Gustav Baldauf handed in his resignation letter on Monday morning, a spokesman for the ailing airline said.

"It merely said that he wished to quit," the spokesman said, of Gustav's two-lined letter to the company.

"It was his personal call. We appreciate his decision," the Air India spokesman said, adding that the airline had accepted his resignation.

Baldauf fell foul of the government after airing criticism of his bosses in an interview earlier this month in which he said the state played "too prominent a role" in Air India's operations.

"When you call someone from outside, let him work. The government should control but let him work," he said. "The government should not be involved in day-to-day operations."

The former Austrian Airlines senior executive had been asked last week by the government to explain his comments amid reports of fury inside the civilian aviation ministry.

Baldauf was appointed last April with a remit to help turn around India's ailing flag carrier, which in 2009-10 lost about 56.56 billion rupees ($1.25 billion).

The airline, which merged with its domestic state-owned counterpart Indian Airlines, has been trying to cut costs and needs funds to modernise its fleet and battle fierce competition.

Air India, which has suffered sharp losses in previous years, posted a cash profit of 495 million rupees ($11 million) in December last year, compared with a profit of 210 million rupees in November.

The airline is not listed at the stock exchanges.

Air India awaits approval of a five-year turnaround plan, which includes a financial turnaround using an equity infusion from the government and a business plan to increase fleet size, rationalise routes and set up network hubs.

The Indian government injected about eight billion rupees ($180 million) into the airline in the fiscal year to March 2010 and expects to put in another 12 billion rupees this year on condition the company cuts costs.

Air India, with a current fleet of 135 planes, has placed orders for 111 new aircraft -- 43 from Airbus and 68 from Boeing -- worth 11 billion dollars.

Air India once dominated Indian skies but has been losing market share since the 1990s after the launch of a succession of private airlines and agreements allowing more foreign carriers to serve the country.

The airline was lagging behind private carriers Jet Airways, Kingfisher and IndiGo in January with a market share of 15.8 percent of traffic, down from 18 percent in the same period last year.