Given the dire straits in which most airline players in India find themselves in, the budget has tried to make their lives easier. But only just. Direct imports of aviation turbine fuel (to save sales tax cost) mentioned by the Finance Minister was allowed some time back. There is scepticism though whether the measure is operationally viable.
The key relief for airline companies in the budget is the permission to avail external commercial borrowings (ECBs) for working capital requirements. ECBs come at cheaper rates than domestic borrowings.
This could ease the interest cost pressure on highly leveraged airline players such as Air India, Kingfisher Airlines and Jet Airways, who could refinance their high-cost working capital loans at cheaper rates. However, the conditions regarding the industry's ECBs being for a period of one year, and subject to a total ceiling of $1 billion (around Rs 5,000 crore) would restrict the benefit.
16/03/12 Anand Kalyanaraman/Business Line
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment