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)

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code