In 2012, cash-strapped Indian carriers were allowed to raise up to $1 billion through ECB route for working capital requirements. "A big private airline has availed of $300 million and another has taken $50 million this way. The balance that remains is $650 million. AI is going to raise $300-350 million for meeting its working capital requirement for spare parts," said a senior official.

AI has awarded the mandate to Citibank and SBI. "The all-inclusive financial cost works out to be lower than 3% per annum. The documentation has been completed. We will start availing this funding from second half of June and complete the same over a year," the official said.

With this working capital loan, AI hopes to improve its aircraft usage by cutting down the time they waste on waiting for spare parts. "Our Airbus A-320s fly for about 11 to 12 hours a day. The wide-body fleet does 14 to 17 hours a day and the Boeing 787 Dreamliner does an average of 13 hours a day. An improved supply of spares will increase aircraft utilization by an average of one to two hours daily," the official said. AI currently has 55 A-320s and is taking four more on lease by the coming winter.

Optimum utilization of assets is very important for AI to generate more revenue, given its precarious financial condition. AI is currently facing a cash crunch and has asked the government to give it Rs 1,777 crore. The gap has been created due to three factors — shortfall of Rs 720 crore in equity infusion last fiscal, along with the rupee's depreciation against the dollar and spiking of oil price to $110 in that financial year.