Indian airlines and private non-scheduled air operators are together likely to add around 1,000 aircraft and 250 helicopters over the next five years, according to Planning Commission estimates. While scheduled airlines are likely to add around 370 aircraft to their fleets, non-scheduled operators could induct 300 business jets, 300 small planes and 250 helicopters during this period, owing to heightened demand.

A working group set up by the plan body to formulate the 12th Five Year Plan for the civil aviation sector said Indian carriers were anticipating significant growth in air traffic, which is leading them to add around 370 aircraft worth about Rs 150,000 crore.

The working group estimates that over Rs 20,000 crore would be invested in general aviation till 2017, with private non-scheduled operators expected to add 600 small aircraft and business jets and about 250 helicopters.

To finance their aircraft acquisition plans, airlines were resorting to multiple methods like direct lending, operational lease, finance lease and sale-and-leaseback. The last option has lately become popular as "it allows airlines to optimise their cash flow", the Planning Commission group said. Leaseback is a financial transaction where one sells an asset and leases it back for a long-term. Therefore, one continues to be able to use the asset but no longer owns it. Leaseback is very often used in commercial aviation to essentially take back the cash invested in assets.