Air Works of Adani to foray into passenger-to-frighter (P2F) conversion operations

The Gautam Adani Group is strategically positioning itself to transform India's air cargo infrastructure by investigating passenger-to-freighter (P2F) conversion operations. Adani Defence & Aerospace is acquiring 85.8% of Air Works India, a leading MRO firm, for ₹400 crore, expanding its presence in aviation and defense MRO services. Adani Defence Systems & Technologies Limited (ADSTL) has signed a share purchase agreement to acquire an 85.8% stake in Air Works India (Engineering) Private Limited (AWIEPL).

This ambitious initiative, known as the Gautam Adani Freighter plans, follows the group's acquisition of Air Works, the largest private maintenance, repair, and overhaul (MRO) company in India, in December through Adani Defence and Aerospace.

In the realm of domestic air cargo, a senior official from Adani highlighted that the P2F operations are in line with the group's long-term strategic objectives. This initiative directly responds to the significant demand for freighters in the country, potentially establishing Adani as a transformative player in aviation logistics infrastructure.

Air Works' potential

The aviation logistics sector offers a promising opportunity for Adani, as India's current freighter fleet consists of only 20-25 operational cargo planes.

Boeing's global forecast anticipates a remarkable 66% increase in freighter fleets, projecting growth from 2,340 cargo planes in 2023 to 3,900 by 2043, underscoring the considerable market potential.

Adani Defence and Aerospace intends to develop comprehensive capabilities for commissioning both narrow and wide-body freighter conversions.

The group's strategic plan includes utilizing Air Works' existing infrastructure, which operates in 35 cities, with significant facilities located in Hosur, Mumbai (BOM), and Kochi (COK).

Industry experts, such as Malcolm D’Souza from Jeena and Company, stress the urgent need for dedicated freighter aircraft. Currently, logistics heavily rely on the belly capacity of passenger flights, which imposes significant limitations on shipment size and weight. Projections indicate a need for 80-100 dedicated freighters by 2030, increasing to 120-150 freighters by 2035.

“Undertaking P2F operations is part of the long-term vision of the company. There is a huge need for freighters in the country to serve the growing air cargo and logistics market. We want to come in and address that demand,” an official said.

The P2F conversion sector in India is garnering significant global interest. Boeing has already set up a conversion facility in collaboration with GMR Aero Technic in Hyderabad, while Israel Aerospace Industries is investigating similar ventures.

Adani Defence and Aerospace may consider adopting this model by forming a partnership with a foreign Original Equipment Manufacturer (OEM).

Air cargo market

India's air cargo sector exhibits strong growth potential, with forecasts suggesting a compounded annual growth rate (CAGR) of 6-8% over the next ten years.

Current domestic cargo operators, including IndiGo (6E), SpiceXpress (SG), Pradhan Air Express (6P), and Bluedart Aviation (BZ), form the foundational ecosystem for this developing market segment.

Infrastructure transformation

The Gautam Adani Freighter's plans for P2F conversion operations indicate a major transformation in India's aviation logistics framework. By tackling the pressing need for dedicated freighter aircraft, this initiative could significantly improve both domestic and international cargo transport capabilities.