In light of the impending sale of Air India to the Tata group, the Finance Ministry on Wednesday withdrew a standing order requiring employees to travel only on the national carrier Air India and directed government departments to pay dues to the airline ‘immediately.’
The Finance Ministry stated that all new tickets for Air India flights must be purchased “in cash until further instructions,” emphasizing that Air India and Air India Express have stopped giving “credit facility” for ticket purchases by Ministries.
In July 2009, the Department of Expenditure decreed that in all cases of foreign and domestic air travel, including leave travel concession flights, when the Government of India supports the cost of passage, officials must travel exclusively by Air India.
The Ministries have been asked to bring the new instructions to the attention of all subordinate offices under their supervision in an office memo headed “Air Travel on Official Account” published on Wednesday with the consent of Finance and Expenditure Secretary T.V. Somanathan.
On Monday, representatives from the Civil Aviation Ministry and the Tata group inked a share purchase agreement for the sale of the faltering airline to the Mumbai-based conglomerate. After fulfilling all other lingering legalities and procedural requirements, the government intends to complete the transition of control of the airline by December.
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The finance ministry has asked all ministries and agencies to clear Air India’s outstanding debts, which were sold to the Tata group in the country’s first privatization process in 19 years. The move comes after Plane India ceased offering credit on air ticket purchases.
Air India tickets must be paid in cash until further orders are received, according to the company. According to a 2009 instruction, all domestic and international air travel for official purposes or Leave Travel Concession financed by the government should be on Air India only. On Monday, the government signed a share purchase agreement with Tata Sons to transfer its entire ownership of Air India. The airline’s transition is expected to be completed by the end of the year.
