RISING AIR TRAFFIC TO LIFT PVT AIRPORTS’ REVENUE BY 30% IN FY25

An expected increase of 10 per cent in passenger traffic on the high base of fiscal 2024, combined with capital expenditure (capex)linked tariff hikes and rising non-aeronautical revenue per passenger, can see the revenue of leading private airport operators go up by around 30 per cent this fiscal. The rising revenue will restore the cushion for debt servicing to around 1.4 times, taking it back to the level last seen before the Covid-19 pandemic. Airports had dipped into their cash reserve to service debt during this period, a CRISIL Ratings study of 10 private airports that accounted for an estimated 60 per cent of overall passenger traffic in fiscal 2024 indicates as much.

Ankit Hakhu, Director,

CRISIL Ratings, is of the view that from the strong base of last fiscal, passenger traffic growth will continue its momentum in fiscal 2025 and rise more than 10 per cent to over 415 million. Continuing economic growth, opening of more airports and improving regional connectivity are providing the tailwinds necessary for domestic traffic growth. On the international side, growing business travel and easing visa requirements to countries such as Malaysia and Vietnam, reducing wait times for visa applications to western Europe and improving connectivity to western and Southeast Asia are significant positives.

As passenger volume rises, airports will see an increase in both aeronautical and non-aeronautical revenue. Aeronautical sources include fees collected from passengers, airlines and cargo operators for use of infrastructure.