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The finance ministry has asked all central government departments to clear the dues to Air India immediately and to purchase air tickets from the airline in cash only as the company has discontinued its credit facility to the government.
The expenditure department in a notification said both domestic and international air travel, including LTC where the government of India bears the cost of air passage, the official concerned may travel only by Air India.
“Recently, the government of India has decided to disinvest Air India, the process of disinvestment of Air India and Air India Express is ongoing. Air India has stopped extending credit facilities on account of purchase of air tickets. Therefore, all ministries/departments are directed to clear Air India’s dues immediately, the notification said.
Air tickets from Air India may be purchased in cash till further instructions, it added further
Air India bid
Tata group has emerged as the successful bidder for Air India. The winning bid was Rs 18,000 crore against a reserve price of Rs 12,906 crore.
The government had sent a letter of intent (LoI) to the Tata group on October 11 post the announcement of the winning bidder.
The Tata group will be handed full control of Air India and its low-cost arm Air India Express, as well as a 50 percent share in ground handling company Air India SATS Airport Services Pvt. Ltd, once the transaction is completed, which the government aims to complete by the end of December (AISATS).
The disinvestment of Air India came after many debacles in the efforts to privatise the bleeding airline. Air India is now returning to its original owner, the Tata group, after 68 years.
After winning the bid, Tatas had requested that the regulatory process for consolidating its airlines be accelerated.