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Last Updated: Wednesday, 25 August, 2004, 13:50 GMT 14:50 UK
Indian low-cost airline expands
Air Deccan plane taking off from Bangalore
Air Deccan hopes Wednesday's take-off will be the first of many
India's first low-cost airline, Air Deccan, has started a service between Bangalore and Delhi.

It is the airline's first service between major cities and its fares are set to be 30% lower than those offered by its rivals on the same route.

Air Deccan has modelled itself on European no-frills carriers Ryanair and Easyjet and believes the market for cheap fares in India could be huge.

Competitor Jet Airways says the move will not force their prices lower.

Air Deccan says its lower cost base will enable it to undercut its rivals, which include Jet Airways, Air Sahara and Indian Airlines.

"It's about pricing for the masses," Air Deccan marketing manager Gaurav Agarwal told BBC News Online.

The company plans to offer 18 flights daily between the two cities, expanding the service to include Bombay as well as other large towns nationwide.

Prices will start at about 700 rupees ($15.10; 8.40) for a limited number of seats, rising to as much as 8,000 rupees.

A similar trip on a Jet Airways flight, booked 30 days in advance, would cost 3,500 rupees.

There are as many as 400 million potential air travellers in India, Mr Agarwal said.

Economic growth has boosted demand for travel and low fares should lure customers away from rail travel as well as rival carriers, he said.

Many Indians have never travelled before, but the air travel market is currently forecast to expand at a rate of between 20% and 25% this year, a trend which should benefit the company, he added.

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