Comparitive ROA Analysis For CALC(Chinese Aviation Leasing Corporation)

Chinese civil aviation industry has achieved transportation of 353.97 million passengers in year 2013, which increased 34.61 million, or 10.8% compared with 2012. Chinese aviation market has become the second largest market worldwide only after the USA. Airlines expand their fleet by operation of new aircraft, replacement of the old ones and disposal of the obsolete model, which provide huge opportunity for Chinese lessors. According to Boeing, Chinese operator will require more than 6000 new aircraft in the next 20 years, two-thirds of which will be introduced by leasing companies. Chinese lessors have achieved quick expansion recently. ICBC Leasing, CDB Leasing and BOC Aviation have already been listed in the Top 15 companies as far as operative portfolio is concerned.Aircraft leasing is highly professional, capital and technical-intensive leasing business. While Chinese lessors are leaping forward, we found the ROA of them is substantial lower than their international counterparts. This paper will use the first public listed Chinese aviation lessor, CALC(Chinese Aircraft Leasing Corp.) as example and analyze its ROA via comparison with foreign lessors. Via comparative analysis, we try to find the dominant factor of the relatively low ROA. Since the main financial leasing companies such as ICBC Leasing, CDB Leasing are not public company, the paper use CALC to compare with Air Lease Corp and AerCap which accomplished their IPO in US in 2011 and 2007 respectively. They will be compared in aspects of business model, market expansion and financing channels, more important, their influence of ROA. The final result shows the difference of financing cost and business model is the main reason for the relatively low ROA of CALC.