SpiceJet (SG, Delhi International) is likely to receive an additional loan of INR10 billion rupees (USD122 million) under the Indian government's modified Emergency Credit Line Guarantee Scheme (ECLGS), reports The Economic Times newspaper.
This week, the Ministry of Finance's Department of Financial Services (DFS) enhanced the maximum loan amount eligibility for airlines under the scheme to 100% of their outstanding loan. In a statement, the DFS said it aimed to provide collateral-free liquidity at reasonable interest rates to help airlines tide over their present cash flow problems.
SpiceJet welcomed the changes but asked the government to extend support on jet fuel as well. "This will provide a tremendous boost for airlines. I request the government once again for its support for including Aviation Turbine Fuel under GST [Goods and Services Tax], which would be a game changer for the entire sector," chairman and managing director, Ajay Singh, was quoted by Mint.
SpiceJet would use the additional loan for lease payments to induct new B737 MAXs and clear outstanding statutory dues like the employee provident fund. "This will take care of the survivability question of the airline once and for all," an unnamed airline executive told The Economic Times. The airline has been looking at multiple ways to raise USD250 million.
Last month, The Economic Times reported that SpiceJet could be thrown a lifeline of around INR2.25 billion (USD28.2 million) under the ECLGS to clear statutory dues and lessor payments. SpiceJet had initially applied for INR2.8 billion (USD35 million) in loans under the scheme.
SpiceJet currently operates less than 50% of its flights on order from the Directorate General of Civil Aviation due to multiple incidents involving its aircraft.
