News / Adani aircraft lessor subsidiary on the runway – with an eye on air freight?

ID 222942169 Photo: Timon Schneider | Dreamstime.com

Adani Group, India’s rapidly growing logistics conglomerate, has now established a subsidiary to own and operate aircraft.

Udanvat Leasing IFSC has been registered to function from Gift City, in Gujarat State, a modern business centre that offers liberalised corporate regulations and tax incentives.

While its specific business objectives have not been announced publicly by Adani, the move has sparked speculation in the industry. Sources keeping a close watch on Adani’s business strategies believe the Ahmedabad-based group is looking at a foray into air cargo in the not too distant future.

The fact that the group is deeply logistics-centric with aggressive growth aspirations and already manages a clutch of airports in India gives credence to speculation about its airfreight ambitions.

Anecdotal indications are that Adani is pursuing e-commerce logistics interests, somewhat emulating the Amazon model.

“That’s highly likely,” a veteran of the Indian air cargo industry told The Loadstar. “The market promises long-term growth and the group is already in an entrenched position, with expansive cargo networks, along with the potential for synergy benefits on a larger scale.” 

Adani has concession rights at seven key airports across India, out of eight licensed by the government for modernisation and operation under the public-private partnership (PPP) scheme.

Suneet Gupta, global head of cargo community systems at Mumbai-based Kale Logistics Solutions, told The Loadstar Adani had the potential and scale to play a pivotal role in India’s aviation sector, as stakeholders increasingly focus on multimodal logistics development.

“Adani could bring a unique proposition to the market with its strength in both air and maritime ,” said Mr Gupta. “With its existing footprint, expansion plans in the loop and an ecosystem in India requiring an infrastructure overhaul to reduce logistics costs, the incorporation of Udanvat Leasing IFSC will ensure Adani disrupts the aviation industry.” 

“Air cargo logistics can be an extended arm to support and bolster Adan’s asset-based business,” added another industry source.

Further adding rumour, Adani Group has concluded a deal with the Gujarat state government to pursue investment in a large air cargo complex at Virochan Nagar, near Sanand – touted as the country’s largest multimodal logistics park at some 1,450 acres. The project was designed to provide rail connectivity to a dedicated freight corridor in the final stages of commissioning.

And on the ocean side, Adani has ambitions to become the world’s top port operator by 2030, with active terminal operations at 13 locations in India, notably Mundra, and some recent “global network” additions, including at Sri Lanka’s Colombo port and Israel’s Haifa.

Meanwhile, India’s air cargo trade seems to be on an upward trajectory. According to new industry data, cargo volumes out of Indian airports hit 279,291 tons in August, the second-highest monthly total in the past year, and an improvement on July’s 271,971 tons.