According to a source, low-cost airline Go First intends to quickly obtain a Rs 600 crore loan under the Emergency Credit Line Guarantee Scheme (ECLGS) for its operations amid increased demand for air travel.
The source at the airline added that promoters had invested over Rs 2,800 crore in the previous 15 months, which has assisted the carrier in overcoming a number of challenges, such as those brought on by the pandemic, travel restrictions, and rising fuel prices.
The government updated the ECLGS last month by extending the maximum loan amount that a business may obtain from the previous cap of Rs 400 crore to Rs 1,500 crore in an effort to assist the airline industry, which is on the road to recovery after being severely impacted by the pandemic.
According to the source, the airline has received Rs 400 crore so far under the ECLGS. "In the coming days, we will submit an application for Rs 600 crore under the ECLGS. Our lenders include banks like Central Bank, Bank of Baroda, and IDBI. To obtain these monies, we will first contact them, "a source informed.
According to the source, the airline can now access up to Rs 600 crore of the remaining Rs 1,100 crore in cash under the ECLGS.
The source added that access to the remaining Rs 500 crore is contingent upon receiving certain government permissions, including clarification of the amount of stock that the promoters will contribute.
The source claims that the company has cumulative working capital loans totaling Rs. 2,650 crore.
Go First carried 8.15 lakh domestic passengers in September, and its market share was 7.9%.
Indian airlines are expected to lose more than USD 2.5 billion this fiscal year, according to an estimate made earlier this week by aviation consultancy CAPA.
This is greater than the USD 1.4–1.7 billion it had previously predicted for the same time period.
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