07/05/2026
The Centre has approved a Rs 5,000-crore relief package for India’s aviation sector under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to help airlines cope with rising fuel prices, currency volatility and airspace disruptions linked to the West Asia crisis.
👉🏽 The scheme offers eligible airlines loans of up to Rs 1,000 crore, with an additional Rs 500 crore tied to equity infusion. The move comes as carriers face mounting operational costs, with Air India already trimming international routes for June and July due to financial strain.
Liquidity Support For Airlines
👉🏽 The Ministry of Civil Aviation said the loans will have a tenure of seven years, including a two-year repayment moratorium, giving airlines temporary financial relief. The government has also allowed up to 50 per cent of the interest amount to be converted into a Funded Interest Term Loan (FITL). Civil Aviation Minister Ram Mohan Naidu said the package would help airlines manage short-term liquidity challenges, protect jobs and maintain seamless connectivity during global disruptions.
Sector Faces Global Headwinds
👉🏽 Indian airlines have been under pressure due to soaring aviation turbine fuel prices, exchange rate fluctuations and restricted international airspace following the Iran cønflict. The government said earlier measures, including ATF price caps and reduced airport charges, helped carriers remain resilient. However, the latest intervention aims to prevent deeper financial stress across the aviation ecosystem, including allied MSMEs and airport-linked services.
⚡⚡As economic uncertainties continue worldwide, how can India balance financial relief for industries while ensuring accountability and consumer welfare?
Source: The Logical Indian
