IndiGo signs $328 million aircraft financing deal with Citi

India’s largest airline, IndiGo, has signed a $328 million financing deal with Citi to acquire eight narrow-body aircraft to be manufactured by Airbus.

According to a statement, the transaction is the world’s first aviation financing deal insured by Belgian export credit agency Credendo and the first export credit agency (ECA)-backed aircraft financing structured through GIFT IFSC.

The financing will support IndiGo’s acquisition of six A321s and two A320s, the statement said.

Citi acted as the sole mandated arranger, ECA coordinator and lender, with the financing backed by credit insurance from Credendo, the statement added.

The transaction was executed through IndiGo subsidiary InterGlobe Aviation Financial Services IFSC and provides the airline with a “competitive and diversified source of long-term funding” to support fleet and network growth, the statement said.

“By combining Citi’s cross-border aviation and ECA financing expertise with Credendo’s credit insurance and IndiGo’s GIFT IFSC platform, we have delivered a first-of-its-kind solution that opens a vital new pathway connecting Indian aviation with the deep pool of ECA-backed international liquidity and supports the next phase of India’s aviation growth,” said K Balasubramanian, Chief Executive, Citi India.

Frank Vanwingh, group deputy CEO of Credendo, said the agency aims to become a long-term partner for Belgian aviation stakeholders seeking international opportunities and innovative financing solutions.

IndiGo’s chief aircraft acquisition and financing officer, Riyaz Peermohamed, said the partnership with Citi, Credendo and Airbus provides a competitive source of funding for the airline’s expanding Airbus fleet.

“The transaction demonstrates the potential of GIFT IFSC to bring together international banks and export credit agencies and create innovative financing solutions for Indian aviation,” Peermohamed added.

In 2023, IndiGo placed an order for 500 narrow-body aircraft from Airbus’ A320 family and also committed to adding the wide-body A350 to its fleet. IndiGo currently operates a fleet of 414 aircraft.