Air India staff will hereafter not be allowed go on foreign tours unless it is "absolutely essential" and that too only with the permission of its Chairman and Managing Director.

"Foreign tours should be undertaken only for absolutely essential purposes. All foreign tours henceforth should be scrutinised at the functional director level and recommended to the Chairman only in respect of critical cases," an Air India circular signed by its Chairman and Managing Director, Raghu Menon, said.

With its losses mounting to Rs 2,100-crore and with air turbine fuel prices on the rise, the national air-carrier has been forced to resort to cost-cutting measures to boost its sagging bottomline.

Air India is expected to implement a rigorous cost-cutting regime based on the recommendations of its Finance Department which was presented before its Board a couple of months ago.

The circular said that foreign travel should be restricted to the bare minimum number of persons who are operationally required to travel and that "accomodation at overseas stations should as far as possible be at crew hotels where facility of lower room-charges is available."

Airline staff has also been instructed to travel only by economy class which offer lower fares.

The cost control measures to be implemented cover areas such as contractual/casual employment/outsourcing, material consumption, outside service and repairs of aircraft, return of lease aircraft, fuel conservation, pooling of vehicles/fuel bills reimbsursement and temporary postings.

The free use of pool vehicles including cars attached to station-managers has also been stopped with immediate effect.

A 25 per cent reduction in fuel expenses of vehicle pools is also being targetted, the circular said.

Besides, fuel reimbursements of all officials right from Executive Director-level to the senior managers have been capped at an upper limit of 140-litres and 100-litres per month respectively. 

Similarly, mobile bill reimbursements would be capped at Rs 1,800 per month for Executive Directors while General Managers cannot claim more than Rs 1,600 on this count. These limits are applicable even to officials posted abroad. 

The passenger service fee reimbursement to staff-on-leave (SOL) has also been stopped.

Addition, the circular states that Rs 250, Rs 750 and Rs 1,000 per sector on each domestic, international and non-stop flight would be recovered to partially neutralise the increase in fuel costs with immediate effect.

Interliners from other airlines will be charged full fuel surcharge on interline tickets issued at all national and oveseas stations, apart from taxes and other charges.

Reimbursement of state-owned holiday home charges and other facilities have also been withdrawn to prune costs.