India may sell up to 10 percent of its long-haul airline Air India as early as next year to help pay for fleet expansion as the state-owned carrier battles tough competition.

Air India, whose privatization was abandoned in 2001 due to lack of investor interest, is enjoying rising domestic air travel, but it faces growing competition on international routes.

India's Aviation Minister Praful Patel told the Times of India newspaper on Tuesday the government planned to sell 10 percent stakes in Air India and sister firm Indian in IPOs to be completed in the year to March 2006.

"(An initial public offering) is certainly possible, and we are looking at the possibilities of raising the resources and improving their financial health by perhaps going for an IPO at a suitable time," Ajay Prasad, an official in India's civil aviation ministry, told reporters on Tuesday while on a visit to Singapore.

Asked about the time frame for a listing, Prasad said: "Difficult to say, but sometime in 2006, probably."

Neither official gave an indication of how much the government wanted to raise from the offering.

Air India has steadily lost market share to foreign airlines over the past decade because of its inability to boost capacity.

It now plans to buy up to 50 planes -- two-thirds of them as firm orders and one-third as options -- as it looks to more than double the size of its fleet of 34 planes by around 2012.

Air India would decide by June whether to buy its aircraft from Boeing or Airbus, Prasad said.

It last bought planes in 1996 and currently carries just 21 percent of the international traffic to and from India.

Until a year ago, Air India and Indian Airlines had a monopoly among domestic carriers on lucrative international routes, but the government has since allowed private airlines to fly them as well.

India, Asia's fourth-largest economy, has a small air travel market because of steep fares inflated by high taxes on fuel and airport levies. But domestic air travel is expected to grow at nearly 10 percent a year for the next 20 years as fares are trimmed and millions of Indians enjoy rising incomes.