Standard Chartered, Bank of India seal $215 mn loan for Air India’s fleet expansion

New Delhi: Standard Chartered and the Bank of India will jointly finance a $215 million term loan to an Air India subsidiary for the financing of six Boeing 777-300ER aircraft.

The Air India subsidiary, AI Fleet Services IFSC Ltd (AIFS), is based in Gujarat International Finance Tec-City (GIFT City), in Ahmedabad.

The seven-year financing for Boeing 777-300ER aircraft is part of the airline's ongoing fleet renewal and expansion plans, which aim to increase its fleet to 570 aircraft, according to a joint statement by the lenders and the airline.

Sanjay Sharma, chairman of AIFS and CFO of Air India, in a statement, said: “Air India has embarked on a five-year transformation journey, placing an order for 570 aircraft, and GIFT City will be important for financing of these aircraft. With this commercial aircraft finance transaction via Standard Chartered and Bank of India, we are glad to see GIFT City maturing further and emerging as an aircraft leasing and financing option for airlines as Indian aviation takes strides.”

Under its Vihaan.AI programme, it has ordered 570 new aircraft, merged sister airlines, and is investing in training academies and maintenance facilities.

This deal marks the first commercial aircraft finance transaction structured with a GIFT City borrower, underscoring the city’s emergence as a hub for aviation finance.

Standard Chartered acted as the structuring bank, while both lenders jointly underwrote the transaction as mandated lead arrangers and bookrunners (MLAB). The move highlights India’s growing role in global aviation financing.

Promoted by the Gujarat government in partnership with the Union government, GIFT City is the country’s first operational greenfield smart city and international financial services centre.

This deal comes amid India’s aviation boom, with the sector expected to play a pivotal role in economic connectivity and growth.

New routes announced

Meanwhile, Air India, in a separate statement, announced that it will operate 174 additional weekly flights across domestic and short-haul international routes during the winter schedule.

The expansion is designed to meet the growing travel demand during the winter schedule, which begins on 26 October.

The new routes will enhance connectivity with major Indian cities and popular destinations in Southeast Asia. Internationally, the airline is ramping up operations on high-traffic routes.

The airline announced that flights between Delhi and Kuala Lumpur will increase from seven to ten times a week, starting 15 November. Additionally, services between Delhi and Denpasar (Bali) will increase to 10 weekly flights, effective 1 December.

In the domestic sector, Air India is targeting important seasonal and regional routes.

The airline will introduce new direct services from Delhi to Jaipur and Jaisalmer, operating three times daily to Jaipur and twice daily to Jaisalmer.

Additionally, frequencies on routes connecting Delhi and Mumbai to Udaipur, Jaipur, and Jodhpur will be increased to accommodate higher passenger demand during the winter tourism season.

Furthermore, the airline is strengthening its network in central India.

Notably, routes from Delhi to Indore and Bhopal, as well as from Mumbai to Indore, will see an increase in daily flights.

Additionally, services to Gujarat, such as those from Mumbai to Bhuj and Delhi to Rajkot, are being expanded to operate twice daily.

Apart from these additions, other high-density routes will also see an increase in flight frequency.

Consequently, Delhi will have more flights to Varanasi, Raipur, Guwahati, Port Blair, Aurangabad, and Nagpur, while Mumbai will see increases on routes to Dehradun, Patna, and Amritsar.

According to Air India, this network expansion comes as its fleet retrofit programme nears completion. The retrofit programme was launched in September 2024, with 26 of the 27 legacy Airbus A320neo aircraft targeted for cabin upgrades already retrofitted with completely redesigned interiors.

As per the airline, these aircraft now feature a three-class configuration, including ‘Business Class, Premium Economy, and Economy Class’.

Currently, Air India operates a fleet of 187 aircraft, comprising Airbus and Boeing models.

The airline stated that its ongoing investment in both network and product reflects the ongoing transformation agenda aimed at repositioning Air India as a world-class carrier.