The Adani group plans to adopt the hub and radio model and integrate its portfolio of Mumbai and six other smaller airports: Ahmedabad, Lucknow, Mangalore, Jaipur, Trivandrum and Guwahati, for which it has won development and operating rights in more than 50 one year lease.
“We see our airport portfolio as a critical lever to help converge Tier 1 cities with Tier 2 and Tier 3 cities in a hub and spoke model,” said Gautam Adani, president and promoter of the Adani group. The firm signed an agreement with the GVK group two days ago to acquire a 75 percent stake in Mumbai International Airport (MIAL). With this, he now also owns the next airport in Navi Mumbai.
The Ahmedabad-based conglomerate, with investments in logistics, transportation, utilities and energy, surprised the industry with aggressive offers for smaller airports.
At 115 rupees per passenger for Mangaluru and 171 rupees for Lucknow, the group’s offers were more than 500 percent more than those received from the GMR group and PNC Infratech, respectively. Similarly, the Adani group submitted an offer of 177 rupees for Ahmedabad airport, almost 200% more than that of Autostrade Indian Infrastructure Development.
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“The addition of MIAL and Navi Mumbai to our existing portfolio of six airports provides us with a transformative platform that will help shape and create strategic adjacencies for our other B2B businesses,” said Adani. Adani said he expected the number of travelers in the country to increase fivefold, which means that India would need an additional 200 airports to handle more than 1 billion domestic and international passengers in Tier 1, -2 and -3 cities. “Most of them will connect to Mumbai,” he said, adding that the company would also bid for the second airports that will be required in metropolitan cities.
“During this period, the top 30 cities in India are expected to require two airports each and Adani Airports is well positioned to help build the required infrastructure platform. The economic value that the cities of the future create will be maximized around airports, ”he said.
According to the plan in its annual report, the company plans to increase non-airport revenue by developing “airport villages”, and has assured its shareholders that it is “well positioned” to become the leading airport operator in India.
The company is committed to the growth of national passenger traffic to achieve this objective.
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