Sumitomo Mitsui Banking Corporation (SMBC), through its Singapore Branch, has successfully closed a $120 million aircraft secured debt facility, marking a significant step in financing the aviation industry’s growth in India.
The deal is designated for the purchase of an Airbus A350-900 aircraft, delivered to Air India, a part of the Tata Group.
SMBC stood as the sole bank in this landmark transaction. The financial arrangement was facilitated with the help of AI Fleet Services Ltd, a subsidiary of Air India located in Gujarat International Finance Tec-City (GIFT City).
This move comes in the wake of Air India’s earlier announcement this year, placing an order for 470 aircraft, signaling a major expansion in its fleet.
Hiroyuki Mesaki, Country Head of SMBC India, highlighted the strategic importance of this deal.
“This transaction not only reinforces SMBC’s global reputation in aviation transportation but also strengthens our long-standing relationship with the Tata Group. The use of an innovative GIFT City structure has enabled us to successfully complete this first-of-its-kind aircraft finance lease transaction in the burgeoning Indian market,” Mesaki said.
Nipun Aggarwal, Chief Commercial and Transformation Officer at Air India, expressed his satisfaction with the partnership.
“Collaborating with SMBC for the financing of the A350-900 aircraft is a pivotal development. This aircraft is one of the initial deliveries from our large order, and the transaction plays a crucial role in expanding our aircraft financing operations through GIFT City, India’s first International Financial Services Centre (IFSC),” Aggarwal stated.
India, currently the fifth largest aviation market globally, is experiencing rapid growth, driven by the expanding middle-class population with increasing travel aspirations.
The aviation sector in the country is poised for continued expansion, as evidenced by the substantial orders placed by various airlines to meet the soaring demand. This deal with SMBC is set to further bolster Air India’s position in the fast-evolving aviation market.
PEVCJournal.com