Aircraft Financing : A Project Finance Risk Analysis

Aircraft financing is essential to promote economic growth and development and to help accomplish the Sustainable Development Goals of the United Nations, aircraft financing is essential. Given the fact that for airlines and investors, the high costs of aircraft maintenance and acquisition present considerable difficulties. This paper examines the main approaches to funding aircraft, the dangers that go along with them, and mitigation techniques. Additionally, it highlights the need for a more investor-friendly strategy by analysing the Indian aviation finance structure through case studies. In order to ensure a vibrant aviation funding environment, the paper stresses the value of reflecting on the past and learning from mistakes, notably those committed by Indian Airlines. The recommendation includes lowering aviation fuel taxes, removing limits on foreign stock in the aviation industry, and creating special purpose companies (SVs) for financing and protecting aircraft. In addition, it is also critical to address supply chain problems, such as producing regularly interchangeable parts in partnership with industry titans Airbus and Boeing. The Indian government should adopt a streamlined single-window clearance system for aviation funding, increasing openness, lowering the risk of corruption, and encouraging stakeholder trust to create an environment that is favourable for investment. Furthermore, initiatives should be taken to draw foreign banks, commercial airlines, and lessors to Gujarat’s GIFT City special economic zone and International Financial Services Centre (IFSC). This paper gives practical advice for creating a solid and sustainable framework for future growth and offers insights into the difficulties the Indian aviation financing sector faces