India’s Airport Sector May Attract ₹4.2 Lakh Crore Investment By 2029: Report

India’s airport infrastructure sector will likely attract investments of up to Rs 4.2 lakh crore by 2029, driven by rising passenger traffic, airport expansion and new greenfield projects, according to a Brickwork Ratings report released on Monday.

The report said the estimate includes around Rs 3.7 lakh crore worth of announced and ongoing projects expected to be implemented by FY2026, along with an additional Rs 50,000 crore in new projects likely to commence by 2029.

According to the report, the airport sector recorded strong operating revenue growth in FY2026 due to record passenger traffic and higher airport tariffs.

Revenue will likely remain robust in FY2027, supported by sustained domestic air travel demand and expansion of the airport network.

Brickwork Ratings Senior Director (Ratings) Neeraj Rathi said domestic passenger traffic is likely to grow by 8-10 per cent, aided by strong demand, expansion of airport infrastructure in Tier-2 cities and the commissioning of greenfield airports such as Navi Mumbai and Jewar. He noted that these factors would largely offset the slowdown in international air travel.

The report attributed slower international passenger growth to flight restrictions, higher fuel prices and geopolitical tensions in West Asia, which accounts for 38-40 per cent of India’s international passenger traffic.

While these challenges may limit growth in the first half of FY2027, Rathi said demand will likely recover in the second half with the launch of new winter flight schedules and full-scale operations at new airports.

The report maintained a stable credit outlook for the sector, projecting operating margins to improve from 44.4 per cent in FY2025 to 53.8 per cent in FY2026 and 54.5 per cent in FY2027. It also highlighted government support through the UDAN scheme and 100 per cent FDI in greenfield airport projects as key growth drivers.