Air India completes acquisition of its first A350 aircraft
Deal structured as a finance lease transaction with HSBC through GIFT City
Air India on Friday said it has completed the acquisition of its first A350-900 aircraft by way of a finance lease transaction with HSBC through GIFT City.
This is the first wide body aircraft to be leased through the GIFT City, India’s first International Financial Services Centre (IFSC).
The Tata Group-owned Air India said the transaction was facilitated by its wholly-owned subsidiary, AI Fleet Services Ltd (AIFS).
It is the first financing transaction from the orders for 470 aircraft made earlier this year.
Air India, which has embarked on an ambitious transformation plan, expects the first A350-900 aircraft to reach India by the end of 2023.
"This landmark transaction marks the beginning of our aircraft leasing business from GIFT IFSC, as AIFS will be the primary Air India Group entity for wide body aircraft financing, playing a pivotal role in the future aircraft financing strategy for us and our subsidiaries," Air India's Chief Commercial and Transformation Officer Nipun Aggarwal said.
Air India orders
International Financial Services Centres Authority (IFSCA) Executive Director Dipesh Shah said it has been working with the stakeholders to develop regulatory enablers for aircraft leasing and financing.
"The steps taken by Air India by establishing a finance company for the purpose of aircraft leasing and financing at IFSC will go a long way in developing IFSC as a preferred destination for aircraft leasing and financing in India as well as globally," he added.
The airline has ordered six A350-900 planes. Five are scheduled for delivery through March 2024.
Apart from these, the airline's firm orders for 470 new aircraft include 34 A350-1000s, 20 Boeing 787 Dreamliners, 10 Boeing 777Xs, 140 A320 neos, 70 A321 neos and 190 Boeing 737MAXs.
Air India signed purchase agreements to acquire these aircraft with Airbus and Boeing in June this year.
Air India now has a fleet of 116 planes including 49 wide body aircraft.
The total includes 27 B787-8s, 14 B777-300s, 8 B777-200LRs, 14 A319s, 36 A320 neos, 13 A321 ceos and 4 A321 neos.
Vistara merger
Tata Group is also in the process of consolidating its airline business as part of which AIX Connect is getting merged with Air India Express and Vistara will be merged with Air India.
Vistara is a joint venture between Tatas and Singapore Airlines, which holds a 49 per cent stake in the carrier.
(With agency inputs)