This is the one privilege that Air India has, but the cabinet might soon take it away

Until now, Air India, India’s flag carrier airline, had the privilege of being the only airline that carries government employees on official tours. However, the civil aviation ministry is preparing a cabinet note, asking for permission to allow it to opt for the airline offering cheapest fare.

"The finance ministry, in one of the review meetings, has asked us to abolish this rule mandating Air India for official flights," a senior aviation ministry official told ET on the condition of anonymity. "We are preparing a Cabinet note, which should reach the Cabinet for approval in 15 days," he added.

In the past, Air India has faced some wrath from some members of the government, which could also be the reason behind the ministry considering this change. Cabinet Minister M Venkaiah Naidu had taken to the social networking site Twitter when he missed a meeting because of delay in his Air India flight.

However, as per analysts, the move is set to hurt the national carrier because when given a choice, government employees might not choose Air India.

"I also do not think this loss of business would improve the services of Air India because the problem identification at Air India since the beginning is wrong. And one cannot improve unless the correct problem is identified," said Shakti Lumba, former head of operations at Air India and IndiGo.

However, as per an Air India official, when it comes to fares, Air India offers low fares as compared to other carriers, thus this move will not have much impact on its business.

"Our fares are competitive with our full-service peers and we will surely retain all our government fliers on that count," said the senior Air India official. "We also have special schemes designed for government employees that will surely help us retain their business."

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