New DelhiIndia’s aviation sector has received a significant financial cushion as the Union Cabinet, chaired by Narendra Modi, approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, with a dedicated ₹5,000 crore allocation for airlines.
The move comes at a time when carriers are facing mounting pressure from rising Aviation Turbine Fuel (ATF) prices, airspace restrictions, and reduced international operations linked to ongoing geopolitical tensions in West Asia. These factors have collectively impacted aircraft utilisation, cash flows, and overall operational stability.
Targeted Liquidity Support Under the scheme:
Airlines can access loans of up to ₹1,000 crore, with an additional ₹500 crore tied to equity infusion
Loans will carry a 7-year tenure, including a 2-year moratorium
Credit guarantees extend up to 90% for airlines, improving lender confidence
This structure is designed to address short-term liquidity mismatches while ensuring long-term financial flexibility.
ECLGS 5.0 signals continued government intervention to maintain stability in a strategically important sector.Thursday, May 07, 2026
