Although India’s aircraft leasing and financing industry is still in its nascent stage, the government’s support through the Gujarat International Finance Tec-City (GIFT City) International Financial Services Centre (IFSC) and policy initiatives such as the Protection of Interests in Aircraft Objects Act highlight the sector’s potential, says Jaideep Mirchandani, chairman of Sky One. Speaking to Outlook Business, the head of the UAE-based leasing and maintenance, repair and overhaul services (MRO) company highlighted the challenges for the sector including the kind of talent required to power the sector’s growth.
Q. What challenges hinder the industry’s growth as the government pushes to make GIFT City a leasing hub?
Indian airlines have mostly relied on international lenders as domestic aviation finance is still underdeveloped. This highlights the need to build a strong local financing and leasing ecosystem.
Earlier this year, Axis Bank, through its GIFT City branch, executed India’s first $-denominated aircraft financing deal for 34 training aircraft. Deals like this show that Indian banks can handle complex transactions and signal GIFT City’s potential as a leasing hub.
With much of India’s airline fleet currently leased from overseas, developing a domestic leasing ecosystem is crucial to reduce dependence on foreign lessors and limit foreign exchange outflows. Legal clarity has also improved with the Protection of Interests in Aircraft Objects Act, aligning India with the Cape Town Convention and restoring lessor confidence.
Together, these steps can help India’s aviation finance industry grow in line with global standards.
Q. Has the Aircraft Objects Act begun translating into leasing opportunities?
The Protection of Interests in Aircraft Objects Act is a significant move that can strengthen aircraft financing and leasing in India. India formally adopted this convention in 2008 but gaps in legal enforcement had kept leasing costs 8 to 10% higher than in other countries. The Act addresses these gaps by providing legal certainty to aircraft financiers and reducing costs for Indian carriers.
The legislation not only reinforces lessor confidence by formalising Cape Town aligned protections but also provides priority for international interests, streamlined enforcement and clarity in insolvency, all of which reduce risk-based pricing. When combined with IFSCA regulations it enhances the bankability of IFSC leases and enables longer tenor financing in GIFT City. We are already seeing this strengthened legal framework translate into live transactions, reflecting growing confidence in the Indian market.
Q. Ahmedabad plane crash exposes aviation safety gaps. Should Indian MROs take on high-value services like engine overhauls and heavy maintenance?
Indian carriers are still heavily dependent on overseas providers for MRO services. With the growth Indian aviation is witnessing it is critical to develop a stronger MRO sector capable of handling these services within the country. Expanding into areas like advanced engine maintenance, especially for new-generation aircraft, will require major investments in infrastructure and skilled manpower. Building additional hangars, strengthening local production of spare parts and scaling technical capabilities will be key to reducing dependence on imports. Coordinated efforts by the government, Ministry of Civil Aviation, airlines, MRO service providers, original equipment manufacturers (OEMs), private manufacturers and suppliers and training institutions will be essential.
Q. How have the India-Pakistan airspace ban and post-Ahmedabad crash safety checks impacted aircraft leasing?
The closure of airspace always creates operational challenges and financial pressure for airlines. Rerouting flights increases travel time which means higher fuel consumption, delays and rebooking issues. Longer routes also affect crew schedules. For flights to Europe and Central Asia these restrictions have raised fuel, crew and maintenance costs. That is why regulators have allowed short-term lease extensions to help airlines. For lessors this situation has created demand for higher-thrust aircraft and more flexible arrangements such as power-by-the-hour, seasonal capacity and wet-lease bridges.
However, it also raises utilisation risks and maintenance costs. Meanwhile the enhanced safety checks introduced after the Ahmedabad crash have led to short-term downtime and increased documentation. These measures improve asset safety and provide greater technical transparency which strengthens the leasing industry in the long term.
Q. Does India have the talent and skills required to power its leasing industry?
While there is a sizable domestic talent pool, leveraging international expertise is also important to help the industry realise its full potential. Meanwhile, aircraft leasing requires cross-trained talent covering credit assessment, technical asset management, contracts aligned with Cape Town norms and repossession or remarketing expertise alongside skilled pilots, engineers and maintenance management specialists.
India has a strong foundation of aviation finance and technical graduates but specialised programmes based in IFSCs for aircraft finance and asset management can accelerate growth. Industry stakeholders and policymakers should also coordinate initiatives including efforts to position India as a pilot-training hub to ensure the availability of skilled manpower needed for the sector’s expansion.
Q. How ready is the civil aviation workforce of pilots, crew and engineers to meet rising demand?
With the kind of growth happening in Indian aviation, the need for skilled manpower is only going to rise. The Minister of Civil Aviation recently said India will require nearly 20,000 pilots in the near future. India issued a record 1,622 licences for commercial pilots in 2023 but the number slipped to 1,342 in 2024. To sustain momentum, coordinated efforts are needed. The high cost of pilot training is a major barrier and cadet pilot programmes, similar to subsidised or partially funded models in Western countries, can help address this challenge.
Moreover, India will need not just pilots and engineers but also specialists in avionics, structures and even new fields like artificial intelligence as aircraft become more advanced. Expanding domestic training centres, scaling apprenticeship programmes linked to IFSC and MRO hubs and introducing fast-track courses in aircraft finance and asset management along with early outreach programmes in schools will be key to building this talent pipeline.
Q. India is now the third-largest aviation market and faces plane shortages—what leasing demand has Sky One seen?
In the past 12–18 months, delays in aircraft deliveries from OEMs and bottlenecks in MRO have pushed Indian carriers towards short-to-mid-term leases and sale-and-leaseback (SLB) deals. Rapid sector growth and supportive government policies have led to more requests for proposals for narrow-body aircraft and rising interest in wide-bodies on trunk routes.
Sky One has been addressing this demand through operating leases, SLBs and novations structured in India. Another area of focus has been asset trading services including sale-and-leaseback options, flexible dry lease terms and advisory support.
