Indian Air Force (IAF) for the first time has been allowed to lease aircraft under new defense equipment proposal which will see IAF procuring much required In-Flight Refueling Tanker Aircraft at the fraction of the cost and will have the ability to add additional aircraft without the need for actually buying it in Wartime emergency to maintain its global reach and strategic advantage.

Leasing of aircraft in the civilian sector is quite common and practiced the world over since buying an airplane is quite expensive and leasing costs just about 1% of aircraft cost per month which makes economical sense for airliners who can’t afford the purchase of several aircraft in one order and leasing of military aircraft too works in similar functions but has additional facilities for its customers.

It is well-established that IAF had selected A330 Multi Role Tanker Transport (MRTT) twice in the row but twice it was also shut down due to the high financial cost of purchasing this asset from the finance ministry now Airbus could leverage the leasing business model it has already developed for the United Kingdom and other European countries as head of the Air Tanker consortium to offer the same aircraft to IAF for long term lease of 15-30 years along with “surge capability ” which can come handy in case of war.

“surge capability ” is additional tankers without actually leasing them in the first place. For example, IAF takes on long term lease of 30 years Six A330 Multi Role Tanker Transport (MRTT) aircraft with an agreement for another 3 aircraft as part of an agreed-upon which is defined as “surge” capability. the leasing company maintains and operates these three aircraft as a cargo transporter without aerial refueling equipment being equipped by the leasing company at a cost-sharing arrangement where IAF doesn’t have to pay for the full fleet at all times and consortium can generate revenue using the surge aircraft when they’re not required for their aerial refueling duties.

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