The government is planning to provide monetary support to domestic airline operators while flight operations are disrupted due to the United States-Israel-Iran war in the West Asian region.
Under a Covid-like credit guarantee scheme to limit the impact of the war, the government is planning to provide monetary support of Rs 5,000 crore to Indian airlines, according to a report by The Hindu BusinessLine.
The credit support will be part of the government’s Emergency Credit Line Guarantee Scheme (ECLGS), which is being worked on to provide relief to crucial sectors from the adverse impact of the West Asian conflict.
The airline portion of the scheme is expected to run for five years, with up to Rs 1,000 crore to be allotted per airline, according to the report. Airlines may further get Rs 500 crore on the condition that the company’s promoter also infuses the same amount.
The scheme is aimed at cushioning the industry from pressures arising from the West Asian crisis.
Since the start of the war in February, flights have been avoiding West Asian airspace, taking longer routes to destinations. Several flights to Gulf countries have also been cancelled.
This has resulted in reduced revenue and higher operating costs at a time when jet fuel prices are soaring due to the energy crisis.
Though the Centre has provided some relief from price hikes to airlines for domestic flights, no such relief has been given for operating international flights.
The support of Rs 5,000 crore to the airline sector is part of the government’s Rs 2.5 lakh crore credit guarantee scheme, on the lines of a similar scheme launched during the Covid crisis.
The scheme may also provide up to 90 percent credit guarantee coverage through the National Credit Guarantee Trustee Company (NCGTC), the report said.
