Passenger traffic at Indian airports to grow at 7% CAGR over FY25 to FY27: CareEdge Ratings
According to CareEdge Ratings, the outlook for airports in India remains positive, albeit with some near-term moderation. Passenger traffic at Indian airports is projected to grow at a CAGR of 7% over FY25–FY27, normalizing from the earlier pre-COVID estimates of ~9%. Slight moderation in growth is expected due to the delayed delivery of wide-bodied aircrafts, heightened global safety concerns, and lingering geo-political disruptions.
CareEdge Ratings notes that despite near-term headwinds, the long-term growth outlook remains robust, owing to favorable demographics, conducive regulations, rising non-aero revenues per passenger, and increasing airport city-side development. It expects passenger traffic to expand from 412 million in FY25 to ~470 million by FY27.
India is the third largest aviation market after USA and China, and Indian Airports continue to handle steady share of global traffic. This underscores the structural demand potential that will continue to drive investments in capacity expansion and modernization of airport infrastructure.
CareEdge Ratings believes that long term growth prospects remain intact for Indian airport sector. A conducive regulatory environment continues to encourage private participation and long-term investments in infrastructure, while favourable demographics—marked by a young population, expanding middle class, and increasing propensity to travel—are driving sustained passenger growth. In addition, the rising trend of non-aeronautical revenue per passenger through retail, food and beverage, parking, and other commercial avenues is strengthening profitability and reducing dependence on aero charges. Further, city-side development has emerged as a key potential, with opportunities in real estate, hospitality, logistics, and commercial spaces transforming airports into integrated urban hubs and unlocking significant long-term value.
Rajashree Murkute, Senior Director, CareEdge Ratings said " The aviation sector in India is currently experiencing a transformative phase, fuelled by its status as home to the world's fastest-growing air passenger markets. The strategic investments in airport infrastructure, capacity expansion, and rising private participation are set to drive the next phase of infra growth. “We expect investments in key infra sector such as roads, ports, airports, and logistics are set to act as a multiplier for GDP and urbanization, renewable energy, backed by policy support and declining storage costs, will drive the next phase of capacity addition. Together, these sectors will not only fuel economic growth but also ensure resilience and sustainability in the years ahead.
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