Air India Borrows $120 Million From Japan's SMBC To Purchase Airbus Plane
The transaction has partly financed Air India's purchase of an A350-900 aircraft from Airbus, which was delivered in October 2023
Tata-owned Air India has borrowed $120 million from Japanese lender SMBC for purchasing a wide-body aircraft from Airbus, the PTI reported on Wednesday. The transaction has partly financed Air India's purchase of an A350-900 aircraft from Airbus, which was delivered in October 2023, according to an official statement.
According to the report, the Japanese lender said this is a secured debt facility through its Singapore branch, while Air India's GIFT City-headquartered arm AI Fleet Services is the borrower. The purchase is part of the mega announcement by the Tatas to buy a total of 470 aircraft from Boeing and Airbus, and AI has also contributed equity. According to some reports, an Airbus A350-900 aircraft is priced above $300 million.
"SMBC Group is pleased to expand upon its long-established relationship with Tata Group through this deal," the lender's country head for India Hiroyuki Mesaki said. He added that this is the the bank's first-of-its-kind transaction for aircraft finance lease.
Nipun Aggarwal, Air India's chief commercial and transformation officer, said the aircraft was among the first deliveries in the company's large aircraft order announced earlier this year. "This transaction is also a major step in expanding our aircraft financing business through GIFT City, India's first International Financial Services Centre (IFSC)," Aggarwal added.
The SMBC statement said India is the fifth largest aviation market globally, and the sector is expected to continue growing significantly on tailwinds like emergence of a large and growing middle-class willing to travel.
Recently, Air India unveiled its new collection of uniforms, designed by Manish Malhotra, for its cabin and cockpit crew. The new uniforms will be introduced in a phased manner over the next few months, starting with the entry of service of Air India's first Airbus A350 aircraft, the company said in a statement.
"Air India's crew uniforms are amongst the world's most storied in aviation history, and we firmly believe that Manish Malhotra's innovative ensemble will script an exciting new chapter for Air India's future narrative," said Campbell Wilson, Chief Executive Officer and Managing Director at Air India.
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