Aviation sector can borrow abroad for working capital

The RBI has allowed aviation companies to resort to External Commercial Borrowing (ECB) for working capital purposes. The ECB will be allowed to the airline companies based on the cash flow, foreign exchange earnings and their capabilities to service the debt, according to the RBI notification. The RBI has given aviation companies time up to May 2014 to raise fund through the ECB route. The overall ECB ceiling for the entire civil aviation sector would be $1 billion and the maximum permissible ECB that can be utilized by an individual airline company will be $300 million.