Air India sale: Center asks ministries, departments to clear dues, pay tickets

New Delhi: The government on Wednesday asked ministries and departments to immediately clear the debt-ridden Air India’s dues and buy tickets only in cash from now on.

The government had earlier this month decided to sell Air India from salt to software conglomerate Tata Group’s holding company Tales Pvt Ltd for Rs 18,000 crore.

The Department of Expenditure under the Ministry of Finance, in a 2009 order, had stated that in cases of air travel (both domestic and international), including LTC, where the Government of India bears the cost of the air route, officers can travel only on Air India.

The Department of Expenditure said the process of disinvestment of Air India and Air India Express is underway and the airline has stopped providing credit facilities for air tickets.

“Therefore, all Ministries/Departments are directed to immediately clear the dues of Air India. Air tickets can be purchased from Air India in cash till further instructions,” the department said in an office memorandum.

It also directed the Ministries/Departments to alert their subordinate offices/institutions under their administrative control for compliance with this Office Order.

On 25 October, the government signed a share purchase agreement with Tata Sons for the sale of the national carrier Air India. Tata will now seek various regulatory approvals before handing it over to the airline by the end of December.

The deal includes cash payment of Rs 2,700 crore and acquisition of the airline’s debt of Rs 15,300 crore.

The government is selling its 50 per cent stake in ground-handling company AISATS along with its 100 per cent ownership of Air India and Air India Express.

Tata surpassed the Rs 15,100 crore offer by SpiceJet promoter Ajay Singh-led consortium and the Rs 12,906 crore reserve price set by the government for the sale of its 100 per cent stake in the loss-making carrier. Read also: Now, read deleted WhatsApp messages: Check out the steps to catch the sender off guard

As on August 31, Air India had a total debt of Rs 61,562 crore. And 75 per cent of this debt, or Rs 46,262 crore, will be transferred to AIAHL, a special purpose vehicle, before the loss-making airline is handed over to the Tata group. Read also: Paytm IPO: Offer size increased to Rs 18,300 crore as Chinese investor plans to sell more stake

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