Air India CMD asks employees to 'strictly control expenses' till sale to Tata completes

Days after Tata Sons won the bid to acquire Air India, the acting Chairman and Managing Director (CMD) of the national carrier has issued an order to the management asking the employees to control expenses, till the divestment exercise is complete. In an order issued by Aviation secretary Rajiv Bansal, the employees were asked to carry out all revenue or capital expenses "only to the extent necessary for the continuity of business till the disinvestment exercise is complete".

"Air India disinvestment process is in its final stages. Letter of Intent has already been issued to the successful bidder. In view of this, it is important to note that all revenue or capital expenses be carried out only to the extent necessary for the continuity of business till the disinvestment exercise is complete, which is likely to happen within 10 weeks or so," the order copy, accessed by ANI said. 

The CMD further directed the management not to enter into any fresh contract without the approval of the Director Finance (DF) and the CMD as the divestment process is in the final stages.

"No fresh contract to be entered into without the prior consent of DF/CMD. As far as possible, the validity of the same may not be beyond March 31, 2022. If the validity is beyond March 31, 2022, it should have a termination clause. All the functional directors, executive directors, Heads of the Departments to take note of the above and ensure strict compliance," the order. 

The above direction was passed after Tata Sons won the final bid for acquiring national carrier Air India on October 8. According to Department of Investment and Public Asset Management secretary Tuhin Kanta Pandey, the transaction will be completed by December 2021. 

Tata Group acquires Air India with a winning bid of Rs 18,000 Cr

Marking the third attempt of the Government of India (GoI) to get rid of the decade-long loss-incurring air carrier, the salt-to-software conglomerate placed a winning bid of ₹18,000 crores to re-acquire the airline more than 65 years after it ceded control to the government. The deal will see Tata taking on almost Rs 15,300 crore in Air India's debt, with the government hiving off the rest of the debt, totaling over Rs 45,000 crore, into a holding company along with the land and building assets the flag carrier owns.

The Tata Group – which owns stakes in Vistara airlines and Air Asia – had been eyeing to bring Air India back into Tata's folds for a long time. Air India, which was founded by J.R.D. Tata, a licensed pilot, in 1932, had been operating a few mail carriers in the 1930s between Karachi in then undivided and British-ruled India, and Bombay.