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Airlines Rally on New Government Aid
SpiceJet and InterGlobe Aviation (IndiGo's parent company) shares rose sharply on Wednesday. The boost came after the Union Cabinet approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, a vital financial support plan for small businesses and the airline industry.
ECLGS 5.0: What's Included
The government has allocated Rs 18,100 crore for this financial package. Airlines will receive a significant portion, with Rs 5,000 crore set aside for them. The scheme aims to fix cash flow problems that intensified after the West Asia conflict began in February, causing serious financial pressure on airlines.
Civil Aviation Minister K Rammohan Naidu highlighted the scheme's goal: "It will provide strong financial backing to safeguard jobs, sustain connectivity, and ensure resilience across the aviation ecosystem, while also supporting MSMEs," he said on X. The plan intends to prevent job losses and keep services running by making sure airlines get timely cash support from banks and financial institutions.
Credit Terms for Airlines
Passenger airlines can borrow an amount equal to their highest outstanding credit, up to a maximum of Rs 1,500 crore each. This credit will be available for seven years from the first payout, including a two-year period where no repayments are required. Other eligible businesses and MSMEs will have a five-year term with a one-year moratorium. The scheme accepts loan applications until March 31, 2027.