Axis Bank has for the first time done aircraft financing through its International Banking Unit (IBU) at Gujarat’s GIFT City IFSC, thus charting a new path for Indian banks in the aviation sector. The deal was done for AI Fleet Services Ltd (AIFS), the leasing arm of Air India, a Tata Group company. This transaction consists of a long-term USD loan to fund the procurement of 34 training aircraft that will be used at Air India’s pilot training centre in Amravati, Maharashtra. The order comprises 31 single-engine aircraft from Piper Aircraft (USA) and 3 twin-engine aircraft from Diamond Aircraft (Austria). The Indian government is encouraging aircraft and ship leasing in GIFT City and has provided tax exemptions and regulatory concessions to enhance the financial services in the region. Sanjay Sharma, CFO of Air India said that this is a very important step as Air India’s five-year transformation plan, Vihaan.AI, requires 570 aircraft and GIFT City will be the financing hub for these aircraft. This deal also marks Axis Bank’s growing international finance role and thus enhances India’s aviation infrastructure by facilitating aircraft leasing from within the country. With the emergence of GIFT City as a global financial centre, more such deals may follow and India can thus establish itself as a major centre for aircraft financing and leasing.
Axis Bank Conducts Aircraft Financing Deal
