Use cotton balls soaked in ink or heavily diluted black or gray paint - depending on the sort of smoke you're trying to create. Once the ink/paint has dried (you can speed up the process by using a hair dryer) tease it out slightly to make "streamers."
For large flames, do the same but with yellow or orange paint/ink. For smaller flames, carefully brush paint onto the cotton balls after they've dried or when they're still a bit damp.
If you're trying for a more dramatic smoke effect, you might need to drill a hole in the plane, insert a thin rod (a piece of wire or a disposable bamboo shiskabob skewer might work) and skewer or glue whole cotton balls to it. But, if the plane is supposed to be moving, you'll need to get the angle of the rod and the cotton balls right to make it look good.
Keep in mind that flames should seem to appear from holes caused by damage (either bullet or flak holes or holes burned by the fire) and that flames start out small if the plane is still flying.
For bullet holes, heat a needle or thin piece of wire on the stove or using an alcohol lamp or soldering iron. Using a pair of tweezers, grasp the needle and poke holes in the plastic where you want the holes to go. For larger holes, you will need to carefully thin the plastic out from the inside using a knife or moto-tool and then use the hot needle to gouge out the damaged areas. Once you're done, carefully scrape the edges of the damaged areas so they look like torn metal, not melted plastic. Be careful, though, it's very easy to over do the damage effects!