Ministries, PSUs, govt depts owe more than Rs 600 crore to Air India

Airline is owed Rs 1,500 crore for tickets: mainly for flying VVIPs, ministers, foreign dignitaries and evacuation operations.

Sai Manish New Delhi

3 min read Last Updated : Oct 28 2021 | 3:27 PM IST

The government has directed its departments and ministries to clear money for tickets purchased on credit from Air India, marking the final stages to settle the airline's dues from various entities and transfer what it owes to others to a special purpose vehicle setup earlier to take over its liabilities.

Official data shows that the tickets worth Rs 1,500 crore are due to the airline as of date. These expenses are mainly on account of transporting so-called VVIPs, ministers, foreign dignitaries and evacuation operations. No amount is owed on account of repatriation flights carried during the pandemic under the Vande Bharat mission as all Indians who were evacuated had to pay market airfares for their respective flights. (See Table)

As of March 2020-21, various ministries, public sector units and other departments owed the airline Rs 613 crore. This was on account of tickets issued on credit to various ministers and government officials. The finance ministry on Wednesday scrapped an order that required government officials to only travel by Air India if they were to be reimbursed for their tickets. This followed a decision by the airline's management to stop issuing tickets on credit to government officials. Now they would be required to pay cash for their tickets.

Much of the money due is also for VVIP flights or the so-called special extra section flights. According to figures given by Hardeep Puri, the former civil aviation minister, in Parliament, the amount due for these VVIP flights as of March 2020 was Rs 900 crore. The ministry however did not specify whether these were settled by the end of the financial year 2020-21. Air India engages the 'special extra section flights' or VVIP aircraft such as the Boeing B747-400 for the President, the Vice President and the Prime Minister. In 2020-21, despite covid travel restrictions, such flights cost the airline another Rs 59 crore.

The return of this 'VVIP ticket' money to Air India could be a first step to set its balance sheet clean before its eventual takeover by the Tata group which won the bid to run the airline earlier this month. Air India has to receive crores of rupees from other entities including its subsidiaries like the Hotel Corporation of India and a few crore from Jet Airways.

However, it has unpaid bills of almost Rs 16,000 crore. Much of the unpaid bills are due to fuel companies and airport operators. It is estimated to owe over Rs 3,000 crore in unpaid fuel bills and almost Rs 2,700 crore to Airports Authority of India (AA) and private airport operators at Delhi, Mumbai, Cochin and Hyderabad. Tuhin Kanta Pandey, Secretary to the Department of Investment and Public Asset Management (DIPAM), had earlier told the Press Trust of India that these unpaid bills would not have to be footed by the Tata group and would be transferred to Air India Assets Holding Ltd, the special purpose vehicle created to take over the airline's debt. It is to be noted that 75 per cent of the airline's Rs 61,562 crore debt will also be transferred to this company and will not have to be repaid by the Tatas.