Air-India has put on hold plans to recruit cabin crew on contract basis for its 100 per cent subsidiary Air-India Charters Ltd, which would have brought down costs per employee by 60 per cent.

The deferred hiring is because the airline wants to start low-cost operations to short-haul destinations other than just to the Gulf region.

The increase in the ambit of operations of AICL would save on the expense on emoluments to the crew as AICL would take over some of the current operations to Southeast Asia and the Gulf, official sources said.

Senior A-I cabin crew get a salary close to Rs 70,000 per month plus night-halt allowances, while the emoluments in case the services are contractual will be Rs 25,000 without a night-halt allowance.

A-I's expenses on employees for the year 2002-03 registered an increase of 21 per cent to touch Rs 1,200 crore (Rs 12 billion) compared with Rs 986 crore (Rs 9.86 billion) in 2001-02.

The crew was also paid an allowance of Rs 42 crore (Rs 420 million) for 2002-03 for extra operations like the Haj flights.

According to labour laws, A-I cannot hire cabin crew on contract, though there is no such restriction in case of a subsidiary.

Sources said the A-I cabin crew unions had expressed their concerns about the decision to expand AICL operations.

Official sources said though the selection process of hiring contract cabin crew was over, the selected candidates would not be given their appointment letters now.

The recruitment process will start only after a viability report has been prepared about the sectors that AICL will operate in.

The airline had initially planned to hire nearly 150 flight attendants to perform both ground and on-flight duties three months ago. At the time the plans were to restricts AICL's operations to the Gulf-Kochi sector.

The airline had decided to employ cabin crew on a three year contract with a starting salary of approximately Rs 6,500 per month.

An additional allowance would be given for flying duties. The company would have the right to terminate the services of the employee if the work proved unsatisfactory.