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A combination of factors ranging from a new accounting standard to lack of good value proposition for the A320 neo aircraft in the lessor market might have forced IndiGo to reconsider the sale-and-leaseback model — one of the basic fundamentals that contributed to the airline’s success story.
With 118 of its 131 aircraft on operating lease, IndiGo has been the most active user of sale-and-leaseback financing under which a lessor will purchase the aircraft from the airline and lease it back. This removes the debt from the airline’s balance sheet and allows it invest its equity for some other purpose.
