6 brownfield Adani airports could help AAI make Rs 650 crore annually

The Airports Authority of In­dia (AAI) can make over Rs 650 crore annually as concession fee from the six brownfield airports that have been won by the Adanis, say analysts.

This is more than four tim­es the income that AAI made in 2019-20 from the same airports, at Rs 142.72 crore, by running them on their own.

These airports include Ma­n­ga­luru, Lucknow, Ah­meda­bad, Jaipur, Trivandrum, and Guwahati with total passen­gers of 32.9 million in 2019-20. The Adanis have already signed up concession agreements from late December 2020 to run the airports.    

AAI’s bonanza in earnings was pegged to passenger num­bers in 2019-20. They have been multiplied by the per passenger winning bid fee. With passenger growth, the earnings for AAI will only go up year-on-year (YoY). An email sent to Adanis didn’t elicit any response. 

AAI has also earned Rs 29,300 crore in 13 years from the concessions of the greenfield Delhi and Mumbai airports under the private-public partnership (PPP) model. How­ever, in both these airports, the concession model was not based on bid per passenger as has been the case for new PPP airports but on a revenue-share model. So, while Delhi pays 45.99 per cent of its annual revenues, Mum­bai forks out 38.7 per cent.  

In contrast, the earnings (profit from operations) that AAI made from these airports when it was running them between 2001 and 2007 was collectively only Rs 3,000 crore. However, in just one year (2019-20), under the PPP model, AAI’s earnings from Delhi and Mumbai together was at Rs 3,052 crore. And, this of course does not include the increase in valuation of the 26 per cent equity that it holds in these two airports.

It is this huge bonanza, which has prodded the government to further privatise airports in a three-pronged strategy. One, it is now planning to complete privatisation of 13 additional airports (six large airports and seven small ones that will be clubbed) run by the AAI under the PPP model by the end of this financial year. 

The six bigger airports include Bhubaneswar, Varanasi, Amritsar, Indore, Raipur and Trichy, which flew over 1.6 million passengers in 2019-20. The smaller ones that will be clubbed with them in­clude Jharsuguda (with Bhu­­b­aneswar), Gaya and Kushi­nagar (with Varanasi), Kangra (with Amritsar), Tirupati (with Trichy), Jabalpur (with Indore) and Jalgaon (with Raipur).