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Aircraft leasing activities are picking up steam at the International Financial Services Centres Authority (IFSCA) in GIFT City with 13 leasing companies setting up shop.
Dipesh Shah, Executive Director (Development) at IFSCA told BusinessLine that two more players have recently applied and the expectation is that at least 30 leasing transactions will be completed this calendar year.
The notification to allow aircraft leasing was issued on February 19, 2021. “We are very happy with the progress One year ago, we were at zero. Now, we have 13 registered companies with two more in the process of being listed taking the total to 15 companies w Shah said.
So far, three leasing transactions have happened – a business jet, helicopter and trainer aircraft. “For 2022, we are expecting at least 29-30 transactions through these companies. Commercial, business jets, helicopters, flying trainer aircrafts are expected to be leased ” he added.
Pass minimum capital requirement
According to Shah, at least seven players who have set up leasing companies have fulfilled the minimum capital requirement while others are soon likely to bring in the money.
Aircraft leasing globally is dominated by players in Ireland, China and the US. Shah said India is still at a nascent stage. He added, “Our first goal is to solve the leasing problem and grab India’s potential. The scope here itself is so huge but the market is being dominated by other countries.”
He is confident that large players will also realise that they can transact from IFSCA’s leasing companies than from international firms. "l believe, in financial year 2022-2023, we will see a lot of traction from larger players like IndiGo, SpiceJet, Tata Group, among others," Shah said.
He said that IFSCA has had two rounds of discussions with Akasa Air. "We've also spoken to Tata Group, IndiGo, and all other big and small players to see if they can lease their aircraft through IFSCA and GIFT City." IFSCA has been working on solving multiple problems and issues to smoothen business procedures for players.
"Our immediate focus is now to address the fact that leasing companies can bring in aircraft through any airport in India." Shah said. Currently, aircraft can only be brought in from a few select airport. The other issue he said was ironing the glitches of financing through Indian financial institutions and banks, he said.
BusinessLine had recently reported that IFSCA has urged provisions for allowing aircraft leasing to be considered as financial services under the Banking Regulation Act.
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