Adani Group hopes to list Adani Airport Holdings in the next 2-3 years. English business newspaper Business Standard has interviewed Jeet Adani, director of Adani Airport Holdings. In which Jeet Adani has talked about his future plans related to the airport business, updates on existing projects and many challenges.
In this interview with Business Standard, Jeet Adani was asked that he had plans to list AAHL (Adani Airport Holdings Limited), but first he wants to pay attention to some things, what are they.
In response to this question, Jeet Adani said that the things he wants to focus on first include the commercialization and stabilization of Navi Mumbai Airport, which will be done from next year.
Listing of AAHL in 2-3 years
Jeet Adani said that ‘City side development around airports will be an important factor in the first phase of our city side development. City side development involves leasing space, which will be started in 2028-29. Therefore, even if pre-leasing starts, it will show that our business model works.
He said that the third thing is our non-aero revenue growth, it has grown almost three times since we started our airport business. It is not going to continue at that level now because it is now reaching maturity, in the next two years, non-aero growth will grow steadily and it will reach a point where it is going to become a major source of income in itself.
Once these three things happen, AAHL’s Ebitda, which is about $300 million today, will grow to $11.5 billion. So, from an investment perspective, he is confident that whatever AAHL is doing is right.
He said that it is not necessary that we will go for listing only after achieving all these three things. Any one or two of these should happen so that we can demonstrate a major part of our business plan. Once we are at the level of about $ 1 billion EBITDA, we will be comfortable listing this business, it will take at least 2-3 years for this to happen.
Jeet Adani said that the work on the second and third phases of Navi Mumbai Airport will start from next year, which was earlier scheduled to start in 2027 and 2028.
Plan to increase non aero revenue
He also outlined a plan to increase the revenue growth of the non-aero business. He said that firstly we are increasing the space (for retail etc.), secondly we are sorting out the entire brands and products. He said that we are going through a very difficult exercise regarding consumer level detailing. We are not following the same old pattern that if KFC or Domino’s is coming then we have to keep them in every airport, because the consumption pattern in every city is completely different.
“So, we are all set. We are looking at specific consumer groups in a city and their spending patterns. Like – how they are travelling, – whether they are in a group or alone, whether they are men or women, because all this changes the spending pattern. Based on this, we are doing tie-ups with brands and food products specifically targeting those consumer groups.”
Jeet Adani said that due to this alone, the revenue growth is going to be around 1520% this year and 1520% next year.
What is the city side development plan?
Jeet Adani said that today we have 8 airports, we want to do full mixed use development here. The first four city side development projects have been started around the terminals in Mumbai, Ahmedabad, Lucknow and Jaipur. Construction has already started in Mumbai and Ahmedabad. Everything will be done at a fast pace in the next three to four months.
Understanding the needs of the city, we have seen a huge need for a good quality hotel and convention centre in Ahmedabad. Similarly, we see a lack of good hotels in Mumbai. That is why we are building hotels there. Like Ahmedabad, Mumbai also needs a big convention centre. There is Jio World Convention Centre and one in Borivali, apart from this there is no other convention centre in Mumbai.
In this interview, Jeet Adani also gave information about the capex plan of AAHL. He said that broadly, there is a plan to invest Rs 1 lakh crore for the next five years.
- Around Rs 20,000 crore will be used to expand existing terminals and build new terminals at airports.
- Rs 20,000 crore to be used for initial cityside development projects at Mumbai, Ahmedabad, Lucknow and Jaipur airports
- Around Rs 18,000 crore will be used for the construction of the second phase at Navi Mumbai airport
- Around Rs 20,000 crore is also being kept aside for future mergers and acquisitions and the government’s next round of airport monetisation (privatisation)
- Apart from this, if any international opportunity is useful for us then we are keeping that amount
Will start ground handling services
In an investor presentation, the Adani Group had said that it was going to start its own ground handling service, on this Jeet Adani said that during the last three years when we were working in the airports business, we realized how complex the eco-system is. As an airport operator, if we have given concession (contracted) in everything, then we have no control over any operations in the airport.
We just build a building and then 10 different companies come and work there. This meant that we had very little control over the customer experience. For example, if a bag is getting delayed on the belt, we would just tell the passengers that the problem is with the ground handler. If security is taking time, it is the security staff. Then, the question arises, what is the airport operator doing at the end? So, with our overall strategy about non-aero revenue, we should take everything in our hands, from car parking, duty free, lounges, food and beverages, retail services, etc., so that we have everything.
We have the same strategy for aeronautical services like cargo, fuel farms, ground handling etc. We want to own everything because we want to completely control the customer experience. We want to ensure that at the end of the day, it should be an Adani experience for the customer, both digitally and physically.
Jeet Adani said that in March itself, he will start ground handling services at Navi Mumbai Airport as well.
When asked if they are working on an international airport business, he clarified that we will not do any international expansion just like that. We will do it only when it is included in our Indian network, as we have done in ports. He also clarified that the company does not plan to start its own airline.
