The Federation of Indian Airlines (FIA), which represents Air India, IndiGo and SpiceJet, has urged the Ministry of Civil Aviation to facilitate the faster release of funds sanctioned to eligible airlines under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
In a letter dated October 1 to Civil Aviation Minister K Rammohan Naidu, the federation sought urgent intervention to ensure that airlines that have opted for the government-backed credit support receive the pending amounts without further delays.
FIA said member airlines that have applied for credit under ECLGS 5.0 have received only part of the assistance sanctioned to them. In several cases, the release of the remaining amounts has been delayed because of continued hesitation among lending institutions.
The federation has requested the Ministry of Civil Aviation to provide appropriate guidance and reassurance to participating banks to facilitate the release of the balance sanctioned amounts, beginning with the first tranche under the scheme. It said timely disbursement is important for airlines that remain financially vulnerable and require immediate liquidity support.
According to FIA, the Indian aviation industry is facing unprecedented financial and operational challenges. The federation has cited the continuing West Asia conflict since April 2026, airspace restrictions and flight diversions, rupee depreciation, rising operating costs and a sharp increase in aviation turbine fuel (ATF) prices among the factors putting pressure on airline finances.
“These developments have severely strained airline liquidity and working capital, necessitating immediate Government support,” the federation said in its communication to the ministry.
FIA said faster access to the sanctioned credit would help airlines meet critical operational and working-capital requirements, sustain their operations and continue providing air connectivity across the country. It also stressed that not all members of the federation require credit under ECLGS 5.0.
The Cabinet approved ECLGS 5.0 in May 2026 to provide targeted credit support to airlines and other eligible businesses facing financial stress linked to external disruptions. The scheme has been structured to provide additional credit through government-backed guarantees, with the National Credit Guarantee Trustee Company Limited (NCGTC) implementing the guarantee mechanism.
For the aviation sector, ₹5,000 crore has been specifically earmarked under the scheme. Eligible scheduled passenger airlines can raise additional credit of up to 100% of their peak credit outstanding during January-March 2026, subject to a maximum of ₹1,500 crore per borrower across the banking system. The loans can have a tenure of up to seven years, including a two-year moratorium on repayment.
The broader ECLGS 5.0 scheme is intended to facilitate additional credit flow of up to ₹2.55 lakh crore. The government provides a 90% credit guarantee for eligible non-MSMEs and airlines, while the scheme is designed to strengthen lender confidence and improve access to working capital during periods of financial stress.
FIA said the timely release of the sanctioned assistance is particularly important for airlines that are already facing heightened cost and operational pressures. It added that financial stability in the sector is critical not only for individual carriers but also for maintaining connectivity, supporting tourism and trade, employment and the wider aviation ecosystem.
The federation has therefore sought the ministry’s intervention with participating lenders so that eligible airlines can access the balance credit already sanctioned under ECLGS 5.0 without avoidable delays.
