IndiGo has secured Japanese Operating Lease with Call Option (JOLCO) financing for two Airbus A320 family aircraft. This not only marks the first JOLCO financing for the airline, but for an Indian carrier.
The deal was secured through the airline's dedicated GIFT City entity InterGlobe Aviation Financial Services.
Recent domestic legislation reforms introduced last month has positioned India to be more closely aligned with the Cape Town Convention, such as allowing aircraft lessors to reclaim assets within 60 days of a bankruptcy event. This has reduced the risk associated with India. Additionally, GIFT City also facilitates cross-border aviation finance, which has supported the lack of a double taxation avoidance agreement between India and Japan.
With GIFT City and the recent legislation reforms, the JOLCO avenue has opened up to Indian carriers.
During Airline Economics' Growth Frontiers India event held last month in New Delhi, panellists noted that these reforms have “brought more investor confidence and will widen the pool of options available to Indian airlines”.