Post by : Rameen Ariff

IndiGo, the largest airline in India, has given the green light for a significant investment of ₹7,294 crore (around USD 820 million) via its entirely owned subsidiary, IndiGo IFSC, aimed at purchasing aircraft assets and enhancing direct ownership.

The board has sanctioned this capital infusion to occur in various stages through a combination of equity shares and 0.01% Optionally Convertible Redeemable Preference Shares (OCRPS). A substantial portion of this capital will facilitate the acquisition of aircraft, enabling IndiGo to lessen its reliance on leased aircraft.

This initiative is integral to IndiGo's larger plan to diversify its fleet and attain better financial oversight. Traditionally, the airline has heavily depended on operating leases for rapid fleet expansion, but this strategic shift towards ownership aims to provide a balanced approach between leasing and direct ownership.

IndiGo IFSC was launched in October 2023 in GIFT City, Ahmedabad. This subsidiary is focused on leasing aircraft and engines while also offering related financial services, thus allowing the airline to manage its fleet more effectively.

Currently, IndiGo boasts one of India's largest fleets, operating over 400 aircraft across more than 90 domestic and 40 international routes. The airline conducts more than 2,300 daily flights both domestically and internationally, securing its position as a frontrunner in the aviation arena.

Through this investment, IndiGo aims to bolster its control over its aircraft, lower long-term leasing expenses, and enhance its financial robustness for forthcoming growth. This strategy marks a pivotal move towards achieving fleet independence and operational optimization.

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