The government on Wednesday called on ministries and departments to immediately pay dues to heavily indebted Air India and now buy 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 the Tata group, a salt-to-software conglomerate, for Rs 18,000 crore.
The Expenditure Department, under the Ministry of Finance, in an order of 2009, had stated that in cases of air travel (both domestic and international), including LTC where the Indian government bears the cost of the passage air, officials can only travel by Air India. The spending department said the Air India and Air India Express divestment process is underway and the airline has stopped extending its credit facilities due to airline tickets.
As of August 31, Air India had a total debt of Rs 61,562 crore. And 75 percent of that debt or Rs 46,262 crore will be transferred to an AIAHL special purpose vehicle before handing over the loss-making airline to the Tata group.
First publication: STI