Air India Stops Credit Facility: Government Employees, Officials Told To Purchase Tickets Only In Cash

The government asked ministries and departments to clear dues of Air India immediately and henceforth purchase tickets only in cash

New Delhi: With a view to tackling the crisis of debt-laden Air India, the government on Wednesday asked ministries and departments to clear dues of Air India immediately and henceforth purchase tickets only in cash. Earlier this month, the government decided to sell Air India to Talace Pvt Ltd, a unit of the holding company of salt-to-software conglomerate Tata group, for Rs 18,000 crore, according to PTI.

What should government employees know?

So far, in cases of air travel (both domestic and international), including LTC where the government bears the cost of air passage, the officials were allowed to travel only by Air India, according to the 2009 order by the department of expenditure, under the finance ministry.

However, the expenditure department noted the process of disinvestment of Air India and Air India Express is ongoing, and the airline has stopped extending credit facilities on account of air tickets. "Therefore, all Ministries/Departments are directed to clear Air India dues immediately. Air tickets from Air India may be purchased in cash till further instructions," the department said in an office memorandum.

It also directed the ministries/departments to alert its subordinate offices/institutes under its administrative control for compliance to this office order. On October 25, the government signed the share purchase deal with Tata Sons for the sale of national carrier Air India. Tatas will now seek various regulatory clearances before the handover of the airline by December end.

 Tata Group had emerged as the successful bidder of the divestment process of the national carrier Air India with a winning bid of Rs 18,000 crore as the enterprise value for the national carrier.  The Tata Group’s holding company, Tata Sons through its wholly-owned subsidiary Talace Pvt. Ltd. submitted the bid and after the acquisition, the Tatas will own a 100 per cent stake in Air India (a full-service airline operating in domestic and international markets) as also 100 per cent in its subsidiary Air India Express (a low-cost carrier airline which focusses on short-haul international operations especially in the Middle East market) and 50 per cent in the joint venture Air India SATS (airport services on ground and cargo handling).