Dr Yu Tai-tei was an accountant before he decided to join China Aircraft Leasing Group (CALC) as chief financial officer. "I joined out of curiosity," he says. "Like most people in Hong Kong, I had no idea what aircraft financing was about before I worked in the sector."
Yu says the job has taught him much about the aviation industry. "Before joining CALC, my only interaction with planes was as a passenger. Now, I can identify different plane models, know their capacity and cruising ability, and have an understanding of how airlines choose which type of planes to rent," he says.
"For example, the Airbus A380 is currently the world's biggest plane model, but it is not necessarily the most popular choice among airlines because it is more difficult to fill, making operation less effective. Smaller models are more popular because they are easier to fill. There is so much to learn about planes."
Yu's experience as an accountant specialising in taxation comes to the fore in getting tax discounts when buying and leasing planes. However, this is just one part of the job and he needs to take care of the various other business aspects.
"I oversee the process of buying planes from manufacturers and renting them to airlines. It is a long process that involves the collaboration of different parties, such as the procurement team, which is in charge of buying planes.
"Manufacturers take at least a year to deliver a plane after an order is placed. The marketing department needs to find the right deal with an airline to rent the plane in advance, because the manufacturer needs to produce a plane according to the specifications of the airline. The timing has to match," he says.
Delivering the plane to the airline is the most exciting moment for Yu. "When the plane is being delivered to the client, the procurement, marketing and technical teams work together. The latter checks the plane to ensure everything is up to standard before passing it on to the airline. It is an important moment, when staff in different departments work together to complete the deal."
As well as learning about aircraft, Yu has also discovered a lot about other areas of the industry. "There is a lot that I needed to find out about the business, such as legal issues around trading planes, as well as talking to engineers about their technical knowledge of planes. I am not an expert in those aspects, but I need to be diverse - to know a little bit about everything."
Investments in planes are long term and differ from investments in stocks and other financial products. "A plane can be in service for as many as 30 years. The lease for a plane usually lasts 12 years. So after two leasing contracts, there is still a lot of value to be extracted from the plane. The aircraft can serve for another six years as a cargo plane before being dismantled and the parts sold," Yu says.
He adds that an aircraft is a valuable asset because its supply is monopolised. "This makes it a profitable investment," he says.
With bright prospects for the industry, the Hong Kong government has shown an interest in developing the city into an aviation hub.
"We have been in touch with the government to discuss the possibility of turning the city into an aircraft-leasing hub," Yu says. "I had government officials asking me if Hong Kong is suitable because of limited space to station planes. The truth is it is not a concern at all, because planes are in the air most of the time and an aircraft-leasing hub does not require huge space for planes.
"There is a lot that the city and the aviation industry has to learn about aviation financing. It is going to be a prosperous career in the future."
