"The valuation was primarily aimed at assessing the exact worth of the airline. It could also be of immense use when the airlne opens dialogue with the prospective strategic partners," said a top A-I official.

The recent assessment of the airline's intrinsic worth is part of the various other initiatives the airline has taken in the past few months. Apart from a plethora of cost-cutting measures, A-I has been negotiating to join one of the global aviation alliances, sources said.

Though A-I top brass has been tightlipped about the name of the global alliance, the airline is believed to have reached an advanced negotiations with Transworld Pact--the alliance recently formed between Air France and Delta Airlines. If this happens, Air France will be the frontrunner for the strategic partnership of Air-India, sources said.

The divestment process in Air-India will be high on the agenda of the new government as finance ministry has given a directive to rope in a strategic partner before the infusion of Rs 1,000 crore funds. The funds will be used primarily to repay working capital debt and fleet expansion.

A-I's efforts at cost rationalisation has seen it making a marginal profit of Rs 1.26 crore for the first five months of the current fiscal against a whopping loss of Rs 106 crore in the last corresponding period. The airline's profit for the first six months could be around Rs 2 crore, A-I officials said.

Over the past few months, A-I has been able to reduce the staff substantially. Employees have also bee redeployed to operational areas from non-operational areas. It has also abolished around 1000 vacant posts.

A-I has has also gone in for major route rationalisation by withdrawing from destinations like Frankfurt and redeploying the capacity in oher profitable areas.

The airline management has found the sharp drop in fares and reduced returns from Gulf countries as the major reasons the revenue drop. A-I's market share has dropped to around 20 per cent in 1998 from around 33 per cent in 1980.

A-I will stand the test of time only if the government provides adequate support, analysts said adding globally, governments come to rescue of airlines when they go down in the dumps.

For instance, the French government pumped in a whooping Rs 17,200 crore to bail out Air France. Even Kuwait Airways was given around Rs 1500 crore by the Kuwait government when the airlne was facing a crisis, the anlaysts pointed out.