Airport passenger traffic in India is expected to remain nearly flat in FY25-26, growing up to 1% to about 415mn (million) passengers, amid a combination of demand shocks and operational disruptions, according to a report from CRISIL Ratings.
The rating agency says the muted growth reflects weak demand following a major aircraft mishap, airbase closures triggered by uncertainties along India’s western border during the first half (H1) of the fiscal and disruption of airline operations in the second half (H2).
Despite the near-term stagnation, airport traffic is projected to increase from around 415mn passengers this fiscal to about 580mn passengers by FY29-30, implying a compounded annual growth rate (CAGR) of 8%-9%, supported by economic growth and capacity additions, it added.
According to the report, traffic growth is likely to recover to 6%-7% in FY26-27 as the disruptions witnessed in December 2025 ease and airline operations stabilise.
“Recovery is expected next fiscal as recent issues ease, paving the way for 580mn passengers by FY29-30 at 8-9% CAGR, driven by economic strength and capacity unlocks,” the report notes.
CRISIL says the slowdown this fiscal stands in contrast to India’s otherwise robust aviation potential which continues to be underpinned by rising incomes, improving connectivity and structural demand growth.
The report highlights that operational and upcoming alternate airports in the Delhi-National Capital Region (NCR), Mumbai Metropolitan Region (MMR) and Goa are expected to reach about 40mn annual passenger handling capacity by the end of FY25-26. This capacity is projected to expand further to 45mn-50mn by FY29-30.
These greenfield and alternate airports are intended to address capacity constraints at older metro airports. In the previous fiscal, the primary airports in Mumbai and Delhi-NCR operated at about 87% utilisation, with limited scope for expansion due to land and space constraints.
The report excludes Hindon airport (Ghaziabad, Uttar Pradesh) from its assessment, citing minimal commercial operations.
CRISIL says the credit profiles of established metro airports are expected to remain stable over the medium term. This is supported by traffic spillover to alternate airports, regulatory tariff true-ups and sponsor support.
However, newer airports face ramp-up risks, the agency says. "Delays in connectivity infrastructure, competition where alternate airports are operated by different entities, and aircraft delivery delays could affect aeronautical and non-aeronautical revenues during the initial control periods, typically structured as five-year tariff cycles."
Ankit Hakhu, director at CRISIL Ratings, says older airports in MMR and NCR are operating close to their design limits and alternate airports are expected to handle 20%-25% of regional traffic by FY29-30, driven by pent-up demand.
The report draws parallels with global multi-airport systems such as New York, where LaGuardia, JFK and Newark operate at high utilisation, and London, where Heathrow and Gatwick serve complementary roles.
In India, Bengaluru and Hyderabad airports currently operate at about 65% utilisation, providing some headroom for traffic growth. In contrast, Mumbai’s experience after FY16-17, when expansion stalled, underscores the risks of relying on a single airport without adequate slot availability.
Gauri Gupta, team leader at CRISIL Ratings, says timely ramp-up of alternate airport infrastructure is critical. "...the alternate airports are not without risks. Traffic could fall short of expectations if supporting infrastructure connectivity progresses slower than anticipated, constraining accessibility and catchment expansion. Competitive intensity could also rise where the incumbent and new operators of the dual airports are different. Additionally, any delays in aircraft deliveries may affect airline capacity deployment at the alternate airports," she says.
For a dual airport in a non-metro city, especially where traffic growth is volatile or weak, the rating agency says there are risks to ramp-up in air traffic if the old airport continues to offer value proposition, such as lower tariffs for airlines and proximity to the city centre for passengers. These factors could lead to underutilisation of infrastructure and reduced return on investments.
According to CRISIL, pent-up demand and expanding catchment areas are likely to sustain traffic at older hubs while supporting the viability of alternate airports. However, it flags monitorable risks including airline fleet constraints, supply- chain issues and potential external shocks such as pandemics.
With India’s aviation sector at an inflection point, the report emphasises the need for balanced development of multi-airport ecosystems to sustain the projected 8%-9% growth trajectory through FY29-30.
