Air Deccan aims to have 17 planes in service by next March

The airline, launched last year, is in talks with two plane makers to buy and lease planes over the next three years.

Air Deccan is hoping to repeat the success of European budget airlines and to compete with India's railways.

It is in talks with Avions de Transport Regional and Canadian firm Bombardier to buy mid-sized planes.

"They will all be new planes including the ones on lease," said Air Deccan managing director Gorur Ramaswamy Gopinath.

Rising wealth is boosting demand for air travel between Indian cities. Air Deccan's strategy depends on offering cheap tickets, with some fares as low as 500 rupees ($11; �6).

Air Deccan hopes to expand its inter-city routes by deploying the new planes, which will be able to carry up to 78 people.

Air Deccan, plans to expand its fleet to 17 planes by March 2005, and 57 planes by 2009.

Air Deccan, which is owned by Bangalore based helicopter charter firm Deccan Aviation Private Ltd, is currently trying to raise $50m by selling 25% of its equity.