Evaluations On The Aircraft Finance Lease In Sichuan Airlines Co. Ltd

Aircraft lease originated at the beginning of the20th century in Europe and developed into a practical operation in the1960s in the US. It was introduced to China in the1980s and had the fast-speed development in the following dozens of years. However, due to the lack of finance in domestic airlines, seeking a better financial mode to decrease financial cost so to enlarge the operating aircrafts has been a to-be-solved problem in Chinese airlines.Finance lease has become the main method for airlines to import aircrafts so to improve their operation force, which has been adopted by the major world-wide airlines. Finance lease provides a platform to connect the real economy with financial capital in the aviation industry chain and brings about huge industry effect. In the future, finance lease will achieve unprecedented development in Chinese aviation industry.This essay aims to analyze the case of Sichuan Airlines’ credit and loan program from the angle of financial institution. In this case, the bank is the creditor and Sichuan Airlines is the borrower, the leasee in finance lease, which needs to gain the credit granting from the bank so to pay for the cost of finance lease. Based on the credit situations of the program, the bank analyzes the company’s general situations, stockholders’background, operation, financial revenues and the income and risk if the bank issues to finance Sichuan Airlines, so to determine whether to finance Sichuan Airlines.The first chapter introduces its research background, purpose, significance, and scholars’researches on finance lease domestic and abroad, while comparing the different evaluation methods among banks domestic and abroad. The second chapter mainly covers the basic concepts and features of finance lease and comes to the conclusion of the unprecedented advantages of finance lease comparing with other methods of funds raising.The third chapter recalls present operation of aviation industry in recent years and looks forward to its future development trend based on the analysis of the situation of Chinese aviation industry.The fourth chapter carries on an objective evaluation on the basic situation of Sichuan Airlines by the introduction of the case of Sichuan Airlines.The fifth chapter comes up with the program of finance lease loan to Sichuan Airlines after the calculation of the cash flow of Sichuan Airlines, the prediction of its repay source and the benefits of the bank.The sixth chapter mainly evaluates the risks and corresponding measures to avoid and prevent all the risks based on all the above analysis. The seventh chapter points out the new points and disadvantages of this essay.The new point in the essay is its new analysis perspective. From the perspective of the bank, involving the author herself participation in the evaluation, the program introduces the concept of finance lease to the case of the credit loan of Sichuan Airlines and evaluates the benefits and risks of the bank to judge whether the bank offers loans. With the application of theory into practice, this essay may be referential to other financial institutions about how to analyze whether to provide airlines with finance lease.The shortage of the essay is that the case description occupies too much space and insufficient theory research.