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Air passenger traffic seen growing up to 11% this fiscal
Passenger traffic in fiscal 2024 grew 15% year-on-year to 376.4 million, flying past the pre-Covid level
Air passenger traffic may grow by about 11% to 418 million this fiscal, backed by improving connectivity to newer destinations and a strong pick-up in leisure and business travel, rating agency ICRA Ltd projected.
Passenger traffic in fiscal 2024 grew 15% year-on-year to 376.4 million, surpassing the pre-Covid level by 10%.
ICRA considered data from the Airports Authority of India, Delhi, Hyderabad, and Cochin International airports for the report.
Vinay Kumar G., vice-president and sector head of corporate Ratings at ICRA, said, “The revenues of ICRA’s sample set are likely to grow by around 15-17% y-o-y in FY2025, driven by the sustained improvement in both domestic and international passenger traffic, increase in tariffs at some of the major airports and ramp-up in non-aeronautical revenues. “
He added that with healthy profitability margins, the debt coverage metrics are expected to remain comfortable despite higher interest outgo and debt repayments due to the commercialization of the capex program at some of the key airports.
The credit profile of airport operators is projected to remain strong, supported by healthy accruals and comfortable liquidity.
“While the global passenger traffic recovered to just 96% of the numbers in 2023,the Indian airport passenger traffic revived to 106% of the pre-Covid level owing to strong economic growth as well as the addition of new airport routes,” Kumar said, adding that India accounted for 4.2% of the global passenger traffic in the year 2023, and its share in passenger traffic has improved from 3.8% in 2019.”
The Airports Economic Regulatory Authority (AERA) sets the fees charged at major airports for five-year periods. Recently, the process has become more efficient, with delays in setting these fees dropping from around three years to less than one and a half years, ICRA said.
The report said that airport operators, regulators, and others have made great progress in solving long-standing issues like equity costs, security deposit returns, forex losses, and real estate income.
The gap between the capital expenses that airport operators wanted and what regulators approved has significantly shrunk, the study added.
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