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May 11, 2024
The International Society of Transport Aircraft Trading (ISTAT) hosted its annual Asia Conference, "ISTAT Asia 2024", in Hong Kong last Tuesday to Thursday, marking its return after a seven-year hiatus. This event is considered one of the most prestigious gatherings in the international aviation industry and it was the third time Hong Kong had the privilege to host it.
Founded in 1983, ISTAT is a premier international organisation with over 5,000 members engaged in various aspects of the aviation industry, including aircraft manufacturing, trading, brokering, leasing, maintenance, and other related businesses. We have the Deputy Financial Secretary, Mr Michael Wong, officiated at this year’s opening ceremony and the Deputy Secretary for Transport and Logistics, Ms Joan Hung, shared with industry professionals from around the world on Hong Kong’s edge on the aircraft leasing industry as well as relevant policies and tax concessions.
Opening ceremony of ISTAT Asia 2024
Opportunities are Everywhere in Aircraft Leasing
The development potential of the aircraft leasing business is immense, with the percentage of leased aircraft rising from 1% in 1970 to over 50% at present, revolutionising the way airlines and operators acquire and manage their fleets, bringing business opportunities to airlines, manufacturers, and related businesses.
Hong Kong, located at the heart of Asia and serving as the southern gateway of China, is full of opportunities in the future aviation business of the Asia-Pacific region and China. A trade forecast in 2023 suggested that global air traffic will grow by 6.1% per year in the next twenty years, with China alone experiencing an impressive yearly growth rate of 11.4%. By 2042, it is projected that approximately 42,600 new commercial jets will be delivered worldwide, 17,000 of these new jets will be delivered to the Asia-Pacific markets, 8,560 of them will destined for China.
Joining Forces with Dongjiang for Strong Collaboration
In my blog post in February this year, I introduced how the "Inland Revenue (Amendment) (Aircraft Leasing Tax Concessions) Bill 2023" can optimise the local aircraft leasingtax regime. We anticipate that around 3,100 aircraft will be leased through Hong Kong platforms in the next twenty years, creating over 1,000 direct employment positions and around 20,000 indirect jobs, contributing over HK$400 billion to the local gross domestic product.
The HKSAR government also marked new milestone for Hong Kong's aircraft leasing market last month. We signed a Memorandum of Understanding with the Tianjin Dongjiang Free Trade Port Zone to deepen cooperation in the development of the aircraft leasing and financing industries.
The Tianjin Dongjiang Free Trade Port Zone is the largest aircraft leasing hub in China and the second-largest in the world after Ireland. Relying on the advantages of Hong Kong as an international financial centre and those of Dongjiang in the clustering of players of the aircraft leasing industry, the two sides will forge deeper co-operation in different areas, including financing, business, international competition, publicity, and the promotion of talent exchanges and training. Together, we aim to build a regionally linked and complementary aircraft leasing and financing platform to promote co-operation between enterprises from both regions.
Looking ahead, we deeply understand that the tax competitiveness is a key factor for developing the aircraft leasing industry as aircraft leasing is a global business without geographical limitations. Therefore, the HKSAR government will continue our work in actively expanding our Comprehensive Double Taxation Agreement network. We will also strengthen our cooperation with Dongjiang including talent training and publicity work.
As mentioned by Deputy Financial Secretary in his opening remarks at "ISTAT Asia 2024," we welcome aircraft leasing companies to establish bases or expand their business in Hong Kong, we can guarantee that aircraft leasing companies will receive customised care, attention and support throughout the establishment process, whether in terms of navigating regulatory requirements, connecting with key industry stakeholders or advising on living and working in Hong Kong.