1 China aviation boom and the first aircraft lessor IPO in Asia (Straits Times) As China’s aviation market booms, local aircraft leasing companies are raising funds in finance hubs like Hong Kong and Singapore in a bet they can win market share from the international players that dominate the industry.
With the country’s growing middle class fueling a surge in travel, Boeing Co estimates Chinese airlines will need nearly 6,000 new jets over the next 20 years, valued at US$780 billion. Many of those aircraft will be leased rather than bought as carriers seek to cap long-term commitments: China’s 800-plane leasing market is set to grow 50 percent by 2018, according to consultancy Ascend.
Friday’s market debut in Hong Kong of Asia’s first listed plane lessor, China Aircraft Leasing Group Holdings, is the clearest example so far of local players chasing expansion. CALG said the nearly $100 million it raised in its initial public offering will be mostly spent on acquiring aircraft to try to expand its 3 percent share of the market.
2 Music industry bets on streaming (Linda Yueh on BBC) The recorded music industry has been in serial decline for decades as it battles to collect royalties on its offerings. This has accelerated in the digital era. When Steve Jobs persuaded record bosses to license downloads from iTunes at 99 cents, music buyers no longer had to purchase a $10 album to get the songs they wanted.
The industry hopes that streaming can reverse the trend. A paid-for subscription typically costs in excess of $100 per year, comfortably more than the $30 per year that defines a good music consumer. Streaming has also helped to tackle the perennial issue of piracy. But, on the other hand, the ad-supported services have reinforced the notion that people don’t have to pay for music.
On a subscription service, a music track needs to be streamed between 25 and 50 times for the rights holder to make the same revenue as a single download. However, on a free ad-supported service, several hundred streams are typically required. New artists, who do not achieve millions of streams, are likely to receive meagre payments for their work.
Apple now appears to be embracing a streaming future, but before his death three years ago Steve Jobs hated the idea of music subscriptions. He believed people wanted to own their music rather than simply rent it. We are about to find out whether he was right.
3 Amazon readying to test drones (San Francisco Chronicle) Amazon is seeking Federal Aviation Administration permission to use drones as part of its plan to deliver packages to customers in 30 minutes. The online retailer created a media frenzy in December when it outlined a plan to deliver packages with self-guided aircrafts that seemed straight out of science fiction.
In a letter to the FAA this week, Amazon said it is developing aerial vehicles as part of Amazon Prime Air. The aircraft can travel over 50 mph and carry 5-pound loads. About 86 percent of Amazon’s deliveries are 5 pounds or less.
The FAA allows hobbyists and model aircraft makers to fly drones, but commercial use is mostly banned. Amazon is asking for an exemption so it can test its drones in the US. The Seattle company says its drone testing will only take place over Amazon’s private property, away from airports or areas with aviation activity -and not in densely populated areas or near military bases.
Last year, Congress directed the FAA to grant drones access to US skies by September 2015. But the agency has missed key deadlines and said the process would take longer.