The agreement was signed between the civil aviation department of the state government and Supreme Air Lines at state secretariat.
In the first phase, flights would start from Jaipur to Jodhpur and Udaipur next week. Thereafter, flights would operate from other cities as well at cheaper rates, a government release said.
The company would operate intra-state flights for six days a week with 9-seater plane Sesana Caravan-C 208B.
The minimum airfare has been fixed at Rs 3,499.