``Our research showed that many passengers who could afford a higher class ticket were flying in economy after getting assurances from the ministry and the airline's staffers that they could be upgraded. This proved to be a big drain on resources for the airline,'' AI officials said. The airline's board has now authorised only the MD, deputy MD, regional directors and commercial directors to upgrade a passenger. They will also have to justify on what basis a passenger has been upgraded on a monthly basis to the board.An upgradation increases the cost of servicing a passenger in terms of giving various extras. Besides, revenue paying passengers were objecting to be seated next to a freeloader, AI officials said.

In most cases, arequest of upgradation came from the Civil Aviation Ministry whose officials are well-known for using both Indian Airlines and Air India as their personal fiefdom. Earlier, even an airport staffer was having the power to upgrade passengers which has now been discontinued.The airline has recorded losses of over Rs 300 crore in the fiscal 1999 and expects that by the end of fiscal 2000, it would contain its losses to Rs 50 crore due to these measures.

In fact, Air India has considerably cut down its losses to Rs 6.4 crore in the first quarter ended June 1999 as compared to Rs 80 crore loss in the corresponding period of last year, officials added.