With the recent delivery of two C909 aircraft to China Express Airlines, Shanghai Rural Commercial Bank has achieved its first breakthrough in financing domestically produced aircraft. It is understood that the bank provides comprehensive and multi-tiered integrated financial services to airport groups, aircraft manufacturers, airlines, and aircraft leasing companies, addressing the financial needs of all segments of the aviation industry chain. This has established a financing service system covering the entire lifecycle of aircraft from "introduction, operation, and exit," and has resulted in a series of exemplary cooperative cases in practice.
During the aircraft acquisition phase, in response to the cash flow pressure brought about by the large advance payments required by lessees before delivery, Shanghai Rural Commercial Bank flexibly utilized its working capital loan products to provide advance payment financing services to aircraft leasing project companies (SPVs). For example, it provided more than RMB 3 billion in advance payment financing for aircraft to leasing companies and their subordinate SPVs, supporting the advance payment needs of multiple airlines, including China Eastern Airlines, Sichuan Airlines, and Juneyao Airlines, effectively ensuring the smooth acquisition of aircraft and alleviating the companies' phased cash flow pressure.
Shanghai Rural Commercial Bank actively supports aircraft financing through various means, including fixed asset loans and factoring, based on the asset value of aircraft and the stable rental credit of airlines. Currently, it has established deep partnerships with key partners such as China Eastern Airlines, Juneyao Airlines, Spring Airlines, and China Express Airlines, covering mainstream aircraft models such as the A320-NEO, A350, and Boeing 737. It also actively supports financing for domestically produced aircraft models such as the C909 and C919, promoting the localization of the aviation manufacturing industry. In March of this year, the bank issued a RMB 145 million loan to Juneyao Airlines for its aviation transportation industry transformation, using a Sustainable Development Linked Loan (SLL) approach, linking the loan interest rate to the Sustainable Development Performance Target (SPT), achieving an innovative breakthrough in the field of green finance for aviation.
In response to the current state of China's domestic aircraft asset back-end market, which is still in its early stages of development and lacks standardization in dismantling and parts trading, Shanghai Rural Commercial Bank has proactively explored financial support models for the aircraft retirement phase. For example, it provided financing for a spare aircraft engine to Lufu Aviation Technology Co., Ltd., which plans to dismantle and sell the engine overseas after the lease expires. This move signifies that Shanghai Rural Commercial Bank's services now cover the entire lifecycle of aircraft, achieving a closed-loop industrial cycle for aviation assets from acquisition to exit.
In addition, Shanghai Rural Commercial Bank provides direct financing services such as bond underwriting and bond investment for airlines and aircraft leasing companies, helping them optimize their financing structure and reduce capital costs. It also provides customized services for complex transactions, such as designing a special financing plan for a financial leasing company's acquisition of a package of 19 leased aircraft.
