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Overview

BOC Aviation (USA) enters into a financial lease worth $730 million USD with American Airlines, Inc. for eight Boeing 737 MAX 8 and two 787-9 aircraft

Commitments (Constant USD, 2023)$730,000,000
Commitment Year•2023Country of Activity•United StatesDirect Recipient Country of Incorporation•United StatesOverseas Jurisdiction•United StatesSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 3, 2023
End (planned)
Dec 31, 2024

Geospatial footprint

Map overview

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This project was a lease agreement for eight Boeing 737 MAX 8 and two Boeing 787-9 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.

Collateral providers

Private Sector

  • American Airlines, Inc.

Loan description

BOC Aviation (USA) enters into a financial lease worth $730 million USD with American Airlines, Inc. for eight Boeing 737 MAX 8 and two 787-9 aircraft

Interest type•Unknown

Collateral

This finance lease was secured by the six Boeing 737 MAX 8 and two Boeing 787-9 aircraft.

Narrative

Full Description

Project narrative

On November 1, 2023, 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 finance lease agreement worth an estimated $730million 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 eight Boeing 737 MAX 8 and two Boeing 787-9 aircraft. The aircraft were scheduled to be delivered in 2024. This finance lease was secured by (i.e. collateralized against) the aircraft in question. The proceeds were to be used for aircraft purchase (finance leases often have provisions to purchase the aircraft at the end of the lease). Eight Boeing 737-8 and two Boeing 787-9 aircraft scheduled for delivery in 2024.

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. $730 million USD was assessed by industry media sources to be the value of this finance lease agreement.