200 aircraft leased from Gift City: Minister Naidu

New Delhi

India is working to develop an aircraft leasing ecosystem, with Gujarat’s Gift City already leasing 200 planes to various companies, Civil Aviation Minister Ram Mohan Naidu said on Wednesday.

Responding to questions in the Lok Sabha, Naidu highlighted the rapid expansion of civil aviation and the government's commitment to increasing competition, which could help lower airfares. He stressed that greater competition leads to more flights and reduced ticket prices.

Prime Minister Narendra Modi is focused on strengthening aircraft leasing in India, and several companies have set up operations at Gift City to support this initiative. Naidu noted that while major leasing hubs exist in Ireland, Singapore, and Dubai, India is striving to build its own ecosystem.

The government is also working to reduce aircraft leasing costs. Naidu announced plans to ratify the Cape Town Convention, which could cut leasing expenses by 8-10%, ultimately benefiting passengers by lowering fares.

India's aviation sector has seen remarkable growth, with the number of aircraft increasing from 340 in 2014 to 840, and airlines placing orders for 1,700 more. The government is encouraging more airlines to enter the market, including smaller carriers under the UDAN scheme.

Regarding airfares, Naidu clarified that the government does not regulate commercial ticket pricing, which is determined by factors such as demand, seasonality, fuel costs, and competition. However, the DGCA monitors airline fares to ensure compliance with established tariffs.