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Indian airlines have sought urgent government intervention for the release of pending funds under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, as a sharp rise in aviation turbine fuel (ATF) prices and other operational pressures strain their liquidity and working capital.
The Federation of Indian Airlines (FIA) has urged the Ministry of Civil Aviation (MoCA) to facilitate the disbursement of the balance amounts sanctioned to eligible airlines under the scheme. FIA said some of its member airlines have received only part of the credit sanctioned under ECLGS 5.0, while the release of the remaining amounts has been delayed in several cases due to hesitation among lending institutions. The industry body has sought the Ministry's intervention to provide guidance and reassurance to participating banks and facilitate the timely release of the pending funds, starting with the first tranche under ECLGS 5.0. "FIA requests the Ministry's support as the urgency of the prevailing situation warrants immediate action to ensure that eligible and desirous member airlines can access funds under the scheme without avoidable delays," the federation said in its letter to the Ministry. It said timely access to the sanctioned credit would help airlines meet critical operational and working-capital requirements, sustain operations and continue providing air connectivity across the country. The appeal comes as airlines face mounting financial pressure from higher operating costs, including a sharp increase in ATF prices. Fuel is one of the largest operating expenses for airlines, and sustained increases in ATF prices has put pressure on margins and cash flows, particularly for financially vulnerable carriers. FIA also highlighted the impact of the ongoing West Asia conflict since April 2026, airspace restrictions and flight diversions, rupee depreciation and rising operating costs, saying these factors have significantly strained the industry's liquidity position. Against this backdrop, the aviation industry has sought faster access to government-backed credit support to meet immediate working-capital requirements and maintain operational continuity. ECLGS 5.0 provides government-backed credit guarantee support to businesses affected by external disruptions, enabling eligible lenders to extend additional working capital while reducing their credit risk. Implemented through the National Credit Guarantee Trustee Company, the scheme covers MSMEs, eligible non-MSME businesses and scheduled passenger airlines. It builds on earlier ECLGS phases introduced during the COVID-19 pandemic and is aimed at improving liquidity, supporting business continuity and preserving employment. FIA has said immediate facilitation by the Civil Aviation Ministry would enable eligible airlines to access the already sanctioned funds without further delays at a time when the sector is facing heightened cost and operational pressures. (ANI)
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