India's Airport Passenger Traffic to Hit 450 Million in FY26: ICRA ICRA estimates that over INR 1,00,000 crore will be spent over the next four to five years. This capital expenditure will be channeled into both new greenfield projects such as the Jewar (Noida), Navi Mumbai, Bhogapuram, and Parandur (Chennai) airports.

India's airport sector is poised for a fresh record in FY26, driven by strong momentum in both international and domestic air travel. As per a new report by ICRA, overall passenger traffic is projected to grow by 7-9 per cent year-on-year (YoY), reaching an all-time high of 440–450 million passengers. This follows a 10 per cent growth in FY25, which saw traffic rise to an estimated 412–415 million.

The surge reflects a broader revival in air travel, powered by improving connectivity, rising demand from leisure and business travelers, and ongoing investment in airport infrastructure. FY25 saw international traffic climb by 11 per cent, outpacing the 9 per cent increase in domestic travel. That trend is set to continue, according to Vinay Kumar G, sector head, corporate ratings at ICRA, who noted that international traffic continues to lead the way.

"International traffic continues to outpace domestic traffic growth, driven by healthy international tourism activity, along with improved connectivity to newer destinations," said Kumar. "The growth momentum is likely to sustain in FY26 as well, with expected YoY growth of 7-11 per cent and 6-8 per cent in international and domestic traffic, respectively."

Kumar emphasized that the rise in international traffic is particularly significant for airport operators, given that international flights are typically more profitable than domestic routes. This is due to higher per-passenger revenue from aeronautical and non-aeronautical sources such as retail, food and beverage, and duty-free sales.

Revenue growth is set to follow suit. ICRA's sample set of major airport operators is projected to post a robust 18-20 per cent increase in revenue in FY26, buoyed by the upswing in passenger traffic and a hike in tariffs at key airports including Delhi, Bangalore, and Hyderabad. The ramp-up in non-aeronautical revenue streams is also expected to play a pivotal role in driving overall growth.

Behind the scenes, India's airport infrastructure is undergoing significant transformation to keep pace with rising demand. Capacity constraints at major hubs are prompting massive investments. ICRA estimates that over INR 1,00,000 crore will be spent over the next four to five years. This capital expenditure will be channeled into both new greenfield projects such as the Jewar (Noida), Navi Mumbai, Bhogapuram, and Parandur (Chennai) airports. This also includes the expansion or modernization of existing ones in Bangalore, Hyderabad, Cochin, Mumbai, and Nagpur. Upgrades are also underway at several Airports Authority of India (AAI) operated sites.

While heavy capex often raises questions about financial stress, ICRA's outlook for the sector remains reassuring. In FY2026, key debt coverage metrics such as interest coverage and debt service coverage ratio (DSCR) are projected to stay strong—above 5 times and 3.5 times, respectively.

"With healthy profitability margins, the debt coverage metrics are expected to remain comfortable in FY2026, despite higher interest outgo and debt repayments with the commercialisation of the capex programme at some of the key airports," Kumar explained. "The credit profile of airport operators is projected to remain stable, supported by healthy accruals and comfortable liquidity."