In addition to this, Sahara plans to replace its two ageing Boeing 737-200s with new Boeing 737-400s.

Sahara will dry lease all the five aircraft from Ansett, an aircraft leasing company of Australia. Sahara will pay about $300,000 (over Rs 1.20 crore) lease rental per month per aircraft.

The 150-seater Boeing 737-700 will be the first to be added to Sahara's fleet. "The aircraft will arrive straight from Boeing's assembly line in Seattle, USA, in the last week of April," Sahara Airlines director Parvez Damania told The Financial Express in an exclusive interview. The entire fleet augmentation and renewal exercise will be completed by the end of the year.

Sahara is expecting the 737-400s by June. The 400s will replace the 737-200s which are presently flying with the airline. By November, twoBoeing 737-800s will be added to the fleet.

The Subrata Roy-promoted airline plans to fly on key trunk routes such as Delhi-Calcutta, Delhi-Bangalore, Calcutta-Bangalore and Mumbai-Hyderabad with the new aircraft.

"We want to make our fleet an absolutely modern one. We are leasing new generation aircraft which will build our brand and lower our maintenance costs," added chief general manager Kapil Kaul.

The fleet augmentation will permit Sahara to aggressively establish its presence in the domestic airline market. With its current fleet of four aircraft, the market-savvy airline is still regarded as small fry by its rivals.

The domestic market is dominated by the state-owned Indian Airlines and Jet Airways, another private player. Jet has a fleet strength of 25 aircraft, consisting of Boeing 737-400s, 500s and 800s.

Indian Airlines, which has roughly 60-65 per cent market share on trunk routes, has the biggest fleet of 56 aircraft. However, unlike Jet, and now Sahara Airlines, the national carrier'sfleet is older and urgently needs replacement. The airline recently refurbished its fleet as an interim measure till it purchases new planes.

With the fleet expansion, Sahara expects to enhance its reach as well as visibility. Sahara has already dropped fares on major trunk routes for the summer, triggering speculations of a fare war in the domestic market. Sahara's fares are now around Rs 1,000 less than its rivals.

The airline says that it has felt an immediate impact of the fare slashing in terms of bigger load factors. "We have attracted that section of the consumers who were earlier travelling by air-conditioned train coaches," said Damania.

Indian Airlines and Jet Airways have ruled out any similar drop in fares. However, Indian Airlines followed up on Sahara's move by launching a shuttle service between Delhi and Mumbai.