India’s Plans for Airport Expansion - India Report

15.10.2024 - 03:29 / skift.com / Jyotiraditya Scindia / Bulbul Dhawan

The Indian government is planning to invest INR 920 billion ($11 billion) in airport infrastructure. This fund will be used for construction of new airports and expansion of existing ones, India’s civil aviation minister Kinjarapu Rammohan Naidu said. 

The aim is to reach 200 operational airports by 2025, with another 200 airports being added over the course of the next two decades. At present, India has 157 airports. The minister said that the focus was on creating “world-class” facilities at the airport to ensure that air travel becomes more accessible to the common man. 

This has come amid a surge in the aviation sector in India. Naidu said that airlines increased their capacity by about 9% this year, totaling 240 million seats across domestic and international markets. Earlier this year, data from aviation analytics firm OAG showed that India is the third-largest domestic aviation market as its domestic airline capacity increased from 8 million in April 2014 to 15.6 million this year.

India’s domestic air passenger traffic is expected to reach 300 million by 2030. 

Surge in Fleets: The investment to upgrade airport infrastructure is a part of India’s overall expanding aviation market. The increasing demand has led to domestic airlines increasing their fleet size. Last year, former civil aviation minister Jyotiraditya Scindia had said that the fleet size of airlines increased from less than 400 in 2014 to about 700 by July 2023: a 75% increase in 9 years.

He had further projected this number to increase to about 1,200-1,400 by 2030. The airport infrastructure is being developed alongside to increase airport capacity accordingly. 

The industry is likely poised to support this expansion. Credit ratings agency ICRA has maintained a stable outlook on airport infrastructure. It added that airport operators are likely to see revenue growth of 12-14% in the 2025 fiscal year. 

“Sustained improvement in both domestic and international passenger traffic, increase in tariffs at some of the major airports and ramp-up in non-aeronautical revenues” are expected to support this growth, said Vinay Kumar G, Vice President & Sector Head – Corporate Ratings, ICRA.

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