Domestic passenger aircraft "going out": the financial assistance behind the arrival of the third ARJ21 in Indonesia

智者寡言

2024-06-09 16:35

ARJ21 regional jet

According to public reports, the third domestically produced jet ARJ21 aircraft delivered by China Aircraft Leasing Group to Indonesia's Lingya Airlines arrived in Jakarta, the capital of Indonesia, on the evening of May 31. This is the first RMB cross-border settlement transaction for a domestically produced aircraft.

According to CALC, the aircraft was delivered to its subsidiary Lingya Airlines on a leased export basis. In this project, CALC adopts RMB settlement on both the purchase and leasing ends, and the rental payment is settled by domestic and foreign Chinese financial institutions through cross-border linkage.

As an enthusiast in the field of aviation, I have always paid attention to the development and progress of domestic passenger aircraft, especially the process of going abroad and further integrating into the world aviation system; At the same time, as a practitioner with many years of work experience in the field of auto finance, I am also very interested in the financial support behind the "going out" of domestic passenger aircraft.

Based on this, I would like to combine the three key words of [domestic passenger aircraft "going global"], [leasing export] and [cross-border RMB settlement] to share some of my views on the topic of "the financial assistance behind the arrival of the third ARJ21 in Indonesia".

In the article "The Three Musketeers of the Lion City: C919, ARJ21 and WZ10ME", I once expressed this opinion:

For the C919, this is not only an opportunity to showcase, but also a rare opportunity to fly on international routes. As a passenger aircraft of the same level as the Boeing 737 and Airbus A320 series, the C919 is also very suitable for flying this kind of short-range routes to Southeast Asia, so when this domestic large aircraft with high hopes opens international routes, Southeast Asian countries should be regarded as important destinations and even important sales markets.

As a regional airliner, the ARJ21 has been in service for a longer period of time, with more than 100 units in service and has been in operation in Indonesia for a long time. Although this aircraft focuses on market segments, it is relatively niche, but it is still relatively competitive in similar products, and the range is also very suitable for domestic routes and intra-regional routes in Southeast Asian countries.

C919 and ARJ21 are jet trunk airliners and regional airliners developed in accordance with international airworthiness standards and have independent intellectual property rights, which are not only for the domestic market in terms of positioning, but also fully consider the needs of foreign markets. However, the "going out" of domestic passenger aircraft faces a similar problem to the automotive industry, that is, whether our goal is to achieve globalization or focus on moderate internationalization on the basis of the domestic market, because globalization is not just a problem of economics, but a problem of political economy.

Therefore, the ARJ21 chose the first stop to go out in the Indonesian market, which initially gained a firm foothold in Southeast Asia, and also laid the foundation for the subsequent export of this type of passenger aircraft and the going out of the C919. Participating in the Singapore Airshow and conducting demonstration flights in Vietnam, Laos, Cambodia, Malaysia and Indonesia is not only a rare opportunity to showcase, but also an important way to develop the Southeast Asian market.

The ARJ21 aircraft delivered to Lingya Air this time is the first time that cross-border RMB settlement + export leasing has been adopted as a means of financial support, and it has also become the first cross-border RMB settlement transaction of a domestic aircraft.

Export leasing is a financial instrument that can be used for high-value commodities such as aircraft and ships. However, traditional export leases are settled in international currencies such as US dollars and euros.

Lease export flow chart

As I mentioned in the article "RMB Exceeds the US Dollar for the First Time: A Brief Discussion on Cross-border RMB Settlement", as early as 2009, the mainland has signed currency swap agreements with Hong Kong Special Administrative Region, Belarus, Malaysia and Indonesia, which means that Indonesia itself is the first country to sign currency swap agreements with the mainland. Southeast Asia, including Indonesia, is also one of the earliest regions to carry out RMB settlement of cross-border trade.

Today, the number of regions that have signed currency swap agreements with the mainland has increased from 4 in the first year to 38, and the cross-border RMB payment system (CIPS) and clearing arrangements have been gradually established and improved. In addition to RMB settlement under trade, cross-border RMB settlement of direct investment continued to maintain rapid growth, and securities investment business continued to be a supporting force to promote the growth of cross-border use of RMB.

According to the official website of CALC, CALC has realized for the first time that both the purchase and leasing ends are settled in RMB, and the cross-border linkage between domestic and foreign Chinese-funded financial institutions such as Bank of China Jakarta Branch and Bank of China Shanghai Branch RMB Clearing Center has effectively guaranteed the timeliness and security of fund payment, making the settlement field of RMB more abundant, and carrying domestic aircraft to the sea, which is a concrete embodiment of the further improvement of China's civil aircraft products and the international competitiveness of RMB.

Therefore, we have reason to believe that in the context of the rapid development of cross-border RMB settlement, it is the general trend for finance to help domestic passenger aircraft "go global", and there will be good development prospects.

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