidly growing Asian aviation market.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com