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Overview

BOC Aviation leases one Boeing 777 aircraft to Korean Air

Commitment Year•2013Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 1, 2013

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 Limited

Receiving agencies

Private Sector

  • Korean Air Lines Co., Ltd. (KAL)

Loan description

BOC Aviation leases one Boeing 777 aircraft to Korean Air

Interest type•Unknown

Narrative

Full Description

Project narrative

Prior to October 2013, BOC Aviation Limited — a Chinese state-owned aircraft leasing company and wholly-owned subsidiary of Bank of China (BOC) — had entered into a lease agreement with Korean Air Lines Co., Ltd. (KAL) — the flag carrier airline of South Korea headquartered in Seoul and listed on the Korea Exchange — for one Boeing 777 aircraft. Prior to October 2013, BOC Aviation had delivered the 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.