Your daily dose of news, covering the latest updates in politics, business, sports, entertainment, and more from India and around the world.
By Chetanya Sarraf
Oct 06, 2026, 12:18 PM
Airlines Seek ECLGS 5.0 Funds Amid Rising Costs
Indian airlines are seeking the urgent release of pending funds under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 as rising aviation turbine fuel (ATF) prices and other operating expenses put increasing pressure on their finances.
The Federation of Indian Airlines (FIA) has urged the Ministry of Civil Aviation to facilitate the disbursement of the remaining amounts sanctioned to eligible airlines. According to the industry body, some of its member airlines have received only part of the credit available to them, while the remaining amounts have been delayed.
The request comes at a time when airlines are dealing with higher operating costs, airspace restrictions, flight diversions and other challenges affecting their liquidity and working capital.
Airlines Seek Faster Funds
The Federation of Indian Airlines has asked the Ministry of Civil Aviation to intervene and help speed up the release of pending ECLGS 5.0 funds. The industry body represents major Indian airlines and has highlighted the importance of timely access to the sanctioned credit.
According to the FIA, some eligible airlines have received only part of the financial assistance approved under the scheme.
Some lenders have reportedly delayed the remaining amounts because of their hesitation.
The industry body has requested the ministry to guide and reassure banks so that the approved funds can reach eligible airlines without further delays. The FIA has also emphasised that timely access to working capital is important for maintaining regular airline operations.
Airlines require substantial funds to meet recurring expenses such as fuel payments, employee salaries, airport charges, aircraft lease obligations and other operational costs. Any delay in accessing sanctioned credit can therefore increase financial pressure on carriers.
The request for faster disbursement is particularly significant because the aviation industry is already facing multiple external challenges. Airlines have had to adjust operations because of international disruptions, airspace restrictions and changes in flight routes.
ATF Costs Add Pressure
One of the biggest financial pressures facing airlines is the rising cost of aviation turbine fuel. Fuel represents a significant portion of airline operating expenses, meaning changes in ATF prices can have a direct impact on the cost of running flights.
The industry has also been dealing with higher operating expenses and disruptions linked to the ongoing West Asia conflict. Airspace restrictions and flight diversions have affected some international operations, adding to the challenges faced by carriers.
The depreciation of the Indian rupee has also contributed to cost pressures because several aviation-related expenses are linked to foreign currencies. Aircraft leases, maintenance requirements and other international payments can become more expensive when the rupee weakens.
For airlines already operating with tight margins, these factors can make it difficult to maintain sufficient working capital.
The industry views government-backed credit under ECLGS 5.0 as an important financial support mechanism.
The FIA has said that timely access to the remaining sanctioned funds could help airlines manage their immediate operational requirements and maintain connectivity.
What ECLGS 5.0 Offers
ECLGS 5.0 was introduced as a government-backed credit support programme aimed at helping businesses affected by external disruptions. The scheme provides additional credit flow through government-backed guarantees and includes support for eligible businesses in several sectors, including scheduled passenger airlines.
The Union Cabinet approved the latest phase with an overall additional credit flow of up to Rs 2.55 lakh crore. A separate allocation of Rs 5,000 crore was earmarked for the airline sector.
Under the scheme, government guarantee coverage is available at different levels depending on the category of borrower. Eligible airlines can receive credit support subject to the conditions and limits prescribed under the programme.
The scheme aims to provide businesses with short-term liquidity so they can continue their operations during periods of financial stress.
Airlines can use the support to meet essential working capital needs, including fuel costs, salaries, airport charges and aircraft-related expenses, subject to applicable rules.
The scheme covers loans that lenders sanction by March 31, 2027, or until they reach the applicable guarantee limit, whichever comes first.
For the aviation industry, such support can provide additional financial flexibility at a time when carriers are facing rising costs and unpredictable operating conditions.
Aviation Sector Under Pressure
The industry has also been watching passenger demand and capacity closely as airlines adjust their operations in response to changing market conditions. Higher costs can influence decisions about routes, aircraft deployment and schedules, particularly when international disruptions affect normal flight patterns. Access to additional working capital can give airlines greater flexibility while they manage these pressures. It can also help carriers meet recurring expenses without disrupting essential services or reducing connectivity. For the government, timely implementation of the scheme could support the wider aviation ecosystem, including airports, maintenance providers, ground handling companies and other businesses that depend on regular airline operations. The funding therefore has implications beyond individual carriers and their immediate financial requirements overall.
The Indian aviation industry plays an important role in domestic connectivity, tourism, trade and employment. Financial difficulties faced by airlines can therefore have wider consequences for businesses that depend on regular flight operations.
Airlines also need to maintain aircraft, retain employees, meet airport-related obligations and ensure that passengers continue to receive reliable services. Delays in accessing approved financial support can make these responsibilities more challenging, especially when operating costs remain elevated.
The FIA’s request for faster release of ECLGS 5.0 funds comes against this broader backdrop. The industry body believes that ensuring timely access to sanctioned credit can help airlines maintain operations and manage their working capital requirements.
For the government and lenders, the immediate challenge is to ensure that eligible airlines can access the support available under the scheme while following the required financial and regulatory conditions.
The development also highlights the financial pressures currently facing India’s aviation sector. With fuel prices, currency movements, international disruptions and other expenses affecting airline finances, access to adequate liquidity remains an important issue for carriers.
The release of pending ECLGS 5.0 funds could provide additional support to eligible airlines as they navigate these challenges and work to maintain regular connectivity across domestic and international routes.
Source: ANI
Your trusted source for news, updates, and insights from India and around the world.
Copyright © 2020–2026 NEWSHOTS. All Rights Reserved.
