Airport operators to report revenue growth of 18-20% in FY26: ICRA

Airport passenger traffic in India is expected to witness healthy growth of around 7-9% year-on-year to hit new highs of 440-450 million in FY26, after witnessing growth of around 10% to 412-415 million in FY25, according to rating agency ICRA.

The growth momentum is likely to sustain in FY26 as well, with expected year-on-year growth of 7-11% and 6-8% in international and domestic traffic, respectively, the rating agency forecasts.

International traffic continues to outpace domestic traffic growth, driven by healthy international tourism activity, along with improved connectivity to newer destinations, said Vinay Kumar G, Sector Head, Corporate Ratings, ICRA.

“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 FY26, 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,” said Kumar.

Given the capacity bottleneck faced by a few airports, the sector will continue to witness substantial capex. Investments of more than ₹1 lakh 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).

“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,” said Kumar.

The sector’s debt coverage metrics are projected to remain comfortable with interest cover above 5 times and debt service coverage ratio (DSCR) at above 3.5 times in FY2026.