The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 has been introduced to provide financial relief to India's top 3 airlines, offering up to ₹1,500 crore each.
This initiative aims to alleviate the financial burdens caused by the ongoing West Asia conflict.
As per the Business Standard report, under the recently announced ECLGS 5.0, India's leading airlines, including Air India, IndiGo, and SpiceJet, are eligible to receive up to ₹1,500 crore each.
This scheme is designed to counteract the financial challenges posed by rising aviation turbine fuel prices, airspace closures, and reduced international operations.
The Cabinet has approved an additional ₹2.55 trillion of working capital support for affected businesses.
The scheme allows airlines to avail loans of up to ₹1,000 crore per borrower, with an additional ₹500 crore linked to equivalent equity infusion.
These loans have a tenure of up to 7 years, including a 2-year repayment moratorium.
According to M Nagaraju, Secretary of the Department of Financial Services, the overall quantum of the scheme is based on banks' credit exposure and outstanding amounts.
The interest rates for the airline sector will be marginally lower, with specifics decided by bank boards.
State Bank of India (SBI) Chairman C S Setty clarified that the facility is available only to airlines with existing banking relationships.
The government will guarantee the additional exposure, ensuring that the funds are utilised for enhanced working capital challenges arising from the West Asia crisis.
Read More: Centre Announces Credit Support Under ECLGS 5.0 to Support MSMEs, Airlines Amid West Asia Tensions!
Indian airlines have faced significant operational challenges, reducing nearly 25% of their weekly international flights due to airspace restrictions and increased costs.
The financial strain is evident, with IndiGo's net profit falling 77.6% year-on-year to ₹549 crore in Q3 FY26, and Air India projected to report losses exceeding ₹22,000 crore in FY26.
ECLGS 5.0 aims to provide crucial financial support to India's top airlines amidst the West Asia conflict, addressing the financial stress caused by operational disruptions and rising costs. This initiative underscores the government's commitment to stabilising the aviation sector during challenging times.
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Published on: May 8, 2026, 10:30 AM IST
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