New Delhi: Air India on January 11 is understood to have 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.

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 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 the 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.

PTI