en.Wedoany.com Reported - A recent report released by Brickwork Ratings indicates that India's airport infrastructure sector is expected to attract a total investment of nearly INR 4.2 trillion (approximately USD 46.7 billion) by 2029. Of this, projects announced or under development as of FY2026 account for approximately INR 3.7 trillion, with an additional estimated INR 0.5 trillion in projects expected to become operational by 2029.
The report notes that the sector is experiencing one of its most significant expansion phases, driven by growing passenger demand, regional airport development, and large-scale terminal upgrades. Over 65 airport projects have been announced, expected to add 500 to 600 million passengers in capacity. Aviation infrastructure will play a key role in supporting India's long-term economic growth.
Niraj Rathi, Senior Rating Director at Brickwork Ratings, stated that domestic air passenger traffic is expected to grow by 8% to 10%, supported by strong demand in tier-2 cities and the operational launch of major greenfield airports such as Navi Mumbai and Jewar. Although international passenger traffic remains subdued due to geopolitical tensions, route restrictions, and high fuel prices, the agency expects a recovery in the second half of FY2027 as airlines expand flight schedules during the winter travel season and new airport assets become fully operational.
The report shows that airport operators recorded strong operating revenue growth in FY2026, driven by record passenger traffic and tariff adjustments. This growth momentum is expected to continue into FY2027 as expanded terminal capacities begin to generate more aeronautical and non-aeronautical revenue. Operating margins are projected to improve from 44.4% in FY2025 to 53.8% in FY2026, and further to 54.5% in FY2027, supported by higher retail income and increased passenger throughput.
Brickwork Ratings also noted an improvement in the sector's financial position. The industry's debt-to-equity ratio is expected to decline from 3.8 in FY2025 to 3.3 in FY2026, and further to 2.7 in FY2027, as airport operators use growing cash flows to repay construction-related borrowings. The agency believes that despite significant capital expenditure commitments, the deleveraging process, combined with predictable passenger-linked revenue, provides a stable credit outlook for the sector.
Government initiatives are laying the foundation for future growth. The UDAN regional connectivity scheme plans to invest INR 288 billion in capital expenditure by FY2036, and the government's policy allowing 100% foreign direct investment in greenfield airport projects is expected to accelerate airport development nationwide.
The report also highlights several challenges. The sector's persistent consolidated net losses, volatility in aviation turbine fuel prices, high maintenance costs, and lengthy regulatory approval processes for tariff adjustments continue to impact profitability. Despite healthy passenger growth, these factors may affect the pace of investment returns.
