Although it is among the fastest growing aviation markets in the world and with the second largest aircraft order book in the world, India has never had a leasing company.
India currently has 700 (commercial) aircraft and 800 aircraft currently on order to be delivered in the next 4-5 years. Until now, not a single one of them was rented in India.
The total value of the backlog of commercial aircraft orders from India is $ 19.32 billion.
Why suddenly now Indian companies started Aircraft leasing business?
The Union budget had proposed the tax holiday for capital gains and tax exemption on aircraft rentals paid to foreign lessors to IFSC-based leasing companies in the GIFT city of Ahmedabad.
So who are going to start/started this ?
To capitalize on this opportunity, the first company to go with is the private charter provider. The JetSetGo aircraft leasing unit will begin operations from GIFT City.
The founder and CEO of the company is Kanika Tekriwal.
The airline plans to bring in six planes by the end of the 2021-21 year, at least two of which can be rented through the next unit.
The service provider plans to purchase used aircraft in the US and Europe through its leasing subsidiary, allowing it the flexibility to access customers both in India and abroad.
Used jets could cost between $ 2 million and $ 15 million.
Urban air mobility is likely to only take off via aggregators through asset-heavy business models, unlike Old / Uber, which operate light-asset models in the automobile segment.
"The first aircraft (Hawker 800XP) will be leased to Info Pacific Aviation Pvt Ltd, a subsidiary company of JetSetFleet."
To lease the aircraft, the company is experimenting with a novel financing strategy in which JetSetFleet plans to use the pay-as-you-go arrangement and is also looking into a revenue sharing arrangement.
The aircraft acquired under the GIFT City scheme operates with an Unscheduled Operation Permit (NSOP), intended to be used by corporations or business leaders.
Facilitating the purchase of less-used aircraft by registering within the country will save valuable foreign currency in terms of leasing, which previously had to be deposited in the foreign country where the company was registered.
So far, Indian airlines lease planes to lessors in Ireland, Hong Kong and Singapore. Currently, it is 48 percent more expensive to do this from India than from Ireland.
SpiceJet, HAL, Acumen Aviation, VMan Aero, Investec are the other companies seeking to open aircraft leasing services in India, based at GIFT City in Ahmedabad.
Global Aircraft leasing industry:
Globally, the largest independent aircraft leasing company is the Irish company AerCap.
In 2020, AerCap's fleet was valued at nearly US $ 29.8 billion.
The company had an estimated fleet size of around 1,074 aircraft in that same year.
In March 2021, GECAS parent company General Electric announced a US $ 30 billion agreement to merge GECAS with AerCap.
The global commercial aircraft leasing market is estimated at US $ 33. 7 billion in 2020, projected to reach a size of US$ 47.1 billion by 2027 growing at a compound annual rate of 4.9% during the period 2020-2027.
Europe generated the highest revenue in the aircraft rental industry in 2020 due to high disposable income and high living standards in the region. The development of new aircraft, increased air traffic, efficient commercial aircraft operation, and technological advancements have led to a growing adoption of aircraft rental in the region.
India is emerging as a global growth hub has immense potential to for growth, this aircraft leasing will improve domestic business and also lower foreign exchange outflow which are currently high.
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