Jetsetgo’s leasing arm to be operational in 6-8 weeks: CEO Kanika Tekriwal
3 min read . Updated: 03 Mar 2021, 05:29 AM ISTThe urban air mobility markets will possibly only take off through aggregators with asset heavy business models
Private jet and helicopter operator Jetsetgo Aviation Services Pvt. Ltd, which is set to become one of the first companies to set up an aircraft financing and leasing arm at Gujarat’s Gift city, is in the process of acquiring pre-owned aircraft. The venture will be a fully-owned unit and is likely to start operations in six to eight weeks, said Kanika Tekriwal, chief executive and founder, Jetsetgo. Edited excerpts from an interview.
Why are you getting into aircraft leasing?
MORE FROM THIS SECTIONSee All
The increasing complexity and disruptions in flying commercial, for which there is no clarity on when or what the new normal will be, is resulting in a significant spike in demand for private aviation. This coupled with attractive acquisition costs for pre-owned aircraft and JetSetGo’s ability to manage the overall life cycle costs (for owning a jet) is prompting a lot of our customers to consider owning or taking an aircraft on long-term lease. Given the emerging trends, it is a natural progression for JetSetGo to consider acquiring aircraft through appropriate financing models on long-term charter contracts with our customers.
How do you plan to fund your aircraft leasing business?
We are already in the midst of our initial acquisition programme, where we are in the process of buying six aircraft and a helicopter. This is being funded through a combination of internal accruals, customer security deposits, long-term charter contracts and debt raised through debentures secured through underlying aircraft-specific cash flows. While we have begun initial discussions with equity investors and international leasing companies, the talks are still in early stages. Thereafter, we will opportunistically seek refinancing and capital raising options.
What kind of aircraft will you consider for leasing?
Our focus has always been on the upper end of the market, where we already manage either mid-sized or larger long-range private jets. We will continue to focus on these segments. At this point, however, we have no specific plans for getting into strategic business alliances with airlines.
What’s your business target for the leasing company?
TRENDING STORIESSee All
JetSetGo’s ability to continue to scale the business has been driven by our ability to remain agile and flexible. We believe business travel is changing forever, with travel either coming down significantly as witnessed through the pandemic, or it being on demand through services that ensures the best, reliable, safe and fastest connectivity between two points. In addition, and following our work with Boeing’s Horizon X through 2018 and 2019, we also see green shoots taking shape for urban air mobility markets in the coming years. Unlike aggregation models of, say, Uber and Ola which are asset-light, urban air mobility will possibly only take off through aggregators with asset heavy business models.
Do you think the tax sops for aircraft leasing and financing business at Gift city are competitive enough for you to expand your leasing and financing business globally?
Prima facie, it appears the government has done an exhaustive and thorough evaluation of alternatives to offer an attractive tax and regulatory framework that is conducive for the Indian aviation industry. Given the attractiveness versus current alternatives in the country and being largely on a par with tax-efficient jurisdictions like Ireland, Gift city could compete at a global scale. What, of course, needs to develop for this is the overall market ecosystem which I suppose needs to be an ongoing task for IFSC (International Financial Services Centre) at Gift city.
Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.