To see Rs 60,000 cr investments
in three years, predicts report
The report highlights that approximately 70 per cent of the projected capex will be financed through debt, underlining the critical role of external funding in driving aviation infrastructure expansion. The analysis is based on 11 private airports, which handled 60 per cent of the total passenger traffic in FY24.
The cumulative capital expenditure (capex) of Indian airports is projected to rise by 12 per cent to Rs 60,000 crore over the next three years, from Rs 53,000 crore during 2022-2024, according to a report by Crisil Ratings, published in FE Online. This investment will be for enhancing infrastructure to accommodate an additional 65 million passengers annually by FY27.
The report highlights that approximately 70 per cent of the projected capex will be financed through debt, underlining the critical role of external funding in driving aviation infrastructure expansion. The analysis is based on 11 private airports, which handled 60 per cent of the total passenger traffic in FY24.
The number of passengers at Indian airports is expected to grow at a compound annual growth rate (CAGR) of 8-9 per cent between FY25 and FY27, up from 376 million passengers in FY24. This growth will be driven by:
- Domestic traffic: Comprising over 80 per cent of the total volume, propelled by increased demand in business and leisure travel.
- International traffic: Boosted by growing business travel, improved visa policies, and expanded airline routes.
Revenue for private airports is forecast to grow at an average rate of 17 per cent during FY25-FY27, supported by increased tariffs, rising passenger numbers, and enhanced non-aeronautical revenue streams.
To meet rising demand, airport operators are focusing on infrastructure upgrades, including new terminal buildings and runways to accommodate higher passenger flow. Non-aeronautical developments such as lounges, parking spaces, retail outlets, and food and beverage services are also being expanded to increase revenue.
The Government’s Udan (Ude Desh ka Aam Nagrik) scheme has operationalised 84 airports and 579 routes as of July 2024. While these routes contribute just 2 per cent to domestic traffic, they are vital in generating feeder traffic for metro airports, boosting connectivity and regional growth.
Despite significant reliance on debt, private airports are expected to maintain strong credit profiles. CRISIL attributes this to:
- A predictable regulatory regime.
- Improved funding access.
- Revenue growth driven by rising passenger numbers, regulated tariff hikes, and increased non-aeronautical income.
“The projected capex and growth in passenger traffic signify robust prospects for Indian aviation,” said Manish Gupta, Senior Director at Crisil Ratings. This expansion underscores India’s push towards becoming a global aviation hub, with both regional and international traffic contributing to long-term growth.
