GVK Group to set up feeder airline, to bid for tier-II airport modernization

29 May 2007

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Mumbai: Airports infrastructure player, GVK Power & Infrastructure Ltd, will launch a new airline, in association with a domestic carrier. It says that the new feeder service would focus especially on 35 tier-II city airports across the country, now being modernized.

According to GVK sources, their proposed airline will connect district cities to the State capital or the nearest metro, through small aircraft that seat around 70 passengers or less. According to these sources, the company would launch the airline service only in those States where it wins bids to develop airports.

GVK officials said that while their airline partner will do the flying, they would handle all the management functions of the airport.

According to these officials, GVK would float a new joint venture firm along with its partners to develop the airports and operate the airline. The GVK Group is already modernizing India's busiest airport, the Chhatrapati Shivaji International Airport at Mumbai.

It had earlier formed the Mumbai International Airport Pvt. Ltd (MIAL), a joint venture company owned by a GVK-led consortium (74%) and Airports Authority of India (26%).

Recent policy changes, such as duty free import of aircraft for non-scheduled point-to-point and non-scheduled charter operators, are allowing companies to consider setting up aviation operations.

The GVK Group has interests in airports, power, roads, services and posted a Rs1,200 crore turnover and a net profit of Rs250 crore in 2006-07.

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