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Overview

AVIC International Leases leases one Airbus A320neo aircraft to Scandinavian Airlines

Commitment Year•2020Country 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, 2020
Start (actual)
Jan 1, 2020
End (actual)
Jan 1, 2020

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

AVIC International Leases leases one Airbus A320neo aircraft to Scandinavian Airlines

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2020, CAVIC 41 DAC — an Ireland-incorporated special purpose vehicle (SPV) and leasing entity wholly-owned by 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 A320neo aircraft. This aircraft was new and delivered in 2020. 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 A320neo aircraft because the aircraft was deemed as excess and with above-market contractual rent.

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.