After recording the greatest passenger counts among all the airports under Groupe ADP's ownership, Delhi has become the jewel in the crown of Groupe ADP's portfolio. In the first nine months of 2023, Delhi handled more passengers than the group's flagship, Paris CDG.
The expansion has occurred despite the fact that IndiGo, the largest carrier in Delhi (and in India), is experiencing groundings owing to Pratt & Whitney engine troubles, as well as the May bankruptcy of GoFirst.
Just before the pandemic, Groupe ADP negotiated an investment transaction with GMR, the operator of Delhi and Hyderabad airports, via Special Purpose Vehicles DIAL and GHIAL, respectively. Airports closed when the world fell into lockdown, affecting traffic and thus revenue. The group would have pondered if the investments were worthwhile, but on the other side of the epidemic, the growth of Delhi Airport more than compensates for whatever concerns that Groupe ADP may have had during the pandemic.
Groupe ADP manages two airports in Paris and owns a part in TAV Airports, a Turkish corporation that owns or operates airports in nations ranging from Kazakhstan to Chile. The investments were tied to GMR infrastructure, the listed firm reorganizing itself as GMR Airports, and the separation of non-airport assets.
The Data Tells the Story
Total traffic at Paris's two airports was 75,563,078 in the nine months ending September. GMR airports handled 79,521,105 passengers, while TAV's 11 operators handled 74,624,104 passengers. From January to September, Delhi airport received 53,431,298 passengers, while Paris CDG received 50,841,244 passengers over the same time.
Since 2019 (pre-COVID), Delhi has been among the airports with increased traffic. Delhi experienced 4.4% increase. Hyderabad increased by 10% as well. Almaty, Medina, Amman, and Zagreb were among the airports in the Groupe ADP portfolio that had increased traffic in 2019. Surprisingly, traffic was down 2.1% at the group level in the first nine months of 2023 when compared to the same time in 2019. Paris CDG, the group's flagship
The ADP airports in Paris, as well as all TAV airports, have shrunk. The TAV airports portfolio handled 87,637,592 passengers in the first nine months of 2019, compared to 74,624,104 in the first nine months of 2023. Without the count of passengers at Mopa, Goa for a like for like comparison, the GMR airports handled around 74,000,000 in 2019, which has climbed to 79,521,105 in 2023.
GMR is Evolving
Since the investments came in, GMR has made some portfolio modifications, including acquiring a stake in Medan airport in Indonesia and divesting its investments in Cebu in the Philippines.
Aside from Delhi and Hyderabad, the firm already operates a third airport in India at Mopa, Goa, and development on an airport at Bhogapuram near Vizag will begin soon. In addition to increasing its global portfolio, the GMR group is creating an airport on the Greek island of Crete.
What is the significance of traffic?
India is one of the world's fastest expanding markets, with over 1000 jets on order from the country's two largest carriers. Because both are well capitalized or backed by significant groups, their chances of survival remain high, unlike several airlines that have failed in the past.
Apart from increased passenger revenue, the real money comes from non-aero revenue, and Delhi has been performing remarkably well in this regard. Non-aero income at Delhi airport totaled 14.1 billion INR in the most recent quarter. 27% of this revenue was generated by Duty Free, where the GMR company now has a presence, and 20% from space rents. Non-aero revenue from retail, cargo, food and beverages, and advertising increased dramatically in Delhi.
With the final phase of construction, the airport's capacity will increase from 66 million to 100 million passengers. This will occur concurrently, with all four runways being used. More flights, more passengers, and more revenue would result from the combined effect.
With European traffic stagnant and, in some cases, declining, major hubs such as Paris are under constant pressure from surrounding hubs such as Frankfurt, Munich, and Zurich, among others. India, on the other hand, has yet to reach that point, and Groupe ADP's investment in GMR appears to be one that will yield large returns in a few years.
