Bailout package for airlines in the works

New Delhi: The Government has asked airlines to submit details of their financial position, extent of debt and working capital requirements in order to try and work out a bailout package in consultation with the Finance Ministry and banks.
A Working Group, under the chairmanship of the Civil Aviation Secretary, has asked CMDs of all seven domestic scheduled airlines to submit the data by this month.
This comes even as banks gave the nod for a Rs 18,000-crore debt rejig plan for Air India and also agreed to provide fresh cash credit of Rs 2,200 crore.
Domestic airlines had approached the Government seeking help to reduce their debt burden and work out a sustainable business model. They had also wanted to ensure that the volatility in the rupee and increasing price of aviation turbine fuel, a key cost component, does not make their operations unviable.
What the industry is said to be keen on is that the Government steps in to ensure that fuel credit be made available without seeking additional bank guarantees, or that the oil companies extend the present credit limits applicable to various airlines.
17/02/12 Ashwini Phadnis/Shishir Sinha/Business Line

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Categories: Indian Aviation- In General Feb 2012