The federation clarified that not all its members require credit under ECLGS 5.0 | Photo Credit: SAMPATH KUMAR GP

The airline industry has sought urgent government intervention to expedite the release of sanctioned credit under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, citing delays by lending institutions amid mounting financial and operational pressures.

Accordingly, the Federation of Indian Airlines (FIA), which represents Air India, IndiGo and SpiceJet, has urged the Ministry of Civil Aviation (MoCA) to provide guidance and reassurance to participating banks to facilitate disbursements to eligible member airlines seeking support.

In a letter dated October 1, 2026, to Civil Aviation Minister K. Ram Mohan Naidu, reviewed by businessline, the industry body said member airlines that had sought credit under the scheme had received a portion of the sanctioned assistance.

“The release of the balance amounts has, in several cases, been delayed due to continued hesitation on the part of lending institutions,” the FIA said.

Vulnerable Carriers

However, the federation clarified that not all its members require credit under ECLGS 5.0.

Its request concerns eligible airlines seeking assistance, particularly financially vulnerable carriers that have applied for immediate liquidity support to sustain and strengthen operations.

Besides, the FIA said the continuing conflict in West Asia since April 2026, airspace restrictions, flight diversions, rupee depreciation, escalating operating costs and a sharp rise in aviation turbine fuel (ATF) prices have severely strained airline liquidity and working capital.

The federation said the urgency of the situation warrants immediate action to ensure that airlines seeking assistance can access funds without avoidable delays.

According to the industry body, the disbursements would help airlines meet critical operational and working-capital requirements, sustain operations and continue providing essential air connectivity.

Furthermore, the FIA highlighted the sector’s contribution to national connectivity, trade, tourism, employment and economic growth.

It cited an estimate that every person employed in aviation supports an additional 6.10 jobs in ancillary and allied businesses.

Spicejet Funds

So far, SpiceJet and Akasa Air have received the first tranche under ECLGS.

Last month, Civil Aviation Minister Ram Mohan Naidu had said that the ministry continues to engage with SpiceJet and examine how it can facilitate matters. 

However, he pointed to limits on government intervention in private airlines.

Besides, Naidu said SpiceJet had received Rs 150 crore under ECLGS, while the remaining funding had to be worked out between the airline and its bank.

Asked about the disbursement of a further Rs 350 crore, the minister said the government had made the scheme available, but obtaining the funds was a matter for the company and the lender.

Furthermore, the minister said the government had extended ECLGS in recognition of the difficulties airlines could face, particularly during the West Asia crisis.

“Our main priority is to ensure that passengers do not face inconvenience, that safety is not compromised at any cost and that smooth operations are sustained,” he said.

Published on October 5, 2026