Air-India said on Saturday that it has decided to hive off its ground handling services into a separate division.

At its board meeting in New Delhi, the carrier decided to create a separate division or profit centre in order to provide the services to other airlines at competitive rates while improving quality, official sources said.

The sources said the new division was not likely to come up in the immediate future and would take a few months as
clearance of several legal and financial processes would be involved.

The government, at present, allows only Indian Airlines, Air-India and a private player, Cambata Airways, in providing
ground handling services at Indian airports.

Air-India has been providing these services to over 40 foreign carriers in the past two years and had earned about Rs
300 crore (Rs 3 billion) in 2000.

The separation of ground handling services would help Air-India improve its aircraft-employee ratio, which has come
under flak from several quarters, including Parliament.

Leading international airlines, like British Airways, Singapore Airlines and Emirates, have separate companies taking care of ground handling services. Emirates' firm, Dnata, had also evinced interest in launching ground handling services in India, but its request was turned down on security considerations.