Aviation Stocks: IndiGo And SpiceJet Share Price Rise After ECLGS 5.0 Relief For Airlines

InterGlobe Aviation (IndiGo) share price and SpiceJet share price moved higher on Wednesday after the government approved the fifth version of the Emergency Credit Line Guarantee Scheme (ECLGS 5.0). The scheme aims to support airlines facing pressure due to the West Asia crisis. 

Market sentiment also improved after reports suggested the US and Iran may reach a preliminary agreement to end the conflict, raising hopes of lower oil prices and cheaper aviation fuel. 

On the stock market, IndiGo shares rose about 7.6%, while SpiceJet hit the 5% upper circuit. This came even as the broader market also traded higher. 

What Is ECLGS 5.0? 

The ₹18,100-crore ECLGS 5.0 scheme is designed to help MSMEs and airlines meet working capital needs. Under this plan, National Credit Guarantee Trustee Company Limited will provide a government guarantee covering 90% of potential loan losses. 

Airlines can borrow up to 100% of their funding requirements, with a cap of ₹1,500 crore per company. The move comes after the Federation of Indian Airlines warned that the sector was nearing a “total collapse” due to rising fuel costs and geopolitical tensions. 

Air Traffic Slows And Cancellations Rise 

Despite the rally in stocks, operational data remains weak.  Domestic air traffic fell 1% year-on-year in March 2026 to 14.4 million passengers, with April also showing softness. 

Passenger load factors dropped and cancellations increased: 

Fuel Costs Remain A Major Concern 

Aviation turbine fuel (ATF) prices for domestic flights stayed unchanged at ₹104.9 per litre, offering short-term relief. However, international ATF prices rose about 5%.  

Read more: Aditya Birla Real Estate FY26 Results: Higher Dividend as Realty Shift Gains Pace.

Conclusion 

Airline stocks rallied after the government introduced ECLGS 5.0 and hopes of easing geopolitical tensions lifted sentiment. While lower fuel prices and credit support offer short-term relief, rising costs and slowing traffic remain key risks for the aviation sector. 

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