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‘Aircraft leasing at GIFT City can change the way India travels’

Covid-19 a temporary setback as fundamentals remain intact and there is still a huge potential for growth in India's passenger as well as cargo traffic, aviation experts say

July 16, 2021 / 03:21 PM IST

The aircraft leasing platform enabled by the government and the International Financial Services Centres Authority opens up opportunities in the civil aviation sector and has the potential to change the way India travels, IFSCA general manager Ashutosh Sharma has said.

IFSCA is the regulator of the International Financial Services Centres set up at GIFT City in Gujarat’s Gandhinagar with the explicit purpose of developing a financial hub.

IFSCA had already given licences to three lessors—Mumbai-based Vman Aviation, New Delhi-headquartered JetSetGo and Ireland’s Acumen Aviation—after coming out with an aircraft leasing framework in February 2021, Sharma said at an  India-focused aviation event organised by Ishka, a leading name in the global aviation industry.

Vman recently ordered its first helicopter and JetSetGo procured the first fixed-wing.

“IFSCA offers internationally benchmarked and globally commercially competitive regime to aircraft lessors and that too in one of the lowest operating cost jurisdiction,” Sharma said.

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He said lessors at IFSC get tax deductions on their income for any block of 10 years out of the first 15 years. With a tax depreciation rate of 40 percent, lessors effectively get tax benefits for most of the 15-year period. The lessors also don’t have to pay stamp duty but for that, they have to set shop at IFSC before March 2024.

The government wanted the aviation sectors to grow and had taken several reform measures, including aircraft leasing, underscoring its commitment, Sharma said.

Speaking at the event, Leo Fattorini of international law firm Bird & Bird said though COVID-19 had the aviation sector in India, the impact would be short-lived as with fundamentals remained the same.

Indian airlines flew more than 341 million people in FY 2020 and the fleet size of mainline airlines was around 750 commercial aircraft, which is projected to increase to 1,200 aircraft by 2027.

To bring business to IFSC, Indian carriers would have to step up and negotiate the terms so that domestic demand could be met through the leasing platform at GIFT City, Lewis Sutherland, an aviation expert with Investec, said.

The Indian market was a focus area for Investec, as there was still a lot of potential in the freight segment, he said.
Moneycontrol News
first published: Jul 16, 2021 02:49 pm

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