Four years after the Covid-19 pandemic upended businesses, the airport industry is expected to grow 30% in the financial year ending March 31, 2025, signaling strong economic growth in the country. This growth rate is calculated based on Crisil Ratings’ study of the 10 top private airports. The study predicts that the country’s passenger traffic will increase by 10% over the previous financial year.
About two-thirds of airport revenue growth is expected to come from aviation sources, such as infrastructure usage fees charged to passengers, airlines and cargo operators. Strong growth in this segment indicates that people will travel more by air for both personal and professional reasons. Since air travel is linked to economic growth, growth in airport sector revenue will reflect the country’s macroeconomic indicators.
Research from Crisil Ratings also predicts a 15% growth in revenue from non-aeronautical sources, including advertising, retail, lounge and duty-free sales. This means people have more residual income to spend on non-essential items, which can often be purchased at the airport. These expenditures have been growing steadily as travelers continue to spend more on retail, restaurants, real estate rentals and advertising.
With air travel still not an affordable option for all classes in the country, any growth in the industry points to rising incomes for the upper-middle class and wealthy. This further means that the high-end market, which is attracting more investment from foreign investors, is on a healthy upward trajectory. As a result, India can attract more foreign exchange and more high-quality global products, and the country will continue to remain a bright spot in the turbulent global economy.
