No tie-up with airlines for govt staff after Air India-Tata deal

The government is not mandating travel by any particular airline, going forward, after handing over Air India because there won't be any state-owned airline, said DIPAM secretary

Post handing over of Air India to the Tatas, government officials will be free to book their travel with any airline that offers them the best price.

And, the Centre will not have a tie up with any carrier, department of investment and public asset management (DIPAM) Secretary Tuhin Kanta Pandey said. 

“The government is not mandating travel by any particular airline, going forward, after handing over Air India because there won’t be any state-owned airline,” he said. 

The department of expenditure (DoE) will soon issue instructions to government departments for official travel as this needs to be done before handing over Air India to the new buyer, he said.  

The government plans to hand over Air India to Tata Sons by December-end. Tata Sons-backed special purpose vehicle (SPV) Talace has won the bid to buy out the government's shareholding in Air India.  Talace had placed a bid to acquire Air India for Rs 18,000 crore, which involved retaining debt of Rs 15,300 crore of the national carrier, and a cash component of Rs 2,700 crore. Travel by Air India was mandated because the government was trying to secure a certain amount of revenue for the airline. “That’s not going to happen now.”

Government officials had to seek permission from higher ups to travel by other airlines in case tickets were cheaper there than what was offered by Air India. They could also take other airlines if the national carrier’s flights were not operating on the routes concerned. 

For leave travel concession benefits that central government staff are entitled to, the DoE will work out a policy, Pandey said.  The Centre had asked all ministries and departments to clear dues of Air India immediately.

The airline will also stop extending credit facilities for purchase of air tickets to government employees. All tickets will have to be purchased in cash, the directive said.