IndiGo Ties Up With Citi to Fund Purchase of Eight Airbus Aircraft
Citi has completed an aircraft financing transaction worth $328 mn with IndiGo for the acquisition of 8 Airbus aircraft, comprising six A321s and two A320s. The transaction, structured using GIFT IFSC, is the first aviation finance transaction to be covered by Belgian export credit agency Credendo.
With a financing arrangement worth $328 million, Indigo, the biggest airline in the country, would purchase eight narrow-body planes from Airbus. A statement said that this is the first ever aircraft finance arranged through the GIFT IFSC. Noting further, it said that it is also the first-ever aviation financing transaction insured by the Belgian export credit agency (ECA) Credendo.
According to Indigo, the funding will allow them to purchase six A321s and two A320s. Credit insurance from Credendo supported the funding, and Citi, a global banking giant, served as the only lender, ECA coordinator, and mandated arranger.
IndiGo to Further Strengthen its Presence with this Funding
As a wholly owned subsidiary of Indigo, InterGlobe Aviation Financial Services IFSC carried out the transaction. In addition, the carrier's fleet and network can grow with the help of this competitive and diverse source of long-term funding. According to K. Balasubramanian, chief executive officer of Citi India, the trio has created a groundbreaking solution by integrating the knowledge and experience of Citi in international aviation and ECA finance with Credendo's credit insurance and IndiGo's GIFT IFSC platform.
This approach will pave the way for the next stage of aviation expansion in India by linking the country's aviation industry to the vast worldwide liquidity pool supported by the ECA. According to Credendo's group deputy CEO Frank Vanwingh, the ECA's long-term goal is to become a reliable partner for Belgian aviation stakeholders who are looking for ways to tap into global markets and creative funding models. The cooperation between Citi, Credendo, and Airbus provides a competitive source of capital for Indigo's expanding Airbus fleet, according to Chief Aircraft Acquisition and Financing Officer, IndiGo, Riyaz Peermohamed.
IndiGo Signs Record 1,000+ LEAP-1A Engine Order
In addition to fresh engine selections from aircraft lessors Jackson Square Aviation (JSA) and SMBC Aviation Capital, CFM International (CFM) has received a record order for over 1,000 LEAP-1A engines from IndiGo. The 510 Airbus A320neo-family aircraft will be powered by the memorandum of understanding with IndiGo. In addition to being the largest order in CFM's history, it is also the largest order ever placed for LEAP engines. During the Farnborough Airshow, the parties announced the arrangement. Long maintenance wait times and spare part shortages have plagued the engine industry for years, causing many airlines to temporarily idle their flights.
The agreement also covers the long-term support for IndiGo's fleet expansion, including material services, spare parts, and assistance in establishing the engine maintenance, repair, and overhaul (MRO) facility as planned by the airline. The company is pleased to extend its long-standing cooperation with CFM International, according to IndiGo CEO-designate Willie Walsh, as IndiGo begins its next chapter of growth towards becoming a truly global airline.
