Also Read|Adani Group Bolsters Position In Aviation Sector, Acquires 74% Stake In Mumbai International Airport
The Adani group has planned to adopt the hub-and-spoke 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 operation rights over a 50-year lease.
“We see our airport portfolio as a critical lever to help converge tier-1 cities with tier-2 and -3 ones in a hub-and-spoke model,” Adani Group Chairman and promoter Gautam Adani said.
Adani Airports, a subsidiary of Adani Enterprises Ltd. had on Monday announced the acquisition of GVK Airport Developers Ltd.’s 50.50% stake in Mumbai International Airport Ltd. It will also buyout a 23.5% stake of Airports Company of South Africa and Bidvest Group to get a 74% controlling interest in MIAL.
“The addition of MIAL and Navi Mumbai to our existing portfolio of six airports provides us a transformational platform that will help shape and create strategic adjacencies for our other B2B businesses,” Adani said. Adani said he expected the number of flyers in the country to grow five-fold, which means India would require 200 additional airports to handle over 1 billion domestic and international passengers across the tier-1, -2 and -3 cities. “Majority of them will connect to Mumbai,” he said, adding that the company would also bid for the second airports that will be required in metro cities.
“Over this period, India’s top 30 cities are expected to each require two airports and Adani Airports sees itself well-positioned to help build the required infrastructure platform. The economic value that the cities of the future create will be maximised around airports,” he said.
According to the plan in its annual report, the company plans to increase non-aero revenue developing "airport villages", and has assured its shareholders that it was "well-positioned" to become the leading airport operator in India.
The company is banking on growing domestic passenger traffic to achieve this aim.
Adani Chairman did not mention any impact due to Covid 19 on growth plans
Gautam Adani did not mention the impact of the COVID-19 pandemic on any growth plans. Global air travel has slumped since March, with government-imposed coronavirus restrictions and public wariness about travel hitting airports and airlines.
Credit rating agency Fitch in a note last month forecast consolidation in the Indian aviation sector and warned of a slow rebound in demand, with domestic passenger volume growth "in the single digits over the next few months".
Fitch also said that most Indian airlines reported passenger load factors of 50-60 percent in July, versus 80-90 percent last year.
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