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Adani Ports MD, ET Infra

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The Adani Group plans to invest Rs 60,000 crore in the next 10 years in its airport business, said Karan Adani. This excludes Rs 18,000 crore it has invested in construction of the first phase of Navi Mumbai airport.

The money will go into runways, taxiways, aircraft parking stands and terminals as well as city side infrastructure such as hotels and shopping malls, said Adani, managing director of Adani Ports & SEZ Ltd. The investment will be funded through internal accruals, he told ET.

Adani anticipates a shift in traffic patterns. “I think the mode of air connectivity where international travel is primarily happening through the metro hubs will fundamentally change,” Adani said. “We see these airports becoming major international hubs in the future where international travel will increase exponentially.”

‘Will List Co Once Profitable’
“With our network of airports, we will also be able to work seamlessly with airlines to build more direct domestic connectivity,” he said.

Karan Adani is the son of group chairman Gautam Adani.

The group plans to list its airport business once it becomes profitable, Adani said.

The Adani Group won the rights to operate six airports – Lucknow, Ahmedabad, Jaipur, Guwahati, Thiruvananthapuram and Mangalore – in 2019. In 2021, it acquired Mumbai and the upcoming Navi Mumbai Airport from the GVK Group. With eight airports, the group is preparing to build capacity for 250 to 300 million passengers by 2040, said Adani Airport Holdings CEO Arun Bansal. That’s up from about 73 million at the seven that are currently operational.

“Only around 300 million Indians out of a 1.4 billion population are flying today,” Bansal said. “Fleet orders placed by airlines indicate that 700 planes that are in the Indian civil aviation fleet will rise to 3,000 by 2030.”

This will mean a quantum jump in the number of people travelling by air. “This 300 million is going to become a billion plus passengers soon,” Bansal said. “Our planning always is based on how we see it in 2033-35 rather than next year, because that’s how the capex cycle depends. This capacity forecast may look big for now but our philosophy is to make the infrastructure for the future so we don’t catch up.”

The airport vertical is being keenly watched by investors as the Adani Group has pitched it as the face of its consumer-oriented business. In the first nine months of FY24, revenue from airports rose 35% on year to Rs 5,748.7 crore, while ebitda rose 27% to Rs 1,774 crore.

Capacity addition

The Adani Group inaugurated a new terminal at Lucknow on Sunday, built at a cost of Rs 2,400 crore. This will be able to handle 80 million passengers a year. “Next up is the Navi Mumbai airport and a new terminal at Guwahati airport. We will continue to add capacity at our airports,” Bansal said.

“Right now we are looking at building the platform for the airport business, building infrastructure and technology to a world-class level,” Adani said. “Once that happens, we will definitely list it separately in the exchanges.” He didn’t give a timeline.

Aviation consultancy firm CAPA said that the current capacity expansion plan of airports by private operators such as the Adani and GMR groups as well as state-run Airports Authority of India (AAI) will ensure that there is adequate capacity in the near to medium term.

“Indian airports have emerged as world-class assets. Now, with a stable airline system in place due to financially strong airlines like IndiGo and Air India, airports should take advantage of the favourable environment,” CAPA said.

  • Published On Mar 11, 2024 at 11:21 AM IST

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