The Indian government is considering a ₹5,000 crore relief package for airlines as the ongoing Iran conflict continues to drive up operating costs and weaken passenger demand. The proposed support includes an Emergency Credit Line Guarantee Scheme (ECLGS), aimed at providing financial lifelines to stressed carriers.
In parallel, authorities are evaluating the use of China’s Hotan air route to help airlines—particularly Air India—bypass restricted or longer diversion paths over Pakistan and conflict zones. The alternative corridor is expected to reduce fuel burn, flight time, and operational complexity on westbound routes.
The measures come amid mounting pressure on the aviation sector, with elevated jet fuel prices, longer flight paths, and declining traffic impacting airline profitability. Industry stakeholders have warned that prolonged stress could lead to capacity cuts, higher fares, and potential financial instability for weaker carriers.
The proposed relief follows earlier steps such as a 25% reduction in airport charges, signaling a broader government effort to stabilize the sector during geopolitical turbulence.
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