S'pore govt goes into plane-leasing business

S'pore govt goes into plane-leasing business

SINGAPORE (AFP): Two investment arms of the Singapore
government have agreed to take strategic stakes in an aircraft
leasing firm which expects more business amid a regional aviation
slump, company officials said yesterday.

Temasek Holdings and the Government of Singapore Investment
Corp. (GIC) agreed to buy a 14.5-percent stake each in Singapore
Aircraft Leasing Enterprise (SALE) for $62.5 million apiece, SALE
officials said.

Before the deal, SALE was a 50-50 joint venture between
Singapore Airlines Ltd. and U.S.-based Boullioun Aviation
Services Inc. They will each keep a 35.5 percent stake in SALE.

The capital injection by Temasek and GIC will raise the paid-
up capital in SALE to $$375 million, allowing it to further
expand into the aircraft leasing and operating business globally,
the company said.

SIA and Boullioun have a commitment to inject S$125 million
each into the leasing company, which now has eight aircraft and
plans to have 40 by 2001.

SALE managing director John Willingham said the company has
placed 12 firm orders for A320 aircraft from Airbus Industrie and
six firm orders for B777 aircraft from the Boeing Co.

Of these 18 aircraft, eight have already been delivered to
commercial airlines. There are talks with a North American
carrier to place three other planes.

SALE chairman Matthew Samuel said airlines will do more
leasing now that the world airline market is down, because
leasing is more cost effective. This is partly due to the impact
of the currency turmoil in Southeast Asia, which has slowed down
airline traffic.

"The scope for growth is considerable and we can expect the
market share of leased aircraft to grow still further in an
expanding aviation industry," Willingham said.

He added that the number of leased aircraft in Asia increased
significantly in the last five years from only 100 jets in 1991
to 300 by 1996.