Flights Won’t Stop Now! Airlines Receive ₹5,000 Crore Relief Package; Centre Extends a Lifeline.

Indian Aviation Sector: Amidst the crisis in West Asia, the government has approved ECLGS 5.0, under which airlines will receive a dedicated allocation of ₹5,000 crore and access to additional credit facilities of up to ₹1,500 crore per airline.

ECLGS 5.0 Scheme: Recognizing the mounting financial pressure on Indian airlines amidst the West Asia crisis, the Central Government has taken a significant step. During a Cabinet meeting chaired by Prime Minister Narendra Modi, the Emergency Credit Line Guarantee Scheme—specifically ECLGS 5.0—was approved. Under this scheme, a separate provision of ₹5,000 crore has been earmarked exclusively for the airline sector.

Under this scheme, the government has facilitated the provision of additional credit to airlines, amounting to up to 100 percent of their peak working capital requirements. However, this amount is capped at a maximum of ₹1,500 crore per airline.

Easy Credit and Concessional Terms

The government will provide a credit guarantee of up to 90 percent on these loans, and the guarantee fee has been set at zero; this means airlines will not incur any additional charges for this facility. To avail the benefits of this scheme, it is mandatory for airlines to have active credit facilities as of March 31, 2026, and their accounts must not be classified as Non-Performing Assets (NPAs). Regarding the loan tenure, the airline sector will be granted a 7-year loan, which includes an initial moratorium period of two years—meaning no installment payments will be required during this time. This scheme will remain in effect until March 31, 2027.

Government Support Amidst Rising Costs

The government has stated that the ongoing conflict in West Asia has led to a rapid surge in the prices of ATF (Aviation Turbine Fuel), placing immense pressure on the operating costs of airlines. In this context, this scheme will help airlines overcome working capital shortages and ensure the uninterrupted operation of their businesses. Furthermore, this initiative will contribute to safeguarding employment and maintaining the integrity of supply chains. It is noteworthy that in recent months, airlines such as IndiGo and Air India have imposed fuel surcharges and reduced flights on certain international routes due to rising fuel costs. Against this backdrop, this initiative by the government is being viewed as a major relief for the airline industry.