India’s airport sector is set for a major boost, with capital expenditure (capex) of more than Rs 1 lakh crore expected over the next 4 to 5 years, said a report by rating agency ICRA. According to the report, the sector will continue to see substantial investments due to capacity bottlenecks at several airports. The projected investments will go into developing Greenfield airports and expanding existing ones.

“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,” read the report.

Greenfield projects include upcoming airports in Jewar (Noida), Navi Mumbai, Bhogapuram, and Parandur (Chennai). Meanwhile, brownfield expansions are planned at key airports such as Bangalore, Hyderabad, Cochin, Mumbai, and Nagpur. Additionally, several airports under the Airports Authority of India (AAI) will also undergo enhancement.

What Else For Airport Sector?

The report has also predicted that airport passenger traffic in India will witness healthy growth in the coming years. Passenger traffic is expected to rise by around 7-9% year-on-year to reach 440-450 million in FY2026.

This follows an estimated 10% growth in FY2025, taking total passenger traffic to 412-415 million. The revenue of the sample set of airports tracked by ICRA is also likely to grow significantly–by about 18-20% year-on-year in FY2026.

Despite the ongoing investments, the sector’s financial health is expected to remain strong. Debt coverage metrics are projected to stay comfortable, with an interest coverage ratio above 5 times and a debt service coverage ratio (DSCR) above 3.5 times in FY2026.

ICRA said, “The sector’s debt coverage metrics are projected to remain comfortable with interest cover above 5 times.”

In FY2025, international passenger traffic grew by 11%, while domestic traffic saw a 9% increase. This growth was supported by improved connectivity to new destinations, an increase in international travel, and a continued rise in domestic leisure and business travel. Better air links to tier II cities and key tourist destinations also contributed to the momentum.