``US sanctions imposed on India in the aftermath of the Pokharan blasts is the main reason behind the downslide in the business of domestic airlines,'' an Indian Airlines official told The Indian Express, adding, ``The number of passengers who used airlines in the peak season of May 1997 was 22,000, which dropped to 19,000 in May 1998. In the same month this year, we had 17,000 passengers only.''

In the aftermath of the US sanctions, foreign investors stopped investing in India, thus adding to the recession, he said.

However, Jet Airlines area manager, Gujarat, Navaid Desai, says that though the slump in the domestic airlines business is a country-wide phenomenon, business in his organisation has dropped by five to six per cent since January 1998. He attributes the slump to theeconomic recession in South East Asian countries. Political instability, according to Desai, added to the crisis as NRIs stopped investing in India.

``Though Jet Airways had started experiencing the ripple effect of the South East Asian economic recession since January 1998, the crisis deepened in the aftermath of the Pokharan blast,'' Desai says. He, however, says Kargil proved to be the straw that broke the camel's back, especially for Jet Airways. ``We used to have many students and corporate groups travelling to Kashmir from Ahmedabad, Rajkot and Vadodara during the season starting from May, but this year due to the Kargil crisis, no one wants to go there,'' he says.

Desai, as well as Indian Airlines officials, are unanimous that the slump in the domestic airlines' business is because all the big corporate houses based in Ahmedabad have made a drastic cut in their air travel budgets due to the economic recession.

``The impact of economic recession is so deep that those who used to earlier travel byexecutive class are now preferring economy class,'' a top Indian Airlines official said. In fact, many have completely shunned air travel and are using railways for their business visits.

Though Indian Airlines has been affected by the slump in business, its officials say losses have, to some extent, been compensated by its airline services to the Gulf countries, where business is relatively better.

``Although there has not been any cut in the staff salaries due to slump in business, it has certainly affected their production-linked bonus, which is related to the number of passengers,'' an IA official said on condition of anonymity.

Interestingly, none of the airlines have reduced their flights and are instead trying to create a demand by providing attractive travel offers, discount at hotels and tourist resorts. Airline officials hope business will look up from October onwards partly due to vacactions and partly because of NRI traffic.