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Airlines Seek Urgent Funds Amid Rising Costs
5 Oct
Summary
- Indian airlines face financial pressure from global events.
- ECLGS 5.0 funds release delayed due to lender hesitation.
- Airlines need funds for daily operations and working capital.
Indian airlines are experiencing significant financial strain, prompting the Federation of Indian Airlines (FIA) to appeal to the Civil Aviation Ministry. The FIA, representing major carriers like Air India, IndiGo, and SpiceJet, has requested assistance in releasing funds already sanctioned under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
Airlines are navigating a challenging economic landscape marked by geopolitical disruptions. The ongoing West Asia conflict has led to airspace diversions, increasing flight times and fuel consumption. Compounding these issues are a weaker rupee, which raises the cost of foreign currency-denominated expenses, and persistently high aviation turbine fuel (ATF) prices.
The FIA noted that while airlines applied for and received partial disbursements under ECLGS 5.0, the release of remaining funds has stalled. This delay stems from the reluctance of some participating lenders to fully disburse the sanctioned amounts. The federation urges the Ministry to reassure and guide these banks to expedite the release of the first tranche of remaining assistance.
ECLGS 5.0, approved in May 2026, is a government-backed credit support scheme designed to aid businesses affected by the West Asia conflict. For airlines, it offers a 90% credit guarantee to lenders on additional loans for working capital. The scheme has earmarked ₹5,000 crore for airlines, with individual borrowers potentially accessing up to ₹1,500 crore. The FIA's request focuses on accelerating the release of these approved funds to support airlines' immediate operational and working capital requirements.
