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Overview

BOC Aviation enters into a lease agreement worth $2 billion USD with American Airlines, Inc. for 22 Boeing 787-8 aircraft

Commitments (Constant USD, 2023)$2,063,467,643
Commitment Year•2020Country of Activity•United StatesDirect Recipient Country of Incorporation•United StatesOverseas Jurisdiction•United StatesSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 9, 2020
End (planned)
Dec 31, 2021
Last repayment (originally scheduled)
Mar 7, 2030

Geospatial footprint

Map overview

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This project was a lease agreement for 22 Boeing 787-8 aircraft with American Airlines, headquartered at 1 Skyview Dr, Fort Worth, TX 76155. More detailed locational information can be found at: https://www.openstreetmap.org/relation/18941910

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

  • BOC Aviation (USA) Corporation

Receiving agencies

Private Sector

  • American Airlines, Inc.

Loan description

BOC Aviation enters into a lease agreement worth $2 billion USD with American Airlines, Inc. for 22 Boeing 787-8 aircraft

Interest type•UnknownMaturity•10 years

Narrative

Full Description

Project narrative

On March 9, 2020, BOC Aviation (USA) Corporation — a Nevada-incorporated wholly-owned subsidiary of BOC Aviation Limited, a Singapore-based Chinese state-owned leasing company — entered into a lease agreement worth $2 billion USD with American Airlines, Inc. — a Delaware-incorporated American major airline headquartered in Fort Worth, Texas operating American Airlines and American Eagle and subsidiary of and a wholly-owned subsidiary of Delaware-incorporated airline holding company American Airlines Group Inc. (AAG), also headquartered in Fort Worth and listed on the Nasdaq Stock Exchange — for 22 Boeing 787-8 aircraft. BOC Aviation (USA) purchased the aircraft from Boeing Company (who was to sell them to Boeing Capital Corporation) to lease American Airlines. The aircraft were new and powered by General Electric GEnx engines. The aircraft were scheduled for delivery on operating leases with 10-year terms in 2020 and 2021. This was BOC Aviation's largest ever lease commitment and American Airlines' first business with it. Prior to May 2021, BOC Aviation delivered four of the aircraft. However, due to Boeing's pause of 787 manufacturing in May 2021 due to investigations by the Federal Aviation Administration (FAA) into its aircraft inspection after a series of manufacturing issues, deliveries were delayed. On August 10, 2022, BOC Aviation delivered the fifth aircraft. As of May 2023, there were still aircraft undelivered.

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. 2. Some media sources claim this was a sale-and-leaseback transaction, while BOC Aviation and other media sources state it was a finance lease, which AidData has assessed to be accurate.