Standard Chartered and the Bank of India have jointly extended a US$215 million term loan to AI Fleet Services IFSC Ltd (AIFS), the aircraft-leasing subsidiary of Air India, to finance six Boeing 777-300ER aircraft.
The deal is structured as a seven-year amortising facility, and the aircraft will subsequently be leased by AIFS to Air India.
AIFS is based in Gujarat International Finance Tec-City (GIFT City), Ahmedabad, and this transaction marks the first commercial aircraft financing arranged through a GIFT City–based borrower, setting a precedent for aviation finance via the international financial services centre.
In the transaction, Standard Chartered acted as the structuring bank, while both Standard Chartered and Bank of India jointly underwrote the deal as mandated lead arrangers and bookrunners.
Strategic Rationale and Context
The loan aligns with Air India’s ongoing fleet renewal and expansion strategy, under which the airline has placed orders for 570 new aircraft across Airbus and Boeing to modernize and scale up its operations.
Sanjay Sharma, Chairman of AIFS and Chief Financial Officer of Air India, said the company intends to leverage the financial infrastructure of GIFT City for funding future aircraft acquisitions.
From the lenders’ side, Abhishek Pandey, Global Head of Transportation Finance at Standard Chartered, said the deal demonstrates the bank’s ability to design jurisdiction-aligned aviation finance solutions and underscores its commitment to India’s aviation sector.
P. D. Singh, CEO of Standard Chartered, India and South Asia, described the transaction as a historic milestone in positioning GIFT City as a major aviation finance hub, reinforcing its potential to host aircraft leasing and financing deals on a global scale.
GIFT City is being promoted by the Gujarat and Indian governments as India’s flagship international financial services center.
The transaction reflects growing confidence in the emerging role of GIFT City in global finance, particularly for aviation.
Officials from Bank of India said the partnership reinforces GIFT City’s growing importance in the global aircraft financing ecosystem and highlights the role of aviation finance in supporting India’s broader growth trajectory.
Ashutosh Sharma, Chief General Manager at the International Financial Services Centres Authority (IFSCA), noted that the successful closure of this transaction marks a significant step for GIFT IFSC, signalling its development as a competitive ecosystem for aviation finance.
Implications and Outlook
The US$215 million loan for six Boeing 777 aircraft represents a milestone for domestically structured aviation finance in India.
It underscores the increasing ambition of Indian carriers to internalize aircraft funding, reduce dependence on foreign lessors, and leverage emerging financial hubs such as GIFT City.
By facilitating such a deal, GIFT City’s profile as an aviation finance destination is expected to be strengthened, potentially attracting further aircraft-leasing and financing activity within India.
For Air India, the infusion of capital will support its fleet growth plans, replace older aircraft, and expand its network in line with its long-term transformation agenda.
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