IndiGo, Air India Plan To Establish Units For Leasing At Gujarat’s GIFT City

Air India and IndiGo are planning to set up leasing arms at Gujarat International Finance Tech-City (GIFT), Gujarat. This is being seen as a move by the two biggest airline companies of the country to expand their aircraft fleet.

IndiGo has a market share of 63 per cent in India and it also plans to invest in an order of 10 additional Airbus SE A320neo aircrafts, according to Bloomberg.

IndiGo will issue corporate guarantees of up to $996 million as security against financial obligations. It will also invest about $3.6 million in its wholly-owned leasing unit. The company will be formed in three years. “Investment of up to ₹30 crore in one or more tranches through equity, quasi-equity, optionally convertible preference shares, optionally convertible debt instruments, or any combination thereof,” the company said, regarding its investments into the leasing units.

Following Air India's acquisition of 470 aircraft from Airbus and Boeing Co., IndiGo also placed a record deal with Airbus for 500 aircraft in June. Akasa, the newest airline in the nation, is concluding the purchase of narrow body aircraft. IndiGo has an order book of close to 970 aircraft, the company informed the exchanges.

IndiGo will need permissions and approvals from Reserve Bank of India to invest in the GIFT City. The place offers relaxed norms to companies wanting to do business in the state. It also received investments from Alphabet Inc.’s Google in June, when the American tech company decided to open its own global fintech operation centre there in June this year.