Six aircraft renting firms including one from Ireland — the worldwide centre point for aeroplane renting — have been offered licenses to function from GIFT City in Gujarat. Acumen Aviation, having central command in Ireland was given a permit in July 2021. This firm is a significant expansion to the aircraft leasing business in India as it is assessed that Ireland alone is in command of 60% of the worldwide leasing market. Other players in GIFT City are JetSetGo Aviation, Vman Aviation Services, Wels, Rensar Aviation and Millennium Aviation.
Authorities said that seven additional entities have applied for licenses for commencing the operations. The advancement comes surprisingly close to the Centre announcing an administrative system for making GIFT City an aircraft leasing hot-spot
The current surge in demand for leased aircraft is coming mostly from flying clubs, air taxis and corporates leasing out business jets. “Six licenses have already been issued to firms for conducting aircraft leasing activities from International Financial Services Centre (IFSC). Seven more companies have already applied for licenses which are currently being scrutinised. Each of these companies has formed a Special Purpose Vehicle to operate from here. Five of those given licenses are Indian firms, while the sixth is a subsidiary of a firm based in Ireland,” a senior official from GIFT City reportedly said.
According to IFSCA officials, the Union Ministry of Civil Aviation is all set to promote the “flying clubs” culture “These flying clubs require certain numbers of training- aircraft. These aircraft are not manufactured in India. Currently, there is a huge demand for trainer aircraft from such clubs,” stated a state government official.
“The demand for leased aircraft is also coming from air-taxi operators. For instance, the deal for a second aircraft to be leased through GIFT City by Vman Aviation is for an air taxi service in Bengaluru. Thirdly, the demand is also coming from corporates interested in leasing business jets,” An IFSAC official said
The Hawker 800 XP aircraft leased by JetSetGo Aviation became the first aircraft to be leased through GIFT IFSC in August 2021. The Airbus H125 helicopter leased from Vman is yet to be delivered.
The absence of an air terminal was one of the initial hurdles the Aircraft lessors faces in GIFT IFSC itself didn’t have an airport. The leased aeroplane needed to land someplace when they come to India. So at first, MIHAN SEZ in Nagpur was picked as a spot as it was an air terminal with an SEZ. So when a recently leased plane lands, it can go into the parking in the narrows which is a piece of the SEZ. All air terminals are uniquely bound regions thus now we have mentioned the public authority to permit recently rented aircraft to land anyplace in the country. This will additionally help aircraft renting.
As one of the components of the regulatory systems at GIFT City, every one of the organizations needs to make a Special Purpose Vehicle (SPV) to work from the IFSC. “Earlier, to lease aircraft, Indian firms had to register their companies in leasing hubs like Ireland. Now they can easily do it from GIFT City,” the official from GIFT City said.
Among the various sops given by the public authority to advance aircraft renting, lessors get tax allowances on their pay for 10 years, the Gujarat government is additionally providing exemptions on stamp duty .“A lot of changes had to be brought into the system to make the aircraft leasing work in GIFT City. Without these changes, we could not have even thought of competing with large aircraft leasing hubs like Ireland,” the official added.
IFSCA had regulated an administrative system for aircraft renting in February 2021.
Ease in doing business:
With the boom of commercial aviation in India and with more than 190 million travellers utilizing planes as a go-to vehicle for transportation during the pandemic, GIFT City appears to be a good turn into a significant community for aircraft leasing. Till now, Indian entities involved in this sector had to register themselves in overseas hubs like Ireland to conduct activities related to the leasing of aircraft, but with leasing activities becoming operational in the GIFT City campus, these entities simply need to form a special purpose vehicle, as mandated under the regulatory framework, to conduct their business. Such entities also have to maintain a minimum capital of USD 20,000 or its equivalent in freely convertible currency, at all times.