New Delhi [India], August 31 (ANI): Passenger traffic at Indian airports is projected to grow at a CAGR of 7 per cent over 2024-25-2026-27, normalising from the earlier pre-COVID estimates of 9 per cent, according to CareEdge Ratings.

A slight moderation in growth is expected due to the delayed delivery of wide-bodied aircraft, heightened global safety concerns, and lingering geopolitical disruptions, the rating agency said in a report this week.

According to CareEdge Ratings, the outlook for airports in India remains positive, albeit with some near-term moderation.

CareEdge Ratings notes that despite near-term headwinds, the long-term growth outlook remains robust, owing to favourable demographics, conducive regulations, rising non-aero revenues per passenger, and increasing airport city-side development.

It expects passenger traffic to expand from 412 million in 2024-25 to 470 million by 2026-27.

India is the third-largest aviation market after the US and China, and Indian airports continue to handle a steady share of global traffic.

This, according to CareEdge, underscores the structural demand potential that will continue to drive investments in capacity expansion and modernisation of airport infrastructure.

CareEdge Ratings believes that the long-term growth prospects for the Indian airport sector remain intact.

A conducive regulatory environment continues to encourage private participation and long-term investments in infrastructure, while favourable demographics--characterised by a young population, an expanding middle class, and an increasing propensity to travel--are driving sustained passenger growth.

In addition, the rising trend of non-aeronautical revenue per passenger through retail, food and beverage, parking, and other commercial avenues is strengthening profitability and reducing dependence on aero charges.

Furthermore, city-side development has emerged as a key opportunity, with potential in real estate, hospitality, logistics, and commercial spaces, transforming airports into integrated urban hubs and unlocking significant long-term value.

Rajashree Murkute, Senior Director, CareEdge Ratings, said, 'The aviation sector in India is currently experiencing a transformative phase, fuelled by its status as home to the world's fastest-growing air passenger markets. The strategic investments in airport infrastructure, capacity expansion, and rising private participation are set to drive the next phase of infra growth.'

'We expect investments in key infra sector such as roads, ports, airports, and logistics are set to act as a multiplier for GDP and urbanization, renewable energy, backed by policy support and declining storage costs, will drive the next phase of capacity addition. Together, these sectors will not only fuel economic growth but also ensure resilienc[RM1] [W2] e and sustainability in the years ahead,' Murkute said.

Established in 1993, the parent company CARE Ratings Ltd (CareEdge Ratings) offers services in Credit Ratings, Analytics, Consulting, and Sustainability. (ANI)