NEW DELHI: Akasa Air has established its leasing unit at Gujarat International Finance Tec-City (GIFT City) in Gandhinagar, named Akasa Air Leasing IFSC Pvt Ltd (AALI), to support its fleet expansion. The airline announced that leveraging the benefits of the GIFT City framework, AALI is expected to finance a majority of the airline's aircraft over time while strengthening onshore leasing capabilities.
The leasing arm will play a pivotal role in advancing the airline's aircraft financing strategy, enabling greater flexibility, cost efficiency, and enhanced access to global capital markets. AALI is a wholly owned subsidiary of SNV Aviation Private Limited.
Priya Mehra, Chief of Governance and Strategic Acquisitions at Akasa Air, stated: "The GIFT City entity is a key enabler of Akasa Air's next phase of growth, strengthening our aircraft financing strategy and positioning us to access global capital more efficiently. It allows us to build deeper, long-term partnerships with leading lessors while supporting our fleet expansion at scale. We appreciate the enabling ecosystem created by the Government of India and remain committed to contributing to the evolution of GIFT City as a global aviation financing hub. We also sincerely thank our leasing partners for their trust and collaboration as we take this important step."
This strategic move underscores Akasa Air's commitment to expanding its fleet and enhancing its financial infrastructure. By establishing a presence in GIFT City, the airline aims to tap into the benefits of India's first International Financial Services Centre (IFSC), which offers tax incentives, regulatory ease, and access to international capital markets. The initiative is expected to not only support Akasa Air's growth but also contribute to the development of GIFT City as a prominent global aviation financing hub.
Strategic Importance of GIFT City
GIFT City has emerged as a key financial hub in India, designed to compete with global financial centers like Singapore and Dubai. The IFSC framework provides entities like AALI with advantages such as tax holidays, relaxed regulatory norms, and seamless integration with global financial systems. For Akasa Air, this means lower financing costs and greater flexibility in structuring aircraft leases.
Impact on Fleet Expansion
Akasa Air, which began operations in August 2022, has been rapidly expanding its fleet to capture market share in India's competitive aviation sector. The airline currently operates a fleet of Boeing 737 MAX aircraft and has placed orders for additional planes. The leasing unit will facilitate the acquisition of new aircraft through efficient financing mechanisms, enabling the airline to scale operations and increase its route network.
Industry experts view this development as a positive step for India's aviation leasing ecosystem. By onshoring leasing activities, Akasa Air reduces dependence on foreign lessors and contributes to the growth of domestic financial services. This aligns with the government's push to make GIFT City a global hub for aircraft leasing and financing.
Future Outlook
With the establishment of AALI, Akasa Air is well-positioned to navigate the challenges of aircraft financing in a post-pandemic world. The airline's focus on cost efficiency and global capital access will likely enhance its competitive edge. As the aviation industry recovers and grows, Akasa Air's strategic initiatives could serve as a model for other Indian carriers looking to optimize their financing structures.
