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GIFT City Becomes India’s Aircraft Finance Hub as Air India Leasing Secures $215 Million Loan for Six Boeing 777-300ERs

GIFT City Establishes Itself as India’s Aircraft Finance Hub with Air India Leasing’s $215 Million Boeing Loan
In a significant development for India’s aviation finance sector, AI Fleet Services IFSC Limited (AIFS), the leasing subsidiary of Air India based in Gujarat International Finance Tec-City (GIFT City), has secured a $215 million term loan from Standard Chartered Bank and Bank of India. This seven-year financing arrangement will facilitate the acquisition of six Boeing 777-300ER aircraft, which AIFS will lease to Air India. Notably, this transaction represents the first commercial aircraft financing deal executed through a GIFT City-registered entity, marking a pivotal moment in the evolution of India’s aviation and financial industries.
A Shift in Aircraft Financing Dynamics
Historically, Indian carriers have relied on established global hubs such as Dublin and Singapore for aircraft leasing and financing. The successful closure of this deal signals GIFT City’s rapid emergence as a competitive alternative, positioning India as an increasingly influential player in the global aviation finance market. Sanjay Sharma, Chairman of AIFS and Chief Financial Officer of Air India, emphasized the strategic significance of this milestone within the context of Air India’s ongoing five-year transformation plan. He noted that with Air India’s order book standing at 570 aircraft, GIFT City is poised to play a crucial role in financing these acquisitions, underscoring the city’s growing stature as a platform for aircraft leasing and financing in India.
Executives from both Standard Chartered and Bank of India underscored the importance of the transaction. Abhishek Pandey, Global Head of Transportation Finance at Standard Chartered, highlighted the bank’s expertise in aviation finance and its commitment to supporting India’s expanding aviation industry. PD Singh, CEO of Standard Chartered for India and South Asia, described the deal as a “historic milestone” for GIFT City and the nation’s aviation sector. Bank of India echoed these sentiments, affirming that the transaction reinforces GIFT City’s rising prominence as a global hub for aircraft financing. Ashutosh Sharma, Chief General Manager at the International Financial Services Centres Authority (IFSCA), the regulator of GIFT City, remarked that the deal exemplifies GIFT IFSC’s development into a robust and competitive financial ecosystem for services such as aircraft leasing and financing.
Challenges Amidst Growth and Industry Dynamics
Despite GIFT City’s ascent as an aviation finance hub, the sector faces a complex and evolving landscape. Global competitors, including the Japan Airlines Group, are optimizing their fleets by focusing on larger aircraft, thereby intensifying competition. Furthermore, recent safety concerns involving Boeing aircraft—most notably incidents with Air India’s Boeing 787 Dreamliners—have increased regulatory scrutiny and may affect market confidence. These developments could influence the approach of airlines and financiers toward future transactions, potentially impacting Air India’s operational and financial strategies.
For Air India, the financing deal represents a critical component of its Vihaan.AI transformation plan, which aims to expand and modernize its fleet while enhancing operational efficiency. More broadly, this transaction sets a precedent for conducting aircraft financing within India, reducing dependence on foreign leasing markets and bolstering GIFT City’s position as a major international aviation finance center. As India’s aviation sector continues its rapid expansion, GIFT City’s evolving role will remain under close observation by industry stakeholders, regulators, and competitors worldwide.

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