IndiGo to ease off aircraft lease model that made it airline No.1

IndiGo Airlines, India's largest carrier, is steadily shifting to owning and financially leasing commercial jets in place of its earlier successful strategy of selling and leasing back planes, its chief executive said.

- Abhishek Law & Varun Sood

The sale-and-leaseback model has been central to IndiGo’s success ever since it started flying 19 years ago. Planes bought at competitive prices in large orders would be sold on delivery to aircraft leasing companies and leased back into service—resulting in significant profits, which then were ploughed back into expansion of its fleet.

The Gurugram-based airline now aims to own and have on finance lease 40% of its planes by 2030, up from 18% now, chief executive officer (CEO) Pieter Elbers said in an interview on Tuesday, after the airline declared its earnings for the September quarter.

"More structurally, and to the heart of your question, we're already revising our classic sale and leaseback model," Elbers said. "It's how Indigo started 18-19 years ago, like many airlines. Now, we're shifting to include financial leases and even some direct ownership.”

In financial leases, aircraft is treated as an asset.

(AFP)