SpiceJet, low-cost Indian carrier, shares rose over 6% to Rs 41.95 on Thursday when a report said
that the finance ministry is expected to allow the airline an additional 10
billion Indian rupees credit line. The loan limit under the Emergency Credit
Line Guarantee Scheme (ECLGS) has been raised to Rs 1,500 crore from Rs 400 crore. 

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As per the
latest ECLGS 3.0, an airline would be allowed credit line up to “100% of their
fund based or non-fund based loan outstanding as on reference dates or Rs 1,500
crore, whichever is lower; and of the above that, Rs 500 crore shall be
considered, based on the equity contribution by the owners.”  The
modifications are aimed to provide needful collateral-free liquidity at
reasonable interest rates to help out the company with its present cash flow

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The Covid-hit
sector was under high liquidity stress. The funds will help the airline to
clear its dues, to pay its lessors on time and enlist new Boeing 737 planes, Business
Standard reported. 

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The news is
welcomed by the investors. The share achieved today’s high of Rs 41.95 while
the previous closing stood at Rs 38.45. The stock still lies in red in returns
of last year by over 46%. As of 3:00 pm, the stock is trading at Rs 41.30 up by 7.28%. 

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SpiceJet had
previously asked the government to extend support on jet fuel as well by
cutting the excise on aviation turbine fuel (ATF).

Ajay Singh, Chairman and Managing Director of SpiceJet requested the government once again for support by including Aviation Turbine Fuel under GST.  “The step would be a game changer for the entire aviation sector,” he said.  “The speed and urgency, the aviation and finance ministries have been showing to take up issues and problems being faced by airlines post-COVID and due to the record high oil prices is remarkable” he added.

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In FY22, the
airline reported losses of Rs 1,725 crore while in FY21 it reported losses of
Rs 998 crore. For the first quarter of FY23, the reported losses of airlines
stood at Rs 789 crore as against Rs 729 crore in the year-ago period.