No-frills AirAsia plans a major fleet expansion after a profitable first year in which it flew 1.1 million passengers, but said it would go regional only next year.

The small carrier, which currently flies within Malaysia, aims to increase its fleet from six to 14 or 15 and more than double its passenger load to 2.6-2.7 million this year.

It also plans to establish its own tour and travel company offering bargain packages, AirAsia chief executive Tony Fernandez told a news conference to mark the carrier's first anniversary.

With only three percent of Malaysians flying short-haul, Fernandez said the airline would focus on growing the domestic market before expanding regionally by the first quarter of 2004.

"We are still crawling. We want to grow the domestic market first, perfect our model, then we will go regional. Last year we flew 1.1 million passengers. Hopefully we'll carry 2.6-2.7 million this year," he said.