Clear Air India dues, buy tickets in cash: FinMin tells ministries

The government on Monday signed a share-purchase agreement with Tata Sons for the sale of the national carrier for Rs 18,000 crore

2 min read Last Updated : Oct 27 2021 | 11:11 PM IST

The finance ministry has asked all government departments and ministries to clear the dues of Air India and Air India Express with immediate effect on the back of the ongoing disinvestment process of the airline.

It further said that since Air India has stopped giving credit facility on account of purchase of air tickets, they may be purchased in cash till further instructions.

The government also clarified that in all cases of air travel (both domestic and international), including leave travel concession where the Centre bears the cost of air passage, the officials concerned are not required to travel exclusively by Air India.

“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 facility on account of purchase of air tickets. Therefore, all ministries/departments are directed to clear Air India’s dues immediately. Air tickets from Air India may be purchased in cash till further instructions,” the Department of Expenditure said in a notification.

The government on Monday signed a share-purchase agreement with Tata Sons for the sale of the national carrier for Rs 18,000 crore. Earlier this month, the government had accepted an offer by Talace — the holding company of Tata Sons - to pay Rs 2,700-crore cash and take over Rs 15,300 crore of the airline's debt.

On October 11, a letter of intent was issued to Tata Group, confirming the government's willingness to sell 100 per cent of its stake in the airline. The deal also includes the sale of Air India Express and the ground handling arm Air India SATS.

The Tatas beat the Rs 15,100-crore offer by a consortium, led by SpiceJet promoter Ajay Singh, and the reserve price of Rs 12,906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier.

This is the first privatisation since 2003-04. Air India will be the third airline brand in the Tatas' portfolio. It holds majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines.