The Indian government has approved a ₹5,000 crore emergency credit facility to support airlines facing financial strain due to rising jet fuel costs.
The decision, cleared by the Union Cabinet chaired by Narendra Modi, comes amid ongoing global disruptions linked to tensions in West Asia.
Airlines in India are currently dealing with increased Aviation Turbine Fuel (ATF) prices, currency fluctuations, restricted airspace, and reduced international operations. These factors have led to lower aircraft utilisation and mounting liquidity challenges across the sector.
To address this, the government has introduced the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, aimed specifically at providing financial relief to the aviation industry. Under the scheme, airlines can avail loans of up to ₹1,000 crore per borrower, with an additional ₹500 crore allowed if matched by equity infusion.
The loans will have a tenure of up to seven years, including a two-year moratorium on repayments, helping airlines manage immediate financial pressures.
Civil Aviation Minister Ram Mohan Naidu welcomed the move, stating that the initiative will help airlines maintain operations, protect jobs, and ensure stability in the aviation ecosystem. He also highlighted that the scheme would benefit related sectors, including MSMEs linked to aviation.
The government noted that the financial package is designed to cushion the impact of rising fuel costs, exchange rate volatility, and operational disruptions, ensuring the sector remains resilient during this challenging period.