The ratings agency ICRA stated Thursday that Indian airport operators should anticipate see 18–20% year-over-year (y-o-y) increase in their topline this fiscal year, driven by tariff hikes, a ramp-up in non-aeronautical income, and a sustained improvement in passenger traffic.
Domestic traffic increased by 9% while overseas traffic increased by 11% in FY25. New investments will also boost the boom. ICRA projects that over the next four to five years, the airport industry will draw in Rs 1 lakh crore in investment.
The rating agency predicts that, following a projected 10% increase in the recently ended fiscal year, total air passenger traffic will expand at a solid 7-9% year-over-year to reach 440-450 million in FY26. ICRA estimates that 412-415 million passengers will travel domestically and internationally in FY25.
According to the statement, the projection is predicated on a sample of airports, including those run and administered by the Airports Authority of India (AAI) and the public-private partnership (PPP) model-operating Delhi, Bangalore, Hyderabad, and Cochin International Airports.
According to the report, these anticipated investments will also be used for airport upgrades under the AAI and brownfield expansions, such as those at Bangalore, Hyderabad, Cochin, Mumbai, and Nagpur.
However, it stated that the industry will continue to witness significant capital expenditures because of the capacity constraints that certain airports are facing. Over the next four to five years, more than Rs 1 lakh crore is anticipated to be invested, including in greenfield airports.
The airport industry will benefit from increased international traffic, which is predicted to rise faster than domestic traffic due to robust international travel and better access to new locations.
“The rise of international traffic continues to surpass that of local traffic… With a predicted y-o-y increase of 7–11% and 6-8% in domestic and foreign traffic, respectively, the growth momentum is probably going to continue in FY2026 as well, according to Vinay Kumar G, sector head, of corporate ratings, ICRA.
Improved air connectivity to tier II cities and popular tourist destinations, a steady increase in domestic leisure and business travel, and improved connectivity to new destinations all contributed to the sustained healthy growth momentum, the report stated.
Even if the commercialization of capital expenditure programs at some of the major airports will result in higher interest costs and loan repayments, the healthy profitability margins and debt coverage metrics should remain comfortable in FY26.
