Adani Enterprises aims for 75% non-aero revenue share at airports

Adani Enterprises expressed its goal of increasing the non-aeronautical revenue share of its airport business to 75% in the forthcoming years, with the remaining portion generated from aeronautical services.

Major sources of non-aeronautical revenue for airport operators, such as food and beverage, retail outlets, lounges, and real estate, were highlighted. Adani Airport Holdings, the airport arm of Adani Enterprises, reported a 19% year-on-year increase in passenger traffic to 88.6 million during 2023-24 (April to March) across the seven airports under its management.

Aeronautical revenues primarily stem from air traffic movements of airlines, encompassing landing fees, parking charges, and other fees imposed by the operator.

During a post-earnings conference call with analysts, the management noted, "With the exception of Mumbai (airport), the ratio is significantly skewed, with approximately 75% derived from aeronautical sources and 25% from non-aeronautical sources across our six airports." The management further stated that the revenue distribution at Mumbai International Airport is evenly split between aeronautical and non-aeronautical sources. Airport operators favour a greater share of non-aeronautical revenue due to the regulatory component associated with aeronautical charges for services provided at an airport.

The management elaborated, "However, from a consumer standpoint, we are consistently striving to adjust this ratio to align more closely with international standards, aiming for a 75% contribution from non-aeronautical sources and 25% from aeronautical sources."

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