New Delhi — In a major policy move aimed at stabilizing the aviation industry amid global economic uncertainty, the Government of India has unveiled a comprehensive relief package worth ₹2.55 trillion, with a dedicated portion allocated to support financially strained airline operators.

According to official details, the government has set aside approximately ₹50 billion (₹5,000 crore) specifically for the aviation sector. The support will be extended in the form of loans to eligible airlines, many of which are currently facing rising operational costs, particularly due to increased aviation fuel prices.

Under the scheme, individual airlines will be able to access loans of up to ₹15 billion (₹1,500 crore). To facilitate easier credit flow, the government will provide a sovereign guarantee covering up to 90 percent of the loan amount, a measure expected to significantly reduce the lending risk for banks and financial institutions.

 

The repayment structure has been designed to ease the financial burden on carriers. Airlines will have up to seven years to repay the loans, including a two-year moratorium period, during which no principal repayment will be required.

 

Industry observers say the move comes at a critical time, as airlines continue to grapple with surging fuel costs, tight liquidity, and global economic pressures linked to geopolitical tensions. The relief is expected to help carriers maintain operations, avoid service disruptions, and protect employment across the aviation value chain.

 

Experts also note that the government-backed guarantee mechanism could play a key role in unlocking much-needed financing for the sector, ensuring that airlines remain operational and financially stable in the near term.

The aviation industry, a crucial pillar for connectivity, tourism, and trade, has been among the most affected sectors in recent years. Analysts believe this targeted intervention will not only provide immediate relief but also support the long-term recovery and resilience of the sector.