New Delhi/Mumbai: Air India could become the first and possibly the only domestic airline to take advantage of the sops offered to the sector in Union Budget 2012-13.
The two major announcements for the aviation industry were sops for the MRO (maintenance, repair and overhaul) sector and an external commercial borrowing (ECB) line of credit for meeting working capital requirements of airlines.
Sources told Business Line that Air India was working to complete a transaction to borrow around $330 million through the ECB route to meet its working capital needs. The Budget permitted domestic airlines a one-year window to tap the ECB market.
According to sources, the state-owned airline is in talks with two banks, including one foreign bank and another which is an Indian branch of a foreign bank, to tie up the finances and hoped to complete the transaction before the current financial year is over. The move is expected to reduce the airline’s cost of borrowing by 7-8 per cent, sources added.
03/02/13 Business Line
