AI has found that the former board's suggestion of leasing-out these two ageing aircraft and acquiring two Airbus A 310s on lease, as replacements, is not cost effective.

"The old Boeing aircraft should be sold-off so that we realise some funds from the sale. Leasing the two A 310s will be a costly proposition and the money for this can come from the sale" an official spokesperson of AI said.AI will put-up the proposal for the sale of the two 747-200s before the new board of directors in the board's next meeting scheduled early next month. The new board of directors consists of civil aviation secretary and AI chairman PV Jayakrishna, AI managing director MP Mascarehas, civil aviation ministry officials and ICICI chairman KV Kamath.

The Government is yet to form a full board of directors of the airline. The civil aviation ministryis in the process of finalising the names of the non-official members of the board. It will also appoint a few functional directors of AI on the board of the airline.

The new board has already met a couple of times. It decided in its last meeting to roll-back the retirement age in Air India from 60 to 58. The former board of directors was sacked in December last year due to differences of opinion between the board and union minister Ananth Kumar.The airline has already sold two of its Boeing 747-200s out of a total of the original nine aircraft of this type which the airline owned. The sale has helped spruce-up its balance-sheet last year.

AI was hopeful of selling another two Boeings in the current fiscal. However, the former board had suggested leasing-out of the aircraft as a better option. Meanwhile, AI has closed the tender for dry-lease of two Airbus A 310s which are to serve as replacements for the Boeings. Ten aircraft leasing companies, along with the aircraft manufacturer Airbus Industrie, havesubmitted their bids in the tender.

Airbus has entered two second-hand Airbus aircraft which were returned to the France-based company by a customer airline.

AI has decided to dry-lease comparatively new aircraft to replace its rapidly ageing fleet. The cash-strapped airline is not in a position to purchase new aircraft.

Air India currently has a fleet of 26 aircraft consisting of seven Boeing 747-200s (270-seater aircraft), six Boeing 747-400s (400-seaters), two Boeing 747-300s (380-seaters), eight Airbus A 310s (195-seaters) and three Airbus A 300s.

The airline has announced that its losses will mount from the current Rs 107 crore recorded in the first five months of 1998-99.