The number of civil turbine helicopters in Greater China is expected to grow to 621 aircraft in 2017, up 15% from 540 in 2016, according to a report by Asian Sky Group. Mainland China’s civil helicopter fleet is arguably the fastest-growing in the Asia Pacific region. Over 60% of its existing civil helicopter fleets are used for commercial services, such as agriculture and forest spraying, power line surveillance, and mine prospecting. The rest are used for corporate purposes and civil services, such as the police force as well as search and rescue. Demand is set to grow at a healthy rate of 17.5% until the year 2020.
This represents new general aviation leasing deals that Hong Kong can tap into, as it builds its credentials as an aircraft financing hub, says Aerochine Aviation, Bell Helicopter’s official independent representative for Hong Kong, China and Macau. A proposed tax regime, which is expected to come into effect as soon as the second half of 2017, will bring the effective tax rate for offshore aircraft leasing activities in Hong Kong down to around 4.3%. With this new regime, Hong Kong hopes to attract new capital funds and investors to the city and target cross border leasing deals with mainland Chinese utility aircraft operators.
“We have found that our customers in mainland China are becoming more open to the concept of light asset investments, as they witness the financial benefits of leasing compared to purchasing. Hong Kong is well positioned over other aircraft leasing hubs, such as Singapore and Ireland, to tap into such aviation leasing opportunities. There is the ease of funding in both US dollars and Renminbi, the availability of PRC free trade zone leasing platforms, and a double tax treaty with mainland China that favours Hong Kong,” said Diana Chou, chairman of Hong Kong-based Aerochine Aviation.
In March 2017, Aerochine arranged an operating lease for a Bell 407GXP helicopter to Zhuhai-based China Southern Airlines General Aviation Limited. The state owned enterprise says the aircraft leasing agreement via Bell Helicopter’s sales representative in Hong Kong allows it to acquire the Bell 407GXP, with its fully-integrated Garmin G1000H™ flight deck, on a short term basis. It has been expanding its business inland and the powerful helicopter will be a boon for its aerial power line inspection services. The Bell 407GXP is the second Bell Helicopter model China Southern Airlines General Aviation has put into operation, following its first Bell 407 in 2016.
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