Air India Gets USD 215M Loan for Boeing Planes

Mumbai, Oct 15 (PTI) Standard Chartered and Bank of India on Wednesday announced a term loan of USD 215 million to Gujarat Gift City-based Air India's aircraft leasing subsidiary AI Fleet Services IFSC Limited (AIFS).

AIFS has entered into a seven-year amortising term loan facility for financing of six Boeing 777-300 ER aircraft. It will lease the aircraft to Air India, a statement said.

The Tata Group-owned Air India is undergoing a fleet renewal and expansion programme following its privatisation in January 2022.

Standard Chartered played a lead role as a structuring bank.

Both Bank of India and Standard Chartered also jointly underwrote the transaction as mandated lead arranger and bookrunner, the statement said.

This is the first commercial aircraft finance transaction to be structured with a GIFT City borrower. The transaction reflects the shared commitment of Standard Chartered and Bank of India to support India's aviation growth story and highlights GIFT City's role as a growing global aviation finance hub, it said.

"This financing highlights our long-standing expertise in aviation finance and our commitment to supporting India's aviation sector as it continues its remarkable growth trajectory," said Abhishek Pandey, Global Head of Transportation Finance at Standard Chartered.

GIFT City is India's first smart city and international financial services centre, promoted by the Gujarat government in partnership with the Government of India as a flagship project to position India on the global financial map.

"We believe the term loan facility to AI fleet services (AIFS), a subsidiary of Air India, will provide a fillip to growing the aviation finance segment in India. It also underscores the Bank's client centric approach and the endeavour to be an equal partner in the clients' growth journey, " said P D Singh, CEO, India and South Asia, at Standard Chartered.

Standard Chartered was the first foreign bank to establish a branch in GIFT City and this transaction reaffirms our commitment to advancing GIFT city as a premier international financial hub, he said.

"Air India has embarked on a five-year transformation journey, placing an order for 570 aircraft, and GIFT City will be important for financing these aircraft. With this commercial aircraft finance transaction via Standard Chartered and Bank of India we see GIFT City maturing further and emerging as an aircraft leasing and financing option for airlines as Indian aviation takes strides," said Sanjay Sharma, Chairman, AIFS, and Chief Financial Officer, Air India.

According to Ashutosh Sharma, CGM, International Financial Services Centres Authority, GIFT City (IFSCA), this transaction also underscores GIFT IFSC's emerging role as a growing hub for aviation financing and a destination offering competitive foreign currency loan structures.

Bank of India said, "Aviation finance is a key enabler for India's economic growth, connecting people, businesses, and markets worldwide. By leveraging the opportunities at GIFT City, Bank of India reaffirms its commitment to strengthening India's presence in international financial services and contributing to the nation's vision of becoming a leader in global aviation finance.