Rajeev Sharma :- The India government is working on a major relief package to support domestic airlines facing operational and financial strain due to ongoing tensions in the Middle East. Under the proposed plan, the Centre is expected to roll out an emergency credit programme backed by sovereign guarantees, aimed at easing liquidity pressure in the aviation sector.
As per the proposal, airlines would be able to avail loans with partial government guarantees up to a defined limit, enabling easier access to funds from banks. In addition, carriers may be allowed to raise further debt, subject to promoters infusing matching capital, ensuring shared financial responsibility and risk.
Officials have clarified that while the government will provide credit guarantees, lending institutions will continue to carry out their own due diligence before sanctioning loans. The move is part of a broader strategy by the finance ministry to stabilise key sectors through targeted financial support.
Industry sources suggest that SpiceJet could be among the biggest beneficiaries of the scheme, given its ongoing cash flow challenges. The airline has reportedly been grappling with delayed salary payments and cost-cutting measures, including employee leave adjustments.
The aviation sector has been hit hard by rising jet fuel prices and reduced flight operations to the Gulf region, a critical revenue market for Indian carriers. Restrictions and cautious operations at major hubs such as Dubai have further impacted earnings.
Despite indications of a temporary de-escalation in geopolitical tensions, uncertainty continues to cloud full resumption of normal flight schedules. Several aircraft across airlines remain grounded due to financial constraints and supply issues, adding to operational stress.
The situation has also made banks increasingly cautious, especially in the wake of past airline collapses, prompting tighter scrutiny before extending fresh credit to the sector.
