Air passenger traffic to grow at a CAGR of 9% over FY25-FY27: CareEdge Ratings
Apr 01, 2025
New Delhi [India], April 1 : Air passenger traffic is expected to grow at a compounded annual growth rate (CAGR) of 9 per cent over FY25- FY27, reaching approximately 485 million by FY27 says a report by CareEdge Ratings.
International air traffic growth is expected to outpace domestic traffic growth during the same period, supported by the addition of wide-body aircraft fleets for the domestic carriers from FY26 onwards.
The report is based on the financial performance of 11 major private airports of India, considering their past and future passenger traffic and capex for the next five years.
Between FY21 and the first nine months of FY25, India's airport operators, including the Airports Authority of India (AAI), have invested approximately Rs 80,000 crore in capex. Notably, 42 per cent of this investment was allocated to the development of greenfield airports across four locations.
Led by brown field expansions, a capex outlay of Rs 1.1 lakh crore is expected over FY26 and FY30.
Driven by tariff hikes and additional capacities, aero revenue is expected to grow at 42 per cent CAGR over FY24- FY27. While, non-aero revenue is projected to grow between 12-14 per cent CAGR over the same period.
The Indian aviation sector has experienced a V-shaped recovery, with passenger traffic reaching 1.10 times its pre-COVID levels in FY24.
While domestic air travel rebounded by FY23, international traffic recovery followed in FY24, exceeding pre-COVID levels by 1.04 times.
The increased air travel observed during the Mahakumbh festival in Q4 FY25 is likely to partially offset the low passenger growth for the remainder of FY25.
The report projects a total capital outlay increase of Rs 30,000 crore during FY26- FY30, reaching approximately Rs 1.1 lakh crore.
Notably, 18 per cent of the total capex is allocated for city-side development (CSD) and non-aeronautical developments, highlighting efforts to enhance commercial and ancillary infrastructure.
Meanwhile, domestic passenger traffic is expected to continue its steady upward trajectory, expanding from a high base. This growth will be primarily driven by the brownfield airport expansions, creating funding opportunities of Rs 75,000 crore.
Additionally, two greenfield airports, with a combined project cost of approximately Rs 25,000 crore, are expected to commence operations in the first half of FY26.
