India Considers ₹5,000 Crore Relief for Airlines Amid Ongoing US-Iran Conflict
Centre eyes Rs 5,000 crore relief, China’s Hotan route to ease airline stress amid Iran war: Report
The Economic TimesImage: The Economic Times
The Indian government is contemplating a ₹5,000 crore (approximately $600 million USD) Emergency Credit Line Guarantee Scheme (ECLGS) to support airlines struggling with rising operating costs due to the US-Iran conflict. Additionally, the aviation ministry is exploring a new route through Hotan, China, to streamline operations for Air India and reduce fuel costs.
- 01The proposed ECLGS could provide up to ₹1,500 crore per airline.
- 02IndiGo is the only financially stable major airline but may not need the relief.
- 03Air India plans to reroute flights through China to avoid Pakistan airspace.
- 04Rerouting could save millions in operational costs for Air India.
- 05Volatility in jet fuel prices remains a critical challenge for airlines.
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The Indian government is considering a ₹5,000 crore (approximately $600 million USD) Emergency Credit Line Guarantee Scheme (ECLGS) to assist airlines facing increased operating costs and reduced passenger demand due to the ongoing US-Iran conflict. Each airline could receive up to ₹1,500 crore under this scheme. IndiGo, currently the only financially stable major airline, may qualify but reportedly does not require the funds. Meanwhile, the aviation ministry is working on securing a new flight route through Hotan, China, which would allow Air India to bypass Pakistan's airspace. This rerouting is expected to significantly lower operational costs by reducing travel distances and avoiding fuel-intensive detours. Air India has proposed to reroute its Airbus A350 and Boeing 787-9 flights from Delhi and Mumbai through Chinese airspace towards Kyrgyzstan, ultimately connecting to existing routes to Europe and the US. The ongoing conflict has highlighted the critical nature of the Middle East in global jet fuel supply, with volatility in fuel prices becoming a major cost factor for airlines, exacerbated by airspace restrictions that increase travel distances by 10-15%.
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If implemented, the relief package could stabilize airline operations and potentially lower ticket prices for consumers, as airlines may pass on savings from reduced operational costs.
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