Indian airports to incur capex of ₹60,000 crore from FY25-27: CRISIL

Passenger growth to clock CAGR of 8-9% during this period

Indian airports will incur a cumulative capital expenditure of over ₹60,000 crore in the three years between financial year 2025 to 2027 up nearly 12% compared with ₹53,000 crore during fiscals 2022-2024, says CRISIL.

In addition to expected growth in passenger traffic, increase in tariffs and spending within the airport ecosystem will lift revenue of private Indian airports at an average growth rate of 17% between fiscals 2025 and 2027.

The projections are based on a CRISIL Ratings study of 11 private airports, which accounted for an estimated 60% of overall passenger traffic in fiscal 2024.

“The number of passengers at Indian airports is expected to clock a CAGR of 8-9% over fiscals 2025-2027 from 376 million last fiscal. Growth in domestic traffic, which comprises over 80% of overall volume, will ride on rising demand from the business and leisure segments and government push to increase penetration of air travel,” said Manish Gupta, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings.

The 84 airports redeveloped under the government’s regional connectivity scheme UDAN has contributed to 2% of domestic air traffic and provided feeder traffic to metro airports.

International traffic will also grow, driven by increased business travel, easing visa requirements, and improving connectivity with airlines adding new routes.

“Although ~70% of capex is expected to be funded by debt, the credit profiles of private airports will remain strong over fiscals 2025-27 due to an average projected increase of 17% in revenue of airports in the CRISIL Ratings study. Revenue growth will be driven by rising passenger traffic, a regulated increase in aeronautical tariffs and an increase in non-aeronautical revenue,” said Ankit Hakhu, Director, CRISIL Ratings.

Published - December 12, 2024 08:43 pm IST