Mumbai: GMR Infrastructure Ltd, which builds and operates airports in India and abroad, is planning to offer consulting services to international airports and is considering buying as much as 15% stake in some of them.

The Bangalore-based infrastructure company is in talks with international pension and sovereign funds to form partnerships so that it can jointly bid to offer services, including project management consulting, operating and management, bidding assistance, financial closure and advisory services, to airports.

New strategy: Subba Rao Amarthaluru, CFO, GMR Group, said the company is likely to finalize a few deals shortly. Photo by Gireesh GV/Mint.

“This will boost our return on equity without investing big capital. We are likely to finalize a few deals shortly," Amarthaluru said. He, however, did not disclose details of the funds his company is in talks with or the names of airports he is keen to offer advisory services to.

Citing the example of Frankfurt Airport Services Worldwide, a global airport operator, which offers airport management services including terminal and traffic management, baggage and cargo handling, aviation ground handling, aviation security and consulting at GMR Infrastructure’s Delhi international airport for a fee, Amarthaluru said: “We will reverse the role in other airports like Frankfurt is to Delhi."

GMR Infrastructure has developed and commissioned the greenfield international airport in Hyderabad. The company, besides operating the existing Delhi International Airport, also built Terminal 3 which was commissioned in time for the Commonwealth Games in October 2010. It also upgraded and is operating the Istanbul Sabiha Gokçen International Airport and has acquired the Ibrahim Nasir International Airport.

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“This is the right move for GMR Infrastructure as it is the time to cash in on the expertise they had acquired by building airports in India and abroad," said Gurcharan Bhatura, chairman of Air Transport and Tourism Advisors. Bhatura, who was executive director of Airports Authority of India, said GMR has got a pool of professionals to support this new line of business.

Asked about the timing of GMR’s intentions to enter project management consulting business, Amber Dubey, director of aerospace and defence advisory at KPMG, said companies ideally would want to use GMR’s global and Indian credentials of executing project ahead of schedule when the economy is slowing. “They had completed Terminal 3 ahead of time," Dubey said.

In 2009, GMR Infrastructure had set up an in-house engineering, procurement and construction, or EPC, division after building an international airport in Istanbul 12 months ahead of schedule. Designed to handle 20 million passengers a year, Turkey’s Istanbul Sabiha Gökçen International Airport, or SGIA, was completed in 18 months. SGIA, twice the size of the new Hyderabad airport and 3.5 times the Bangalore airport, was built by a consortium including GMR, Limak Insaat San. Ve Tic. AS and Malaysia Airport Holding Bhd. It was the third airport project for GMR, and the first outside India, where large infrastructure projects typically run into long delays.

GMR Infrastructure shares fell 5.65% on Thursday to end trading at Rs29.20 on BSE, while the Sensex lost 2.3%.

The Cochin International Airport Ltd (CIAL), the first international airport in the country outside the ambit of the Union government, also has plans to offer consulting services to airports outside India, but without partners.

It has taken up the consulting project and preparation of detailed project report for the proposed Kannur International Airport, in northern Kerala.

The decision of CIAL and GMR comes at a time when the International Air Transport Association (IATA) downgraded its industry outlook for 2012, primarily because of rising oil prices. IATA now expects global airlines to report a combined profit of $3 billion in 2012.

The downgrade from the December forecast is primarily driven by a rise in the expected average price of crude oil to $115 per barrel, up from the previously forecast $99. “2012 continues to be a challenging year for airlines. Airline performance is closely tied to global gross domestic product (GDP) growth. Historically, when GDP growth drops below 2%, the global airline industry returns a collective loss. With GDP growth projections now at 2% and an anaemic margin of 0.5%, it will not take much of a shock to push the industry into the red for 2012,’’ said Tony Tyler, IATA’s director general and chief executive.