Kingfisher Airlines has sought an additional Rs 300 crore as funded limit and a similar amount to secure letters of credit as well as bank guarantees from the consortium of banks.

Sources in the airline told Business Line that the Vijay Mallya-owned Kingfisher Airlines will also make a presentation to the consortium of banks which is holding a meeting tomorrow in Bangalore seeking additional funds.

The consortium has already funded the airline to the extent of about Rs 1,300 crore in addition to the standby letters of credit.

Sources also said that such additional funding will help the airline to operate at the same level as before. It will also give breathing space for the airline to firm its Rs 2,000-crore rights issue and once the Government allows FDI in the aviation sector, foreign investment could come through the GDR route as well.

After the presentations are made, the respective bank representatives in the consortium are expected to return to their head offices to go through the details before taking a decision on extending further aid to the cash-strapped airline.

The airline officials are learnt to have informed the consortium that there has been huge change in international price of crude oil as well as rupee value. When the initial plan was made, the crude oil price was about $80 per barrel, which has now crossed $100 per barrel while the rupee has depreciated from Rs 40 to Rs 50 to a dollar. Therefore, the working capital requirements have also gone up significantly, sources said.

Sources said that the consortium has been patient with the airline and has been extremely cooperative as well. Hence it must be given enough space to consider the macro environment as well as domestic issues so that it can arrive at the right decision.

Sources said that the status of the airline was not as bad as it has been made out to be though these are difficult times for the entire airline industry as a whole.

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