The Wadia family-owned GoAir, the country's smallest low-cost carrier, has decided to retrench 10 per cent of its staff. This, it hopes, will help prune its wage bill by 40 per cent -- a clear indication that the axe will fall on several senior-level jobs.

The company has already asked 13 expatriate pilots out of the total pool of 79 to go. All told, around 140 jobs are on the chopping block.

Indian carriers are incurring huge operational losses, thanks to high aviation turbine fuel (ATF) prices. Several of them have decided to cut their losses through route-rationalisation and deferment of aircraft acquisition.

GoAir, which people familiar with the developments said is losing around Rs 24 crore a month, is the first to shed flab in such a significant way.

The company, according to the sources, has also decided to prune its aircraft acquisition programme drastically to less than a third of the original. Earlier, GoAir wanted a fleet of 34 aircraft by 2009; the number has now been cut to between eight and ten.

It will also reduce the number of cities it flies to. It had first withdrawn its service to Jaipur. Flights to Bangalore were stopped last week. The sources said that more cities could join the list soon. It currently operates to six cities, though a significant part of the airline's operations are on the Delhi-Mumbai route.

An e-mail to the company spokesperson did not elicit any reply. GoAir Managing Director Jeh Wadia did not comment on the issue and attempts to meet him proved unsuccessful.

Sources added that the management would meet shortly to decide on various measures to deal with the situation, which might include a strategic alliance or a merger with another airline. The immediate aim of the company, according to the sources, is to reduce the monthly loss to Rs 10 crore.

GoAir had hired Ernst & Young and KPMG to sell a strategic stake in the closely-held company to investors.

However, with the sharp climb in ATF prices, the sources said it had become difficult to find people ready to invest in the civil aviation sector.