MUMBAI- Five years after securing the bid to operate six international airports and becoming the largest private airport operator in the country, the diversified Adani Group is aiming to further expand its footprint in the airport sector.
Adani Airport Holdings (AAHL) is eager to add more airports to its portfolio by participating in government tenders for the privatization of at least 25 airports.
Adani Group Eyes More Airports
According to an Adani Enterprises presentation, 30-35 airports currently managed by the state-owned Airports Authority of India (AAI) are slated for privatization by 2025.
AAHL currently operates airports in Trivandrum (TRV), Mangaluru (IXE), Ahmedabad (AMD), Jaipur (JAI), Lucknow (LKO), and Guwahati (GAU), acquired in early 2019.
Its most significant asset is the Mumbai airport, which it took over from the GVK group in 2021. Combined, AAHL airports handle 23% of India’s total passenger traffic.
The group is now aiming to become a network player, facilitating seamless connectivity between airports for improved route planning.
Bidding for More Airports
Saurabh Shah, Deputy Chief Financial Officer of Adani Enterprises (AEL), stated, “We will consider airports that come up for privatization, likely post-elections. We are committed to bidding for projects that align with our core network development strategy.”
With the Mumbai airport nearing capacity, AAHL plans to open the Navi Mumbai Airport (NMI) in the March quarter of FY25. This greenfield airport is part of the company’s strategy to alleviate congestion at the Mumbai airport.
The network planning aims to enhance not only passenger traffic but also the growing cargo traffic.
“We want to ensure that we establish ourselves as a network player, which significantly strengthens our route planning and strategic development,” Shah stated during the post-earnings call.
The bundling of smaller airports with major ones offers an attractive package for potential bidders, according to AEL’s presentation.
Airports that will be Privatize
Major airports slated for privatization include Chennai (MAA), Bhubaneswar (BBI), Amritsar (ATQ), and Varanasi (VNS), along with smaller airports like Gaya, Dharamsala, and Jharsuguda.
Adani’s airport business saw a 35% year-on-year (y-o-y) revenue growth to Rs 8,062 crore, while EBITDA increased by 45% y-o-y to Rs 2,437 crore during FY24.
In the March quarter of FY24, AAHL added 10 new routes, seven new airlines, and 18 new flights across its seven operational airports. Passenger traffic at its airports grew by 19% y-o-y to 88.6 million during the same quarter.
Currently, AAHL’s primary revenue source is from aero operations. However, the company plans to shift this focus to non-aero operations in the coming years. Except for Mumbai, approximately 75% of AAHL’s revenues come from aero operations and 25% from non-aero operations. Mumbai airport has a more balanced split, with about 50% of each.
“We are continuously working to shift that ratio towards 75% non-aero and 25% aero, aligning with international standards. This is how we plan to grow the business. Over the next 2 to 3 years, you will see a significant change in the ratio from aero to non-aero,” Shah stated.
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