Airport Capex to Grow 12% to Rs 600 Billion by FY27: CRISIL
AVIATION & AIRPORTS

Airport Capex to Grow 12% to Rs 600 Billion by FY27: CRISIL

The cumulative capital expenditure (capex) of Indian airports is projected to rise by 12% to Rs 600 billion by FY27, compared to Rs 530 billion during 2022-24, according to a CRISIL Ratings report. This investment aims to enhance infrastructure to accommodate 65 million additional passengers annually, with 70% of the funding expected to come from debt. The projections are based on a study of 11 private airports, which handled 60% of India’s passenger traffic in FY24. CRISIL anticipates an average annual revenue growth rate of 17% for private airports from FY25 to FY27, driven by increased passenger traffic, higher tariffs, and spending within the airport ecosystem. Passenger volumes are expected to grow at a compound annual growth rate (CAGR) of 8-9% over FY25-27, up from 376 million in FY24. Growth in domestic traffic, accounting for over 80% of the total, will be fuelled by rising demand in business and leisure travel, along with government initiatives to expand air travel penetration. The government’s regional connectivity UDAN scheme, which has operationalised 84 airports and 579 routes as of July 2024, contributes approximately 2% of domestic air traffic. While this is a small share, these routes provide essential feeder traffic to metro airports. International traffic is also expected to rise, supported by increased business travel, relaxed visa policies, and expanded airline routes. To meet the growing demand, airport operators are investing in terminal expansions, new runways, and non-aeronautical facilities such as lounges, retail spaces, and parking, which will further boost revenues. CRISIL highlights that despite 70% of the capex being debt-funded, private airports will maintain strong credit profiles due to robust revenue growth projections. "The revenue growth will stem from rising passenger volumes, regulated tariff hikes, and increased non-aeronautical revenues," said Ankit Hakhu, Director at CRISIL Ratings. (ET)

The cumulative capital expenditure (capex) of Indian airports is projected to rise by 12% to Rs 600 billion by FY27, compared to Rs 530 billion during 2022-24, according to a CRISIL Ratings report. This investment aims to enhance infrastructure to accommodate 65 million additional passengers annually, with 70% of the funding expected to come from debt. The projections are based on a study of 11 private airports, which handled 60% of India’s passenger traffic in FY24. CRISIL anticipates an average annual revenue growth rate of 17% for private airports from FY25 to FY27, driven by increased passenger traffic, higher tariffs, and spending within the airport ecosystem. Passenger volumes are expected to grow at a compound annual growth rate (CAGR) of 8-9% over FY25-27, up from 376 million in FY24. Growth in domestic traffic, accounting for over 80% of the total, will be fuelled by rising demand in business and leisure travel, along with government initiatives to expand air travel penetration. The government’s regional connectivity UDAN scheme, which has operationalised 84 airports and 579 routes as of July 2024, contributes approximately 2% of domestic air traffic. While this is a small share, these routes provide essential feeder traffic to metro airports. International traffic is also expected to rise, supported by increased business travel, relaxed visa policies, and expanded airline routes. To meet the growing demand, airport operators are investing in terminal expansions, new runways, and non-aeronautical facilities such as lounges, retail spaces, and parking, which will further boost revenues. CRISIL highlights that despite 70% of the capex being debt-funded, private airports will maintain strong credit profiles due to robust revenue growth projections. The revenue growth will stem from rising passenger volumes, regulated tariff hikes, and increased non-aeronautical revenues, said Ankit Hakhu, Director at CRISIL Ratings. (ET)

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?