Through this initiative, airlines can access up to Rs 1,500 crore. For the aviation industry, the loan has a term of seven years from the date of initial disbursement, including a two-year moratorium.
While IndiGo and Tata Sons’ Air India Group have the resources to weather the perfect storm – a sharp rise in jet fuel prices, a slumping rupee and a large portion of their operating costs denominated in dollars – many other weaker players are struggling to survive. For example, an airline company has been unable to pay wages, PF or even TDS on time for a long time. ECLGS could provide them with some liquidity and avoid a shutdown for the time being.
“Eligible borrowers: MSMEs and non-MSMEs with existing working capital limits as on March 31, 2026, and scheduled passenger airlines with outstanding credit facilities, subject to their accounts qualifying… Additional credit is available up to 20% of the peak working capital utilized in Q4FY26 (capped at Rs. 100 crore). For airlines, up to 100% (capped at Rs. 150 per borrower) Crores subject to certain specific conditions),” the government statement said.
“The scheme is designed to help businesses cope with the challenges posed by conflicts in West Asia. Additionally, it is expected to help businesses sustain operations, protect jobs and sustain supply chains. The proposed credit guarantee scheme is an important step in helping businesses, especially MSMEs and the aviation industry, secure banks and financial institutions to meet their additional working capital needs. By providing timely liquidity, this program will sustain businesses and prevent job losses,” the statement added.