Selling hundreds of billions in assets, what is the 30 billion aircraft leasing giant planning to do?

Radar Finance Production Text | Written by Zhou Hui | Edited by Meng Shuai

The Spring Festival just passed, and Bohai Leasing, the world’s second-largest aircraft leasing company, has announced the sale of assets worth over 100 billion yuan.

The announcement shows that Bohai Leasing’s controlling subsidiary, Avolon Holdings Limited (“Avolon”), and its subsidiaries are selling 24 leased aircraft assets, with a market value equivalent to approximately 11.061 billion RMB.

It is noteworthy that the aircraft leasing assets being sold are all popular models currently in high demand in the global aviation market.

However, Bohai Leasing is currently under pressure from declining performance. According to the company’s latest forecast for 2025, due to significant goodwill impairment, the company’s net profit attributable to shareholders is expected to be a loss of 250 million to 500 million RMB for the year.

Additionally, Bohai Leasing faces substantial debt pressure. As of the end of 2024, the company’s overdue debt was about 1.783 billion RMB, with debts maturing within one year reaching 7.6 billion RMB. As of the third quarter of last year, Bohai Leasing’s debt-to-asset ratio was as high as 83.91%.

Against the backdrop of forecasted losses and debt pressure, Bohai Leasing recently adjusted its management team. Former Chairman Jin Chuan was promoted to Vice Chairman, while Liu Lu, a veteran from Hainan Airlines with a background in finance, took over the company’s management as the new Chairman.

Leading Aircraft Leasing Company with 30 Billion Yuan in Assets Sells Over 10 Billion Yuan in Assets

In the context of sustained high demand in global air passenger traffic, Bohai Leasing, a leader in aircraft leasing, announced the sale of 24 leased aircraft assets.

According to a notice released on the evening of February 24, Bohai Leasing’s controlling subsidiary Avolon and related entities signed agreements with ACG Aircraft Leasing Ireland Limited (“AALIL”) to sell 24 leased aircraft assets with lease agreements.

The announcement states that the market value of these 24 leased aircraft assets is approximately $1.589 billion (about 11.061 billion RMB), with the actual sale price to be negotiated between both parties.

Information from Tianyancha and the company’s official website shows that Bohai Leasing was listed on the Shenzhen Stock Exchange Main Board in 1997. It is the largest A-share listed company primarily engaged in operating leasing, with main businesses including aircraft leasing, infrastructure leasing, and large equipment leasing. The largest shareholder is HNA Capital Group Co., Ltd.

Radar Finance learned from the company’s 2025 semi-annual report that as of June 30, 2025, Bohai Leasing, the world’s second-largest aircraft leasing company by fleet size, had a fleet of 1,105 aircraft, including 663 owned and managed aircraft, and 442 on order, serving 142 airlines across 60 countries.

Regarding the sale of these 24 leased aircraft assets, Bohai Leasing stated that the move aims to optimize the company’s asset structure, improve fleet quality, and enhance its competitiveness in the global aircraft leasing market.

It is noteworthy that the 24 leased aircraft assets being put up for sale are not marginal assets but are popular models in high demand in the global aviation market.

According to the announcement, among these 24 leased aircraft, 18 are narrow-body aircraft and 6 are wide-body aircraft.

Specifically, the narrow-body fleet includes 2 A320 CEO series, 4 B737-800 series, 7 A320 NEO series, and 5 A321 NEO series aircraft. The wide-body fleet includes 3 A350-900 series and 3 A330 NEO series aircraft.

As of February 1, 2026, the average age of these aircraft assets is about 4.5 years, with an average remaining lease term of approximately 8.9 years.

In last year’s semi-annual report, Bohai Leasing mentioned that as of June 2025, the fleet utilization rate was about 100%, and 98% of the aircraft on order scheduled for delivery in the next 24 months had already been leased.

This suggests that the 24 leased aircraft being sold could provide the buyer with stable cash flow and profits.

Since the transaction involves a large number of aircraft assets, the sale methods include direct sale of aircraft leasing assets by Avolon subsidiaries, sale through entrusted trust institutions, or sale of lease income rights. All aircraft are expected to be transferred before September 30, 2026.

Bohai Leasing stated that because the counterparty is not an affiliated party, this transaction does not constitute related-party transactions or a major asset restructuring and does not require approval from the company’s shareholders.

As of the close on February 26, Bohai Leasing’s stock price was 5.3 RMB per share, with a latest market value of approximately 32.778 billion RMB.

Goodwill Impairment Drags Down Performance, Losses Exceed 250 Million Last Year

At the same time as selling over 100 billion yuan worth of aircraft assets, Bohai Leasing recently reported a forecasted full-year loss.

Data from iFinD shows that from 2020 to 2024, Bohai Leasing’s revenue was 27.418 billion, 26.791 billion, 31.922 billion, 33.675 billion, and 38.431 billion RMB respectively; with year-on-year growth rates of -29.34%, -2.29%, 19.15%, 5.49%, and 14.12%, showing a trend of decline first and then recovery.

During the same period, net profits attributable to shareholders were -7.704 billion, -1.232 billion, -1.987 billion, 1.281 billion, and 904 million RMB, gradually moving out of losses.

However, according to the latest forecast for 2025, Bohai Leasing’s preliminary financial estimate indicates a net loss attributable to shareholders of 250 million to 500 million RMB for the year, down about 1.15 billion to 1.4 billion RMB from the previous year; net profit after excluding non-recurring gains and losses is expected to be a loss of 1.1 billion to 1.6 billion RMB, turning from profit to loss.

The company explained that the significant decline in performance is mainly due to large goodwill impairments.

In May 2025, the company’s wholly owned subsidiary, Global Sea Containers Two Limited, signed an agreement to sell 100% equity of Global Sea Containers Ltd (“GSCL”).

Since the transaction price was below the net asset value of GSCL, signs of goodwill impairment appeared, and Bohai Leasing recognized an impairment loss of about 3.289 billion RMB in the first half of 2025, directly impacting the full-year results.

Excluding this goodwill impairment, Bohai Leasing expects the full-year net profit attributable to shareholders to be about 2.8 billion to 3.05 billion RMB, a year-on-year increase of 210% to 237%, mainly due to the continued recovery of the aircraft leasing business.

The company explained that in 2025, global air travel demand remained strong, coupled with limited production capacity of aircraft manufacturers, keeping aircraft market value, leasing rates, and renewal rates high.

Meanwhile, the company completed the acquisition and delivery of 100% equity of Castlelake Aviation Limited during the reporting period and continued to optimize the fleet structure through aircraft asset sales, increasing profitability.

Despite the improvement in core business performance, Bohai Leasing still faces significant debt pressure.

In a May 2024 announcement, Bohai Leasing disclosed that as of December 31, 2024, overdue debt was about 1.783 billion RMB, with debts maturing within one year reaching 7.6 billion RMB (excluding the debts maturing within one year of its offshore subsidiaries Avolon and GSCL).

Furthermore, affected by high US dollar interest rates, the company’s offshore dollar financing costs are high, adding to financial burdens.

According to the third-quarter report of 2025, as of the end of Q3 2024, Bohai Leasing’s total assets were 286.33 billion RMB, with cash and cash equivalents of 7.863 billion RMB, a decrease of 8.15% year-on-year.

At the same time, total liabilities reached 240.272 billion RMB, including short-term borrowings of 7.557 billion RMB (up 7.02%), non-current liabilities due within one year of 30.434 billion RMB (up 47%), and long-term borrowings of 53.226 billion RMB (down 8.17%).

As of the end of Q3 2025, the company’s asset-liability ratio was as high as 83.91%, up 1.27 percentage points year-on-year.

Meanwhile, the current ratio and quick ratio were 0.52 and 0.38 respectively, both relatively low, indicating weak short-term debt-paying ability and some short-term liquidity pressure.

Hainan Airlines Veteran Liu Lu Takes Over as Chairman

Faced with dual challenges of forecasted losses and debt pressure, Bohai Leasing recently initiated a management reshuffle. Industry veteran Liu Lu was elected as the company’s new Chairman.

On January 5, Bohai Leasing announced that former Chairman Jin Chuan resigned due to work adjustments but would continue to serve as a director and in related roles within subsidiaries.

The board approved Liu Lu as the new Chairman of the 11th Board of Directors, and Jin Chuan was elected Vice Chairman, with the term lasting until the end of the 11th Board.

Public information shows that Jin Chuan holds a bachelor’s degree in international finance from Fudan University and has extensive experience in banking, having worked at Bank of China headquarters and New York branch, as well as at US-based Huamei Bank.

Since 2011, Jin Chuan has served as General Manager and Chairman of Hong Kong International Aircraft Leasing; Deputy CEO and CFO of SeacoSRL; Chairman of Bohai Leasing Co., Ltd.; CEO of Bohai Leasing; Chairman and General Manager of HNA Capital Group; and Director of HNA Capital Investment (Beijing) Co., Ltd., among other roles.

Since September 2020, Jin Chuan has been Chairman of Bohai Leasing. During his tenure, the company ended several years of losses, achieving a net profit attributable to shareholders of 1.281 billion RMB in 2023.

Liu Lu, who succeeded Jin Chuan as the new Chairman, is also a strong industry professional. Born in 1970, he holds an MBA from Beihang University and has many years of experience in airport and aviation financial operations.

Liu Lu previously served as CFO of Haikou Meilan Airport; CFO, Vice President, and Chairman of Chang’an Airlines; President of Hainan Airport Co., Ltd.; CFO of Yangtze River Express Airlines; and Executive President of Gansu Airport Group.

Notably, Liu Lu is also a veteran of HNA Group. He joined HNA in 1994 and has held positions such as President and Executive Vice Chairman of Hainan Airlines Holding Co., Ltd.; Chairman of HNA Aviation Investment Group; COO of HNA Aviation Tourism Group; President and CFO of HNA Aviation Group, Vice Chairman, etc.

Currently, Liu Lu is a director and general manager of Hainan HNA No. 2 Information Management Service Co., Ltd., and Party Secretary and Director of Bohai Leasing.

Some analysts believe that in the current context of Bohai Leasing needing to reduce financial burdens and resolve liquidity risks, Liu Lu’s background in finance is a significant advantage. Her rich financial experience and keen financial insight could help optimize the company’s financial structure, plan funds reasonably, and effectively address debt pressures.

What direction will Liu Lu lead Bohai Leasing in after taking the helm? Radar Finance will continue to follow.