Police in India have arrested a group of conmen for pretending to launch a new airline and tricking hundreds of would-be employees into paying expensive job application fees.

The elaborate fraud began in January with the announcement in newspaper advertisements of the launch of a new airline called FA Airways.

Then followed recruitment promotions on a well-designed website and invitations to attend job interviews at a Mumbai office building.

Police say the perpetrators of the scam collected fees of up to $1,000 each from around 400 hopefuls seeking a career in India's fast-growing aviation sector.

It is not clear how the plan unravelled but five men are now being held by for cheating and forgery.