Air India Achieves Milestone with GIFT City: Acquires First A350 Aircraft through Finance Lease

Air India has successfully concluded the acquisition of its inaugural A350-900 aircraft through a finance lease facilitated by HSBC, utilizing the services of GIFT City, the country's first International Financial Services Centre (IFSC).

This marks a significant milestone for the airline and GIFT City, highlighting the burgeoning prospects of aircraft leasing in India.

GIFT City's Role in Aviation Finance:

In a notable move, Air India, in collaboration with HSBC, has completed the finance lease transaction for its first A350-900 aircraft through GIFT City. GIFT City's status as an IFSC played a crucial role in facilitating this transaction, making it the first of its kind for a wide-body aircraft.

AIFS - Catalyst for Aircraft Financing:

Air India's wholly-owned subsidiary, AI Fleet Services Ltd (AIFS), played a key role in orchestrating this groundbreaking transaction. AIFS, established with the purpose of wide-body aircraft financing, is set to be a pivotal entity in Air India's future aircraft financing strategies.

Strategic Significance for Air India:

Air India views this transaction as the commencement of its aircraft leasing business from GIFT IFSC. Nipun Aggarwal, Air India's Chief Commercial & Transformation Officer, stated, "AIFS will be the primary Air India Group entity for wide body aircraft financing, playing a pivotal role in the future aircraft financing strategy for us and our subsidiaries."

Regulatory Enablers and IFSCA's Perspective:

Dipesh Shah, Executive Director of International Financial Services Centres Authority (IFSCA), highlighted the collaborative efforts to develop regulatory enablers for aircraft leasing and financing. He expressed optimism about Air India's steps in establishing a finance company dedicated to aircraft leasing and financing within GIFT IFSC, contributing to the global appeal of GIFT City in this sector.

Future Aircraft Deliveries and Orders:

Air India has ordered a total of six A350-900 planes, with the first expected to arrive in India by the end of this year. The airline's firm orders for 470 new aircraft, including A350-1000s, Boeing 787 Dreamliners, Boeing 777Xs, A320 neos, A321 neos, and Boeing 737MAXs, showcase its ambitious expansion plans.

Tata Group's Aviation Consolidation:

While Air India continues its transformative journey, Tata Group is consolidating its aviation business. AIX Connect is set to merge with Air India Express, and Vistara, a joint venture between Tatas and Singapore Airlines, will integrate with Air India, streamlining the group's airline operations.

Some relevant and latest facts about Air India's acquisition of its first A350-900 aircraft through GIFT City:

• This is the first wide body aircraft to be leased through GIFT City, the country's first International Financial Services Centre (IFSC).

• The transaction is also the first financing transaction from the orders for 470 aircraft that Air India placed earlier this year.

• Air India expects the first A350-900 aircraft to arrive in India by the end of this year.

• Air India has ordered a total of six A350-900 aircraft, and five of them are scheduled for delivery through March 2024.

• Air India has also placed firm orders for 470 new aircraft, which include 34 A350-1000s, 20 Boeing 787 Dreamliners, 10 Boeing 777Xs, 140 A320 neos, 70 A321 neos, and 190 Boeing 737 MAXs.

• Air India is currently in the process of consolidating its airline business as part of which AIX Connect is getting merged with Air India Express and Vistara will be merged with Air India.

These facts suggest that Air India is making significant investments in its fleet and is committed to its transformation plan. The acquisition of the first A350-900 aircraft through GIFT City is a significant milestone in this journey.

The IFSC authority has also welcomed Air India's move, saying that it will go a long way in developing IFSC as a preferred destination for aircraft leasing and financing. This is a positive development for the Indian aviation industry, as it will help to make aircraft financing more accessible and affordable.