Funding challenge looms as India scales up airport capacity

India's airport capacity build-out gathers pace, but rising capex, airline stress and regulatory delays could test financial sustainability, according to Brickwork Ratings.

Written by Akbar Merchant

July 3, 2026 18:21 IST

Wings of Capital: India’s Airport Infrastructure Prepares for a ₹3.7 Trillion Capex Surge

India’s aviation infrastructure is entering its biggest expansion cycle yet, but funding the next decade of airport development while ensuring financial viability will remain the sector’s defining challenge for a long time. According to a Brickwork Ratings report, India will require investments of about ₹3 trillion by 2030 to create capacity for 500-600 million passengers and develop 55-60 new airports. An alternate estimate pegs the investment requirement at ₹1.2 trillion to accommodate an additional 120 million passengers through around 30 new airports.

The sector has expanded rapidly over the past decade, with the number of operational airports rising to 163 from 74 in 2014. Passenger traffic during April-January FY26 stood at 350.49 million, comprising 281.78 million domestic and 68.71 million international travellers. According to IATA, India is projected to become the world’s third-largest air passenger market by 2030, with passenger numbers expected to reach 480 million by 2036.

Structural Velocity

The investment pipeline is equally ambitious. As of FY26, 205 airport projects worth ₹3.7 trillion are under various stages of development, including 131 projects worth ₹2.5 trillion under implementation. Over the past five years, 84 projects worth ₹0.75 trillion have been completed, while another 66 projects valued at ₹0.85 trillion have been announced. Projects worth ₹0.47 trillion are expected to be commissioned between FY27 and FY29. Major developments include Navi Mumbai, Pune, Jewar, Sriperumbudur and Bhiwadi airports, besides expansion projects at Bengaluru, Delhi and Hyderabad.

Despite the massive capital expenditure, Brickwork Ratings expects the sector’s credit outlook to remain “Stable” through FY27, supported by structural passenger growth, an active greenfield pipeline and deleveraging by major operators. “The sector’s credit trajectory through FY27 is expected to remain Stable, underpinned by structural passenger growth, an active greenfield pipeline, and deleveraging at major operators,” the report said.

Bottom-Line Paradox

The report, however, cautions that airport operators are expected to continue reporting negative profit after tax between FY21 and FY27, despite EBITDA margins improving to 54.5% in FY27, reflecting the long gestation period of infrastructure assets. It identifies aviation turbine fuel (ATF) price volatility, land acquisition delays, multi-agency regulatory approvals and capacity constraints at metro airports as key headwinds.