Airlines look to raise $2 billion to fuel plans

Mumbai: Hit by spiralling jet fuel costs for much of the year and intense competition, India’s rapidly expanding airlines are looking to raise a second round of funding of about $2 billion (Rs9,080 crore) in all, even as they struggle to meet their first round targets.
Indian carriers are expected to register a combined loss of $2 billion this fiscal.
Some of these airlines are cashing in on the financial strength of parent groups to raise funds for their day-to-day finance requirements.
Only low-fare carrier SpiceJet Ltd could succeed in getting $100 million in the current economic turmoil. The investors in SpiceJet will convert their investment into equity in future, though. National Aviation Co. of India Ltd, or Nacil, that runs Air India, has deferred its initial public offer indefinitely. It the airline did manage to get loans from commercial banks to fund aircraft acquisition. Indian carriers, in the first round, had been collectively looking at raising $4 billion to fund expansion.
UB Group promoted Kingfisher is also planning to raise $400 million through the private equity route or by tapping the capital market. Kingfisher, which had acquired the country’s largest low-fare carrier Air Deccan, run by Deccan Aviation Ltd, is in the process of raising Rs1,000 crore from ICICI Bank Ltd.
Meanwhile, the Wadia Group’s GoAirlines (India) Pvt. Ltd, which runs GoAir, has appointed singularity advisers for raising $100 million. The carrier is exploring primarily private equity investments or even other sources of funds.
13/09/08 P. R. Sanjai/Livemint

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Categories: Indian Aviation- In General Sep 2008