* May float less than 25 percent
* Is Investment possible advisor
* Airline has grown rapidly
By Evrim Ergin
ISTANBUL, Oct 1 (Reuters) - Turkey's Pegasus Airlines has started talks about a possible initial public offering in the first quarter of next year but may float less than 25 percent of the company, sources close to the negotiations said on Monday.
The Istanbul-based budget airline postponed a previous planned public offering last year due to poor market conditions. Pegasus is part of Esas Holding, which is also active in the food, healthcare and retail sectors.
"Talks are well advanced but a final decision has not been made. A final decision is possible this week," a company source close to the negotiations told Reuters.
"Talks are being held on carrying out the public offering in the new year... It is anticipated that the offering this time will be less than 25 percent," the source said.
Pegasus could not immediately be reached to comment.
Brokerage Is Investment , which was mandated along with Credit Suisse for the previous IPO plans, may be chosen to handle the float, the sources said.
Founded in 1990, Pegasus has grown its fleet from just two aircraft to more than 40 mostly Boeing 737-800s over the past two decades, and serves 52 destinations in 24 countries.
It applied to the Istanbul Stock Exchange in February 2011 for an offering of 31.3 percent. It said when announcing the previous offering plans that the proceeds would be used to enlarge its fleet and strengthen its competitive position.
(Writing by Daren Butler; Editing by Nick Tattersall)