This time any market sector that is under huge pressure is only the Aviation Sector and the Govt. decision regarding this result an increased demand of regular cash flow.
Continuously expanding financial amount for regular operating transaction due to growing competition in Aviation market is forcing Airline to perform better with high financial deals.
Keeping in view all facts that hike the circumstances of the Civil Aviation sector, Finance Minister, Pranab Mukherjee recommended Aviation Companies to avail of ECBs for a period of one year for refinancing of outstanding working capital rupee loan.
Under the amendment of Budget 2012-13, all the Airline companies would be allow a maximum ceiling of US$ 300 million during the 1 year out of USD 1 billion.
It has also mandated that all the individual aviation companies under the Civil Aviation Sector will have firstly approved their proposal by RBI that may increase average maturity period for ECBs above USD 20 million from five to three years.
However this new Airline Industry benefited amendment will surely keen a source of working capital at low cost that directly helps to remove financial crisis that Airline has been facing for several months and held under stress of downing market share.
But one thing for that Company should have to show, its ability of having regular liquidated limit in form of cash and repayment of loans from their foreign exchange earnings.