In the recent development of events, Rajya Sabha has instructed its members to settle the air travel bills and clear their dues with Air India. A letter was issued to the members by the Upper House Secretariat stating that 'Air India has stopped extending credit facility for the purchase of air tickets against exchange orders which was in practice in the past.' It was informed by the RS communications that tickets can be purchased with cash from Air India until further instructions.
Tickets From Air India can be Purchased on Cash Basis
The letter issued by Rajya Sabha said that members are requested to submit their travel allowance claims in the prescribed form along with original air tickets and boarding passes purchased against the exchange orders already issued either by the Rajya Sabha or Lok Sabha Secretariat for the purpose of attending Committee meetings, tours should be submitted to the Rajya Sabha Secretariat for their settlement and clearing of Air India's dues at the earliest.
A memorandum issued in 2009 states that in all the cases where the central government bears the expense for air travel of the officials including for LTC (Leave Travel Concession), the tickets can only be purchased from Air India.
Earlier, the Finance Ministry of India had directed all central ministries and government departments to pay off their dues to Air India instantaneously. Moreover, the Department of Expenditure (DoE) had instructed that all the government departments may purchase Air India tickets only on a cash basis. The changes are taking place as the national flag-bearing carrier has been taken over by Tata Group and a decision has been made to bring a stop to providing credit facilities to government departments.
The share purchase agreement was signed between TATA Group and the central government. The agreement includes the sale of Air India to Talace Pvt. Ltd. a subsidiary of TATA Group for Rs 18000 Crores. Previously, the bid for the purchase of Air India was accepted by the government where Talace Pvt. Ltd. would pay Rs 2700 Crores in cash and would take over Rs 15,300 Crore of debt in order to fully acquire the airlines.