SpiceJet, Go Air apply under modified ECLGS scheme, to get funds in 4-6 weeks

Domestic airlines SpiceJet and Go Air have applied under the Emergency Credit Line Guarantee Scheme (ECLGS) for which the government had last week raised the loan limit, government sources told CNBC-TV18 on Thursday.

Bank of Baroda and Axis Bank have been slated to disburse funds to airlines under the ECLGS scheme, sources said, adding that the lenders will take four to six weeks to start releasing the funds.

The Finance Ministry last week revised the loan limit under the scheme to Rs 1,500 crore from Rs 400 crore to help the COVID-hit aviation industry tide over liquidity stress.

Sources had then told CNBC-TV18 that SpiceJet was expecting to receive an additional Rs 1,000 crore as part of modified ECLGS.

On the other hand, SpiceJet continues to remain under enhanced surveillance of the Directorate General of Civil Aviation (DGCA) till October 29. The aviation regulator had on July 27 cut the airline's operations by half of its departures that had been approved under the summer schedule and before that, issued a show-cause notice saying the airline had failed to "establish safe, efficient and reliable air services".

The regulator will decide on extending the 50 percent cap on SpiceJet's operations, sources said today. They said the cap did not affect a single flight of SpiceJet as fewer aircraft were being deployed anyway.

The government is ready to consider the airline’s request to deploy more aircraft and does not want to constrain air capacity, they said.

Separately, sources also said that discussions had taken place on using one or two percent sustainable fuel in aircraft. Indian Oil Corporation is working on two pilot projects in Gujarat and Haryana’s Panipat to develop sustainable fuel for aircraft as the availability of fuel remains an issue.