Aircraft China- the capricious neighbor of India, has made significant inroads into several Indian sectors. One of its growing roles is in the Indian aviation industry.
According to data, about 20 per cent of the aircraft operated by Indian carriers have been leased from Chinese lessors, who have given a tough competition to the earlier dominating companies from Ireland and the US.
Almost all Indian airlines, such as AirAsia India, GoAir, IndiGo, SpiceJet, and Vistara, have leased planes from Chinese companies. Only national carrier Air India is excluded from the list.
Out of the 480 aircraft that are operated by Indian carriers, 96 are leased from Chinese lessors. In total, about 650 aircraft are currently operational in India. Apart from the commercial airlines, the rest of the planes belong to the ‘general aviation’ category, including charter service providers.
Who are these Chinese lessors?
Most of the Chinese leasing companies are either backed or owned by the local banks, giving them easy access to the capital. For example, China Development Bank (CDB) Leasing Company, which has leased out 30 planes to Indian carriers, is owned by China Development Bank.
Moreover, Bank of China owns BOC Aviation, which has leased out 24 aircraft to Indian carriers. Several other Chinese leasing companies are active in India including ICBC Leasing, China Aircraft Leasing Company Ltd, CMB Financial Leasing, and Minsheng Financial Leasing.
In total there are over 20 leasing companies from China.
Taking innovation from China
Rightly said by our PM it’s the time to make an ‘Aatmanirbhar Bharat’. Aatmanirbhar theme can be applied to the aircraft leasing industry too in India.
Surprisingly, as per the Rupee Raftaar report released by the government in 2019, it asks the Indian aviation industry to take inspiration from the Chinese counterpart!
The report noted that nearly Rs 10,000 crore is spent every year by Indian airlines in lease rentals. To boost the business in India, the report asks providing tax incentives to develop a domestic leasing industry.