 "aircraft, plane, flights, air travel, aviation")
Advisory firm Primus Partners on Wednesday released a report highlighting the challenges and recommendations for the progress of the Aircraft Leasing Industry in India.
According to the report, amid growing passenger traffic, India's demand for aircraft is predicted to reach 2,100 in the next 20 years. It also states that around 80 per cent of the total commercial fleet in India is leased in comparison to 53 per cent globally.
It also recognises that the industry holds immense potential, therefore, it is crucial that the right ecosystem is built for the sector to flourish and for India to be deemed as a leasing hub.
The report suggests that currently, Indian airlines are forced to finance their leases through other countries such as Ireland, Singapore, and Hong Kong which provide an ecosystem that fulfills their needs such as strong financing, faster aircraft repossession and redeployment, and provision of maintenance and operations activities.
Leasing internationally implies Indian funds are redirected abroad which is another factor that should drive the Government to take the necessary steps to establish a thriving leasing eco-system in India.
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There is also a dire need to streamline processes and the regulatory environment, with Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC) possessing the sufficient potential to become the face of Aircraft Leasing in India.
The report also mentions several reasons why aircraft leasing has not taken off in India after consultations with industry experts. Some of these reasons include the lack of a proper financing framework, weak implementation of regulations on repossession, and past experiences leading to a not-so-great industry perception are some of the major issues.
It also mentions some reforms, which include:
- Financing aircraft leases indigenously
- Strengthening aircraft repossession
- Streamlining tax regulations
- Ripple effect on the maintenance, repair, and operations ecosystem in India
