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The inquiry by the Indian Directorate General of Civil Aviation will be assisted by an Air India team, Civil Aviation Minister Praful Patel said, the Press Trust of India reported.
Patel told reporters an initial investigation show there was no problem with the 4-year-old runway at Mangalore or the Air India Express jet. The aircraft overshot the runway by about 2000 feet.
The pilot, a British national of Serbian origin, and the Indian co-pilot had made several landings at the same airport, he said.
Patel said the aircraft's black box, an instrument that records what went on in the cockpit, has not yet been recovered, PTI reported.
The plane arriving at Bajpe airport on a flight from Dubai in the United Arab Emirates apparently touched down late and skidded off the runway into the valley, where it burned, The Hindu reported. Mangalore's airport is described as a "tabletop," set on a hill with steep cliffs not far from the runway.
The accident occurred on the longer of the two runways at the airport, which is 8,000 feet long. The shorter runway is 6,000 feet long, PTI reported.
Earlier, authorities said they believed cloudy conditions and reduced visibility may have contributed to India's worst air disaster in 14 years, The Times reported in London.
Mohammad Umer Farooqi, a young Mangalore man returning from a job-hunting trip in Dubai, said from a hospital that he jumped from the plane when he saw a hole in the fuselage, landing on the hillside.
"Then the plane veered off toward some trees on the side and then the cabin filled with smoke," he said. "I got caught in some cables but managed to scramble out."
He covered his face with his hands while he plunged through the hole to avoid the flames.
Police said the bodies of 120 passengers have been recovered.