InvestorQ : Is Adani planning to become the dominant airport operator with its latest acquisition of MIAL from the GVK group?
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Is Adani planning to become the dominant airport operator with its latest acquisition of MIAL from the GVK group?

Answer
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1 month ago


Adani Enterprises could become India’s largest private airport operator if it is able to complete the acquisition of Mumbai Airport company, MIAL. This will largely gel with their longer term dominance in the field of ports and energy.

The Union Cabinet has already approved the transfer of 6 airports on 50-year leases to Adani Enterprises. These airports now under the control of Adani Enterprises will include Ahmadabad, Lucknow, Mangaluru, Jaipur, Thiruvananthapuram and Guwahati.

However, Adani group has challenges too. COVID 19 impact is far from over. Passenger demand for air travel is expected to fall by 50% this year. There are already protests in Kerala about the transfer of the Thiruvananthapuram airport to the Adani group.

In a way, Adani will break the virtual duopoly of GVK and GMR in the airports business. Now comes the business part. Typically half the revenues come from captive entertainment and that includes the aerotropolis, hotels and shopping malls within the airport premises.

The other half of the revenue stream will come from aeronautical revenues, which includes the landing fees, user development fees, cargo and ground handling, parking and housing fees and aircraft fuelling and re-fuelling. Then you also have adjacent revenues.

According to Knight Frank estimates, the airport retail market in India is expected to grow to $9.3 billion in 2030 from just $1.4 billion in 2019. In case locations like Mumbai and Delhi, airport retail revenues are twice that of most successful malls in cities.