Expecting a boom in outbound tourist traffic in the ensuing season, Air-India is considering a five per cent hike in its fares and has written to concerned agencies for clearance, official sources said on Thursday.

The carrier is awaiting clearance from the Directorate General of Civil Aviation to increase the fares out of India by five per cent from the next fiscal as it expects a "vibrant outbound market" in the summer season from April to June, the sources said.

However, Civil Aviation Minister Shahnawaz Hussain told PTI in New Delhi that the government was not in favour of such a hike at this moment.

Air-India is also considering imposing a $2 fuel surcharge on the fares but no decision has yet been taken on it, they said.

Some international carriers like Sri Lankan Airlines, have already imposed the surcharge and several others were considering the same.

Meanwhile, the minister reviewed the financial performance of Air-India, its growth plans and budget targets for the next fiscal.

At the meeting in Mumbai, Hussain also approved the carrier's business plans, which incorporates "a massive growth of capacity" amounting to about 20 per cent over this fiscal.

Plans for dry-leasing of two more A-310s were approved by the minister during the year, the sources said, adding that the additional planes were expected to be inducted before the winter schedule starting October.

While one of these newly leased aircraft would be deployed on the new route of Lucknow-Jeddah, the other would be used to increase the frequencies on Delhi-Singapore and Delhi-Dubai routes. Lucknow-Jeddah route would be the fifth new one to be started in the ensuing fiscal.

Air-India's business plans also include significant restructuring of flight schedules effective from April.

The airline has also started standardising its departure timings of flights from Delhi, Mumbai and Kochi to Dubai, Abu Dhabi and Muscat on its short haul operations. Departure timings from Delhi and Chennai to Singapore have also been standardised, the sources said.

Hussain said he was satisfied over the high load factor achieved during the current fiscal, which stood at an average of 80 per cent in the past three months despite sluggish tourist arrivals and fears of a war in Iraq.

The summer schedule of the airline was also finalised at the meeting. The schedule includes daily services to the Gulf sector from Mumbai, Delhi and Kochi along with a fourth weekly service to Newark in the US, effective from March 30.

The state-owned carrier's services to Riyadh will increase to nine per week with introduction of new direct services from Thiruvananthapuram and Kochi and a bi-weekly service from Hyderabad, as per the proposed schedule.

Capacity on Kozikode-Jeddah route will be enhanced with the introduction of a Boeing 747-200 flight on Friday in addition to the three weekly Airbus 310 services on this route.