Nov. 10 (Bloomberg) -- BOC Aviation, Bank of China Ltd.'s aircraft-leasing unit, said it has access to more than $1 billion to buy planes next year as rivals are conserving cash and avoiding new deals amid a global credit squeeze.

Asia's biggest lessor plans to expand its fleet by buying planes that airlines are unable to finance or that banks have seized, BOC Aviation Chief Executive Officer Robert Martin said in an interview. The Singapore-based company may also make acquisitions, he said.

``We are looking to go counter-cyclical,'' Martin said in Hong Kong on Nov. 7 ``The best time to buy assets, provided you have capital, is in a downturn. We don't think the problems are finished yet and it's going to get a lot worse before it gets better.''

The credit market meltdown has caused banks worldwide to curb lending, which could leave as much as $20 billion of aircraft arriving next year without financing. Leasing companies, led by International Lease Finance Corp. and General Electric Co.'s unit GECAS, that have historically bought more planes during previous recessions, are also being squeezed.

ILFC, the airplane unit of American International Group Inc., has said it is borrowing $6.5 billion to meet debt obligations into the first quarter of 2009. General Electric, whose GECAS unit is the biggest lessor by number of aircraft, is tightening lending standards to help cut risks.

``Pulling Back''

Leasing companies and banks, which financed 60 percent of planes bought in 2008, are ``likely to pull back substantially,'' which could leave a funding gap of as much as $20 billion in 2009, according to an Oct. 20 report by JPMorgan Securities Inc.

Smaller leasing companies have little or no additional funds to finance aircraft because they have relied on short-term debt to expand and now need to raise capital to meet obligations, according to Martin.

``A lot of people have been financing long-term assets with short-term debt, which brings a liquidity risk when the market hits a bottom,'' Martin said. ``We could end up with a number of liquidating portfolios, where they won't be able to do new business. We've gone from 20 competitors to two or three.''

BOC Aviation has $865 million remaining from a $1 billion credit facility it got from its parent and about $300 million of loans from a group of banks. The company's debt is less than three times equity, compared with some of its rivals, which have debt-to-equity ratios as high as 20 times, Martin said.

``Long-term Future''

``This is a good time to be in the business,'' said Bill Cumberlidge, director of aviation asset finance at Allco Finance Group, which owns $3.5 billion of aircraft assets. ``If you invest in the right aircraft and invest in the long-term future of the aircraft, you'll make money.''

Allco handed operations to outside managers on Nov. 4 after warning it may default on its debt. The company relied on credit to buy assets such as aircraft and wind farms, a strategy that backfired this year as debt market seized up and bankers forced it to put assets on the block even as prices slumped.

BOC Aviation is in talks with the U.S. Export-Import Bank to conclude a deal, after securing agreements with BNP Paribas SA and Commerzbank AG. It is seeking single-aisle aircraft from the Airbus A320 family and next generation Boeing 737s, as well as larger planes such as the A330s and Boeing 777s.

BOC Aviation, which has posted profits every year since it started in 1993, owns and manages 80 planes and has 76 more on order, according to Web Site.

To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net

Last Updated: November 9, 2008 21:16 EST