Key Points

The rating agency asserted that this will be driven by capacity expansion due to substantial increase in terminal utilisation levels.

Capital expenditure, or capex, is used to set up long-term physical or fixed assets.

On the other hand, capex at large private airports - remaining half of the overall upcoming private airport capex - will see a decline during the same period as much of the capacity expansion has been completed or is nearing completion.

Net-net, the overall capex of private airports will slightly slow down by 10-15 per cent to Rs 40,000 crore over the next three years.

Crisil Ratings said it has analysed 11 operating private airports and two soon-to-be-operational private airports, which account for more than 95 per cent of India's private airport passenger traffic.

Ankit Haku, Director, Crisil Ratings said small private airports are expected to embark on a significant expansion of up to 1.5 times their current base by fiscal 2028.

"This is in response to escalating travel demand and moderate capacity on the ground," Haku said.

Strong demand, leading to recovery of air traffic movement, has yielded a remarkable compound annual growth rate (CAGR) of 45 per cent in passenger traffic at small private airports between fiscal years 2022 and 2025.

In contrast, large private airports are expected to see a significant reduction in capacity addition following substantial expansion over the past three years, which has absorbed high traffic growth and kept terminal utilisation stable at 80-85 per cent.

"While capex intensity for small private airports will rise to over 2 times, project risk will be manageable since these are expansions of existing sole airports in their respective cities," said Gauri Gupta, Team Leader, Crisil Ratings.

- ANI