The $2 billion airport for congested Mumbai will be Adani’s next major challenge

Atop scaffolds, some 22 miles southeast of the heavily packed airport that opened in Mumbai 82 years ago, are hard-hatted labourers constructing a substitute. To complete the first of two runways and eventually build a second airport in India’s financial capital, others are levelling a neighbouring hill.
The $2.1 billion project led by the Adani Group in the satellite city of Navi Mumbai is, in many respects, a microcosm of the vast infrastructure reform that India is undergoing as Prime Minister Narendra Modi tries to overtake China.

It’s a test for Gautam Adani to see whether he can establish India as a major aviation hub.
With a lotus-shaped design that echoes both the national flower of India and the Modi party’s electoral emblem, the airport is expected to open in March of the following year and have the ability to handle 20 million people annually. If there is sufficient demand, it will increase to 90 million by 2032, according to Arun Bansal, the CEO of Adani Airport Holdings Ltd., the biggest private sector airport operator in India and the company that operates the current Mumbai airport.
According to Bansal, in an interview, Navi Mumbai airport would be a “perfect” candidate to develop into an international transit hub comparable to some of the busiest airports in the world, including Dubai, London, Frankfurt, and Singapore.
“India is in a very advantageous position geographically,” he said. “It is rare to find a country where flying is not possible in 12 hours.”
This goal may be aided by a surge in aircraft sales and airport expansions. Together, Air India Ltd., IndiGo, and newcomer Akasa have placed orders for around 1,100 aircraft. The most populated country in the world is also investing $12 billion to construct more than 72 new airports by 2025.
One of two significant infrastructure projects in the city, the Navi Mumbai Airport, will put Adani, the mining-to-media giant that withstood a devastating short-seller strike last year, to the test.
The other is the reconstruction of Mumbai’s Dharavi slum, which provided the setting for the critically acclaimed film Slumdog Millionaire. It’s one of the biggest and densest slum clusters in the world, with 80 people sharing a single bathroom and families of six sometimes living in 100-square-meter tenements.
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Initiatives such as these are essential to Modi’s goal of making India a developed country by 2047. However, it won’t be simple.
Navi Mumbai airport is making an attempt to replicate Adani’s strategy of gaining a larger share of the global logistics market. In October, the group established a first-of-its-kind transshipment port at India’s southernmost tip in an attempt to entice the largest container ships in the world.
Continue Reading: India’s New Mega Port by Adani Will Attract the Biggest Ships in the World
However, it faces fierce competition from airports like Heathrow in London and Changi Airport in Singapore, which handled around 59 million and 79 million passengers, respectively, last year. Furthermore, Mumbai has a long way to go before catching up to London, which has six major airports compared to New York City’s three.
According to Mabel Kwan, managing director of Alton Aviation Consultancy, the new facility will also need to have enough planes scheduled and make sure passengers and checked-in luggage move quickly enough during brief layovers. For travellers with extended layovers, there must also be on-ground facilities.
According to her, slots at Navi Mumbai airport would probably be requested by Singapore Airlines Ltd., Emirates, and Qatar Airways QCSC—all of whom have a significant presence in India.
Bansal said that the “majority” of foreign airlines are in talks with Adani Airport on how to speed up passenger flow. He also stated that he anticipates 30% of the facility’s traffic to come from international flights and 70% from local ones. If any airlines have committed to operating out of the new facility, he did not say.
Time of Transit
According to Bansal, the airport’s design aims to minimise the time required for passengers to catch connecting flights, preferably no more than 75 minutes, in compliance with global standards.
He said that each airline would decide for itself which of its sectors will relocate to the new airport and which will remain at the existing one based on commercial considerations. He said, “You can’t force any airline to lift and shift.”
Adani Airport won’t “force any airlines to shut down from the older Mumbai airport and move to Navi Mumbai because that will be discriminatory, right?” he added. Adani Airport hopes to list some time before 2028 and already operates seven other facilities.
According to a Jefferies analysis published on February 13, the two Mumbai facilities would account for more than half of Adani Airport’s projected $1.7 billion in revenue in 2026.
However, Kawn views Adani’s ownership of the two airports as advantageous since there won’t be any “destructive competition.”
Another significant conundrum facing regional leaders will be highlighted by the Navi Mumbai airport: whether to continue opening up Indian airspace.
Continue reading: As demand increases, Emirates calls on India to grant the Open Skies Accord.
The country in South Asia is now refraining from granting foreign airlines more flying rights so that its own airlines, some of whom are financially precarious, might develop on international routes. However, that decision might jeopardise its own goals of becoming a major international transportation centre.
“Tightrope”
India’s aviation policy, according to John Grant, chief analyst at the UK-based OAG, a worldwide travel data supplier, “is walking a tightrope between liberalisation and protectionism.” “Developing a world-class hub without market liberalisation is difficult.”
According to Grant, “Dubai is the best example where it takes time, investment, and a very liberalised market to make that happen.”
Taking advantage of the fact that Indian airlines have fewer flights in international skies, Emirates and Qatar Airways have already established a business model that involves transporting Indians to the US and Europe via Dubai and Doha. In contrast, Kwan claims that just 13% of the seats available on Air India, Vistara, IndiGo, and SpiceJet Ltd. are for foreign travel.
The fact that the two runways at the current Mumbai airport can only be used one at a time because of their overlapping alignment is another issue. This makes keeping up with the rapidly increasing aviation traffic in India more difficult.
The Ministry of Civil Aviation claimed last month that air space congestion causes flights to Mumbai to routinely be delayed and force planes to loiter above the city for up to 60 minutes.
Double the current capacity, Navi Mumbai will feature four terminals and two parallel runways.
The whole makeover of the city depends on its success as well. Mumbai, which now has a population of 21 million and is expected to develop quickly, will see up to $30 billion in new infrastructure built in the coming years.
Continue Reading: Mumbai’s $30 Billion Transformation Is Underway: India Version
In an effort to increase non-aviation income streams, the Adani Group and local authorities have plans to create an “aero city” around the new airport.
The civil bodies overseeing the greater Mumbai metropolitan region are also building new bridges and roads between the island city and the mainland to provide crucial connectivity to the new airport. According to a report released by Jefferies in October 2022, the conglomerate plans to create these “aero cities” around its airports in India via “a mix of hotels, convention centres, retail, entertainment and health care options, logistics, and commercial offices.” There are plans to build a dedicated metro line connecting the two airports.
The goal, according to a source familiar with the plans who requested not to be named because they are not the official spokesman, is to cut the journey to less than 45 minutes.
According to the source, two coastal highways will be completed in the next few years, and a six-lane bridge between Navi Mumbai and Thane, a satellite city located north of Mumbai, may open by September.
The good news is that there should be enough demand for all of these infrastructure supplies.
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In addition, New Delhi, the capital of India, is constructing a second commercial airport in the satellite city of Noida, which will serve 12 million passengers a year when it opens at the end of this year. Additionally, the city’s present facility is being renovated to accommodate 100 million flyers instead of only 70 million.
Due to connecting travellers, load factors on flights from India to Europe and Africa topped 75% in the previous year, according to Kwan. As a result, domestic carriers will be able to handle East-West linking traffic.
India is “positioned strategically at the intersection of important global routes,” according to her. These brand-new airports “may offer the blank canvas to grow India’s ambitions to become an aviation hub.”