Axis Bank, the fifth largest bank in India under the market value of 40 billion dollars, last month became the first Indian bank to implement the aircraft rental deal, for 34 Air India trained aircraft.
The deal also represents a milestone for financing of Indian aviation: the first deal in which all the stakeholders, the lender, the borrower, the law firm (Dentons), the agent of the facility, and the security agent-were worked through their entities stationed in the international financial Googists (City Gift), the new international financial services center in India (IFSC).
Indian airlines usually relied on multinational banks and foreign lenders for aircraft rental contracts, which were mainly directed via Dublin, Ireland, due to the lack of a strong local financing framework across the border. This changes.
Air India, through its leased entity registered in Gift City, AIT Fleet Services, closed eight $ 1 billion lease deals, including international lenders of Airbus A350s. The March for Trainer Forcraft deal was made exclusively with an Indian lender, and extends throughout the long term provided by the dollar. Interglobe Aviation Services IFSC, the Indigo Airlines city arm, funded 20 Airbus A321Neos for $ 1.8 billion through international lenders and has plans to direct 25 other aircraft soon via IFSC.
The Indian government pays the use of gifts as a financial center for border deals for all sectors, but it is especially flying in the form of long -term rental contracts. Gift City provides a positive tax system for local and international financiers and a strong regulatory framework, including a new law that allows faster pavement than backward planes.
Indian Airlines has requested a total of 1,600 aircraft worth $ 100 billion, to deliver them over the next ten years, which Indian banks are keen to finance. The government is to facilitate local and foreign banks that regulate and finance rent outside the city of gifts and set 30 billion dollars in financing the fleet update and expansion.
After the Axis Bank deal, many other Indian banks indicated their interest in entering the space as well.
