Kashyap will be replaced by JRD Rao, deputy managing director, Indian Airlines. Sources in the civil aviation ministry said that the reason for Kashyap's transfer is the crash of an Alliance Air Dornier 228 aircraft near Lakshwadeep in August.

The move is, however, being widely interpreted in Indian Airlines as part of the revamp at the top level which is currently being effected by the civil aviation ministry.

The induction of new 50-seater turbo-prop aircraft, which was one of the contentious issues between Ananth Kumar and the erstwhile board of directors of IA and AI, was to be part of the Alliance Air fleet. Alliance Air is responsible for all short-haul operations of IA. Kashyap's removal will clear the path for an eventual purchase of the new 50-seater aircraft.

The government last week sacked the joint board of directorsof IA and Air India (AI). PC Sen, managing director of IA, was also removed from his post.

Kashyap was the founder managing director of Alliance Air since 1996. Alliance Air, which has a fleet of 12 Boeing 737-200s and three Dornier aircraft, flies to destinations in the North-East, Jammu & Kashmir, Leh, Port Blair and Kochi. The Alliance Air flight to Lakshwadeep was suspended after the Dornier crash.

Alliance Air was floated by IA as a fully-owned subsidiary in the wake of an outflow of pilots from the state-run airline to privately-operated airlines. Alliance Air, unlike IA, was permitted to hire pilots on contract from the open market. This had helped IA offset the advantages enjoyed by private airlines two years ago.

Meanwhile, the civil aviation minister has announced that the separate board of directors of IA and AI will consist of four functional directors from each airline. The names of the directors will be vetted by the Public Enterprises Selection Board (PESB). The previous common board ofIA and AI consisted of ministry officials and airline industry representatives. The board also consisted of the managing directors of IA and AI.

The immediate reason for the sacking of the previous board was its decision to set the ball rolling for the eventual merger of IA and AI. The board, last Monday, accepted the report prepared by AF Ferguson & Co setting a three-year time-frame for the merger of the two airlines.