AAHL will either have an IPO or demerger between 2027 and 2030: Jeet Adani

Navi Mumbai International Airport will begin commercial operations on December 25, with Adani Airports outlining traffic targets, capex plans and long-term expansion

The Navi Mumbai International Airport (NMIA), the second airport in the Mumbai Metropolitan Region (MMR), will see its commercial flight operations begin on December 25 after a long wait. Jeet Adani, director, Adani Airport Holdings Ltd (AAHL), spoke to the press at a media roundtable at the airport’s office ahead of the operational launch. Edited excerpts:

 

There has been a buzz about a proposed study by the City and Industrial Development Corporation (Cidco) of Maharashtra for a third runway. What’s your view?

 

It is something that we welcome. More than just the land feasibility, what’s important is to see the sky feasibility because Mumbai airspace is quite congested. If the third runway comes through, it will benefit since that will push out the need for a third airport by five to six years. Larger point, if we compare Mumbai to London, there are five airports in London, and in Mumbai there’s talk about two to three airports. You need five airports in Mumbai itself.

 

Is there space for a third runway within the existing NMIA?

 

There is no space. It is a little theoretical. On paper, a new airport will need up to ₹20,000 crore. If I can buy land for ₹2,000-3,000 crore and put another runway, it is a better option on paper. But it’s not just the runway. With that, one requires highway connectivity, a new terminal, and other things. It has to be truly independent.

 

Projected footfall was estimated to be 12 million in 2025-26 (FY26). What’s the outlook for passenger traffic now since the launch has been delayed.

 

We are looking at about 12 million in FY27. There will be a couple of million passengers this year because we only have two-three months left. Then, by the year after that, it should be at full 20 million capacity. By then, we will also see a combined tariff with the same rates for Mumbai and Navi Mumbai airports. Cidco and the Airports Authority of India (AAI) have agreed in principle to adopt this combined tariff. It is also being looked at quite positively by the Airports Economic Regulatory Authority (AERA), which is working on the methodology and how the tariff will work.

 

What are the other development plans at NMIA?

 

We have about 240 acres of land at Navi Mumbai which is developable under city-side development. We will completely develop it ourselves in the first two phases. It’s going to be mixed use development, with commercial real estate, hospitality, retail, and others. We are doing a 25,000 seating arena for live entertainment, and a convention centre in partnership with one of the major operators. In the first phase, we are developing about 5 million square feet (msf), and then every year 2-3 msf will keep getting added.

 

What are the plans to demolish terminal-one (T1) at Mumbai’s Chhatrapati Shivaji Maharaj International Airport (CSMIA)?

 

It will happen in 2030. We are seeing MMR as a region where total demand right now, even after the 20 million passenger footfall, being still higher than supply. We are starting the construction of the next terminal of NMIA in the next six months. Once terminal-two and the second runway at NMIA become operational in the next 3-3.5 years, we will have some breathing room when we can demolish and rebuild T1 at Mumbai airport.

 

What is the quantum of capex the group is planning for its airports?

 

The total capex for airside, terminal, and city-side development at all our airports will be around ₹1 trillion over the next five years.

 

Does AAHL plan an initial public offering (IPO), and is there a timeline to that?

 

It will be either an IPO or a demerger. The time between 2027 and 2030 is a good timeline to have. IPO has three triggers. The first is NMIA launching operations. Second, the company needs to generate its own cash. While it is Ebitda (earnings before interest, taxes, depreciation, and amortisation) positive, but because of its capex, it still depends a lot on AEL (Adani Enterprises Ltd) for cash. It will be self-sufficient in the next two-three years on an ongoing basis. The third part is going to be leasing or sub-leasing of one of the city-side projects, so that we can demonstrate value.

 

What are the growth plans for Flight Simulation Technique Centre (FSTC)?

 

FSTC has 15 simulators today. After the IndiGo crisis, one of the focus areas is how do we train more pilots. Our vision in the next two-three years is to increase the number of simulators from 15 to 50-60 across India, and install them in cities such as Mumbai, Navi Mumbai, Ahmedabad, Guwahati, Lucknow, Chennai, Bangalore, and Hyderabad. Cities may have minimum two at a place while in some places there will be 5-10 in the next two-three years.

 

What is Air Works’ significance with respect to NMIA?

 

We are expanding maintenance, repair, and overhaul (MRO) as a sector that needs to be domiciled in India. In Navi Mumbai, there are nine hangars where approximately 27-30 planes can be maintained and repaired together. Air Works will be one of the biggest investors in MRO over here. There’s job creation in this sector, with many skilled technicians required.