The Federation of Indian Airlines (FIA) has called upon the Civil Aviation Minister, Ram Mohan Naidu, to intervene for the swift disbursement of funds under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. This request comes as the aviation sector grapples with significant financial and operational challenges exacerbated by ongoing geopolitical conflicts, particularly in West Asia since April 2026.

The FIA represents key players in the industry, including Air India, IndiGo, and SpiceJet. In its correspondence, the federation outlined various issues impacting operational efficiency, including airspace restrictions, flight diversions, currency depreciation, and rising costs associated with aviation turbine fuel (ATF).

According to the FIA, these factors have severely hampered the liquidity and working capital necessary for airline operations, necessitating urgent governmental support to sustain the sector.

National Importance of the Aviation Sector

The aviation industry is integral to national connectivity, trade, tourism, employment, and broader economic development. Consequently, the financial stability of airline operations is deemed critical for achieving the government’s vision for a developed India by 2047.

While the FIA expressed appreciation for the government’s efforts to extend credit support through ECLGS 5.0, it noted that not all member airlines had availed themselves of the credit. However, those that had applied reported partial disbursement of approved amounts, with delays in releasing the remaining funds attributed to hesitancy from lending institutions.

The federation emphasised the need for the Ministry of Civil Aviation (MoCA) to ensure the prompt release of funds under the scheme, particularly for airlines that are financially vulnerable and require immediate support to stabilise their operations.

Impact of Delayed Disbursement on Airlines

Timely financial assistance is essential for airlines to meet critical operational needs and manage working capital effectively. The FIA indicated that prompt disbursement would not only aid individual airlines but would also contribute to maintaining air connectivity throughout India.

The FIA’s communication stressed that urgent government action is vital in safeguarding the financial sustainability of member airlines participating in ECLGS 5.0. Delayed assistance could jeopardise airline operations and, by extension, the entire aviation ecosystem.

In conclusion, the federation urged the MoCA to offer guidance and assurance to participating banks to facilitate the swift release of sanctioned funds, starting with the first tranche of ECLGS 5.0. The FIA reiterated that timely intervention is crucial to ensuring the ongoing provision of essential air services in the national interest.

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