Cumulative capex of airports to grow 12% at US$ 7.07 billion (Rs. 60,000 crore) in three years: Report
- IBEF
- December 13, 2024
Indian airports' cumulative capital expenditure (capex) is expected to rise by 12% to US$ 7.07 billion (Rs. 60,000 crore) over the three years through FY27, up from US$ 6.24 billion (Rs. 53,000 crore) during 2022-24. This investment will support the addition of infrastructure for around 65 million passengers annually, according to rating agency CRISIL. Around 70% of the capex will be financed through debt. CRISIL’s projections are based on a study of 11 private airports, which account for 60% of the total passenger traffic in FY24. With the anticipated growth in passenger traffic, the revenue of private Indian airports is expected to grow at an average rate of 17% between FY25 and FY27, driven by tariff increases and increased spending within the airport ecosystem.
The number of passengers is expected to grow at a compounded annual growth rate (CAGR) of 8-9% between FY25 and FY27, building on the 376 million passengers recorded in FY23. Domestic traffic, which comprises over 80% of total volume, will benefit from rising demand in business and leisure segments, alongside government initiatives to expand air travel penetration. The operationalisation of 84 airports and 579 routes under the regional connectivity UDAN (Ude Desh ka Aam Naagrik) scheme is expected to boost regional traffic further, contributing additional feeder traffic to major airports. Airports are investing in infrastructure such as terminal buildings, runways, and non-aeronautical facilities like lounges, parking, food and beverage spaces, and retail outlets to cater to this growth and enhance revenue streams. Despite the significant debt funding, the credit profiles of private airports are expected to remain strong due to the projected revenue growth.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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