Air India sets up aircraft leasing unit at IFSC Gift City.

Air India has become the first major airline to set up a leasing unit at IFSC Gift City in Gujarat. The airline’s six A350s, which are slated to be inducted into the Tata-owned airline’s fleet, will come through the said leasing firm AI Fleet Services IFSC Limited under a financial lease, said sources. The estimated project cost is ₹7,253 crore.

Sources said the Airline’s ‘AI Fleet Services IFSC Limited’ was approved earlier this month. The unit was approved during the SEZ meeting held on August 07. This will function as a subsidiary of Air India.

According to the Ministry of Corporate Affairs data, Vinod Hejmadi, who is also the CFO of Air India, Kalpana Rao, also the Company Secretary of Air India, and Abhijit Menon are part of its top management. Both Hejmadi and Menon will be Directors at the said entity. The entity has an authorised capital of ₹50 crore and a paid-up capital of ₹30 crore.

A Special Economic Zone (SEZ) approval committee document reviewed by businessline said: “Air India has placed an order for the procurement of 470 aircraft from Airbus and Boeing through leasing and financing. Out of these 470 aircraft, the near-term delivery of six Airbus A350 aircraft (long-range, wide-body. twin-engine jet airliner) is planned to be financed through the proposed entity.” It further added that the proposed entity will be engaged in leasing (both operating and finance) business for their parent company, Air lndia, and its subsidiaries only.

businessline had reported that the first set of A350 aircraft ordered by Air India will start arriving by October this year.

Though it is unclear whether the other aircraft will also come through AI Fleet Services or not, another person in the know said, “It’s too early to comment on that but viability has to be considered.”

On the financial aspect, the document stated that the “Free on Board (FOB) value for the export (inflow) of services for a five-year period is projected at ₹1,684.50 crore with a projected import (outflow) of foreign exchange at ₹1,675 crore, resulting in a Net Foreign Exchange (NFE) of ₹9.3 crore (0.56 per cent). The cost of the project is estimated at ₹7,253 crore.”

HBL