Despite MIAL setback, Adani group keep airport business dream intact

The Adani group may have been checkmated by GVK in its bid to acquire 23.5 per cent in Mumbai International Airport Ltd (MIAL), but the Gujarat-based conglomerate, with a significant presence in power, ports, real estate, agriculture and defence, has made its intention clear: It now wants to be an aggressive player in airports too.

A few days ago, the group bid for all the six airports put up for privatisation by the Airports Authority of India (AAI), locking horns with the big boys in the airport infrastructure business. 

The airports are Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvanthapuram and Mangaluru.

In its airport venture, the Adanis are looking at both options — bidding for airports being offered under privatisation and acquiring stakes in existing joint-venture airport companies.

The Adanis’ tryst with airports began some years ago when they set up an airport at Mundra, which has now become an important commercial city in Gujarat. The group has cobbled up a plan to invest Rs 1,500 crore to upgrade the airport strip and convert it into a full-fledged commercial airport with integrated cargo and aerospace operations to cater to the growing demand from the expats of Gujarat.  

Airport players say they are expecting the Adanis to make aggressive bids for the six airports, especially for Ahmedabad and Jaipur. 

“We won’t be surprised if they win two to three of these airports, though we will know only at the end of this month, when the bids are opened. Unlike us, who are bidding based on the economic viability of the airports, they are bidding for strategic entry into a new area of infrastructure. So the strategy would be different,” says a top executive of one of the key bidders for the airports.

The bids are based on the highest monthly fee per passenger and not revenue share.

The six airports could be an attractive way to enter the airport infrastructure space. They together carried about 20.6 million domestic passengers and 5.1 million international flyers in April-December 2018.

In the domestic and international arenas, they account for around 10 per cent of all passengers flying domestic or abroad. But Ahmedabad and Jaipur constitute half (over 10 million) of these domestic passengers and they are growing rapidly. 

Domestic traffic in Ahmedabad, for instance, in the same period grew by more than 23 per cent over the previous year and Jaipur by 17.8 per cent, making them some among the fastest-growing airports in the country.

Even Lucknow has seen huge growth in passenger traffic both in the domestic as well as the international spaces. Experts say the Adanis, who have their headquarters in Ahmedabad, would surely make a determined bid to win the project.

However, for both Ahmedabad and Jaipur there are seven bidders in the fray.   

A toehold in Mumbai airport, the second-largest in the country, would have been a shot in the arm for the Adanis. Though that dream has soured, the audacious bid has made it clear that the group means business as far as aviation is concerned.