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01 October 2005
India and China are both emerging markets for aircraft finance – and the two are becoming increasingly similar. Dominic Jones reports.
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The Chinese and Indian air transport and finance markets share much in common: both are experiencing rapid traffic growth and fleet expansions, and they both have burgeoning funding requirements and increasing liquidity in their respective domestic banking markets.
Even though financiers have had few opportunities to explore long-term aircraft finance options for Indian carriers over the past decade, unlike in China, banks expect the two aircraft finance markets to develop along similar lines. Export finance, in particular, is expected to account for a larger proportion of aircraft finance deals in the two markets.
Long-term aircraft finance has been absent from the Indian market partly because government intervention has prevented the two state majors, Air India and Indian Airlines, from purchasing new jets. The airlines have had to rely on leasing instead to meet their expansion needs.
Air India, for example, has had to seek aircraft on operating lease for its...
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