PGA Perceptions from the Middle Kingdom

Across the 2016–2018 PGA Perceptions publications, a consistent theme is that China’s commercial aviation outcomes are driven as much by policy and execution mechanics as by pure market demand. Several reports explain how internal CAAC rules, government approval cadence, and state-directed structures can materially change deal timelines, market entry requirements, and the practical ease of transferring used aircraft. For investors and asset managers, the takeaway is straightforward: in Greater China, process risk is value risk, and disciplined, on-the-ground execution becomes a differentiator. The series also highlights how the OEM–airline–government dynamic shapes procurement outcomes, including large package deals and phaseout decisions that can move supply and pricing quickly.

The reports also explore demand-side and fleet-planning realities: the growth of China’s Western-built fleet over three decades, the constraints on freighter capacity even as e-commerce volumes surge, and how trade and regulatory context influences aircraft and engine procurement behavior. From a transactional lens, these publications provide practical context for timing mid-life remarketing, managing end-of-life transitions, and anticipating shifts in buyer behavior or approval friction. If you are evaluating an opportunity tied to Greater China, these briefs help frame the questions that matter before you commit capital. For related capabilities, see Services and recent announcements on Press Releases.

Top-down directed changes could reorganize and restructure the PRC aviation industry in ways that are difficult to replicate elsewhere. The report discusses leadership rotation among major airline groups, related government agencies, and aviation manufacturing organizations, and how that kind of cross-pollination can affect industry coordination. It also explores why an arbitrating state body (such as SASAC) can influence how these personnel shifts are executed and disputes are resolved. For investors and lessors, the practical value is understanding how policy direction and organizational structure can change counterparties, fleet planning signals, and transaction timing.

The current "trade war" between the US and China is less likely to significantly impact airplane and engine sales than the mass media and some on Wall Street seem to think it will. The report breaks down where headline risk diverges from transaction reality, including how procurement decisions are actually made and how counterparties adapt. It also highlights that policy signaling, timing, and local execution can matter more than press narratives when you are moving metal. For buyers and sellers, it offers a useful framework for separating noise from the few factors that truly affect pricing, approvals, and delivery outcomes.

During the past 30 years, the Chinese western-built mainline commercial passenger aircraft fleet has grown from about 50 aircraft in May 1988, to about 2,600 aircraft today. This is an extraordinary accomplishment which has revolutionized transportation within China and globally. The report looks at how that growth has matured into more complex fleet-management challenges, including transition planning, asset utilization, and lifecycle decision-making. For investors, it provides context on the depth of the market and why end-of-life and phaseout planning is now a core competency, not an afterthought. It also reinforces that scale does not eliminate complexity—it often amplifies it.

The recent multi-airline "package deal" for a large quantity of new aircraft, announced during the U.S. presidential visit to China, is another example of the existing triangle relationship between Chinese Airlines, both major western OEMs and the PRC government. This report connects those dynamics to practical fleet phaseout planning and the downstream effects on mid-life supply, pricing, and remarketing windows. It is particularly relevant if you are underwriting value based on assumed retirement timing or expected secondary-market absorption. The message is clear: large, state-influenced procurement decisions can accelerate or delay phaseouts in ways that standard market models may miss.

Chinese cargo airlines ride growing wave of e-commerce volume, but are inhibited by shortage of additional new and converted freighters. The report explains why demand alone does not translate into near-term fleet expansion, especially when conversion capacity, approvals, and feedstock availability become binding constraints. For asset managers, this is useful when evaluating freighter conversion candidates or cargo-focused placements, because the bottleneck is often structural rather than commercial. It also highlights how quickly e-commerce growth can reshape utilization and residual-value assumptions when capacity cannot keep pace.

We anticipate that the forthcoming new rules will address several fundamental issues while presumably (hopefully?) also promoting harmony, at least in the long run, among Chinese governmental agencies, Chinese airlines, and foreign airplane OEMs. This report flags how regulatory updates can change transaction mechanics for used aircraft and engines, including documentation expectations and approval sequencing. For buyers and sellers, it is a practical reminder that compliance is not just a box-check—it directly affects closing timing and cost. Understanding the direction of these rules helps investors avoid surprises and structure deals with realistic contingencies.

Although Taiwan is a small island, it is strategically well positioned geographically to serve as a world hub for the trans-Pacific and South Asian long-haul markets, which greatly favors the established local entrants China Airlines and EVA with their combined long-haul and regional fleets. The report provides a compact view of carrier positioning, fleet mix, and competitive dynamics that matter for route economics and capacity planning. For transactional stakeholders, it helps frame how regional hubs influence widebody deployment and the timing of fleet updates. It also underscores that geography and network strategy can be as determinative as pure aircraft performance when evaluating long-haul asset demand.

Perhaps the most significant Q3 development for the PRC domestic aviation industry was the issuance of CAAC Internal Rule #96 dated August 29, 2016 governing the process for market entry by new startup airlines (hereinafter "the Rule"). The report explains why internal policy changes can raise the bar for new entrants and, in turn, affect capacity growth and aircraft placement assumptions. For investors and lessors, this matters because fewer viable start-ups can reduce the number of credible counterparties for certain aircraft types. It is also a clear example of how regulatory process can create or remove liquidity in the secondary market.

We continue to witness steady growth within China's airline industry, despite a challenging business climate in other industries, in China as well as worldwide. This report looks at the pace and mechanics of government approvals for deliveries and why that cadence is critical to forecasting OEM production absorption and airline fleet plans. For transaction teams, approval timing affects everything from delivery slots to replacement cycles and, ultimately, the supply of mid-life aircraft coming to market. It also provides context for why seemingly stable demand can still be disrupted by evolving policy or macro constraints.

The past few years have seen a robust purchase and expansion phase for both mainland China network carriers and China's newly developed bank-owned operating lessors. The Chinese airlines are continuing to place large orders with western OEMs, whether through stand-alone deals or by participation in a multi-airline "package" deal under PRC Government supervision... This report focuses on how new PRC regulatory requirements can complicate used-aircraft transactions, particularly around process, documentation, and approvals. For buyers and sellers, it highlights why early planning and local execution capability can prevent delays that erode value. If you are underwriting a China-related exit path, the regulatory dimension is not optional—it is a core driver of feasibility and timing.