After airports, Adani group enters jet leasing business

TheAdanigrouphas incorporated an aircraft owning andleasingcompany in Gujarat’s GIFT City, marking its entry into thisbusinessaftertwo of the country’s leading airlines – IndiGo and Air India – formed subsidiaries for the same.

UdanvatLeasingIFSC was incorporated on October 23 byAdaniPorts and Special Economic Zone with an authorised and paid-up share capital of `2.5 crore divided into 2.5 million equity shares of `10 each.

TheAdanigroupis already a major player in the airportbusiness, controlling 23% of the country’s total passenger traffic, by the end of August.AdaniAirport Holdings has seven operationalairports, including Mumbai, Ahmedabad and Lucknow, while one airport at Navi Mumbai is under development.

Gujarat International Finance Tec-City (GIFT City) has India’s maiden International Financial Services Centre (IFSC), which is positioned as a gateway for inbound and outbound requirements of international financial services in India.

Its overarching goal is to provide financial services currently consumed outside India by overseas financial institutions and overseas branches/subsidiaries of Indian financial institutions. GIFT City claims to offer a competitive tax regime and regulations forleasingcompanies.

Nearly 1,400 aircraft are on order by just two Indian airlines, IndiGo and Air India, who control nearly 90% of the domestic market. Akasa Air, the newest airline in India, said it will place orders for aircraft running into three digits before the end of this year.

While there are no aircraftleasingcompanies in India, some of the biggest companies in thebusinessare based in Ireland. More than 80% of operational aircraft possessed by the Indian airline companies are leased. These companies have to pay lease rentals which are often exposed to currency fluctuations.