Indian airlines slash 25% international flights in May amid airspace disruptions.
Iran conflict and Pakistan curbs force longer routes, sharply raising operational costs.
Government weighs relief package, including credit support under ECLGS framework.
Indian airlines have reduced 25% of their weekly international flights in May as the curbs on air space due to the conflict in West Asia and flying restrictions imposed by Pakistan are forcing the airlines to take longer routes and thereby escalating the costs, reported Business Standard.
Indian carriers have reduced 1,034 weekly international flights over May last year, a contraction of nearly 24.59%, reported Business Standard citing aviation analytics firm Cirium.
1 May 2026
Get the latest issue of Outlook Business
Meanwhile, Cirium data shows that weekly operations for non-Indian carriers have declined just 1.2%, suggesting they have a more stable footprint.
On February 28, Israel and the US launched military strikes on Iran, leading to widespread airspace closures in parts of West Asia.
For the Indian airlines, this West Asia conflict has compounded the existing issue. Pakistan’s airspace has remained shut for them since Operation Sindoor in May 2025, leaving them squeezed between two restricted corridors.
Relief-Package Under Consideration
According to a report published by NDTV on April 27, the Centre was planning to roll out a relief package for most-impacted sectors due to the Iran conflict. This package will be under a broader ₹2.5 lakh crore ECLGS (Emergency Credit Line Guarantee Scheme) framework being worked out for multiple affected sectors.
Under the package, an airline credit scheme, worth ₹5,000 crore, is under consideration. Also, airlines may get access to Centre-backed credit line via ECLGS route. Besides, there could be a provision of up to ₹1,000 crore credit cap per airline. The scheme may run for five years with possible extension. Notably, the airline relief package could be a part of the broader crisis support framework.
Apart from this, the government may offer up to 90% credit guarantee cover. The relief package has not been rolled out yet.
Earlier in March, Central Board of Indirect Taxes and Customs (CBIC) had extended relief measures for exporters in view of the Middle East crisis.
The Iran conflict fallout has caused a sharp correction in the markets with more than 400 stocks seeing double-digit declines in March alone. The sell-off has hurt several sectors including energy, airlines, autos, manufacturing, financials, consumer goods and logistics.
Meanwhile, citing Axios report, NDTV reported that Iran has reportedly offered to hold talks with the US to reopen the Strait of Hormuz. The route is crucial for India’s energy requirements and disruptions have already led to jet fuel price increases, adding to costs for airlines.
What Is ECLGS
The Union Finance Ministry had launched the Emergency Credit Line Guarantee Scheme (ECLGS) in May 2020 with an aim to support the economy during the Covid-19 crisis.
The scheme was designed to reduce the financial stress caused by lockdowns. ECLGS helped them access quick funds without additional security. Its key features include collateral-free loans, government-backed loans, extended loan tenure, interest rate is capped and no additional guarantee fee.
