On 21 May 2026, a specialised training session on "Aviation Leasing and Aircraft Asset Financialization" was successfully held for MIB 2025 students. The session was delivered by senior industry expert Peter (Zhou Hua), who provided an in-depth analysis of the evolution of the aviation leasing industry, the logic of aircraft asset financialization, and valuation systems.
Instructor Background and Course Positioning
Peter has nearly 20 years of experience in the aviation industry, having worked at companies including Airbus and Bombardier, covering areas such as sales, marketing, asset management, and maintenance operations. This course aimed to combine practical experience with financial fundamentals to help students understand the operational logic of aircraft as financial assets, with a focus on exploring the dual attributes of aircraft as both products and financial assets, as well as the core position of leasing companies within the industrial chain.
Evolution of the Aviation Leasing Industry and Market Landscape
It is estimated that by 2030, global aviation industry funding needs will reach as high as 1.6 trillion US dollars, and leasing companies have become a core financing engine. The training distinguished between operating leases and finance leases, noting that operating leases are particularly important during periods of supply chain strain due to their flexibility. The industry has evolved from bank credit into a global asset management and capital management industry. Leading lessors such as AerCap, Avolon, and SMBC Aviation Capital occupy a dominant position, expanding their scale through mergers and acquisitions. Lessors are not only customers of OEMs but also partners.
Aircraft Asset Attributes and Valuation Systems
Aircraft are not only means of transportation but also tradable, mortgageable financial assets. At the end of their service life, residual value can be recovered through passenger-to-freighter conversion or the dismantling of components. Valuation methodologies include three types: the market approach, which determines benchmark value by comparing recent transaction data and is suitable for mature aircraft models; the cost approach, which is suitable for new models lacking transaction data; and the income approach, which is suitable for aircraft already leased and determines value by discounting future rental cash flows. Core value concepts distinguish between "base value" and "current market value."
Industrial Chain Ecosystem and OEM Strategic Transformation
In addition to airlines and lessors, the aviation finance ecosystem also includes capital market regulators, export credit agencies (ECAs), second-hand market traders, and law firms. Aircraft must comply with international airworthiness certification standards such as those of the FAA and EASA to ensure liquidity. OEMs are transforming from manufacturers into asset managers, needing to manage the value of aircraft throughout their entire life cycle while maintaining production discipline to avoid asset depreciation.
Open Discussion and Q&A
During the Q&A session, students actively asked questions on topics such as valuation methods, asset depreciation, and tax policies. Regarding the valuation of new models (such as the C919) when transaction data is lacking, Peter stated that the cost approach is typically used. He pointed out that engines account for approximately 60%–70% of an aircraft's overall value, and their maintenance condition directly affects residual value. Regarding valuation discrepancies, he emphasised that valuation is a professional opinion, and industry practice is to engage multiple appraisal institutions and take the average. Cross-border transactions typically use legal frameworks such as the Cape Town Convention to avoid tax risks.
This training provided MIB students with a practical perspective on the aviation finance field, and the event came to a successful close amid lively discussion.