Dutch airline KLM launched a low cost airline on Tuesday, further intensifying competition in the budget airline market.

Buzz is to fly to seven European destinations, Berlin, Dusseldorf, Frankfurt, Milan, Lyon, Paris and Vienna, from London's Stansted airport.

It offers two fares. The done deal carries restrictions, while the higher priced open deal offers greater flexibility.

Buzz, which has a £7.5m launch budget, says so far it has £1m worth of sales.

Crowded market

Buzz joins a crowded market, which some say could account for 15 million passengers by 2003.

Other contenders are Ryanair, British Airway's Go and easyJet.

High fixed costs in the airline industry will limit the price cuts Buzz can offer.

But already, it has undercut its rivals. To fly to Milan with Buzz costs £60, compared with Go's £80 fare.

Buzz's competitors fear that if the larger airlines enter the budget market, it will be to the detriment of the consumer.

An easyJet spokesman said: "The worry is that they are the only ones to have the funds to continually lose money ( and will) sweat out smaller operators."

Unlike most of its rivals, the airline plans to to fly to primary airports in European cities.

Most no-frills carriers cut their costs by flying smaller airports further away from the city.

The Buzz strategy is aimed at increasing its popularity with business travellers.

Passengers will have more choice on flights to Milan and Lyon, which British Airway's low-cost airline Go services. Customers will also have more choice on flights to Frankfurt, as Ireland's Ryanair also flies there.

Helsinki, Marseille, Hamburg and Bordeaux will be added to the Buzz network from 27 March.

The airline has a fleet of eight BAe 146 aircraft, with a livery of yellow, purple and lime green.