Long-term aim to reduce cost of operations by 30-50%: Adani Airports CEO

Adani Airports Holdings (AAHL) has a long-term aim to reduce the costs of operations by 30-50 per cent, aided by the right set of workforce, digitisation, and collaboration with other stakeholders in the aviation sector, said Chief Executive Officer Arun Bansal on Wednesday.

AAHL, an Adani group company, manages seven functional airports in Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram.

It is also building Navi Mumbai airport, which is expected to start operations by the end of 2024.

“Today the airport model is very simple. Passengers are paying for running the airport. Hence, the costs are artificially high. But if we can reduce the costs by 30-50 per cent, we can pass on the benefit (to passengers),” he said during the CAPA India Aviation Summit 2023.

India overall lacks aviation capability, he said.

“Let me be honest. If you really search around the whole country, you will find a handful of people who are aviation experts, but that cannot help India in scaling up immensely,” he mentioned.

“Indian aviation has been taken for granted for 20-30 years, where the prices in India for buying software have been 75-80 per cent higher than they should be, simply because we did not have the capability to know what we are buying. The cost of doing business, operating the airports, should go down by 30-50 per cent if we have the capability to know what we are doing,” he explained.

“Couple this with our Make in India capability. Our Adani Digital CEO is sitting here. We are developing our own app,” he said.

“If we buy the same app from abroad, it will cost us a lot,” he added.

“There are a lot of things that AAHL can collectively do -- gathering its partners, suppliers, airlines, etc. -- to make the aviation business sustainable. Today, we know that the airlines are not making money, and that is not a sustainable model,” he said.

When asked if the Adani Group was reconsidering its airport expansion plans because the conglomerate had been facing challenges recently (aftermath of the Hindenburg report), he said: “No. We have committed, submitted our plans to the government. Whatever plans we have submitted, we are following our investments.”

When asked what the timeline was for achieving this 30-50 per cent reduction, he replied: “This is a long-term goal.”

He said a lot of policy frameworks had become old.

“The world has moved on. Technology has moved on,” he added.

“I have seen that in any industry, with technology, with software -- we should be able to reach that kind of efficiency,” he mentioned.