GMR Ups Stake in Delhi Airport Amid Growth in Aviation Sector

12.09.2024 - 15:25 / skift.com / Thomas Cook / Narendra Modi / Bulbul Dhawan

GMR Airports Infrastructure Limited has entered into an agreement with Fraport AG Frankfurt Airport Services Worldwide to acquire Fraport’s 10% stake in the Delhi International Airport. With this, GMR will hold a 74% equity stake in the airport, while the remaining 26% stake will continue to be with Airports Authority of India (AAI). 

GMR is acquiring the stake for $126 million.

The GMR group operates three airports in India: Delhi International Airport, Hyderabad International Airport, and Manohar International Airport, Goa. It is also currently developing an international greenfield airport in Andhra Pradesh. 

Rise in Airport Operators’ Revenue: Indian airport operators are expected to witness a 15% to 17% increase in their revenue during the ongoing 2024-25 financial year, according to credit ratings agency ICRA. Increase in domestic and international passenger traffic, rise in tariffs at some of the major airports, and amplification of non-aeronautical revenues are expected to drive the revenue growth. 

Earlier, credit ratings agency CRISIL also said that an increase in passenger volumes will lead to an increase in aeronautical revenue, such as fees collected from passengers, airlines and cargo operators for use of infrastructure. Non-aeronautical revenue from sources such as advertising, retail, lounge and duty-free shops will also increase.

The Indian aviation industry has recorded its highest-ever domestic passenger traffic for a half year. Between January and June 2024, Indian airlines carried 79.35 million passengers, according to data from Indian aviation watchdog Directorate General of Civil Aviation (DGCA). This was an increase of over 4% from the previous year.

India has also become the third-largest domestic aviation market, after the U.S. and China, according to data by aviation analytics firm OAG. Over the past 10 years, the Indian domestic market grew at an annual rate of 6.9%.

Furthermore, the annual passenger capacity at Indian airports is set to increase by 60 million, after Prime Minister Narendra Modi inaugurated new terminal buildings at 12 Indian airports earlier this year.

These factors are leading to a growth in the airport business, including development of more airports. Since 2014, the number of airports in India has gone up from 74 to 157 currently. Investments in airports is also increasing with Airports Authority of India (AAI) planning to infuse INR 300 billion ($3.6 billion) over the next five years to build and revamp the airport infrastructure in the country.

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