Thursday, August 09, 2018

Sigh of relief for debt-ridden Indian airline sector; government may allow external funding

Debt-laden Indian airlines may have something to cheer as the government is muting the idea of opening up the external commercial borrowing (ECB) route for them to raise working capital. The idea is to allow the airlines to get the loans from the foreign lenders. The Business Standard reported that the ministry of civil aviation has asked the finance ministry to allow foreign funds in the airline sector.

A senior Aviation Ministry official told Business Standard, "Airlines, in their correspondence with the government, have requested that since aviation has become a primary mode of transport and an essential part of the infrastructure, they should be given benefits such as access to ECB for working capital. We have written to the finance ministry asking for it."

The ministry has sought for a cap of $500 million (Rs 34.5 billion) for a single company and $1 billion (Rs 69 billion) for the entire aviation sector. The aviation ministry said that some private players such as Jet Airways and IndiGo had requested for a higher cap.
09/08/18 Ashish Shukla/IBTimes