India to extend Rs 4,000 crore emergency credit programme to airlines: Report

New Delhi: India is reportedly set to extend an emergency credit programme worth around Rs 4,000 crore to local airlines to address operational challenges caused by the ongoing Iran war. 

According to a report in The Economic Times, the government will provide a sovereign guarantee for loans up to Rs 1,000 crore to each airline. Airlines can also borrow an additional Rs 500 crore if promoters or owners invest an equivalent amount in the company, the report added.

Budget airline SpiceJet is expected to be the main beneficiary of this programme. Despite raising Rs 3,000 crore in 2024, the airline faces financial difficulties, including delayed salaries and unpaid leave for some employees, the report stated.

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Indian carriers have cancelled over 10,000 flights since the onset of the West Asia conflict, a senior government official said on April 7. Escalating tensions and airspace restrictions have disrupted international operations.

Key transit corridors have been closed, forcing airlines to suspend or reroute services, especially on long-haul routes to Europe and North America. Indian carriers used to operate about 300 to 350 flights daily to the Middle East, but this number has dropped to 80-90 flights. 

Several countries in West Asia, including Israel, Jordan, Lebanon, Kuwait, Qatar, Bahrain, and the UAE, have closed or restricted their airspace. This has caused unprecedented disruption in global aviation and international connectivity. Flights to Europe and North America now take longer routes, increasing travel time and costs.

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The Directorate General of Civil Aviation (DGCA), as a relief measure, has temporarily relaxed Flight Duty Time Limitations for pilots on long-haul flights. Flight time limits have been extended to around 11.5 hours to manage longer routes and pilot shortages. This relaxation is valid until April 30 and will be reviewed based on the situation.

The official said aviation turbine fuel (ATF) prices have risen internationally, but in India, the government has moderated the increase. This intervention has helped keep domestic airfares stable despite ATF constituting about 40 per cent of airline operating costs.