Adani Airports Targets 75 Per Cent Non-Aeronautical Revenue Share Amid Buoyant Passenger Traffic

Adani Airports, part of billionaire Gautam Adani's conglomerate, is aiming to increase the share of non-aeronautical revenue to 75 per cent in the coming years, with the rest being generated from aeronautical services.

Aeronautical services encompass landing fees, parking charges, user development fees, and air navigation services charges (ANS). Conversely, non-aeronautical revenue stems from various amenities such as food and beverage outlets, retail stores, advertising rights, and duty-free shops within the airport premises.

Airport operators generally favour a higher share of non-aeronautical revenue due to the regulatory component associated with aeronautical charges for services provided within the airport premises.

“Except for Mumbai (airport), the ratio is very skewed, about 75 per cent comes from aero and 25 per cent from non-aero in our six airports,” the management said in a post-earnings conference call with analysts on Thursday.

“But as you know, from a consumer perspective, when we look at this business, we are constantly trying to move that ratio towards how it is being done at the international level, towards 75 per cent, which may come from non-aero to 25 per cent, which comes from aero,” the management said.

“So that's how we are also poised to grow this business. In the next two to three years, you will see a very big change in terms of the ratio from aero to non-aero," the management added.

The Adani Group, through its subsidiary Adani Airport Holdings Limited (AAHL), currently manages operations at seven airports nationwide: Mumbai, Ahmedabad, Jaipur, Thiruvananthapuram, Guwahati, Lucknow, and Mangaluru, and is involved in developing the Navi Mumbai International Airport (NMIA) in Mumbai.

According to management, the revenue distribution at Mumbai International Airport is evenly split between aeronautical and non-aeronautical sources.

Furthermore, in their latest investor presentation, Adani has outlined plans to enhance lounge infrastructure as part of their non-aero strategy. This involves partnering with reputable third parties to deliver premium services, with the aim of increasing the contribution of non-aero revenue.

In the fiscal year 2023-24 (April-March), Adani Airport witnessed a notable 19 per cent year-on-year increase in passenger traffic, reaching 88.6 million across the seven airports under its management.

The company also reported robust financial performance during this period, with an operating profit of Rs 2,437 crore, marking a significant 45 per cent rise from the previous year. Additionally, revenue rose 35 per cent to Rs 8,062 crore, on the back of strong operational performance.