SpiceJet turbulence: Centre may accord infrastructure status to aviation sector for easy finance

New Delhi: With SpiceJet passing through a turbulent phase, the civil aviation ministry is likely to push for granting infrastructure status to the aviation industry to enable it to access finances at cheaper rates and ease the cash crunch.

A "relief package" is being evolved for the entire industry, not just the beleaguered SpiceJet, official sources said, adding that informal parleys have been held between the officials of the ministries of finance and civil aviation.

 SpiceJet turbulence: Centre may accord infrastructure status to aviation sector for easy finance

Struggling SpiceJet. AFP

Maintaining that the SpiceJet crisis has triggered the preparation of such a package, they said, there are a series of proposals were being considered to help the bleeding aviation industry.

These include allowing them to access external commercial borrowings with lower interest rates and tax exemptions for a fixed period.

The proposals also include asking banks to cap interest on borrowings by airlines at eight per cent and reschedule
payment of dues to oil companies.

The sources said these proposals were currently under discussion and any decision would be taken only after consultations with the Prime Minister's Office and finance and corporate affairs ministries.

The issue of high taxation on aviation turbine fuel would be taken up separately, they said.

These proposals being discussed now come days after the government permitted SpiceJet to accept bookings till March-end, asked banks to give short-term working capital loans worth Rs 600 crore and requested state-owned oil companies to extend a credit line for jet fuel for two more weeks.

PTI

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Updated Date: Dec 18, 2014 21:43:26 IST