MUMBAI — Indian carriers will need more than 1,000 new aircraft over the next two decades to meet growing demand and replace ageing fleets, according to a study by European aircraft maker Airbus.

Airbus's global market study released on Thursday forecasts India to be the fastest growing for air travel for the next ten years, with domestic traffic set to grow by an average 12 percent each year.

By the year 2028, airlines in India will need 1,032 new aircraft valued at 138 billion dollars, the Airbus study said, at an ongoing air show in the southern city of Hyderabad which ends March 7.

"The Indian economy is showing signs of rebounding. This will translate to new aircraft orders by 2012," said Miranda Mills, Airbus vice president in India.

Mills described India's aviation growth potential as "exceptional".

India's airline sector -- the fourth-largest globally in terms of domestic passenger numbers -- has been one of the most vibrant symbols of the country's economic progress.

The sector, which was hit by soaring fuel prices and the global slowdown last year, is slowly recovering with a rise in passenger travel.

Airbus is locked in a battle with its rival Boeing for market share in India.