Axis Bank Pioneers Aircraft Financing at GIFT City

Mumbai: Axis Bank has become the first Indian lender to execute an aircraft financing deal through its International Banking Unit at GIFT City IFSC. The private sector bank extended a long-term US dollar loan to AI Fleet Services, Air India’s leasing arm, for the purchase of 34 training aircraft. These will be deployed at Air India’s upcoming pilot training institute in Amravati, Maharashtra.

The deal marks a shift in India’s aviation finance sector, traditionally dominated by foreign lenders. By structuring the transaction entirely within GIFT City, Axis Bank reinforces the hub’s growing role in global aviation finance. The Indian aviation sector is projected to require USD 30 billion for fleet expansion over the next decade. The move aligns with the Govt’s push for financial self-reliance by promoting GIFT City to emerge as a strategic alternative to global aviation finance centers.

For the first time, all key stakeholders in the deal—the lender, borrower, law firm, facility agent, and security agent—are GIFT City entities. Rajiv Anand, deputy managing director at Axis Bank, said the deal was a step toward creating a strong aviation finance ecosystem in India. "By leveraging its presence in the IFSC ecosystem, our GIFT City franchise has demonstrated capabilities to offer homegrown financing options that strengthen India’s position in the global aviation landscape," he said.

Sanjay Sharma, chief financial officer at Air India, said the airline has placed an order for 570 aircraft as part of its five-year transformation plan, Vihaan.AI, and GIFT City will play a key role in financing them. In FY 2023-24, AI Fleet Services executed eight finance lease transactions worth more than $1 billion. The recent transaction for 34 training aircraft is among the first where an Indian bank has participated in long-term dollar aircraft financing, he said.

Historically, airlines have depended on multinational banks for aircraft financing. Axis Bank’s entry into this space provides domestic carriers with an alternative funding option.


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