New Delhi, Oct 5 (IANS) Indian commercial airlines have sought the help of the Civil Aviation Ministry to get banks to expedite the release of the credit sanctioned to them under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
The Federation of Indian Airlines (FIA), which represents Air India, IndiGo, and SpiceJet, has written a letter to Civil Aviation Minister Ram Mohan Naidu stating that the Indian aviation industry is facing unprecedented financial and operational challenges due to the continuing conflict in West Asia. The airspace restrictions, flight diversions, and soaring aviation turbine fuel (ATF) prices have led to a sharp increase in operating costs.
“These developments have severely strained airline liquidity and working capital, necessitating immediate Government support,” the letter stated.
The FIA said airlines that have sought credit under the scheme have received only a portion of the sanctioned assistance. The release of the balance amounts has been delayed in several cases due to continued hesitation on the part of lending institutions.
“Therefore, it is imperative that MoCA facilitates the timely release of funds under the ECLGS 5.0 scheme, particularly for member airlines that remain financially vulnerable and have applied for the immediate liquidity support provided by ECLGS 5.0 to sustain and strengthen their operations,” it said.
The FIA requested the Ministry of Civil Aviation (MoCA) to provide appropriate guidance and reassurance to participating banks to facilitate the release of the balance sanctioned amounts.
It said timely disbursement would help airlines meet critical operational and working-capital requirements, sustain operations and continue providing air connectivity across the country.
Timely support at this juncture is critical to help safeguard the financial viability of member airlines that have sought support under the ECLGS 5.0 scheme, the letter stated.
The Cabinet approved ECLGS 5.0 in May this year to help airlines, MSMEs and other businesses, badly hit by the West Asia conflict, to tide over the crisis and save jobs. The scheme has a total outlay of Rs 18,100 crore and aims to unlock additional credit of up to Rs 2.55 lakh crore, of which Rs 5,000 crore is allocated for the aviation sector.
The government’s policy provides a 90 per cent credit guarantee through the National Credit Guarantee Trustee Company Limited (NCGTC), with no guarantee fee. Eligible scheduled passenger airlines can raise additional credit of up to 100 per cent of their peak credit outstanding during January to March 2026, capped at Rs 1,500 crore per borrower across the banking system.
–IANS
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