India’s airports emerge as premier commercial, recreational hubs- The Week

If you think an airport is a place you go to catch a flight, you need to update yourself. Airports today are mini cities in themselves, offering anything from shops, bars and restaurants to spas and hotels. And, in some cases, even museums, gaming alleys and theatres.

“Airport terminals across the world have always been designed as functional entities,” said Bengaluru airport CEO Hari Marar. “The upcoming Multi-Modal Transport Hub just outside the terminal… will also serve as a retail and event hub, reimagining the role an airport can play in a city.”

Notice the aero hubs next to airports in places such as Chennai and Pune. Ostensibly created because the older terminal complex didn’t have space for parking and other amenities, these hubs are now retail destinations, with even non-fliers dropping in. Pune actually calls it an ‘Aero Mall’.

Last month, Delhi airport CEO Videh Kumar Jaipuriar said almost 60 per cent of Indira Gandhi International (IGI) Airport’s revenue comes from non-aeronautical activities, including shops and restaurants.

A main reason for this boom has been privatisation, which has led to not just innovations in marketing and revenue generation, but also cutting-edge technology and sustainability practices that become a blueprint for others.

Though Kochi became the first Indian airport to bring in private players in 1999, it took close to a decade for the model to go national. In 2006, the Airports Authority of India (AAI) handed over Delhi’s IGI to private operator GMR, with Mumbai and Bengaluru following suit (the initial owner was GVK; the present ones are Adani in Mumbai and Fairfax in Bengaluru).

The privatisation spread has only gained steam over the past 15 years, with private operators taking over several AAI-run airports such as Lucknow, Jaipur and Thiruvananthapuram. Another 11 are earmarked for auctions.

The result has been the coming of age of India’s airports infra sector. Today, the Adani Group is the biggest private airport operator in India, its count going up to nine once the Navi Mumbai airport is commissioned in end-September. GMR, which operates IGI, Hyderabad and Nagpur airports, and Goa’s second airport in Mopa, is not only building a new one in Visakhapatnam, but is also operating an airport in the Philippines and developing one in Greece.

Initially, there were questions on whether private operators would ever make profits, but those fears were misplaced—Bengaluru airport posted a profit of Rs500 crore last financial year, while Mumbai’s Chhatrapati Shivaji Maharaj International reported 1.1 per cent growth in domestic traffic and 3.3 per cent in international.

“People spending at airports can make them extremely profitable,” said Sharat Goyal of Impact Infracap. “In most cities in India, malls are the recreational facility. So if you have a well-constructed airport that offers the facility of a mall, there is much more propensity of people to spend. That is a huge impetus.”

It is, with over Rs1 lakh crore being invested in new airports or in refurbishing old airports across the country. Credit rating agency ICRA projects that airport operators could see their revenue increase by 20 per cent this financial year, with strong passenger growth and higher non-aeronautical revenues.

“With healthy international tourism activity along with improved connectivity to newer destinations, the growth momentum is likely to sustain in FY2026,” said Vinay Kumar G., sector head (corporate ratings), ICRA. “The healthy rise in international traffic will augur well for the airport sector, given that it is relatively more remunerative than domestic traffic. Revenues are likely to grow… driven by the sustained improvement in both passenger traffic, increase in tariffs at Delhi, Bengaluru and Hyderabad airports and ramp-up in non-aeronautical revenues.”

The value-add of private airports has not just been on the profit side, but in the kind of innovations they have brought in. For example, Kochi airport is fully run on solar energy, even giving the excess energy back to Kerala’s electricity grid.

In May, Cochin International Airport Limited unveiled a Rs200-crore initiative to fully digitise airport operations through AI, automation and advanced cybersecurity. Last September, it also opened the Rs484 Luxury Aero Lounge next to the business jet terminal, said to be India’s largest.

“CIAL’s current roadmap features over 150 projects spanning airport systems, digital transformation, green energy and commercial development,” said S. Suhas, MD, CIAL.

The innovation has spread beyond the airport, too. “KMRL (Kochi Metro Rail Limited) is actively examining the possibility of introducing a water metro service from Aluva to Cochin International Airport via the Periyar [river],” said Lokanath Behera, MD, KMRL. “This initiative reflects our continued commitment to connecting communities with greener and smarter transport options.”

Several new non-aero projects are under way, including a commercial zone in front of the international terminal, transit accommodation, golf villas, sporting facilities and a hotel project.

Meanwhile, Hyderabad airport recently became the first in the country to implement an AI-powered predictive operations centre. Many of the private airports were the first to implement other innovative features like mobile apps, smart trolleys, etc. GMR, in fact, has an arm called Innovex that works with startups and research institutes to come up with aviation solutions, besides having a robotic centre of excellence.

But while private airports hit headlines, it is not as if the AAI-run ones are a shambles. Many are trying to refurbish themselves and succeeding in varying degrees. For example, Kolkata’s Netaji Subhas Chandra Bose airport posted a revenue of around Rs1,500 crore and a profit of Rs670 crore in 2024.

Private or public, greenfield or brownfield, all this improved efficiency coupled with rapid expansion can only be good news for the Indian flier.

With inputs from Nirmal Jovial

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