ECLGS 5.0- Govt Opens Rs 5,000 Crore Relief Package for Airlines, Ticket To Cheap Soon?

ECLGS 5.0: Big relief for aviation sector. To support the companies impacted by the West Asia crisis, the central government has allocated Rs 5,000 crore for airline companies through the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. This scheme was approved by the Union Cabinet on Tuesday and offers a total of Rs 2,55,000 crore in support for micro, small, and medium enterprises (MSMEs) as well as other businesses. This amount represents the loans that banks can extend to qualifying companies, with the government providing a guarantee. This initiative aims to supply additional funds for the daily operations of these companies.

On Wednesday, the Civil Aviation Ministry announced that Rs 5,000 crore has been set aside specifically for airlines. These airlines are currently experiencing a cash flow crisis due to soaring jet fuel prices stemming from the West Asia crisis, along with airspace restrictions and diminished operations, particularly on international routes.

Loans will be accessible for a duration of 7 years

The ministry indicated that under this scheme, each borrower can receive a maximum loan of up to ₹1,000 crore, with the possibility of an extra loan of up to Rs 500 crore, contingent upon an equal equity investment from the borrower. The maximum duration for these loans will be seven years, which includes a two-year moratorium period. This will help alleviate short-term liquidity challenges faced by companies.

No guarantee fee will be required

Under this scheme, there will be no guarantee fee. In the fourth quarter of the fiscal year 2025-26 (January-March 2026), eligible companies will be able to access up to 20 percent of their working capital (with a cap of Rs 100 crore) as additional credit. Airlines will be eligible to receive up to 100 percent of their working capital (up to a maximum of Rs 1,500 crore).

Relief will be provided with the help of the government

Civil Aviation Minister Ram Mohan Naidu said that at a time when airlines around the world are grappling with operational challenges, timely measures have kept Indian airlines stable. The approval of the ECLGSN 5.0 plan will enable airlines to overcome short-term cash crunches and maintain uninterrupted operations amid global disruptions.