After Airports, Adani Group Sets Sights on Jet Manufacturing With Brazil's Embraer

After airport operations and airline maintenance, the Gautam Adani-led conglomerate is set to foray into aircraft manufacturing through a partnership with Brazilian regional jet maker Embraer.

The Adani Group has tied up with Brazilian aerospace major Embraer to manufacture the latter’s popular regional jets in India, a Times of India (TOI) report said. Regional jets are typically operated on short- to medium-haul routes and have seating capacities ranging from 70 to 146 passengers.

The report said Adani Aerospace, a subsidiary of the Adani Group, signed a memorandum of understanding with Embraer in Brazil last month to set up a final assembly line (FAL) for these aircraft. While the details of the agreement are yet to be made official, an announcement is expected next month at the Hyderabad Air Show.

Citing a government official, the report said the Indian government may also indirectly incentivise the project as part of its push under the Make in India scheme. The aim is to encourage global aircraft manufacturers such as Airbus and Boeing to establish similar facilities in India.

Several measures are under consideration, including fiscal incentives for airlines that place aircraft orders from the proposed FAL, the official told TOI. The idea is to offer incentives on a reducing basis as order volumes grow, such as after every 50 aircraft ordered.

Embraer already has a presence in India, with nearly 50 aircraft of 11 types operating across commercial, defence and business aviation segments.

In the commercial aviation space, Star Air operates Embraer aircraft and is likely to place additional orders. With no single-aisle aircraft from Airbus or Boeing available for delivery until the middle of the next decade for new orders, some Indian start-ups are planning to launch operations using Embraer jets.

As the world’s fastest-growing aviation market, with more than 1,800 aircraft on order by airlines including the Air India Group, IndiGo and Akasa, the government has been keen for global aerospace majors to set up final assembly lines for commercial aircraft in India.

Meanwhile, for the Adani Group, which plans to invest ₹1 lakh crore in its airports business over the next five years, the proposed venture could open up a new revenue stream.

The group also plans to invest in new airport privatisations expected in the next round of bidding. It has already invested in maintenance, repair and overhaul (MRO) facilities and flight simulation training centre (FSTC) verticals.

The Adani Group, through its airport arm Adani Airport Holdings Ltd (AAHL), is India’s largest airport infrastructure operator, accounting for about 23% of passenger traffic and nearly 33% of cargo movement across the country.

AAHL is investing in capacity upgrades and phased expansions at its airports, while scaling up ancillary businesses such as non-aeronautical retail and city-side developments. This reflects its strategy to turn airport infrastructure into diversified revenue streams.

In December last year, the Adani Group said it plans to enter engine maintenance, repair and overhaul, as well as passenger-to-freighter (P2F) aircraft conversion.

“We have separated the two aviation verticals. One is the airport infrastructure and the other is the aircraft services business, which can include dual-use defence and civilian operations. Between Indamer and Air Works (MROs), we are now combining the platform into a single large MRO company,” Jeet Adani, Director of AAHL, told PTI during an interaction last week.