DELHI– India’s airport sector will receive investments exceeding Rs 1 lakh crore over the next four to five years, according to a new report by rating agency ICRA (Investment Information and Credit Rating Agency of India Limited)
These substantial investments aim to address capacity constraints at multiple airports across the country. The funds will support both new airport construction and the expansion of existing facilities.
Photo: Noida International AirportIndia’s Airport Sector Boom
The investment will flow into several major airport projects nationwide. New greenfield airports are under development in Jewar (Noida) (DXN), Navi Mumbai (NMI), Bhogapuram (VIZ), and Parandur (Chennai).
Simultaneously, existing airports in Bangalore (BLR), Hyderabad (HYD), Cochin (COK), Mumbai (BOM), and Nagpur (NAG) will undergo significant brownfield expansions. The Airports Authority of India (AAI) will also upgrade numerous airports under its management.
“Given the capacity bottleneck faced by a few airports, the sector will continue to witness substantial capex. Investments of more than Rs. 1,00,000 crore are expected over the next 4-5 years, including greenfield airports.”
ICRA Reports
Passenger traffic through Indian airports will continue its strong upward trajectory. ICRA forecasts 7-9 percent year-on-year growth, with total passenger numbers reaching 440-450 million by FY2026. This follows an estimated 10 percent growth in FY2025 when passenger traffic is projected to hit 412-415 million.
Photo: HOKRevenue Increase Expected
Airports tracked in ICRA’s sample set will likely see significant revenue growth. The report projects an 18-20 percent year-on-year increase in FY2026, demonstrating the sector’s expanding financial strength.
Despite the massive capital expenditure planned, the sector’s financial position remains robust. Debt coverage metrics show positive indicators, with the interest coverage ratio expected to stay above 5 times and the Debt Service Coverage Ratio (DSCR) above 3.5 times in FY2026.
ICRA emphasized this financial stability, noting: “The sector’s debt coverage metrics are projected to remain comfortable with interest cover above 5 times.”
Photo: Sandeep PilaniaRecent Traffic Trends
In FY2025, international passenger traffic grew by 11 percent, while domestic travel increased by 9 percent. This growth stems from several factors: improved connectivity to new destinations, increased international travel demand, and continued expansion in domestic leisure and business travel.
Enhanced air links to tier II cities and popular tourist destinations have further strengthened this positive trend.
The substantial investment plans reflect confidence in India’s aviation sector, which continues to expand despite global economic challenges. These developments position India’s airport infrastructure for significant modernization and capacity enhancement in the coming years.
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