The overall airport passenger traffic is expected to witness healthy year-on-year (YoY) growth of around 7-9% to reach new highs of 440-450 million in FY26, after witnessing growth of 10% to 412-415 million in FY25, according to ICRA.

The revenues of ICRA’s sample set are likely to grow by around 18-20% YoY in FY26. The sector’s debt coverage metrics are projected to remain comfortable with interest cover above 5 times and debt service coverage ratio above 3.5 times in FY26.

FY25 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.

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 FY26 as well, with expected YoY growth of 7-11% and 6-8% in international and domestic traffic, respectively.”

He further said that 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, Bengaluru 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 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).

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.”