T2 will not make Mumbai airport expensive: Sanjay Reddy

GVK group Vice-Chairman Sanjay Reddy said the launch of a new integrated terminal would not make flying out of Mumbai expensive.

“I don’t think the airport will be expensive. It will not be expensive for the kind of facilities and services we will offer here,” Reddy told Business Standard.

Mumbai International Airport Ltd has filed for a rate revision for a second five-year control period beginning April 2014.

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Airlines and aviation experts believe the new terminal will result in rate and user development fee rises.

He said ‘expensive’ was a relative term and even sea link toll could also seem expensive.

Reddy, whose company runs both Mumbai and Bangalore airports is also looking to dilute stakes in the airport holding company.

“A lot of companies have shown interest after seeing the Bangalore and Mumbai airport projects and we are hopeful we can complete stakes’ sale in the next few months,” he said. The company is looking for an equity infusion of about Rs 2,500 crore (Rs 25 billion) to retire its debt.

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Reddy said the group’s strategy was not to develop an aviation hub in Mumbai. The group was focused on quality rather than quantity, but was making efforts to attract foreign airlines.

Mumbai airport did not have unlimited capacity and there was no strong carrier which could use Mumbai as its hub, he added.

He said the Mumbai airport had the right infrastructure in place and the airport would intensify its marketing efforts.

“We have developed a cost-effective airport,” he said, pointing out that the cost of developing T2 was about 15 per cent the cost of London Heathrow’s Terminal 5 and much lower than airports in Bangkok and Beijing.