ICRA revises FY2026 airport traffic growth to 5-7%, post-covid low, etTravelworld

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Rating agency ICRA has pegged the airport’s passenger traffic growth at 5-7 per cent for the year compared to 7-9 per cent in India. This marked the slowest growth since the Covid-19 recovery phase, to 430-440 million passengers against 412 million in FY2025.

After a fatal crash in June 2025, a steady crash has reduced visibility and aircraft availability.

Domestic passenger traffic is expected to increase by 4-6 percent FY2026, compared to 2.6 percent growth in the first five months will reach 348-355 million. International passenger traffic is forecast to expand more strongly, reaching 82-85 million, supported by increased connectivity, tourism demand and new destinations.

“International traffic continues to grow domestic traffic driven by healthy international tourism activity, in addition to improving to new destinations, healthy growth in international traffic, more than domestic traffic is recovered, the head of the sector, corporate rating, implementation.

ICRA expects airport operators to grow 7-8 per cent in FY2026 or 15-16 per cent adjusted for disposable income in FY2025. Growth will be supported by higher air fares, rising passenger volumes and improving non-air revenues at Delhi International Airport.

Air cargo volumes are expected to grow 4-6 percent in FY2026 versus 10 percent in FY2025, compared to weaker international cargo demand amid US trade tensions and a high base effect. Domestic cargo volumes are expected to grow 5-7 percent, while international volumes are forecast at 2-4 percent.

The sector continues to witness significant investment activity. INR 1,00,000 crore over the next 4-5 years, covering Greenfield airports in NEWAR, Navi Mumbai, Bhogapuram, Puandur and Purandar, Bangalore, Hyderabad, Mumbai, Nagpur, Cochin and airports in India.

Operating margins for airport operators will stand at 51-52 percent in FY2026-FY2027, with higher interest expense expected post-capex. Nevertheless, ICRA projects stable credit profiles for operators, supported by healthy levels of profitability and liquidity.

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