Low-cost Indian airline SpiceJet said it would launch cut-rate domestic flights in May 2005 to lure travellers from popular train services.

“The fares will be slightly higher than AC (air conditioned) train fares,” chief executive Mark Winders said. “We believe there is a tremendous opportunity in the low cost model in India. The air market is dramatically under served here.”

SpiceJet said its most expensive fares were 55-60 percent cheaper than regular full economy fares of competitors such as Jet Airways, India’s largest domestic airline. SpiceJet will also offer more than 9,000 seats for as low as 99 rupees (USD$2.30) each for the first 99 days of operations.

Rock bottom fares by SpiceJet and rival Air Deccan are helping to fuel the supply of low cost carriers and stimulating demand.