Air India Taps GIFT City Subsidiary for $300 Mn Payment to Aircraft Lessors

Tata Group airline Air India has made a payment worth $300 million to aircraft lessors via its leasing venture AI Fleet Services (AIFS) at the International Financial Services Centre (IFSC) Gift City in Gujarat. The development comes at a time when Air India has set a goal of becoming a world-class airline and is making huge investments to expand its fleet. 

“Over the past two months, we’ve made payments of around $300 million via IFSC GIFT City. The initial payment was of around $250 million. These payments have been made to lessors for aircraft,” ET reported, citing a source.

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GIFT City & India’s Aircraft Financing Industry 

AIFS is a subsidiary of Air India and a GIFT IFSC-registered finance company. AIFS serves as the primary Air India Group company for wide-body aircraft financing. In 2023, the subsidiary had played a crucial role in financing a lease transaction with HSBC bank for the country’s first Airbus A350-900 aircraft.  

This was a significant development not just for Air India but also for the country’s overall emerging aviation finance sector. It aligns with the government’s plan to make Gujarat’s GIFT City the country’s aircraft financing hub with all stakeholders, including global lessors, banks, insurance companies, legal experts and airlines, facilitating the transactions. This is crucial, as nearly 85% of the aircrafts used by the airlines in the country are leased from foreign lessors, the aviation minister Ram Mohan Naidu Kinjarapu said in Rajya Sabha. A report by PwC mentioned that around 80% of India’s total commercial aircraft are leased. 

Aircraft Objects Bill, 2025 

Besides the GIFT city initiative for aircraft leasing and financing. The parliament has also recently passed the Protection of Interests in Aircraft Objects Bill to streamline aircraft leasing in the country and provide legal support to the Cape Town Convention of 2001.

Also Read: Aircraft Objects Bill Takes Off in Lok Sabha; Check How It Will Give Leasing a Legal Boost in India 

“The bill will boost the Indian leasing industry, incentivise domestic lessors, and strengthen our banking system,” said the aviation minister in a post on X. 

The bill also aims to instill confidence in foreign lessors.