Speaking at a press conference Mr Yadav said: "We plan to increase our non-tariff revenue by putting the land in AAI's possession to commercial use." The AAI has nearly 365 acres of land which could be commercially exploited, he added.

"Consultants will be appointed to study the scope for non-tariff revenue, and suggest ways and measures to increases such revenues," Mr Yadav said. The minister was speaking at a press conference after he inaugurated upgraded facilities at the Centaur Hotel Mumbai.

The Hotel Corporation of India (HCI), has embarked upon a programme to upgrade its rooms to international standards. Mr Yadav said that HCI has undertaken renovation of rooms at its properties at Delhi, Mumbai, Srinagar and Rajgir in a big way. In the first phase of renovation, 100 rooms at Delhi, 60 rooms at Mumbai, Airport and 84 rooms at Juhu Centaur have been upgraded under the theme "Western Culture Indianised", he added.

On the central governments plans to divest its stakes in Centaur, Mr Yadav said that his ministry is co-ordinating with the ministry of disinvestment. The minister said that the government has received 21 expression of interests (EOI) applications.

Mr Yadav said that Air-India's (AI) fleet size in December 2000 was 23, it was proposed to sell three Airbus A-300 aircraft to Indian Airlines. This decision has now been reversed and AI will retain these aircraft in its own fleet.

The minister further added that in addition AI is leasing four Airbus A-300 aircraft to increase its fleet size from 23 to 27. Mr Yadav said that it is the first time in many years that there has been an increase in fleet size. This will result in additional flights and additional seat capacity being deployed on different routs.

Remedial measures have been taken to improve profitability of AI, he said. The remedial measures include route rationalisation, involving transferring capacity from marginal or loss-making routes to those which generate cash margins and profits.

Another measure that has been taken up is re-configuring aircraft, which would include - introducing a two class concept - business class and economy class - in lieu of the previous three classes which also had a first class on all aircraft except the B-747-400 which is operated on the India-UK-USA routes.

The minister also highlighted cost reduction measures like a complete ban on recruitment and no filling of vacancies. "There has been a 35 per cent reduction in local staff at stations abroad. There has also been a 33 per cent reduction in India-based staff at stations abroad, reduction of over 1,000 staff at headquarters and stations in India," an official release said. According to Mr Yadav, the airline has been able to reduce staff strength from 18,900 in 1997-98 to 17,200 in December 2000.