The group, which is the major partner in consortiums that have, respectively, set up and are upgrading the Hyderabad and Delhi airports and runs charter flights, has put together a team of experienced aviation experts for the project.
The group could apply for a fresh licence or buy one of the smaller incumbents.
When asked about the group's intent to launch a separate domestic carrier, a GMR group spokesperson said: "While the group has a general aviation business segment, it is premature to discuss firm business plans at this stage. As a policy, the company does not discuss subjects that are of a hypothetical or speculative nature."
GMR's chartered airline business, GMR Aviation Pvt Ltd, owns a nine-seater Falcon aircraft and one helicopter. Another group company, GMR Industries, owns a five-seater aircraft.
Apart from airport projects in India, the group won a bid to develop the Sabiha Gokcen International Airport, Istanbul's second facility.
According to industry insiders, GMR was also discussing the possibility of getting into charters with business class configuration, like Coimbatore-based private airline Paramount Airways does, and operating on profitable regional routes.
Industry experts said although it appears unusual for a new player to enter the business at a time when operators are struggling with higher costs and slowing passenger growth, the industry is expected to revive by 2010 following anticipated consolidation in the market, which could be whittled down to four or five players.
Experts suggest that the group might look at a niche market such as being a business carrier.
"An all-business class configuration on routes like Gujarat for the trading community will be a good idea, provided there are limited flights," one analyst said.
There are, however, others who suggest that the move is risky. "The existing players will become big and it will be difficult for newcomers to compete on pricing," said an analyst with a leading research firm.
It is, however, not clear whether GMR will be able to derive cost advantages from the fact that it operates key airports in the country.
