Budget carrier SpiceJet has secured the first tranche of funding under the Centre’s Emergency Credit Line Guarantee Scheme (ECLGS), with the airline receiving around ₹150 crore from Bank of India earlier this week, industry sources told businessline.
Speaking to businessline, sources said the amount forms part of the ₹500 crore ECLGS funding currently being processed for the airline.
“Nearly about ₹150 crore of ₹500 crore under ECLGS has been received by the airline from Bank of India,” sources told businessline.
“The rest of the amount is expected to be received subsequently,” they added.
When contacted, SpiceJet did not elicit any response.
The development marks the first drawdown by the airline under the government’s latest ECLGS framework for the aviation sector.
At present, airlines are grappling with elevated fuel costs, geopolitical uncertainties and operational disruptions.
Besides, sources indicated that the proposed fundraising was aimed at strengthening the airline’s cash position amid rising operating costs as well as an increasingly challenging industry environment.
Jet fuel price hike
The aviation sector has witnessed a sharp increase in operating expenses following higher aviation turbine fuel (ATF) prices, while airspace restrictions and geopolitical disruptions across certain international corridors have added further pressure on airline operations.
The development assumes significance as airlines increasingly explore liquidity enhancement measures and cost-management initiatives amid a challenging operating environment and elevated fuel costs.
In May, the Union Cabinet approved ECLGS 5.0 to facilitate additional credit flow of Rs 2.55 lakh crore with government guarantee support for micro, small and medium enterprises (MSMEs), non-MSME sectors and airlines, including a dedicated Rs 5,000 crore allocation for the aviation sector.
Notably, businessline had reported in April that the Centre was considering a separate support package of around Rs 5,000 crore for airlines under a new version of the ECLGS to cushion the impact of the West Asia crisis on the aviation industry.
Under the scheme, airlines are eligible for additional credit of up to 100 per cent of peak working capital utilised during the fourth quarter of FY26, subject to a cap of ₹1,500 crore per borrower and other prescribed conditions.
The scheme also provides a seven-year loan tenure along with an option to convert up to 50 per cent of interest into a Funded Interest Term Loan, easing immediate repayment pressure and improving cash flows for eligible borrowers.