Air India completes acquisition of its first A350 aircraft through GIFT City

Source: The Economic Times

In a ground-breaking move that signifies a new era for Air India, the airline giant has made history by securing its inaugural Airbus A350-900 aircraft. This significant milestone was achieved through an innovative finance lease agreement with HSBC, facilitated via India's pioneering financial hub, GIFT City. Notably, this transaction marks the first instance of a wide-body aircraft being leased through GIFT City, India's premier International Financial Services Centre (IFSC).

The deal was orchestrated by Air India's subsidiary, AI Fleet Services Ltd (AIFS), a move that stands as the vanguard among the 470 aircraft orders placed earlier this year. This strategic acquisition comes amidst Air India's ambitious transformation under the stewardship of the Tata Group. Anticipating a revolutionary change, the airline expects to welcome its inaugural A350-900 aircraft by the close of this year.

Nipun Aggarwal, Air India’s Chief Commercial & Transformation Officer, expressed his excitement about this milestone, stating, "This milestone deal marks the start of our aircraft leasing business from GIFT IFSC, as AIFS will be the main Air India Group entity for wide body aircraft financing, playing a key role in our future aircraft financing strategy for us and our subsidiaries."

Dipesh Shah, Executive Director of the International Financial Services Centres Authority (IFSCA), highlighted the collaborative efforts to establish regulatory frameworks for aircraft leasing and financing. He commented, "The steps taken by Air India by setting up a finance company for aircraft leasing and financing at IFSC will help in making IFSC a preferred hub for aircraft leasing and financing in India and globally."

This acquisition forms part of Air India's order for six A350-900 planes, with five more slated for delivery by March 2024. The comprehensive fleet enhancement plan also includes 34 A350-1000s, 20 Boeing 787 Dreamliners, 10 Boeing 777Xs, 140 A320 neos, 70 A321 neos, and 190 Boeing 737MAXs, as per the purchase agreements inked with Airbus and Boeing earlier this year.

Currently, Air India boasts a formidable fleet of 116 aircraft, encompassing 49 wide-body planes. This amalgamation of 27 B787-8s, 14 B777-300s, 8 B777-200LRs, 14 A319s, 36 A320 neos, 13 A321 ceos, and 4 A321 neos signifies the airline's steadfast commitment to technological advancement and service excellence.

In parallel, the Tata Group is orchestrating a strategic merger within its aviation sector. AIX Connect will be amalgamated with Air India Express, while Vistara, a joint venture between Tatas and Singapore Airlines, will be seamlessly integrated with Air India. This convergence represents a significant leap forward, aligning with the global trends of business consolidation and enhanced efficiency.

This monumental development not only elevates Air India's status but also underscores the increasing economic interactions fostered by GIFT City. As a burgeoning global financial hub, GIFT City continues to attract investments from diverse sectors, further solidifying its position on the world stage.