IndiGo is setting up its own aircraft leasing arm in the northwestern Indian state of Gujarat, according to a National Stock Exchange of India filing of September 4, 2023.
This latest move by the Indian low-cost carrier, which has nearly 1,000 aircraft on order, mimics a similar decision announced by Air India in August 2023.
Both airlines are establishing wholly owned aircraft leasing units at Gujarat International Finance Tec-City (also known as “GIFT City”), a greenfield new business district near the city of Ahmedabad.
GIFT City has been conceived as a “smart city” and special economic zone (SEZ), offering a number of advantages, such as tax holidays on capital gains, to financial services companies that relocate there.
IndiGo will invest 30 million Indian Rupee (US$3.6 million) in this new leasing unit and will issue corporate guarantees to the tune of US$996 million to secure the payment obligations of the new subsidiary.
The formation of IndiGo’s leasing firm is subject to approval by the government of India and will take place within a period of three years.