Commercial and Business Case

Airport Intelligence Series From Transit to Taste: The Explosive Growth of India’s Airport F&B Sector October 2025 3 min read The rise in Indian population income levels and changing lifestyle has given the Indian airports F&B sector a chance to expand and tap into new F&B segments. The Indian airport F&B sector continues to invite huge amounts of interests, investment and still sees high growth and opening of new chains at a rapid pace. The Income Per Pax (to the operator) CAGR at Indian airports in the 5 years prior to COVID-19 have been 10-20 percent.  Prior to COVID-19, airports F&B concepts were evolving by creating food zones that have a clean and sense of place, creating an illusion of street food markets. New evolving trends uses robots to create healthy fast food at affordable prices with speed of service. Such trends are likely to be visible in airports over the next 5 years.  The Indian airports F&B units tend to have by far the highest sales densities (i.e. sales volume over area), due to the small size of the units and high sales, even without well-wishers, as they are not permitted to enter the terminal building. However, there is increasing evidence of retail and F&B plazas being developed at airport landside areas to accommodate the visitors and encourage city dwellers. E.g. Bangalore airport commissioned Quad which is an open-air commercial plaza outside Terminal 1, abutting the terminal forecourt. The penetration rate (defined as the % of total addressable market of passengers that end up buying) is substantially higher at Indian airports than their global counterparts – 35-40 percent at some airports, basically 1 in every 2.5 passengers. Globally, this is more like 1 in 10 passengers though this varies significantly across regions. What’s driving the higher spends and penetration rate?  (1)  Partly because Indians closely link food to the experience of travel, accentuated by the excitement of first-time leisure travel (remember the air travel penetration in India is still very low) even though pricing maybe through the roof. (2) The high percentage of LCC traffic with a sandwich in a box concept. BLR is testament to the hot food breakfast rush at the Tiffin place in Terminal 1. Filter Coffee anyone? Trivandrum, Mumbai, Cochin, Bangalore and Hyderabad are clearly the food capitals when it comes to their airports in terms of spend metrics. At TRV and COK, the higher % of foreign bound traffic has a direct impact on the higher dwell times within the terminal and the average transaction value. Penetration rates at Bangalore and Mumbai are among the highest in the country. Beverages forms the bulk of the sales – around 70% by revenue as per a report by India Retails & Hospitality Private Limited. The Millennials and now the Gen Alpha value ease, engagement, entertainment, and wellness-oriented option over other factors. The upcoming Greenfield airports – Noida and Navi Mumbai – aim to create a sense of place for its passengers. Navi Mumbai is positioning its F&B as an experience rather than a stopgap by offering passengers a taste of Mumbai’s culture. When it comes to F&B, the possibilities are endless – and Indian airports are pulling out all the stops to get travellers to indulge. Share Share Share

Airport Intelligence Series The A321XLR – Network Catalyst or Widebody Killer? January 2026 6 min read Historically, “Long-Haul” was an either-or choice: high-capacity widebodies for transoceanic routes or range-limited narrowbodies requiring technical stops. The A321XLR breaks this paradigm, acting as an instrument of “Hub Bypass” that fundamentally alters the risk profile of new route development. It liberates it to fly high-density trunk routes where its scale is an asset rather than a liability. In this article, we deep dive into the economics of the inaugural route for the A321XLR by Indigo airlines. The A321XLR Case Study: IndiGo became the first Indian airline to induct an Airbus A321XLR. There are few more A321XLRs on the way in 2026 and it could be a gamechanger for the airline. The flexibility to deploy a narrowbody aircraft on thin long haul routes fits in well with the overall DNA of the airline. Indigo recently commenced its first A321XLR route to Athens with service on different days from Delhi and Mumbai (rotation: BOM-ATH-DEL-ATH-BOM). The Delhi route bypassing Pakistan and Iranian airspace, adds another 90 minutes (or around 1,200 km) to the route, making it a very long narrow body flight. The current DEL-ATH route has a stage length of about 6,200 km / 3,360 nm or 8-hour 45 minutes block time (blue line in the exhibit below) and stretches the range of the A321XLR to almost the maximum with a full payload (3,700 nm+ the payload-curve starts dropping to allow for longer stage lengths). Reduced air densities during the summer season could result in payload penalties, should the current airspace situation remain unchanged. The graphic above shows two routes for Delhi–Athens. The blue line is the longer route that Indigo currently operates on necessitated by the Pakistan and Iranian airspace closure, while the orange line shows the shorter path that a foreign flag carriers may use. Though Indigo is the only non-stop service currently operating on the Delhi-Athens route, a foreign flag carrier would offer a distinctive advantage for European destinations (1,200 km or about 90 minutes of flight time on DEL-ATH route). This is what Aegean Airlines (A3), the flag carrier of Greece, is banking on apart from a lusher business class product. Aegean has announced a new service connecting DEL and ATH, starting in March 2026, with their brand-new XLRs.  For Indigo, bypassing Pakistan airspace adds roughly 1,200 km to the Delhi route. This extra distance eats into the A321XLR’s range and limits where it can be deployed. As a result, routes like Delhi–Milan, Delhi–Barcelona, Delhi–Paris, Delhi–Amsterdam, and Delhi–London are not feasible for the A321XLR without payload penalties. But Indigo is banking on connecting to these potentially high-density markets with the next batch of A321XLR deliveries. With the current airspace closures, the A321XLR can fly to Athens and Rome and parts of Southern Europe, and Seoul, Tokyo, and Bali in East Asia. Going East maybe the better solution from an airline economics perspective in the near term. With the A350’s in the horizon for Indigo (first aircraft expected in 2027), the narrowbody route opener can also function as a non-seasonal back stop for the busier widebody operation during the peak season. DEL-ATH Economics (6223 kms/3360 nautical miles) Cost per Available Seat Kilometer (CASK) Benchmarks: CASK provides the ultimate “efficiency score” for an airline’s operations: < 5 cents: Excellent Efficiency — Strong operational performance and fleet utilization 5–7 cents: Acceptable Range — Standard for many full-service carriers > 7 cents: Inefficiency Threshold — High risk of operational loss The A321XLR offers some of the best cost economics in the industry for medium to long-haul operations, significantly lowering the revenue threshold required to break even. At IndiGo’s current competitive fares on the Delhi-Athens route —across 183 economy seats and 12 business-class seats—an 80% load factor is required to generate an operating profit (excluding overheads). This is obviously a metric that could be difficult to achieve all year-round, and the airline would look at raising prices at some point of time. Initial response appears to be robust with high load factors. This reflects a classic market-entry strategy, with pricing positioned as a highly attractive value proposition to stimulate demand. If the demand surges (and assuming a more stable geopolitical environment), up-gauging to a widebody would require filling an additional 150+ seats to achieve route-level profitability. The XLR isn’t meant to replace widebody planes. It’s a way for airlines to lower risk and test long-distance routes with fewer passengers. It makes it easier to start new long-haul routes that wouldn’t work with widebodies, but they are required for high-demand routes. It’s entry into commercial service reflects a structural shift in long-haul network planning rather than a simple extension of narrowbody range. Share Share Share

Airport Intelligence Series Applying P3 Lens: Revitalizing Washington Dulles International Airport (IAD) December 2025 6 min read Washington Dulles International Airport (IATA Code: IAD) has served the DC region since its opening in 1962. In 2024, the airport was the 25th largest in the United States by total passenger volumes.   The new Dulles Airport Master Plan outlines expansion plans more than a half-century to accommodate growth to 90 million annual passengers. The Master Plan lays out the roadmap in which terminals will be developed, redeveloped and razed, and an extension of AeroTrain service to a new Concourse F along with a potential for a 5th runway.IAD’s new use and lease agreement includes a $9.0B capital program for a 15 year period. That’s about $800+ Million per MAP of growth – how does it compare to the rest of world? And more importantly can this growth be accommodated in a more cost-efficient manner with P3 capital? That’s the question the Department of Transportation (DOT) wants to know and has issued a Request for Information (RFI) seeking out of the box ideas for redesigning IAD. Submissions may include: Design proposals Construction concepts Financing approaches, including public–private partnerships (P3) At this stage, the roadmap is to shortlist the interested parties based on the initial ideas for a more formal P3 process that will take months to conclude. 2040 Capital Construction Program Source: REPORT TO THE STRATEGIC DEVELOPMENT COMMITTEE for Approval of the Dulles International Airport Master Plan The Metropolitan Washington Airports Authority (MWAA), which operates Dulles under a long-term lease, for consideration and potential sponsorship is supportive of the move, as it sees any long-term development to incorporate P3 capital in some form. Airport P3 Investment Decision Framework There are several levers that need to be evaluated as part of any P3 assessment. At Avinia, we have primarily worked on the buy side and supported investors and global airport operators to evaluate the investment attractiveness of airport assets in Asia Pacific, Africa and Europe. We know from experience that airports attract P3 capital not because of traffic growth alone, but because of stable rules, predictable cash flows, disciplined capex, and credible governance.   In this article, we take a closer look at demand fundamentals. Other factors may be examined in future articles. IAD Aviation Traffic Forecast  Note: Source: Baseline, Scenario 1 and 2 from Chapter 3 – Aviation Activity Forecast (As of August 2021) of the Master Plan IAD-MP_3_Forecasts_FINAL-DRAFT_May2025.pdfARIMA model projections by Avinia LabsBaseline: Based on socioeconomic regression analysis with recovery to pre-COVID (2019) passenger levels by 2024–2025 and long-term growth consistent with historical trendsScenario 1: Assumes reductions in select international nonstop markets beginning in 2024, with international and domestic activity growing at baseline rates but from a lower activity levelScenario 2: Assumes resumption of pre-COVID planned airline activity, including new domestic service (from 2023) and expanded international service (from 2025), resulting in higher long-term passenger growth 2024 saw record passenger numbers at IAD, adding new airlines and boosting system-wide totals, indicating strong demand. On the back of a boom in international service, aviation traffic at IAD has grown in 2025 by leaps and bounds – with 17 new international routes across seven airlines, spanning Asia, Africa, Europe, and the Middle East, and up gauging to higher density new gen aircraft. IAD is one of the fastest growing international hub airports in the United States. The forecast in the Master Plan was done in 2021, and a lot has happened since in terms of traffic growth. Actuals have outpaced the Master Plan numbers in 2022 and 2023 though Scenario 2 appears to have baked in the anticipated growth by 2024 (2.3% CAGR from 2024 to 2045). The Avinia team ran a range of scenarios. ARIMA model with one autoregressive term, one order of differencing, and no moving-average term was found to be a good fit for predicting future values based on the recent growth in traffic. The model generated numbers that were closer to Scenario 2 (which can be considered the high case) projecting total passenger volumes of 38.6 MAP in 2040 (2.1% CAGR till 2045). Typically, for a P3 asset due diligence exercise, various regression based (socio-economic) and mathematical modelling (ARIMA/SARIMA etc) can be used to encapsulate a range of outcomes and define a blended outcome (which could be subjective based on the market understanding). Probabilistic modelling (using a monte carlo simulation by defining uncertainty in the independent variables) is also a robust methodology. The availability of advanced tools and the computing power allow these scenarios to be run in a very short timeframe and can be leveraged for decision making. The anticipated growth of traffic at IAD is clearly very attractive for investors. External shocks due to economic or geopolitical factors could dampen the numbers. Future shocks can be modelled by looking at past forecast errors to define a low case scenario. Airline Market Share  Note: Percentage based on 2024 seat supplySource: CiriumMesa and Republic merged in Nov 2025. Republic Airways Inc. will continue to support American Airlines, Delta Air Lines, and United Airlines under its existing capacity purchase agreements (“CPA”) while Mesa Airlines will support United Airlines under a new 10-year CPA signed in connection with this transaction. United Airlines is the dominant carrier with almost 49% market share (excluding the code shares with regional carriers). The market share is closer to 60% including United Express (CommuteAir) and the regional carriers that that have purchase agreements with UA. This level of dominance carries both advantages and risks. UA’s large, diversified network across domestic, transatlantic, transpacific, and Latin American markets and yields from international passengers is positive from a cash flow perspective. But it also brings risks with geo-political factors that are beyond the control of the airline. The Herfindahl-Hirschman Index (HHI) measures the size of companies relative to the size of the industry they’re in. The HHI is a common measure of market competitiveness. It can range from close to zero to 10,000 with lower values indicating a less concentrated market. Higher the