India's airport infrastructure sector is projected to attract investments of up to ₹4.2 lakh crore by 2029, according to a report released on Monday, 29 June by Brickwork Ratings. The estimate encompasses ₹3.7 lakh crore in projects already announced or under implementation as of FY26, plus an additional ₹0.5 lakh crore in projects expected to be commissioned by 2029.

Revenue Outlook and Traffic Growth

After robust operating revenue growth in FY26 — driven by record passenger traffic and tariff hikes — revenue momentum is expected to remain strong in FY27, supported by domestic air traffic expansion and new airport footprints coming online. Air traffic is forecast to grow by 8–10 per cent, underpinned by resilient domestic demand and the scaling up of Tier-2 city connectivity.

Niraj Rathi, Senior Director – Ratings at Brickwork Ratings, said: 'Air traffic is expected to grow by 8–10 per cent driven by resilient domestic demand, expanding Tier-2 footprints and the launch of new greenfield assets including Navi Mumbai and Jewar airports.' He added that these factors cushion a 'highly subdued international segment.'

International Headwinds Cloud Near-Term Outlook

International passenger growth has flattened, weighed by route restrictions, rising fuel prices, and the ongoing Middle East conflict. The Middle East accounts for an estimated 38–40 per cent of India's total international passenger traffic, making instability in the region a material risk for the sector. Rathi noted that these combined headwinds are likely to keep growth in H1 FY27 'flat and subdued,' but flagged that 'a sharp capacity and demand recovery could occur in H2 FY27 as airlines adjust schedules for peak winter travel and new airport assets scale up.'

Margins and Credit Outlook

Operating margins for FY26 surged to an estimated 53.8 per cent, up sharply from 44.4 per cent in the prior year, as newly completed terminals began contributing revenues. Margins are projected to improve further to 54.5 per cent in FY27, as expanded facilities allow operators to collect higher-margin retail fees and airport charges across a larger passenger base.

The credit outlook for the sector has been assessed as stable by Brickwork Ratings. While heavy capital expenditure on terminal expansions is pressuring near-term cash flows, steady passenger traffic growth provides an underlying buffer.

Policy Tailwinds: UDAN and FDI

The sector is also benefiting from structural policy support. The government's UDAN regional connectivity scheme carries a capital outlay of ₹28,800 crore through FY36, while 100 per cent foreign direct investment (FDI) is permitted in greenfield airport development — a provision aimed at drawing global infrastructure capital into India's fast-expanding aviation market. This comes amid a broader push by the Centre to position India among the world's top three aviation markets by the end of the decade.