Adani aviation plan: A top airline may be shifted to Navi Mumbai airport

A three-fold increase in airport commercial area, building multiplexes and Legoland theme parks in the city side and shifting one of the top airlines to Navi Mumbai airport in an effort to decongest Mumbai airport — these are among the steps Adani Group is exploring to boost revenues from its eight airports.

Adani Airport Holdings (AAHL), a group company, currently manages seven functional airports in Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram. It is also building Navi Mumbai airport, which is expected to start operations by 2024-end.

In a meeting with investors last week, the Adani Group executives made two presentations on airport plans, according to people in the know. Adani Group didn’t respond to the Business Standard’s queries on the matter.

Mumbai airport — India’s second busiest — had no further scope of capacity enhancement beyond 60 million passengers per year as it is situated in the middle of the city, one of the presentations said. This means that “effectively no new slots (are) available for airlines” at Mumbai airport, the presentation is learnt to have mentioned.

According to sources in the investor community, the Adani Group presentation said the Mumbai airport had two major airlines with domestic as well as international operations — IndiGo and Air India. “One airline can be shifted to NMIAL (Navi Mumbai International Airport Ltd), which will release the gridlock at MIAL (Mumbai International Airport),” it highlighted.

The airline that is shifted will benefit from prime slots at Navi Mumbai airport, it noted. Transferring the entire base from Mumbai to Navi Mumbai will be “efficient and economical for the airline, since shifting of only spillover will result in extra initial set up cost to the airline”, it added. 

IndiGo and Air India did not comment.

Aviation analytics company Cirium’s data suggests that the Mumbai airport is currently handling 2,573 weekly departures, out of which 919 are IndiGo flights and 390 Air India flights. Vistara and Go First are at number three and four with 364 and 243 weekly departures, respectively.

On another point, the second presentation stated that the group plans to expand its passenger handling capacity at seven functional airports from 31 million to 75 million by 2027. Phase I of the Navi Mumbai airport will become operational in December 2024 with 20 million capacity, it mentioned.

The conglomerate wants to target “underserved” international routes, increase the share of wide-body aircraft at its airports, attract airlines with monetary and non-monetary benefits, and make Mumbai airport a transit hub like the Dubai airport, the presentation noted.

To boost its non-aeronautical revenues, the Adani Group wants to expand the commercial area at its eight airports by three times to 115,000 square metres by 2025, it mentioned. The Group plans to do this by identifying “dark spaces”, optimising existing area, and expanding existing terminals.

The commercial area at Mumbai airport is proposed to be increased from 28,000 square metres to 47,000 square metres. In Lucknow, it could go up 17 times to 17,000 square metres and in Guwahati from 1,000 square metres to 14,000 square metres.

The Group will get premium brands to open more outlets in categories such as apparel, perfumes, bakery, sweets, footwear, and luggage at its airports to ensure that the “average transaction value (ATV)” goes up anywhere between 60 per cent and 200 per cent, the presentation mentioned.

For example, the average ATV in the luggage category is just Rs 6,500, but Samsonite’s own ATV is Rs 11,000. The footwear category’s ATV is Rs 5,000, but Steve Madden’s own ATV is around Rs 8,500, it noted.

In phase one of the city side development plan, the Group wants to establish aquariums at five locations, Legoland theme parks at three locations, virtual reality parks at five locations, rainforest cafes at five locations, and Madame Tussauds’s wax museums at two locations, the sources said citing the presentation.

Twenty-one hotels – six 5-star, 10 4-star, and five 3-star hotels – will also be developed in a 5.1 million square feet area, it said. Six hospitals with 2,200 beds, multiplexes with a total 66 screens and nine food and beverage zones will also be developed, it added.

For this, basic designing would be done by AAHL, there will be partnerships with the business operator (like Madame Tussauds or Taj hotels), final conceptualisation and designing would be done by architects and specialised firms, and then the “development” would be done by AAHL itself, it mentioned.

The presentation said the Adani super app “will capture end-to-end journeys (of passengers) including handling of baggage delivery system” by integrating it with the airport network.

At present, none of the eight AAHL-controlled airports has integrated cargo terminals. Therefore, this along with e-commerce domestic regional distribution hubs will be established at all airports — except the Mumbai one, it added.

Across Ahmedabad, Thiruvananthapuram, and Navi Mumbai airports, transhipment hubs for international as well as domestic cargo will also be established, it noted.

The presentation said AAHL will have its own ground handling business at all airports by 2026. “The focus will be more on international handling as for the same services airlines offer higher rates,” it said.

The central government had in February 2019 privatised six major airports — Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram, and Guwahati. After a competitive bidding process, the Adani Group won the rights to run all of them for 50 years. AAHL took control of these airports between October 2020 and November 2021.

In August 2020, the Adani Group acquired a 74 per cent stake from the GVK Group in MIAL — which operates the Mumbai airport. The conglomerate took control of the Mumbai airport in July 2021. MIAL owns NMIAL, which is currently constructing
the Navi Mumbai airport.

TAKE-OFF PLAN

• Freeing up slots at a constrained Mumbai airport
• Developing Legoland theme parks, Madame Tussauds’ wax museums, multiplexes, hospitals, hotels, virtual reality parks, offices and aquariums outside terminals
• Increasing passenger handling capacity in its 7 operational airports from 31 million to 75 million by 2027
• Expanding commercial area in and around airports from 35,000 square metres to 115,000 square metres by 2025
• Getting premium brands to open more outlets in airports to ensure higher average transaction value
• Having its own ground-handling business, with focus on international flights, in all 8 airports by 2026