A cash-burning airline has cash, an undrawn revolver with a springing covenant, and leases it may be able to defer. How many months of runway does it really have, and what should management do first?

Six months with no action, 7.2 with the lease deferral, 8.0 with the revolver drawn to its springing limit, and 9.2 with both, not the ten months the headline suggests. Only Rs 50 crore of the Rs 100 crore revolver is usable, because the next rupee triggers a covenant test Vihang would fail. Management should draw that Rs 50 crore now, open lessor talks immediately and hire advisers while there is still time.

A credit card with a Rs 1 lakh limit is not Rs 1 lakh of money if using more than half of it makes the bank cancel the card. A springing covenantA financial test in a loan that applies only when a trigger is hit, often when a revolver is drawn above a set share of its size. means the second half of Vihang's revolver can only be drawn by triggering a test it would fail, which is an event of default. So reachable liquidity is Rs 150 crore of cash plus Rs 50 crore of revolver, Rs 200 crore, not Rs 250 crore. Runway is cash you can reach without tripping anything, divided by burn.

Work each case month by month. With no action Rs 150 crore lasts exactly six months at Rs 25 crore a month; the lease deferral cuts burn to Rs 15 crore for three months and adds 1.2 months; drawing the revolver to Rs 50 crore adds two months; both together give 9.2 months. The deferral does not remove the Rs 30 crore; it pushes it to the end of the lease term, which is why it helps now and costs later.

Order matters because some options close as the cash runs down. Draw the Rs 50 crore now, while the conditions for drawing can still be met, because a revolver usually requires the company to repeat that nothing has gone badly wrong at each drawing, and that gets harder every month. Second, open the lessor conversation today: consent takes weeks, and lessors negotiate harder with an airline that has two months of cash than with one that has eight. Third, build a 13-week cash flow forecast so every number above is tested weekly rather than monthly. Fourth, hire restructuring advisers and ask the revolver lenders for a covenant waiver or reset, which is the only way to reach the other Rs 50 crore.

Close on what the runway is for. Nine months is not a solution; it is the time available to cut the burn, raise new money or agree a deal with lenders and lessors. A strong answer gives the 9.2 months, names the covenant as the reason it is not ten, and says that every month of delay shortens the runway and weakens the company's hand in every negotiation that follows.