Akasa Air Establishes Aircraft Leasing Arm at GIFT City to Accelerate Fleet Financing

What Happened and Why

On May 8, 2026, Akasa Air announced the establishment of Akasa Air Leasing IFSC Private Limited (AALI) at GIFT City, Gandhinagar. Leveraging the benefits of the GIFT City framework, AALI is expected to finance a majority of the airline's aircraft over time while strengthening onshore leasing capabilities. The move reflects the airline's need to fund a vast fleet expansion programme while reducing borrowing costs and accessing international capital markets more efficiently.

Strategic Context

Akasa Air has announced plans to grow from its current fleet of approximately 40 aircraft to over 200 aircraft by 2030, a capital commitment exceeding $15 billion. Currently, Akasa Air has a fleet of 38 Boeing 737 MAX airplanes and has placed an order for 226 such aircraft. Traditional financing for this volume would be expensive and time-consuming for a nearly four-year-old carrier.

The new entity enables the airline to issue bonds and securities directly into international markets under IFSC regulations, with direct market access typically reducing borrowing costs by 150–300 basis points compared to traditional aircraft loans.

GIFT City Framework Advantages

The IFSC is a regulatory enclave where entities can transact in foreign currency, are governed by a single regulator (the IFSCA) instead of multiple regulatory bodies such as the RBI, SEBI, and IRDAI separately, and benefit from a tax regime calibrated against established financial centres such as Dublin, Singapore, and Dubai.

The Section 80LA deduction permits eligible IFSC units to claim an income tax deduction of 100 per cent for the first 10 years in a 15 year span, equating to a de facto 20 year income tax holiday, with the eligibility period to commence operating extended from 31 March 2026 to 31 March 2030.

Who Decided

Priya Mehra, Chief of Governance & Strategic Acquisitions, Akasa Air, stated: "The GIFT City entity is a key enabler of Akasa Air's next phase of growth, strengthening our aircraft financing strategy and positioning us to access global capital more efficiently. It allows us to build deeper, long-term partnerships with leading lessors while supporting our fleet expansion at scale. We appreciate the enabling ecosystem created by the Government of India and remain committed to contributing to the evolution of GIFT city as global aviation financing hub."

Industry Peer Activity

Air India and IndiGo also have their aircraft leasing entities in the GIFT City. IndiGo's leasing arm, InterGlobe Aviation Financial Services IFSC, plans to nearly double its aircraft portfolio from 78 to 150 by March 2027, with the additional aircraft estimated to be worth $3.5–$4 billion. Air India subsidiary AI Fleet Services plans a major expansion, aiming to increase its GIFT IFSC-leased fleet from 16 to as many as 75 aircraft during FY27, involving assets worth around $2.5–$3 billion.

What Changes

AALI's establishment allows Akasa Air to shift from relying solely on global lessors and international banks to financing a significant portion of its fleet through a dedicated IFSC entity. The entity can structure lease arrangements with affiliated subsidiaries, optimizing tax outcomes across jurisdictions, and structured leasing allows Akasa Air to match aircraft acquisition cycles with fleet planning more precisely, rather than committing to long-term fixed-rate financing.

As of May 2026, 101 commercial aircraft have been leased through GIFT IFSC, including 82 narrow-body aircraft and 14 wide-body aircraft, with IndiGo having leased the most at 78, followed by Air India with 16.

Next Steps

Akasa Air has served over 27 million passengers since its launch in August 2022 and operates to 31 destinations including six international destinations as of January 2026. Akasa Air plans to lease 60 aircraft over the next five years through GIFT City structures, aligning with its broader fleet modernization and route expansion strategy. The airline will need to coordinate aircraft deliveries from Boeing with integration of new aircraft into its operations while managing growth across domestic and international networks.