Air India's Leasing Arm Secures $215 Million Loan from Standard Chartered and Bank of India

AI Fleet Services IFSC (AIFS), the leasing arm of Tata Group-owned Air India, has successfully secured a $215 million, 7-year amortising term loan from Standard Chartered Bank and Bank of India, as per the news reports 

The loan will finance 6 Boeing 777-300ER aircraft, which will be leased to Air India. This deal is notable as it marks the first-ever commercial aircraft financing transaction structured with a GIFT City borrower, setting a significant milestone in India's emerging aviation finance ecosystem.

Milestone Aviation Finance Deal at GIFT City

This transaction, structured through GIFT City (Gujarat International Finance Tec-City), is a groundbreaking moment for India’s aviation finance sector. As the first such commercial aircraft financing deal, it highlights GIFT City's potential as an emerging aviation finance hub with global stature. The deal sets a precedent, positioning India as an attractive destination for aviation financing.

Air India's Fleet Expansion Plans

Air India is currently undergoing an ambitious fleet renewal and expansion programme to elevate itself into a world-class global airline. As part of its transformation, Air India has placed an order for 570 new aircraft, a combination of both Airbus and Boeing. The financing secured by AIFS will support the acquisition of the Boeing 777-300ERs, contributing to the airline’s long-term growth and international competitiveness.

AIFS’ Role in Air India’s Transformation

Sanjay Sharma, Chairman of AIFS and CFO of Air India, emphasised the importance of GIFT City for financing Air India’s fleet expansion. He noted that the $215 million deal was a significant step in the airline's journey to modernise and expand its fleet, with GIFT City poised to play a key role in future financing initiatives.

Transaction Leadership and Vision

Standard Chartered Bank led the structuring of the transaction, while both Standard Chartered and Bank of India acted as the Mandated Lead Arrangers and Bookrunners. As per the news reports, P.D. Singh, CEO of India and South Asia at Standard Chartered, expressed confidence in the deal, stating that it would help grow the aviation finance segment in India. He further highlighted that this transaction reinforces GIFT City's growing reputation as a global aviation finance hub.

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Conclusion

This deal is a major milestone for Air India and India's aviation finance ecosystem. The $215 million loan strengthens Air India’s fleet expansion strategy and demonstrates the growing significance of GIFT City as a financial hub for aviation deals. It marks a new chapter in the airline’s transformation into a globally competitive carrier.

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