Aviation sector to be eligible under ECLGS 3.0

To provide liquidity relief to the civil aviation sector, government has announced extension of Emergency Credit Line Guarantee Scheme (ECLGS) to the civil aviation sector. Industry players opine that this move of the government will ease the pressure off the industry and will provide liquidity.

The pandemic hit sector has been looking for support from the government. Recently, the ministry of civil aviation permitted reduction of capacity to 50% for the domestic airlines from June 1. The second wave has impacted the demand as lockdown and strict restrictions prevail in some states.

ECGLS 3.0 was introduced in March to cover the business enterprises in travel and tourism, leisure, hospitality and sporting sectors. Finance ministry said that the civil aviation sector will be eligible under ECLGS 3.0.

“Airlines in India have been at the very forefront of this war against COVID-19 and the government’s recognition of the difficulties being faced by our industry is certainly a move in the right direction,” SpiceJet Chairman and Managing Director Ajay Singh said.

Furthermore, current ceiling of Rs. 500 crore of loan outstanding has also been removed to be eligible under ECGLS 3.0. Maximum ECLGS assistance to each borrower is limited to 40% or Rs. 200 crore, which ever is less.