Induced passenger traffic growth at Indian airports projected at 7% Compound Annual Growth Rate (CAGR) spanning 2024-2025 through 2026-2027, according to CareEdge

Induced passenger traffic growth at Indian airports projected at 7% Compound Annual Growth Rate (CAGR) spanning 2024-2025 through 2026-2027, according to CareEdge

The Indian airport sector is poised for growth and transformation, driven by strategic investments in key infrastructure sectors and a conducive regulatory environment.

According to Rajashree Murkute, Senior Director of CareEdge Ratings, the Indian aviation sector is undergoing a transformative phase. Murkute expects investments in sectors such as roads, ports, airports, and logistics to act as a multiplier for GDP and urbanization.

Favourable demographics, characterized by a young population, an expanding middle class, and an increasing propensity to travel, are driving sustained passenger growth in India. This underscores the structural demand potential that will continue to drive investments in capacity expansion and modernisation of airport infrastructure.

The Indian aviation sector, being home to the world's fastest-growing air passenger markets, is a significant driver of these investments. Indian airports continue to handle a steady share of global traffic, making India the third-largest aviation market after the US and China.

CareEdge Ratings projects a growth rate of 7% for passenger traffic at Indian airports over 2024-25 to 2026-27. While this growth rate is a slight moderation from the earlier pre-COVID estimates of 9%, the long-term growth prospects for the Indian airport sector remain intact, according to CareEdge Ratings.

The Zurich Airport company has announced a long-term investment in the Noida Airport project in India, committing 111 million Swiss francs in 2024 to a total budget of 750 million Swiss francs. This investment aims at expanding capacity and modernizing infrastructure with a 40-year concession.

The outlook for airports in India remains positive, with some near-term moderation, according to CareEdge Ratings. The rising trend of non-aeronautical revenue per passenger is strengthening profitability and reducing dependence on aero charges.

City-side development presents a key opportunity for real estate, hospitality, logistics, and commercial spaces, transforming airports into integrated urban hubs. Renewable energy, backed by policy support and declining storage costs, will drive the next phase of capacity addition.

CareEdge Ratings expects passenger traffic to expand from 412 million in 2024-25 to 470 million by 2026-27. The strategic investments in airport infrastructure, capacity expansion, and private participation are expected to drive the next phase of infrastructure growth.

Policy support continues to encourage private participation and long-term investments in infrastructure, contributing to the Indian airport sector's long-term growth prospects. Together, these sectors are expected to fuel economic growth and ensure resilience and sustainability in the years ahead.