Indian airlines are set to receive up to INR50 billion (USD529 million) in government-backed emergency support, an increase from the previously announced INR40 billion. This aid aims to assist carriers as they cope with financial strains caused by rising jet fuel costs, airspace restrictions, and reduced international operations amid geopolitical tensions.
On May 6, 2026, the Indian Ministry of Civil Aviation confirmed the approval of the new Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. The scheme offers a 90% guarantee on airline loans, with individual support capped at INR15 billion. Eligible airlines must have existing credit facilities as of March 31, 2026, and loans must be sanctioned by the end of March 2027.
Supporting Small and Large Carriers
The loans under this scheme can extend up to seven years, including a two-year repayment moratorium. Civil aviation minister Ram Mohan Naidu expressed confidence that this support would enable airlines to manage liquidity challenges and sustain operations during ongoing global disruptions.
One of India's largest airlines, Air India, has already responded by reducing international flights until July 2026, citing higher fuel costs and operational challenges. The Federation of Indian Airlines has called attention to the sector's 'extreme stress' and urged the government to address rising aviation fuel prices, which continue to impact profitability.
