Air India (AI, Delhi International) will establish an aircraft leasing unit in the special economic zone in India's Gujarat state known as IFSC Gift City, according to the Hindu Business Line outlet. The new wholly Air India-owned leasing entity will be known as AI Fleet Services IFSC Limited.
The carrier's six A350-900s, due to start arriving later this year, will arrive under an AI Fleet Services IFSC Limited financial lease. Air India Chief Financial Officer Vinod Hejmadi and company secretary Kalpana Rao are slated to take senior management and board roles at the leasing entity, which will have an authorised capital of INR500 million (USD6 million) and paid-up capital of INR300 million (USD3.62 million). Beyond the six A350s, AI Fleet Services IFSC Limited will supply aircraft to Air India and its subsidiary airlines via operating and finance leases.
Air India placed an order for 470 aircraft earlier this year, sourced from Boeing and Airbus. More recently, ch-aviation has reported that Air India will take a portion of those planes on an outright purchase basis while intending to source the majority of them under sale/lease-back terms. The A350-900s, among the first aircraft in the order to be delivered, include airframes originally destined to go to Russian carriers.
Documentation obtained following an August 7 committee meeting of the IFSC Special Economic Zone (SEZ) approval committee stated, "Free on-board value for the export (inflow) of services for five years is projected at INR16.85 billion (USD203.7 million) with a projected import (outflow) of foreign exchange at INR16.75 billion (USD202.5 million), resulting in a net foreign exchange of INR93 million (USD1.1 million). The project cost is estimated at INR72.53 billion (USD876.9 million)."
Dipesh Shah, IFSC Gift City's director of development, told the news outlet that the special economic zone was working to attract airline leasing customers, offering tax breaks for ten years from business profits, no capital gain tax, no stamp duty, and no GST on transactions carried out through the entity. "GIFT IFSC provides a level playing field for undertaking aircraft leasing services," he said. "We have already registered around 22 leasing firms, and 100 plus assets are leased in India. We welcome Air India's move, and we hope it pushes other airlines to follow suit."
