FIA, representing Indigo, Air India and SpiceJet, Civil Aviation Minister K. Rammohan Naidu requested for early release of arrears of loan assistance sanctioned to eligible airlines under the Emergency Credit Facility Guarantee Scheme (ECLGS) 5.0. The Federation of Indian Airlines (FIA) in a letter dated October 1 has sought immediate intervention for early release of funds to eligible airlines willing to take loan assistance under the ECLGS 5.0 scheme. The letter said that the airlines which had applied for loans under ECLGS 5.0 have already received a part of the assistance sanctioned under the scheme, but the release of the remaining amount has been delayed due to continued hesitancy of the lending institutions.
How much money is due
The FIA said that the support of the Ministry is necessary for timely release of funds under the scheme, especially for those member airlines which are still financially weak and have applied for immediate cash assistance under the scheme. Sources said that Spice Jet, which is facing many challenges, has so far received Rs. 150 crore has been received and that Rs. 350 crore awaiting the next installment.
Approved by the government in March and implemented by the National Credit Guarantee Trustee Company, ECLGS 5.0 aims to provide targeted credit guarantee support to businesses affected by external shocks. The scheme will remain in effect till March 2027 or until the guarantee of Rs 2.55 lakh crore is released, whichever is earlier. This includes micro, small and medium enterprises (MSME), eligible non-MSME business borrowers and scheduled passenger airlines.
What is this scheme?
The loan tenure is seven years, with a two-year moratorium on repayment, and the guarantee cover remains in place for the entire tenure. Only those airlines are eligible which have outstanding credit facilities till March 31, 2026 and whose accounts are in ‘Standard’ category. The loan should be sanctioned by March 31, 2027.
The scheme revives the original ECLGS model, which was launched to provide government-guaranteed, collateral-free credit to MSMEs during the Covid-19 pandemic. Since the start of the conflict in West Asia, Indian airlines have faced challenges such as high fuel costs, closed airspace and long flight routes, which have forced them to curtail many international operations.
