New Delhi: National carrier IndiGo has signed a $2.6-billion finance and leasing agreement with the Industrial and Commercial Bank of China (ICBC) under which the latter will finance more than 30 new aircraft.
Wang Hejun, commercial counsellor at the Chinese embassy, made the announcement at a FICCI-organised India-China business meeting here.
The agreement comes at a time when Chinese President Xi Jinping is in India on a three-day visit that started on Wednesday. Agreements for China to invest billions of dollars for the development of infrastructure and industry in India are expected to be signed between the two neighboring countries.
Under the MoU, the Chinese bank will provide IndiGo with financing for the planes through either a sale and lease back or commercial lending deal, IndiGo President Aditya Ghosh said in the statement. Among the other financial agreements, Wang said China Development Bank will give India’s Exim Bank a loan of $200 million.
IndiGo – the largest carrier in India by market share – currently has a fleet of 81 Airbus A320-200 single-aisle planes. It will use the financing from ICBC Financial Leasing Co., a wholly-owned unit of ICBC, to add more Airbus planes, the statement said.
Adding new planes would allow IndiGo to expand its network as competition intensifies from operators such as SpiceJet Ltd., GoAir, and Malaysia’s AirAsia BhD, whose Indian unit began operations in June.