Air India Yanks Credit Agreement With Government Of India After Several Departments Don’t Pay Their Bills

It appears that several departments of the Government of India are delinquent in their obligations to national carrier Air India and the airline has announced that they’ll turn off the faucet on past due accounts.

Ministries who owe the airlines substantial amount of money will no longer be available to buy tickets on credit and pay for their flights like every other passenger, some exceptions apply for the Ministry of Aviation.

Cash strapped Air India has seen it’s fair share in use and abuse of government relations over the decades, mainly serving as a taxi service for all sorts of “VIP’s” who also held complimentary elite status with the carrier.

In recent years more and more stories made headlines in India and sometimes abroad where such “VIPs” were abusing staff and their own privileges to the detriment of the carrier.

Today came another nail in the coffin when the airline announced that several government departments are seriously delinquent in paying their bills for tickets used by government employees. A fact that the airline – itself fighting for survival – can no longer live with.

Air India told the national news agency that they will suspend ticket sales on credit to departments owing the carrier more than 10 lakh (US$ 9,130).

Cash-strapped Air India has commenced an initiative to recover pending dues from other government departments. Under the initiative which was commenced last month, the airline identified government departments which owed it more than Rs 10 lakh in dues for tickets availed for official travel.

The airline has also stopped issuing tickets to these departments, except for some such as the AAI and the Ministry of Civil Aviation. The airline has sought immediate repayment of dues, and until then no tickets will be issued on credit to the officials of these departments.

“No credit will be provided to some government departments for booking Air India tickets till the time these departments do not clear their dues,” a senior Air India official told IANS.

“If a department has a due of over Rs 10 lakh then their officials would be required to pay up front to purchase the tickets. Till now the initiative which was started last month has helped us to recover Rs 50 crore. However, despite the recovery, still Rs 220 crore [US$ 30.8 Mio] worth of dues are still pending with different government departments.”

Air India is in constant negotiation with the government figures in power over a decision if the airline should be sold or possibly even shut down. As such it’s hard to press these same entities too much on paying back their 30 Million Dollar worth of debt, much of which was likely used by state employees on non-official travel.


Considering that Air India has already given exceptions to some departments which could likely give them a lot of problems one can’t help but wonder how serious a measure this is going to be. Imagine the airline telling some person at the aviation department they won’t be issuing their ticket on credit anymore and suddenly this person throws a wrench in the machine, disrupting the carriers schedule. It wouldn’t take much in India for this to happen considering the level of corruption.

It’s a sad case with Air India. The country really deserves a good carrier to serve the public but it seems like this position can only be filled by budget carriers. After all money talks and people don’t want to pay.

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