Claiming to have succeeded in its efforts to save on expenditure, Indian Airlines board on Thursday approved its 2003-04 budget, announcing that its operating loss had declined by over Rs 67 crore (Rs 670 million) this fiscal and aimed at reducing it by another Rs 128 crore (Rs 1.28 billion) next year.

The IA board, which met in New Delhi on Thursday, also authorised the management to set up a subsidiary company with a capital of Rs 100 crore (Rs 1 billion) to provide ground handling services to its own flights as well as to those of other domestic and foreign carriers, an IA spokesman said.

It also approved a voluntary retirement scheme based on the 'Gujarat pattern' aimed to attract about 1,000 non-operational personnel. The scheme would require governmental clearance before implementation.

The board noted that the airline's operating revenue rose by 9.5 per cent over that of last year while its operating expenditure increased only by 7.3 per cent, thereby enabling it to reduce its operating loss from Rs 220.65 crore (Rs 2.21 billion) to Rs 153 crore (Rs 1.53 billion), he said.