India's airport infra likely to attract investments of up to Rs 4.2 lakh crore by 2029
New Delhi, June 29
India's airport infrastructure sector is expected to garner investments of up to Rs 4.2 lakh crore by 2029, a report said on Monday.
The estimation includes Rs 3.7 lakh crore based on the value of projects announced and under implementation as of FY26 and project value likely to be commissioned by 2029 at nearly Rs 0.5 lakh crore, the report from Brickwork Ratings.
After robust operating revenue growth in FY26 over record passenger traffic and tariff hikes, the revenue growth in FY27 is expected to remain strong driven by domestic air traffic growth and footprint expansion.
The sector navigated an intensive capacity expansion phase in FY26, with regional airport development and terminal upgrades accelerating to absorb a structural surge in domestic travel.
"Air traffic is expected to grow by 8-10 per cent driven by resilient domestic demand, expanding Tier-2 footprints and the launch of new greenfield assets including Navi Mumbai and Jewar airports," said Niraj Rathi, Senior Director - Ratings, Brickwork Ratings. These factors cushion a highly subdued international segment, he added.
International growth has flattened due to route restrictions, rising fuel prices, and the Middle East conflict. The Middle East constitutes a massive 38-40 per cent share of India's entire international passenger traffic and instability in the region will have a major impact on the sector.
"These combined headwinds will likely maintain growth in H1FY27 flat and subdued, but a sharp capacity and demand recovery could occur in H2FY27 as airlines adjust schedules for peak winter travel and new airport assets scale up," Rathi said.
The report said the credit outlook for the airport infrastructure sector is stable. Heavy spending on terminal expansions pressures near-term cash flows, but steady growth in passenger traffic keeps the industry moving forward safely.
Operating margins for FY26 surged to an estimated 53.8 per cent, up from 44.4 per cent in prior year due to completion of new terminals.
Margins are projected to improve to 54.5 per cent in FY27 as these expanded facilities open up, allowing operators to collect high-margin retail fees and airport charges from a larger volume of passengers.
Tailwinds for the sector include UDAN initiative with a capital outlay of Rs 288 billion by FY36, and the 100 per cent FDI being permitted in greenfield airport development projects.
— IANS
Reader Comments
4.2 lakh crore is huge money. But hope they don't just build fancy terminals and forget about basic things like parking, clean washrooms and proper signage. Travel experience at Indian airports is improving but still has a long way to go.
Interesting. As someone who frequently flies between Mumbai and London, I've noticed the Middle East disruption first-hand. Transit through Dubai or Doha is getting expensive. Maybe direct long-haul routes from new airports like Navi Mumbai could be a game-changer.
Great news! Remember when we used to have just one international airport in Mumbai? Now look at us. But seriously, Jewar airport should be operational soon - Delhi's IGI is bursting at seams. Hope the government keeps the momentum going without getting into typical Indian delays.
53.8% margins sound impressive but who's paying for it? The airstrip development fee and other charges keep going up. As a frequent flyer, I feel the pinch. Still, better infrastructure is welcome if it means less delays and better experience. Just hope ticket prices don't skyrocket.
Middle East situation is scary - 38-40% of our international traffic goes there? We need to diversify routes. India should push for more direct flights to Europe and Africa. Also, why is international growth flat? Feels like we're missing an opportunity here.
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