Indian airport sector set for 18–20% revenue growth in FY2026: ICRA, BA

India’s airport sector is on course to record strong revenue growth of 18–20 per cent in FY2026, driven by increasing passenger volumes and higher aeronautical and non-aeronautical revenues, according to credit rating agency ICRA. Overall airport passenger traffic is expected to rise by 7–9 per cent year-on-year, reaching a new high of 440–450 million in FY2026, up from an estimated 412–415 million in FY2025.

International travel continues to outpace domestic growth. FY2025 saw international passenger numbers expand by 11 per cent, while domestic traffic rose by 9 per cent. This trend is expected to continue in FY2026, with projected growth of 7–11 per cent in international traffic and 6–8 per cent in domestic travel.

Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, noted: “International traffic continues to outpace domestic traffic growth, driven by healthy international tourism activity, along with improved connectivity to newer destinations. The healthy rise in international traffic will augur well for the airport sector, given that it is relatively more remunerative than domestic traffic.”

He added that revenue growth would be further supported by increased tariffs at major airports including Delhi, Bangalore, and Hyderabad, alongside improvements in non-aeronautical income.

Despite rising capital expenditure, the sector’s debt coverage is expected to remain comfortable, with interest coverage projected above five times and DSCR above 3.5 times in FY2026. Over INR1 lakh crore in investment is anticipated in the coming years, including in greenfield projects like Noida, Navi Mumbai, and Parandur, and expansions at existing airports.

“The credit profile of airport operators is projected to remain stable, supported by healthy accruals and comfortable liquidity,” Kumar said.