According to a JM Financial report on GMR Airports (which operates Delhi, Hyderabad, and Goa), alcohol is indeed the “anchor tenant” of Indian travel retail, and its contribution to the bottom line is disproportionately high.
The Profit Engine: Non-Aeronautical Revenue
The claim that alcohol accounts for over 50% of profits stems from how airport revenue is structured. Airports divide income into two buckets: Aeronautical (landing fees, etc.) and Non-Aeronautical (retail, F&B, duty-free).
- Higher Margins: While non-aeronautical sources make up roughly 40-50% of total revenue, they contribute more than 70% of operating profit because they carry much lower operating costs than running runways and terminals.
- Alcohol’s Dominance: Within the duty-free segment, wine and spirits account for 58% of all sales in India. This is significantly higher than other categories like fragrances or cosmetics (which only make up 16%).
Why Alcohol is the “Profit Fuel”
Several factors make alcohol the primary driver of airport profitability in India:
| Factor | Description |
| Category Share | Spirits/Wine account for nearly 60% of total duty-free turnover. |
| Tax Arbitrage | Extremely high state taxes on alcohol in places like Maharashtra and Karnataka make airport duty-free prices significantly more attractive. |
| Whisky Obsession | India is the world’s largest consumer of whisky. Whisky alone accounts for 75% of all duty-free beverage volumes in India. |
| High Spends | The average spend per passenger in the duty-free section is rising by 6-10% annually, driven primarily by “premiumization” (travelers buying more expensive, single-malt brands). |
The “Sovereign AI” of Retail: Direct Operation
In a strategic shift noted in early 2026, operators like GMR have moved from simply collecting rent from duty-free shops to running the operations themselves.
- By taking over Delhi Duty-Free and cargo operations, GMR now captures the full retail margin instead of just a lease fee.
- This “re-monetization” is expected to drive a 28% CAGR in EBITDA for airport stocks through 2028.
Comparison: India vs. The World
The Indian airport profit model is unique compared to other global hubs. While Chinese airports are driven by Fragrances & Cosmetics (61%), Indian airports rely almost exclusively on Alcohol (58%) to balance their books and cross-subsidize cheaper flight tickets for passengers.
“Airports are turning into high-margin consumption businesses… the regulated side of India’s metro airports is becoming the base business, with the real showstopper being retail.” — JM Financial Report, Feb 2026.
