AVIC International reportedly signed an agreement with the Aviation Industry Corporation of China (AVIC), the National Social Security Fund (NSSF) and Bank of China Group Investment Ltd (BOCGI) in which the NSSF will increase its stake in the state-owned aviation conglomerate (Asia Pulse, 11-Jan-2010). The NSSF and BOCGI will both hold a 16.3% stake in AVIC International and AVIC will hold the remaining 67.4%.
National Social Security Fund increases stake in AVIC International
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The USD10 billion deal will create the world’s third largest lessor - and they may be more to come yet.
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First bananas, then people. China's lifting of a trade ban against bananas from the Philippines bodes well for aviation. Relations between China and the Philippines turned negative in 2012. The issue was primarily over China's claims to uninhabited islands – a debate that also caused China-Japan relations to turn sour. China banned Filipino banana imports and issued a travel warning against the Philippines. Travel warnings from China carry more weight than in other markets since state-owned/linked travel agencies essentially stop selling the impacted market. Diplomatic rows have resulted in drastic reductions in outbound passenger flows from China.
Japan has more than recovered but the Philippines' underexposure to China is well evident: the Philippines has received the least number of Chinese tourists in Asia. Laos and Cambodia, far smaller than the Philippines, each received more Chinese tourists than the Philippines.
New Filipino President Rodrigo Duterte is pivoting Manila's allegiance away from the US – to China. His presidency is young and the calculation has its sceptics, but China appears to be warming. Following the lifting of its ban on banana trade, China is expected to use President Duterte's visit to Beijing to lift its travel warning against the Philippines. This will likely stimulate large air service growth between China and the Philippines. Yet for existing markets, there is some concern that the Philippines presents new competition.