Akasa Air gets Rs 740 crore ECLGS loan from IndusInd Bank

The Story in Brief

Akasa Air has secured a Rs 740 crore working capital loan from IndusInd Bank under the government-backed Emergency Credit Line Guarantee Scheme, The Hindu Businessline reports. It is the second Indian airline, after SpiceJet, to access the scheme approved for scheduled carriers.

The Mumbai-based airline plans to use the funds for normal operations. It now operates 40 Boeing aircraft across 36 destinations and is adding planes. Founder and chief executive Vinay Dube said Akasa remains well-capitalised, but fuel and foreign exchange volatility linked to the war make full-year profitability uncertain. He said the airline still aims to launch an initial public offering within two to four years.

The Indian Opinion

The easy story is that a fast-growing airline has secured a government-backed rescue loan, while the opposite claim is that funding alone proves business strength. Neither follows from this announcement. The money supports working capital, not profitability, and Akasa itself points to fuel and currency risks. Its stated IPO ambition will face a harder test in earnings, cash generation and aircraft utilisation. Investors should watch whether the airline can expand beyond 36 destinations without repeated public support.

Source: thehindubusinessline.com

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