Air India takes lion's share

Air India Ltd., the unprofitable state-owned carrier, plans to raise as much as $600 million (Dh2.2 billion) from overseas, cornering a bulk of the loan quota made available to airlines in the federal budget in March. Air India sought offers for loans of $300 million for working capital needs with a maturity of at least three years for both itself and budget unit Air India Charters Ltd., according to a tender document posted on its website yesterday. The Mumbai-based company had on April 13 invited bids for loans of as much as $1 billion. Air India revised its loan requirement after the Reserve Bank of India on April 24 notified guidelines setting a $1 billion cap for the domestic airline industry for working capital needs or to refinance rupee debt. Each carrier is allowed to borrow a maximum of $300 million under the rules. That leaves five airlines, including Jet Airways (India) Ltd. and Kingfisher Airlines Ltd., to compete for the remaining $400 million while struggling with losses amid high fuel costs and a price war. "It will be on first-come-first-serve basis," Harsh Vardhan, chairman of Starair Consulting, a New Delhi-based company that advises carriers, said. "No other airline has gone to the Reserve Bank for permission as yet. Maybe they are not utilising the option." Air India won backing from the government for bailouts totalling Rs300 billion (Dh20.83 billion) through 2020.