"We are planning to offer leave without pay for three to five years. We can consider it for about 15,000 employees," Air India chairman and managing director Raghu Menon said on Thursday.

He, however, said those who take up the offer to go on leave would be taken back if they desire so at the same seniority and last drawn pay. 

Menon's statement comes at a time when the country's leading private carrier Jet Airways [Get Quote] has laid off 1,900 jobs due to the financial crunch in the aviation sector worsens.

An official of Air India, who did not want to be named, said that a proposal for leave without pay could be brought before the company's Board soon.

The government had on Wednesday, however, ruled out any job cuts in Air India with Civil Aviation Minister assuring employees that there were no plans to prune staff strength immediately.

"No...Air India is not going to have any job cuts. Certainly it (the aviation crisis) will affect the growth plans, it will affect the future employment opportunities which would have come the way of Air India in case the aviation industry was in a much better financial health," Patel said.

"But as of now I do not have the luxury to say beyond the fact that those who are working for the Air India shall continue to do so and we shall not have any issue of people being laid off," he said.

The 77-year-old state carrier, which initiated a fleet renewal programme three years ago and merged with its sister airline Indian last year, has proposed infusion of Rs 1,000-1,500 crore (Rs 10 to 15 billion) of equity capital.

It is also looking at soft loans of Rs 1,000 crore from government that can be repaid over a period of time.

According to industry experts the coming together of Jet and Kingfisher could further mount the problems for Air India. Menon, however, disagreed with the views and said it would only lead to a reduction in competition.

"There are a number of routes and there are a number of airlines. All the airlines will be evenly poised in the market," he said.

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