This move was decided "unanimously" at the airlines' board meeting, presided by managing director PC Sen and attended, among others, by civil-aviation ministry representatives. The board's recommendations will be sent to the ministry for final approval.

This is for the third consecutive year that Indian Airlines has increased passenger fares which, according to official sources, had become necessary to meet increase in operational costs.

Last year too, the airlines had increased the fares by over 11 per cent in mid-October.

Justifying the hike, an official release issued late in the evening after the nearly five-hour board meeting said the rate of inflation had risen from 4 per cent to 8 per cent and the price index was 10.5 per cent higher than last year. There was also adepreciation of the rupee by 20 per cent.

This, the release said, had led to a number of organisations and companies resorting to increase in fares and tariffs like railways, hotels and postal department.

The release further stated that the main increase in the input costs were on account of a hike in aircraft-leasing charges, increase in the landing and route navigational fees charged by Airports Authority of India, increase in costs of aircraft maintenance owing to depreciation of rupee and inflation, increase in cost of passenger amenities due to hike in catering items' prices, increase in wages of the staff and in hotel rates for aircraft crew.

In its presentation to the board, IA management, while pressing for increase in fares, said the proposed hike was restricted only to offset the increases in input costs.

The management, according to the release, informed the board that the company had "scrupulously refrained" so far from increasing the fares, but there was no way out to resist it.

Themanagement listed the steps taken by it to check expenses and further reduce them. These included a total ban on overtime, freeze on direct recruitment, reduction in engineering expenditure, closing of booking offices, freeze on capital expenditure and review of uneconomical flights.

The board members, however, were of the view that there was need to reduce fare hikes to a minimum, the release said, adding that there were detailed discussion on measures to cut costs. Certain suggestions were also made by board members, which the release did not detail, but said these would be acted upon by the management.

Neither the chairman, nor other senior official of the airlines were immediately available for giving the rationale behind this decision. Neither were the details of the actual increase in fares available.

The IA management had proposed to increase the fares at its september two board meeting, but the proposal was dropped after a civil-aviation ministry directive. Official sources said since then, themanagement had explained to the ministry the necessity to raise the fares.