Indian airlines may find it more difficult to take loans due to banks’ increased reluctance to lend to the industry following the bankruptcy filings of Jet Airways and Go First within a five-year period, said a report by Economic Times (ET).
Airlines executives told ET that lenders are demanding more collateral or promoters to pledge more personal holdings in order to obtain loans for lending to airlines.
The sector’s creditworthiness was improving after Tata Group increased its presence in the sector by acquiring Air India and with a strong performance from IndiGo, but after Go First filed for bankruptcy, it turned out to be very unfavourable, they said.