Interestingly, the planning department is headed by Aruna Mascarenhas, wife of AI's managing director. The commercial wing, which is opposed to Aruna Mascarenhas's plans of inducting the SCLR, is headed by HS Uberoi, an old AI hand.

According to sources, Uberoi has communicated his opposition to the plan to purchase the smaller SCLR planes to Aruna Mascarenhas. He indicated that the commercial department is unwilling to abandon plans to buy the MCLR aircraft after four years of working on the project.

The conflict over the aircraft purchase is being deepened by intense lobbying by the two aircraft manufacturers, Boeing and Airbus Industrie, who are adding fuel to the fire, sources said.

The Seattle-based Boeing is pushing for the MCLR contract. Onthe other hand, rival Airbus Industrie has favoured the SCLR deal. Boeing has pitted its 777-200 aircraft for the MCLR against Airbus A 340-300 aircraft. The two aircraft have an almost equal footing on the technical front.

However, if AI goes in for the SCLR, Airbus may gain a competitive edge over Boeing. Airbus will offer its A 330-200 against the Boeing 767-400. The former aircraft can fly non-stop to London from cities in India.

Planners in AI, headed by Mascarenhas, feel that the airline needs a smaller aircraft which can be used more frequently. The non-stop high frequency routes can bring AI maximum revenue.

Calculations made by the planners indicate that the smaller SCLR aircraft, which has roughly 200 seats, will prove more cost effective in pursuing the non-stop, high frequency strategy. The planning department is also citing the down-turn in the Asian economy for preferring smaller aircraft.

The commercial department, on the other hand, is pushing the line that a smaller aircraft will meanhigher unit costs per seat. It favours a long-term view of the global and Asian economic scenario.

AI's commercial wing, which will finally have the upper hand in choosing the aircraft, also feels that AI has already done a lot of research on the MCLR planes which were found to fit into the airline's strategies.

AI's hopes for capacity induction have soared after union civil aviation minister, Ananth Kumar's utterances on government disinvestment in the cash-strapped airline.

Kumar has stated that the BJP-led Centre will disinvest in the two national carriers, Indian Airlines and AI, within a period of one year. The disinvestment is expected to be preceeded by a financial restructuring package for the airline.

AI had planned to induct 23 MCLR aircraft three years ago. The capacity induction was later scaled down to 8 aircraft.

The planning department of AI has estimated that a total of 18 SCLRs can be inducted into AI by the year 2003-04. This will cost AI around $ 1.8 billion.