Capital Expenditure Surge at Small Private Airports

Capital expenditure (capex) at small private airports in India is anticipated to grow by an impressive 50–60 per cent annually over the next three years. This surge is primarily due to the need for capacity expansion amidst increasing terminal utilisation levels, as highlighted by ratings agency Crisil on Monday.

Contrasting Trends in Large Private Airports

In contrast, large private airports are expected to see a decline in capex over the same period. This is attributed to the near completion or finalization of their capacity expansion projects, according to the agency.

Overall Capex Outlook

Despite the significant investment in smaller airports, the overall capex by private airports is projected to slightly decrease by 10–15 per cent, amounting to around Rs 40,000 crore over the next three years.

Analysis Based on Extensive Data

Crisil's analysis covers 11 operational private airports and two soon-to-be-operational ones, representing over 95 per cent of India’s private airport passenger traffic.

Defining Small and Large Airports

Small private airports, defined as those with a capacity of less than 20 million passengers per annum, are located in cities like Ahmedabad and Jaipur. Large airports handle more than 20 million passengers annually or are situated in metro areas such as Delhi-NCR and Mumbai.

Future Expansion Plans

Small private airports are set to expand up to 1.5 times their current capacity by fiscal 2028, driven by escalating travel demand and existing ground capacity constraints.

Passenger Traffic and Capacity Growth

Passenger traffic at these airports has grown at a robust compound annual growth rate (CAGR) of around 45 per cent between fiscals 2022 and 2025. However, capacity growth has lagged, necessitating urgent expansion efforts.

Regulatory Framework and Risk Management

The established regulatory tariff framework and the expertise of sponsors in operating large private airports mitigate project risks, ensuring manageable expansion efforts.