The tension between the US and Iran is still not settled, and this global conflict is no longer limited to borders. It is now affecting major industries, especially aviation. With rising costs and growing pressure, the Indian government is stepping in to prevent the situation from getting worse in aviation sector. Read to know more!
How Indian Government Is Helping Aviation Sector?
The government is planning to help airlines that are struggling due to higher costs and fewer passengers. As per Moneycontrol, they are considering a ₹5,000 crore Emergency Credit Line Guarantee Scheme (ECLGS). This scheme may get approval within this week. This scheme will give financial support to airlines that are facing cash problems. Under this plan, each airline can get up to ₹1,500 crore to manage their expenses and continue operations.
Also, the aviation ministry is working on a new route to make flights more efficient. It is trying to get approval to use the Hotan route through China. This will allow Air India to avoid Pakistani airspace for westbound flights. Planes from Delhi and Mumbai will fly via Leh, enter China, and turn near Hotan before heading to Europe, the UK, and the US. Air India will use its Airbus A350 and Boeing 787-9 aircraft on this route. This change can help save fuel by avoiding longer routes.
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Fuel Cost Remains A Major Concern
The government is also planning to give relief as jet fuel prices remain high. Moneycontrol reported that earlier, it reduced landing and parking charges by 25% at 34 major airports for three months starting April 8. Airlines also got some relief from rising fuel prices this month. Now, airlines are asking the government to extend these benefits into May to continue easing their cost burden.
Airlines have warned the government about possible problems if costs stay high. Stronger airlines say they may have to reduce flights, which can lead to fewer travel options and higher ticket prices. At the same time, weaker airlines are at greater risk, as some may even shut down. This could affect jobs and reduce connectivity in many areas.
While IndiGo is eligible to get support under the ECLGS, officials feel the airline may not actually need this financial help because it is in a stronger financial position compared to others.
What are your thoughts on this? Tell us in the comments below!
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FAQs
How has the US-Iran conflict impacted airlines?
The US-Iran conflict has increased cost pressures on airlines, and demand has also declined.