Indian Airport Operators to Report Revenue Growth of 18-20% in FY2026: ICRA
ICRA projects the overall airport passenger traffic to witness healthy growth of around 7-9% YoY to reach new highs of 440-450 million in FY2026, after witnessing growth of ~10% to 412-415 million in FY2025. The revenues of ICRA’s sample set are likely to grow by around 18-20% YoY in FY2026. The sector’s debt coverage metrics are projected to remain comfortable with interest cover above 5 times and DSCR at above 3.5 times in FY2026.
FY2025 saw an 11% expansion in international traffic and a 9% rise in domestic traffic. The continued healthy growth momentum was driven by a steady increase in international travel amid improving connectivity to newer destinations, continued uptick in leisure and business travel in the domestic segment, along with improvement in air connectivity to tier II cities/ key tourist destinations.
Giving more insights, Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, said, “International traffic continues to outpace domestic traffic growth, driven by healthy international tourism activity, along with improved connectivity to newer destinations. The growth momentum is likely to sustain in FY2026 as well, with expected YoY growth of 7-11% and 6-8% in international and domestic traffic, respectively. The healthy rise in international traffic will augur well for the airport sector, given that it is relatively more remunerative than domestic traffic. The revenues of ICRA’s sample set companies are likely to grow by a robust 18-20% YoY in FY2026, driven by the sustained improvement in both passenger traffic, increase in tariffs at Delhi, Bangalore and Hyderabad airports and ramp-up in non-aeronautical revenues.”
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 (Jewar (Noida), Navi Mumbai, Bhogapuram, Parandur (Chennai)), brownfield expansions (Bangalore, Hyderabad, Cochin, Mumbai and Nagpur) and upgradation of airports under the Airports Authority of India (AAI).
Commenting on the airport operators’ performance, Kumar said, “With healthy profitability margins, the debt coverage metrics are expected to remain comfortable at in FY2026, despite higher interest outgo and debt repayments with the commercialisation of the capex programme at some of the key airports. The credit profile of airport operators is projected to remain stable, supported by healthy accruals and comfortable liquidity.”
