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Overview

AVICL leases one Airbus A330-300 aircraft to Scandinavian Airlines

Commitment Year•2015Country of Activity•SwedenDirect Recipient Country of Incorporation•SwedenSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2015
Start (actual)
Jan 1, 2015
End (actual)
Jan 1, 2015
Last repayment (originally scheduled)
Dec 29, 2026

Geospatial footprint

Map overview

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This lease agreement supported the acquisition of one aircraft by Scandinavian Airlines (SAS), which is headquartered at Frösundaviks allé 1, 169 70 Solna, Sweden. More detailed locational can be found at: https://www.openstreetmap.org/way/23999377.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

  • AVIC International Leasing Co., Ltd. (AVICL)

Receiving agencies

Private Sector

  • Scandinavian Airlines System Denmark-Norway-Sweden (SAS)

Loan description

AVICL leases one Airbus A330-300 aircraft to Scandinavian Airlines

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

In 2015, AVIC International Leasing Co., Ltd. (AVICL) — a Chinese state-owned leasing company and a wholly-owned subsidiary of Aviation Industry Corporation of China (AVIC) — entered into a lease agreement with Scandinavian Airlines System Denmark-Norway-Sweden (SAS) — the flag carrier airline of Sweden, Denmark, and Norway headquartered in Solna, Sweden and wholly-owned by SAS AB, a Sweden-incorporated holding company listed on Nasdaq Nordic in Stockholm with secondary listings in Copenhagen and Oslo with the Swedish Ministry of Finance owning a 14.8% stake and the Danish Ministry of Finance owning a 14.2% stake — for one Airbus A330-300 aircraft. This lease carried a term of 12 years. This aircraft was new and delivered in 2015. On June 14, 2019, AVICL closed a Japanese operating lease with call option (JOLCO) financing for the aircraft with the Tokyo Branch of the Bank of China (BOC) as lender and BOC London Branch as facility agent and security trustee. JPA No. 137, an affiliate of JP Lease, acquired the aircraft, which remained on lease to AVICL and leased to SAS. SAS experienced financial issues in the 2020s and began to restructure its fleet. In January 2023, SAS requested the United States Bankruptcy Court for the Southern District of New York to authorize the rejection of the AVIC lease on the A330-300 aircraft because the aircraft was deemed as excess and with above-market contractual rent. On September 2023, CAVIC 31 — an Irish-registered leasing entity of AVIC — signed an agreement on SAS on the aircraft's lease. In October 2023, SAS requested court authorization to retain the Airbus A330-300 aircraft.

Staff comments

1. A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. Under a capital lease (a financial arrangement where the lessee/borrower uses an asset and pays regular installments plus interest to the lender/lessor), rental payments are usually classified as interest and obligation payments, similarly to a mortgage (with the interest calculated each rental period on the outstanding obligation balance). AidData codes capital leases as loans.