NEW DELHI: With an airport being operationalised every 45 days in the country, the availability of aircraft to run operations remains a key bottleneck, said Union Civil Aviation Minister Ram Mohan Naidu. He chaired the first High-Level Committee (HLC) on Aircraft Leasing and Financing on Wednesday.
Highlighting the importance of aircraft leasing, the Minister said with more than 85% of the fleet of Indian carriers being leased it was imperative to continue engagement with stakeholders to strengthen the aviation eco system, he said.
"The Government efforts to encourage aircraft leasing and boost lessor confidence are yielding results, with 422 assets, including 250 aircraft and 87 engines, having been leased through IFSC (International Financial Services Centre) and 474 leasing agreements having been signed," he told the committee.
He also suggested exploring mechanisms for greater allocation of bank credit to the aircraft sector and identifying joint ventures for technical and skill development in aircraft leasing, said a release from the Ministry.
Measures need to be taken to develop a robust and globally competitive aircraft leasing and financing ecosystem in India, in line with the rapid expansion of the country’s aviation sector.
Aircraft leasing is an established and commercially viable business, with the risks associated with the sector being progressively addressed through appropriate legal and regulatory measures, the Minister added.
Naidu also emphasised the need for a coordinated and time-bound approach towards addressing the identified regulatory, financing and taxation-related issues. These reforms have the potential to fundamentally reshape India’s aviation landscape by making aircraft acquisition and financing easier, faster and more competitive, he felt.The Committee also took up a range of issues to create an enabling environment for aircraft leasing and financing, including taxation, regulatory frameworks, availability of finance and ease of doing business. Discussions included the potential for rupee-denominated financing for aircraft, greater clarity on the applicability of GAAR (General Anti Avoidance Rule).and the possibility of renegotiating the Double Taxation Avoidance Agreement framework with Ireland.
Samir Kumar Sinha, Civil Aviation Secretary, Puneet Kansal, Additional Secretary, officials of the Ministry of Finance, Commerce, aviation regulator DGCA, RBI, IFSCA (International Financial Services Centres Authority) and representatives of industry associations took part.