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NEW DELHI,BENGALURU :The Adani Group is looking to take its airports business global beginning with the Far East and Southeast Asia, a top executive aware of the development said. The expansion would be part of the second phase of the airport plans of the group, which entered the sector in 2020.
The Adani Group is looking to take its airports business global beginning with the Far East and Southeast Asia, a top executive aware of the development said. The expansion would be part of the second phase of the airport plans of the group, which entered the sector in 2020.
“The new strategy will run parallel to the domestic expansion strategy through acquisition of airports being divested by the government, and also looking at bidding for greenfield airports," the executive said on the condition of anonymity.
“The new strategy will run parallel to the domestic expansion strategy through acquisition of airports being divested by the government, and also looking at bidding for greenfield airports," the executive said on the condition of anonymity.
Any expansion will be funded by group company Adani Enterprises Ltd, the executive added.
In the first phase, the Adani Group had won contracts to operate, develop and manage six airports of the Airports Authority of India (AAI) in tier II cities for 50 years—Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram.
It also acquired the GVK group’s stake in the Mumbai airport, India’s second busiest airport after the New Delhi airport. It is now building a greenfield airport in Navi Mumbai through its holding in Mumbai International Airport Ltd (MIAL), the company that runs the airport in Mumbai.
Adani Airport Holdings Ltd (AAHL) holds 73% in MIAL, which, in turn, holds 74% in Navi Mumbai International Airport Ltd. With seven operational airports in its management and development portfolio, AAHL services a quarter of India’s passenger footfalls and a third of India’s air cargo traffic.
An email sent to the Adani Group for comment remained unanswered till press time.
Analysts feel that the strategy to go global will not just add to the bottom line, but also help develop best practices for airport management.
“It is the right strategy for an Indian airport company like Adani to look beyond India," said Mark D. Martin, the chief executive of Martin Consulting, an aviation consultancy firm. “Entering global markets not just adds to the bottom line but also helps learn best practices available elsewhere that can be used in India."
Martin added that infrastructure growth in India has not matched the pace of growth of the country’s aviation market. So, it is “imperative for Indian airport companies to bring in efficiencies".
According to numbers shared by the company with investors, AAHL reported ₹1,905.5 crore in revenue in the September quarter, as against ₹1,292.26 crore in the year-ago period. Net profit totalled ₹200 crore.
India’s airport ownership and management landscape has three key players. The biggest (in terms of number of airports) is the AAI, followed by AAHL and the GMR Group (which also owns and runs global airports—one in Greece and one in the Philippines.)
India has also seen the entry of Zürich Airport International AG, which is a marginal entity for now. It is building the greenfield airport in Uttar Pradesh’s Jewar, which will act as a second airport for Delhi.
These airport operators are set to compete against each other during the next phase of airport divestment that the government is likely to announce during the second half of 2024 calendar year.
As part of a monetization plan, the government plans to put up 25 AAI airports for operations and management at Bhubaneswar, Varanasi, Amritsar, Trichy, Indore and Raipur, and also in tier II and III cities such as Kozhikode, Coimbatore, Nagpur, Patna and Madurai.
While the Adani Group’s bids for the six airports in 2019 were aggressive, industry watchers say the bids this time may be more realistic, implying lower revenues for the government.
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