To extend the lifetime of commercial and scientific satellites in low Earth orbit (LEO) and below (100-250 km of altitude) recent years showed an increased activity in the field of air-breathing electric propulsion as well as beamed-energy propulsion systems. However, preliminary studies showed that the propellant flow necessary for electrostatic propulsion at these altitudes exceeds the mass intake possible within reasonable limits, and that electrode erosion due to oxygen flow might limit the lifetime of eventual thruster systems. The pulsed plasma thruster (PPT), however, can be successfully operated with smaller mass intake and at relatively low power. This makes it an interesting candidate for air-breathing application in LEO and its feasibility is investigated within this paper. An analysis of such an air-breathing PPT system shows that for altitudes between 150 and 250 km, drag compensation is at least partially feasible assuming a thrust-to-power ratio of 30 mN/kW and a specific impulse of 5000 s. Further, to avoid electrode erosion, inductively heated electrothermal plasma generator technology is discussed to derive a possible propulsion system that can handle gaseous propellant without unfavorable side effects. Current technology can be used to create an estimated 4.4 mN of thrust per 1 mg/s of mass flow rate, which is sufficient to compensate the drag for small satellites in altitudes between 150 and 250 km.