New Delhi: In response to the increased demand for air travel, low-cost airline Go First plans to quickly obtain a Rs 600 crore loan under the Emergency Credit Line Guarantee Scheme (ECLGS) for its operations.
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.
The source said that so far, the airline has availed Rs 400 crore under the ECLGS. “We will be applying for Rs 600 crore under the ECLGS in the next few days. Banks like Central Bank, Bank of Baroda and IDBI are our lenders. We will be approaching them first to avail these funds,” the source told PTI.
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, it reported citing sources.
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.