Go Air, owned by the Mumbai-based Wadia family, will launch by October in an already crowded Indian market, offering prices in line with air-conditioned train fares, or perhaps cheaper.

"Aviation's been a premium sector, limited to just a certain section of people," Jeh Wadia said in an interview on Thursday. "Our responsibility is to commoditise it."

About 19 million people travelled by air in India in the fiscal year to March, according to the Asia-Pacific Centre for Aviation, compared with 15 million who ride the trains everyday.

An air fare war has already broken out in India. Air Deccan this week offered flights for 222 rupees, cheaper than the bus, and its web site and call centre were so overwhelmed they shut down. SpiceJet Ltd., which launched in May, sells tickets for 321 rupees.

Kingfisher Airlines Ltd., a subsidiary of India's biggest brewer, the UB Group, also launched in May and undercut premium carriers with Mumbai-Bangalore fares of 3,900 rupees.

Go Air fares will start at 1 rupee, perhaps even lower, Wadia said. It will fly in western and southern India with nine leased Airbus A320s, and add 11 more planes in the second year. It will also buy 20 Airbus or Boeing aircraft, with an option for 20 more, and take delivery of them as early as 2007.

The airline aims to be profitable by the end of its first year, and Wadia is exploring options such as private equity investment and an initial public offering to help fund it.

Go Air will be modelled on Ireland's Ryanair, Europe's biggest discount carrier, which hugely expanded Europe's market for flights. But India lacks the secondary airports that Ryanair uses to cut landing and parking fees, Wadia said.

"In India, a low-cost airline can operate at 40 percent lower costs than a full service airline. Abroad, the difference could be as much as 55 to 60 percent," he said.

Go Air Chief Executive Graham Williamson is a former chief operating officer of Slovakia-based budget airline SkyEurope. His opposite number at SpiceJet, Mark Winders, helped launch Canadian discount airline CanJet Airlines, while Kingfisher's Alex Wilcox worked at U.S. discount carrier JetBlue.

The Indian government expects the sector to grow 20 percent annually over the next five years with $20 billion in investment.

Jet Airways had a 43 percent domestic market share last year, and Air Sahara and state-owned Indian Airlines made up the rest. Nearly a dozen more carriers aim to begin operations in India over the next 12-18 months, but Wadia believes the group's background will give it an edge.

The Wadia group, which started in shipbuilding 250 years ago, is majority owner of textile maker Bombay Dyeing & Manufacturing Ltd. and food firm Britannia Industries Ltd..

"The Wadia group has fed and clothed Indians for a very long time. The consumer will look at whom to trust when being offered the same product at the same price," Wadia said.