Commercial Aviation
Vietjet Ends COMAC C909 Lease Highlighting Market Challenges
Vietjet concludes six-month COMAC C909 wet-lease citing high costs and lack of local support, underscoring challenges for COMAC in SE Asia.
Vietjet and COMAC: The End of a Six-Month Experiment
In the highly competitive world of Commercial-Aircraft, every decision, from fleet acquisition to route planning, is scrutinized for its economic and strategic implications. The recent conclusion of Vietnamese low-cost carrier Vietjet’s lease of two Chinese-made COMAC C909 aircraft marks a significant moment, not just for the Airlines, but for the broader aerospace manufacturing landscape. This development provides a practical case study on the immense challenges new players face when trying to penetrate a market long dominated by giants like Airbus and Boeing. The six-month trial was seen as a landmark for China’s aviation ambitions, representing a key step in its goal to establish its aircraft in the bustling Southeast Asian market.
The initial agreement, which saw the COMAC C909s take to the skies over Vietnam in April 2025, was layered with meaning. Occurring shortly after a high-level state visit, the lease was widely interpreted as a diplomatic and economic gesture aimed at strengthening ties between Vietnam and China. For Vietjet, it was an opportunity to test a new aircraft type on specific domestic routes, particularly those requiring specialized performance, such as the service to Con Dao Island with its short runway. For the Commercial Aircraft Corporation of China (COMAC), it was a crucial foothold in a foreign market and a chance to prove the C909’s operational capabilities on an international stage.
However, as the six-month contract expired on October 18, 2025, the decision not to renew has shifted the narrative. While the aircraft themselves reportedly performed without issue, the episode underscores the complex web of logistics, economics, and support infrastructure that dictates an airline’s fleet strategy. We will explore the factors that led to this decision, the operational realities of the wet-lease model, and the wider implications for COMAC’s global aspirations. This is not a story of aircraft failure, but one of business pragmatism and the high bar for entry into the global aviation ecosystem.
The Wet-Lease Arrangement: A Closer Look
The two COMAC C909 aircraft, registrations B-652G and B-656E, were supplied to Vietjet by China’s Chengdu Airlines under a wet-lease agreement. This type of lease, also known as ACMI, is a comprehensive package where the lessor provides the Aircraft, Crew, Maintenance, and Insurance. Essentially, it’s a turnkey solution that allows an airline to quickly add capacity without the long-term commitments of purchasing an aircraft or the complexities of a dry-lease, where the airline provides its own crew and operational support. This model is often used to cover seasonal demand, test new routes, or bridge capacity gaps while awaiting new aircraft deliveries.
For Vietjet, a carrier laser-focused on cost efficiency, the wet-lease model presented a double-edged sword. On one hand, it allowed for a low-risk trial of the COMAC C909, an aircraft not previously operated in Vietnam. On the other, it is a significantly more expensive arrangement than a standard dry-lease or outright ownership. The costs associated with using a foreign crew, along with maintenance and support managed by Chengdu Airlines, proved to be a substantial financial burden. For a low-cost carrier, where every operational expense is meticulously managed, these elevated costs were ultimately unsustainable over the long term.
The operational side of the lease appeared to run smoothly. Sources familiar with the matter confirmed that the aircraft performed acceptably during their six months of service. They were primarily used on domestic routes from Hanoi and Ho Chi Minh City, including the challenging route to Con Dao Island. The C909, formerly known as the ARJ21, is a regional jet designed for such missions. The successful deployment on these routes demonstrated the aircraft’s technical capabilities, but the underlying economic framework of the lease was the critical factor in the final decision.
The decision not to extend the lease was primarily driven by high operating costs associated with the wet-lease model, which included foreign crew, maintenance, and support. The lack of a local parts and support network in Vietnam also contributed to increased expenses and logistical challenges.
Logistics and Strategy: The Deciding Factors
Beyond the immediate costs of the wet-lease, deeper logistical hurdles played a crucial role in Vietjet’s decision. A key challenge was the absence of a local maintenance, repair, and overhaul (MRO) and parts support network for COMAC aircraft in Vietnam. In the modern aviation industry, having a robust and responsive support system is non-negotiable. When a part needs replacement or specialized maintenance is required, airlines rely on a global network to provide components and expertise swiftly to minimize aircraft downtime. Without this infrastructure in place for the C909, any required parts had to be sourced directly from China, adding layers of cost, complexity, and potential delays.
This logistical reality clashes directly with the business model of a low-cost carrier like Vietjet, which relies on fleet commonality to streamline operations. The airline’s primary fleet consists of over 100 Airbus A320 and A321 models, with significant Orders for Boeing 737 MAX jets. This standardization allows for efficiencies in crew training, maintenance procedures, and spare parts inventory. Introducing a new aircraft type from a different manufacturer, especially one without an established global support network, disrupts this finely tuned operational harmony. The added complexity and expense were significant factors weighing against the continuation of the COMAC lease.
Regulatory context also added another layer to the situation. While reforms had made it possible for aircraft certified by Chinese authorities to operate in Vietnam, some restrictions under local aviation law were still cited as a contributing factor. Ultimately, Vietjet has indicated no immediate plans to purchase or lease aircraft from COMAC, opting instead to focus on its existing strategy of expanding its established Airbus and Boeing fleets. The end of the lease will also see the airline withdraw from the Con Dao routes, as it lacks other suitable aircraft in its current fleet for that specific mission.
A Setback for Ambition: The Broader Implications
The conclusion of the Vietjet contract is more than just a footnote in an airline’s operational history; it is a notable setback for COMAC’s international ambitions. The six-month lease was a significant milestone, marking the first use of Chinese-made commercial jets on domestic routes in Vietnam and serving as a critical test case for COMAC’s expansion into the competitive Southeast Asian market. Its premature end highlights the monumental challenge of competing with the entrenched duopoly of Airbus and Boeing, who have spent decades building not just aircraft, but comprehensive global ecosystems of sales, support, and service.
This episode serves as a clear illustration that building a technically sound aircraft is only part of the equation. To win over major airlines, especially cost-conscious carriers, a manufacturer must provide a seamless and cost-effective operational experience. This includes accessible MRO facilities, a reliable supply chain for spare parts, and a proven track record of support. COMAC’s journey is still in its early stages, and establishing this global support network remains a primary hurdle. Furthermore, securing certification from major international regulators like the European Union Aviation Safety Agency (EASA) and the U.S. Federal Aviation Administration (FAA) is crucial for wider adoption, a process that remains a significant challenge for both the C909 and the larger C919 aircraft.
FAQ
Question: Why did Vietjet stop operating the two COMAC C909 aircraft?
Answer: Vietjet stopped operations because its six-month wet-lease agreement with Chengdu Airlines expired on October 18, 2025. The airline chose not to renew the contract, primarily due to the high operating costs associated with the wet-lease model and logistical challenges related to maintenance and parts support.
Question: Were there any safety or performance issues with the Chinese-made aircraft?
Answer: No, sources familiar with the matter confirmed that the two COMAC C909 aircraft performed acceptably and without any operational issues during the six-month lease period.
Question: What is a wet-lease agreement?
Answer: A wet-lease, also known as an ACMI lease, is an arrangement where the leasing company provides the aircraft, crew, maintenance, and insurance to the airline. It is a comprehensive, turnkey solution but is generally more expensive than other leasing models.
Question: What does this mean for COMAC’s expansion plans?
Answer: The end of the Vietjet contract is considered a setback for COMAC’s ambitions to expand its presence in the Southeast Asian aviation market. It highlights the challenges the manufacturer faces in competing with established players like Airbus and Boeing, particularly in providing a cost-effective and logistically simple global support network for its aircraft.
Sources: Reuters
Photo Credit: Reuters
Aircraft Orders & Deliveries
Boeing and Icelease Agree on Up to Three 767-300BCF Aircraft
Icelease signs for up to three Boeing 767-300BCF aircraft, with conversions at ST Engineering Singapore starting Q1 2027.
The Boeing Company and aircraft lessor Icelease have finalized an agreement for up to three Boeing 767-300 Boeing Converted Freighter (BCF) aircraft, marking the leasing firm’s expansion into the medium widebody cargo market.
Announced in a press release on November 2, 2026, the transaction includes one firm order and options for two additional conversions. The aircraft will join the managed cargo portfolio of IAT Leasing, a Dublin-based sister company to Icelease.
Conversion timeline and operational details
The formal signing ceremony for the agreement took place on October 22, 2026, during the Cargo Facts Symposium. The physical conversion work will be executed at ST Engineering’s airframe maintenance, repair, and overhaul (MRO) facilities located in Singapore.
Induction of the first Boeing 767-300 aircraft for conversion is scheduled for the first quarter of 2027. Delivery of the completed Boeing 767-300BCF to Icelease and IAT Leasing is expected to follow in the second quarter of 2027. The Boeing Converted Freighter programs are managed by The Boeing Company’s Global Services division.
Lindsey Douglas, Vice President of Cabin, Modifications, Maintenance and Digital Services at The Boeing Company, stated that the agreement underlines the continued collaboration between the two companies to meet global cargo demand.
Sigthor Einarsson, Managing Partner at Icelease, noted the strategic importance of the deal for the lessor’s broader fleet strategy.
“This agreement with Boeing to convert up to three Boeing 767 aircraft marks an important milestone for both Icelease and its Dublin-based sister company IAT Leasing,” Einarsson said.
Icelease and IAT Leasing’s growing cargo portfolio
The Boeing 767-300BCF order builds upon an established relationship between the manufacturer and the lessor. Icelease, an aircraft leasing company with a 21-year history, specializes in aircraft acquisitions, leasing, operations, finance, and investor relations. The firm was originally formed as a spinoff from Icelandair in 2005.
On November 14, 2021, Icelease placed an order for 11 Boeing 737-800 Boeing Converted Freighter (737-800BCF) aircraft during the Dubai Airshow. That order established Icelease as the launch customer for a new conversion line at Boeing’s London Gatwick MRO facility.
The newly ordered widebody freighters will be managed by IAT Leasing. Incorporated in late 2023, IAT Leasing is owned by four equity partners. The Dublin-based entity has rapidly built a portfolio of approximately 40 narrowbody and widebody passenger and Cargo aircraft, which are leased to operators globally. The company’s current managed cargo portfolio already includes seven Boeing 737-800BCF aircraft.
“The history between Icelease and Boeing dates over 20 years and includes a multitude of new aircraft deliveries as well as cargo conversions,” Einarsson said. “The Boeing 767-300BCF will join the growing managed cargo aircraft portfolio of IAT Leasing, which already includes seven Boeing 737-800BCF and other freighters leased to various customers.”
Widebody freighter market outlook
The Boeing 767-300BCF is positioned to serve regional and long-haul cargo networks as a highly efficient medium widebody converted freighter. The aircraft offers a payload capacity of 57 tonnes and a maximum range of 3,300 nautical miles.
The Icelease order aligns with broader industry forecasts regarding long-term air cargo growth. On October 28, 2026, The Boeing Company released projections indicating that the global freighter fleet will exceed 4,000 airplanes by 2045. The manufacturer anticipates that air cargo traffic will double over the same period, providing a sustained demand environment for passenger-to-freighter conversion programs across both narrowbody and widebody platforms.
AirPro News analysis
We view Icelease’s transition from narrowbody to medium widebody conversions as a natural progression for lessors seeking to capture higher-yield cargo segments. While the Boeing 737-800BCF serves domestic and regional express networks effectively, the Boeing 767-300BCF provides the volume and range necessary for intercontinental e-commerce flows. By securing conversion slots at ST Engineering for 2027, Icelease and IAT Leasing are positioning their portfolio to absorb capacity demands as older widebody freighters face retirement toward the end of the decade. The decision to allocate these assets to the recently formed IAT Leasing also highlights the robust investor appetite for dedicated freighter leasing vehicles.
Photo Credit: Boeing
Commercial Aviation
Avolon Launches Constellation Aviation With $1.4B Portfolio
Avolon, I Squared Capital, and ADIA launch Constellation Aviation with a $1.4B aircraft portfolio targeting $6B in scale.
Avolon, I Squared Capital, and the Abu Dhabi Investment Authority (ADIA) have launched Constellation Aviation, a new joint venture aircraft leasing platform seeded with a $1.4 billion initial portfolio.
Announced in a press release on November 2, 2026, the partnership combines institutional capital with Avolon’s aircraft origination and management expertise. The venture is designed to provide airlines with essential fleet capacity amid ongoing constrained aircraft manufacturing, while offering investors exposure to long-term contracted cash flows.
Seed portfolio and operational structure
Constellation Aviation will acquire its initial seed portfolio directly from Avolon. The $1.4 billion portfolio consists of 22 modern, fuel-efficient aircraft, specifically Boeing 737 MAX, Airbus A320neo, and Airbus A330neo models. The aircraft have an average age of five years and are currently leased to 17 airlines across 15 countries.
Under the terms of the joint venture, Avolon will retain a minority equity interest in Constellation Aviation. The Dublin-based lessor will also serve as the exclusive aircraft manager and servicer for the platform, leveraging its existing global relationships.
Avolon Chief Financial Officer Ross O’Connor stated that the joint venture will expand the company’s asset management business. He noted that the partnership reflects the confidence leading institutional investors place in the aviation sector and in Avolon’s ability to originate, manage, and service high-quality assets.
The transaction is supported by a syndicated debt facility provided by a consortium of international banks. BNP Paribas, Crédit Agricole CIB, Société Générale, ING, MUFG, and Mizuho are acting as joint lead bookrunners. Mizuho is also serving as the financial advisor to the investors. Milbank LLP acted as legal counsel to the investors, and Clifford Chance acted as legal counsel to Avolon. The deal remains subject to standard regulatory approvals.
Capitalizing on constrained manufacturing
The launch of Constellation Aviation occurs during a period of significant supply chain disruption in the aerospace sector. Aircraft lessors currently own approximately half of the global airline fleet. This share is in high demand due to substantial backlogs in new aircraft deliveries from major manufacturers.
Gautam Bhandari, Co-Founder, Managing Partner, and Global Chief Investment Officer of I Squared Capital, highlighted this dynamic in the announcement.
“Aircraft manufacturers’ order books now stretch a decade or more into the future, and airlines rely on lessors with scale and aircraft delivery slots to grow their fleets. Avolon has one of the largest order books with Boeing and Airbus and thus enjoys significant benefits of scale.”
Avolon, a subsidiary of China‘s Bohai Leasing Co Ltd, recently solidified its delivery pipeline. On October 9, 2026, the lessor placed a firm order for 250 new-technology aircraft. That order included 140 Boeing 737 MAX aircraft and 110 Airbus aircraft, split between 75 A320neo family and 35 A330neo family jets. The transaction brought Avolon’s total order book to 749 aircraft. As of September 30, 2026, Avolon reported an owned, managed, and committed fleet of 1,092 aircraft, serving 138 airlines in 62 countries.
The new joint venture partners bring substantial financial weight to the platform. I Squared Capital is an independent global infrastructure investor headquartered in Miami with over $60 billion in assets under management. ADIA, established in 1976, is a globally diversified sovereign wealth fund investing on behalf of the Government of Abu Dhabi.
Khadem AlRemeithi, Executive Director of the Infrastructure Department at ADIA, described aircraft leasing as a resilient and growing sector supported by strong structural demand for modern aircraft.
Long-term growth ambitions
While the platform launches with a $1.4 billion portfolio, the partners intend to grow the venture significantly. According to reporting by Reuters, Constellation Aviation aims to scale its portfolio over time with ambitions to reach a $6 billion valuation.
The creation of Constellation Aviation mirrors other recent large-scale lessor partnerships designed to distribute capital risk. Reuters noted that the structure is similar to SMBC Aviation Capital’s deal last year to share the risk of acquiring U.S.-based rival Air Lease Corp for $7.4 billion with a group of investors via a newly established entity.
AirPro News analysis
The formation of Constellation Aviation highlights a continuing shift in how aircraft leasing is financed. By partnering with I Squared Capital and ADIA, Avolon is effectively utilizing a capital-light growth strategy. The lessor recently committed to 250 new aircraft in October, a massive capital expenditure. This joint venture allows Avolon to place those future deliveries into a managed vehicle where it earns servicing fees and retains a minority stake, without carrying the full debt burden on its own balance sheet.
Furthermore, the involvement of a major infrastructure fund like I Squared Capital underscores that modern commercial aircraft are increasingly viewed by institutional investors as core infrastructure assets rather than alternative investments. With Boeing and Airbus sold out for years, existing delivery slots and young, fuel-efficient aircraft are scarce commodities. Sovereign wealth funds and infrastructure managers are willing to deploy billions to secure the long-term, contracted yield these assets generate, provided they have an experienced servicer like Avolon to manage the technical and placement risks.
Photo Credit: Avolon
Aircraft Orders & Deliveries
AerCap Leases Two Boeing 777-300ERSF to Turkish Airlines
AerCap finalizes lease of two Boeing 777-300ERSF freighters to Turkish Airlines, with deliveries scheduled for 2027.
AerCap Holdings N.V. has finalized lease agreements with Turkish Airlines for two Boeing 777-300ERSF converted freighters, with deliveries scheduled between March and September 2027.
Announced on October 29, 2026, the transaction expands the Turkish flag carrier’s dedicated cargo capacity while utilizing Etihad Engineering’s maintenance, repair, and overhaul (MRO) facility in Abu Dhabi for the passenger-to-freighter (P2F) modifications. In a press release detailing the agreement, the Dublin-based aviation lessor emphasized the strategic alignment between the aircraft’s capabilities and the airline’s expanding freight network.
Expanding Turkish Airlines’ cargo operations
The agreement builds on an existing relationship between AerCap and Turkish Airlines, which operates a large international network requiring substantial dedicated cargo lift. The addition of the two widebody freighters is intended to support the carrier’s volume requirements on high-demand international routes.
Peter Anderson, Chief Commercial Officer at AerCap, stated that the aircraft will provide the airline with additional cargo capacity combined with the performance capabilities specific to the 777-300ERSF platform. Financial terms of the lease agreements, including the exact lease duration and the specific aircraft serial numbers, were not disclosed in the announcement.
The Big Twin conversion program
The Boeing 777-300ERSF, marketed as “The Big Twin,” is a P2F conversion program developed through a joint venture between AerCap and Israel Aerospace Industries (IAI). It represents the first program designed to convert the Boeing 777-300ER into a dedicated freighter configuration.
According to AerCap’s cargo division, the 777-300ERSF offers 25 percent more cargo volume than the factory-built Boeing 777-200LRF. This increased capacity positions the converted twin-engine aircraft as a cost-effective replacement for aging four-engine Boeing 747 freighters currently operating in the global fleet.
AerCap delivered the first 777-300ERSF to launch customer Kalitta Air in September 2025. Since that initial delivery, the lessor has handed over aircraft to Fly Meta and secured lease agreements with other major operators, including Ethiopian Airlines and China Southern Group.
Regional conversion strategy in Abu Dhabi
The physical conversion of the two aircraft destined for Turkish Airlines will be executed at the Etihad Engineering MRO hub in Abu Dhabi, United Arab Emirates. This facility serves as a dedicated regional conversion center for the 777-300ERSF program.
Anderson highlighted the strategic importance of the location, noting that the Abu Dhabi facility provides a regional platform capability that enables aircraft to be converted in the Middle East prior to delivery. This localized approach is designed to efficiently serve customers across the Europe, Middle East, and Africa (EMEA) market.
“The dedicated 777-300ERSF conversion facility at Etihad Engineering’s MRO hub in Abu Dhabi provides an important regional platform capability, enabling the aircraft to be converted in the Middle East ahead of delivery to Turkish Airlines,” Anderson said.
AerCap’s broader market position
The Turkish Airlines agreement follows a period of strong financial performance for AerCap. On October 28, 2026, the company reported its third-quarter financial results, citing record adjusted earnings per share and raising its full-year 2026 guidance amid high lease rates and sustained demand for aviation assets.
As of September 30, 2026, AerCap’s total portfolio included 1,537 owned and managed aircraft, alongside approximately 1,300 engines and over 300 helicopters. The company’s dedicated cargo division manages a fleet of approximately 110 owned, managed, and on-order freighters, having completed more than 160 passenger-to-freighter conversions to date.
AirPro News analysis
We view the placement of 777-300ERSF aircraft with a major network carrier like Turkish Airlines as a strong validation of the Big Twin program’s economic proposition. As operators look to phase out older Boeing 747 freighters, the 25 percent volume advantage over the 777-200LRF makes the converted 300ER an attractive middle ground between factory-built twin-engine freighters and legacy four-engine platforms. Utilizing the Etihad Engineering facility in Abu Dhabi for a European customer also demonstrates the logistical efficiency of AerCap’s decentralized conversion strategy, reducing ferry times and regional friction for EMEA operators.
Photo Credit: AerCap
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