Amid rising cost of jet fuel and ongoing tensions in West Asia, the pressure on India’s aviation industry was continuously increasing. In such a situation, the government has taken a big step and approved an emergency credit package of ₹ 5,000 crore for the airlines. This is expected to provide relief to companies in trouble. But the big question is whether passengers will also benefit from it?
The government has given this relief under the Emergency Credit Line Guarantee Scheme (ECLGS). Under this, airlines will get loans from banks, which will be guaranteed by the government. Each airline can get a maximum loan of up to ₹1,500 crore, so that they can manage their expenses.
Expensive fuel increased the problem
The largest cost for airlines is jet fuel, which typically accounts for 30-40%. But in recent months it has increased to about 50%. There has been a tremendous increase in the expenses of companies due to war in West Asia, closure of airspace and long flights.
Number of passengers decreased
Not only the expenditure, but there has also been a decline in the number of passengers. The growth of domestic air travel slowed down to around 1.3% in FY26, which was more than 7% earlier. This has also affected the earnings of airlines.
How will this scheme work?
- Loan repayment facility for 7 years
- No need to pay EMI for first 2 years
- Government guarantee on extra loan
This will provide immediate relief to the airlines and they will be able to continue their operations.
Will flight tickets be cheaper?
At present, due to rising expenses, airlines have made tickets expensive and have also imposed fuel surcharge. This package will provide relief to the companies, but there is little possibility of the tickets becoming cheaper immediately. However, if the situation improves, there may be relief in rent in future.
Why did the airlines need this help?
Airlines had sought help from the government because the situation had become such that some international flights might have to be stopped. The companies had conveyed their views to the government through the Federation of Indian Airlines.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
