Gupta said that the rationalisation will lead to a reduction in costs andoperational problems.

The aircraft in AI's stable include Boeing 747-400s, 747-200s, 747-300s,Airbus A 310s and Airbus A 300-B4s. The planes are also fitted withdifferent engines even though they belong to the same make.

Incidentally, globally even large airlines such as Swissair are opting for asingle-aircrfat fleet as it is easy to maintain and operate. Also, theairline's expenditure on pilot training goes down if only one type ofaircraft are used.

AI's VRS is expected to attract at least 300 employees immediately. However,the airline, which has over 700 employees per aircraft, needs to shed flabmuch more drastically to reduce costs and improve its bottomline.

The airline found that 800 employees were ready to accept an offer of lowerpay and reduced working week which was launched in 1998. The national flagcarrier expects to reduce its losses to Rs 75 crore in this fiscal comparedwith Rs 200 crore in the previous fiscal. Most of AI's losses are accountedfor by interest payments on loans to meet its working-capital needs. Theloans help to fund the mounting wages and salaries bill of AI.

The VRS is the second one to be launched by AI since its first scheme didnot meet with an enthusiastic response.

AI's work force recieves plum salaries owing to a hefty Productivity linkedincentive (PLI) which was introduced a few years ago. The efforts of themanagement to remove the PLI have understandably not met with success.

The BJP-led government is planning a disinvestment in AI which could meanthat a foreign airline may take over management control. But the Centre willhave to tackle the issue of excess manpower before that happens.