Did you know that if Congress doesn’t act soon most of the airplanes belonging to our airlines could be owned by the Chinese? China is indeed moving in on US airline operational control, by acquiring ownership of the airplanes our airlines fly!
COVID-19 is the culprit allowing China’s exploitation of U.S. interests to escalate. The coronavirus has positioned the Chinese to achieve its first major opportunity to control the fate of the airplanes that U.S. airlines operate.
In other words, the coronavirus crisis has given China ample opportunity to systematically move more control of the U.S. airline industry into their regime.
Airplane leasing control
The disturbing trend has its roots in the airplane leasing procedures commonly practiced by airlines:
- In April United Airlines sold 22 of its planes to the Bank of China. Like other airlines, United was looking for revenue during the coronavirus pandemic.
- On May 8, Southwest Airlines announced that it too was raising revenue to the tune of $815 million, through sale and leaseback of 20 airplanes (10 B737-800s and 10 B737MAX-8s). At the time of the announcement, it was not revealed which leasing company the airline was negotiating with, but it could be an indicator that China is involved in this one too.
How do aircraft lease agreements work?
There are about 7,000 commercial airliners in service for U.S. airlines. About half of these airplanes are not owned by the airlines.
Rather, the airplanes are owned by third-party companies providing the planes through lease agreements with the airlines.
Airline “sell and leaseback transactions”
Initially, airlines often purchase new airplanes. Later on, the airline sells the airplane to a leasing company, just to lease that same plane from the leasing company.
The advantage of such is that airlines generate capital to be used for further aircraft purchases as well as different improvements within that airline’s infrastructure.
The practice has commonly been in place in the airline industry for the past 25 years. Flyers, in turn, have benefitted from this arrangement by the availability of purchasing cheap tickets.
U.S. ownership of leasehold companies
Traditionally the aircraft leasehold companies have been American owned. These companies have consisted of institutions, such as university endowments and public employee pension funds.
In other words, middle-class Americans have traditionally been the shareholders of the airline leasing companies.
When COVID-19 hit the airlines
The airline disaster caused by COVID-19 has resulted in most of the U.S. (and the rest of the world’s) aircraft being parked on airport tarmacs.
When the COVID-19 financial disaster hit the airlines could no longer keep up with the lease payments. Airlines then had to approach the airplane lessors (airplane owners) for financial solutions.
As a result, the leasing companies began looking at ways to restructure leases and accept delayed rent payments from the airlines.
The CARES Act did not address aircraft leasing companies!
With U.S. airlines eventually defaulting on their monthly lease payments the aircraft owers (the leasing companies) will be in deep financial trouble. Airlines will still have the financial support of the U.S. Government under the terms of the CARES Act. But, leasing companies don’t have that privilege.
As a result, leasing companies are likely to lose up to 95% of its revenue.
China steps in, getting a piece of US airlines control in the process
Although international trade and global commerce are good, China’s ulterior motive goes beyond that. The goal of China’s communist-totalitarian system is world dominance.
This is where China is standing by, taking advantage of the corona epidemic, conquering yet another piece of America:
When the U.S. companies that own the airplanes (the leasing companies) fail they will most likely be swallowed up for pennies on the dollar by Chinese leasing companies standing by.
How the Chinese Government own and control its aircraft leasing companies
There is no true private sector in communist China. So, the Chinese Government will own the plane you fly on, operating as a U.S. airline!
By the way, looking back to 2006, there were no aircraft leasing companies in China. Now there are more than 40 of them.
Chinese Communist Party (CCP)- approved leasing companies accounted for ownership of more than 20 percent of the world’s airliners by value in 2019. In 2020 the Chinese share has increased to 26 percent, with a rapidly increasing share as the COVID-19 situation progresses!
According to flightglobal.com, the leasing companies are “closely tied to Bejing’s policy agenda”.
The “silent” Chinese takeover of the U.S.A.
Bejing’s current policy agenda goes hand-in-hand with the late Chairman Mao’s vision for Chinese world dominance. The Chinese are doing everything they can to undermining and taking over key U.S. industries. Health care, computers, real estate, U.S. businesses, in general, is just the beginning.
The airline industry is a part of that Chinese takeover plan.
Don’t blame China for elbowing itself into US airlines
The wheel that allows China to exploit and expand its control of the United States is located in Washington D.C. So, what will develop if our government doesn’t act soon to stop our airlines from turning to Chinese leasing-companies for help?
You will most likely be flying on U.S. carriers increasingly operating airplanes owned by communist China!
Shouldn’t that be considered a threat to the national security of our infrastructure?
Aircraft leasing companies need access to CARES Act loans now, which need to be fully repaid post-COVID-19. In the end, U.S. taxpayers would not lose on such a deal.
At the same time, another hostile Chinese conquering of another piece of the United States can be averted.
It’s up to our elected representatives in Congress to act before it’s too late!
What do you think about China being allowed to step in to enter US airlines’ ownership and control of airplanes? You can contact us here.
Featured Image: Captain Miguel C, Mexicana Airlines, for CaptainJetson.com.