The Adani Group is attempting to strengthen its position in the airport industry by expanding into all related businesses.
According to the study, the group’s expansion strategy would include the acquisition of more airports as well as forays into a number of airport service sectors, including ground handling, maintenance, repair, and operations (MRO), and duty-free shops.
On Tuesday, Adani Airport Holdings announced that it had paid $400 million to acquire AirWorks, the oldest airline in India.
According to the article, the group is also negotiating to buy a 30% stake in a joint venture between US-based MRO company AAR Corporation and Prajay Patel-owned Indamer Aviation.
The business is also poised to make a competitive offer for AI Engineering Services (AIESL), the government’s plan to sell Air India’s MRO division in the first quarter of the upcoming fiscal year.
There are three companies competing for the servicing of aeroplanes in India: GMR Aero Technic, AirWorks, and AIESL. However, because the Indian market is so small and so fragmented, no one is able to fully utilise their hangar space and generate income from it. According to a person familiar with the company’s ambitions, the Adani Group is considering sector consolidation and having a sizable footprint there.
Even though the Indian airline industry has one of the fastest expanding aviation markets, around 85% of the $1.4 billion in maintenance work is done abroad, in places like Singapore and Turkey.
The group has intentions to penetrate other markets that significantly boost airport profitability, much like the MRO industry does. In the next five years, it wants to increase non-aero revenue by five times by bringing in international food and fashion businesses at all of its eight airports.
Adani Airport purchased a 74% stake in Flemingo Travel Retail and its Mumbai Travel Retail division last year. These companies run duty-free shops in India’s busiest airports.