Budget carrier SpiceJet has received ₹150 crore from Bank of India under the Emergency Credit Line Guarantee Scheme (ECLGS), according to sources familiar with the matter. As reported by businessline, this represents the first tranche of a proposed ₹500 crore funding package being processed for the airline under the government-backed credit guarantee scheme. The remaining ₹350 crore is expected to be disbursed in phases, with sources confirming that "nearly about ₹150 crore of ₹500 crore under ECLGS has been received by the airline from Bank of India." The development marks the first drawdown by the airline under the government's latest ECLGS framework for the aviation sector.
The funding comes as SpiceJet continues efforts to strengthen liquidity and restore capacity amid ongoing financial challenges. The airline is among the first beneficiaries of the ₹5,000 crore credit facility earmarked for the aviation sector under ECLGS 5.0, sources added. The ECLGS programme was expanded to provide additional support to sectors affected by operational and financial stress, with airlines receiving a dedicated allocation to help meet working capital requirements and sustain operations. Airlines are currently grappling with elevated fuel costs, geopolitical uncertainties and operational disruptions, making the liquidity enhancement particularly crucial for the sector. The development assumes significance as airlines increasingly explore liquidity enhancement measures and cost-management initiatives amid a challenging operating environment and elevated fuel costs.
The ECLGS programme was expanded to provide additional support to sectors affected by operational and financial stress, with airlines receiving a dedicated allocation to help meet working capital requirements and sustain operations. The scheme represents a government-backed credit guarantee mechanism designed to provide liquidity support to businesses facing operational challenges during the current economic environment. In May, the Union Cabinet approved ECLGS 5.0 to facilitate additional credit flow of ₹2.55 lakh crore with government guarantee support for micro, small and medium enterprises (MSMEs), non-MSME sectors and airlines, including a dedicated ₹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 ₹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.
The proposed fundraising was aimed at strengthening the airline's cash position amid rising operating costs as well as an increasingly challenging industry environment. 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. 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 funding also includes 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.
