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May 04, 2018

Sector Report: Airport Infrastructure

This report is available to users in India for ₹40,000 + applicable taxes


Table of Contents


  • Summary
  • Passenger
  • Freight
  • Investment plans
  • Introduction
  • Brownfield airports
  • Greenfield airports




Growth in air passenger traffic at airports to decline further in fiscal 2019


CRISIL Research expects the air passenger traffic growth at Indian airports to decline to 14-16% in fiscal 2019, compared with 15-17% growth in fiscal 2018, mainly due toinfrastructure constraints and rise in air fares.


Overall passenger traffic at airports is projected to clock 12-14% compound annual growth rate (CAGR) between fiscals 2017 and 2022 -- with domestic traffic expected togrow by 13-15%, and international traffic by 9-10%. While the domestic share of total passenger traffic is pegged to increase, it is dependent on growth in gross domesticproduct (GDP) and airport infrastructure (through greenfield and brownfield projects), as well as a revival in the global economy.


Limited routes operational under UDAN owing to slot constraints


Till October 2017, of the allocated routes for 45 UDAN airports, only 28 routes connecting 14 airports were operational. Among the five airlines that won routes in Phase I ofRegional Connectivity Scheme (RCS), only three - Alliance Air, SpiceJet, and TruJet, have started operations. Moreover, these three airlines have commenced operations ononly a few of their allocated routes, due to constraints at metro airports, and delays in acquiring requisite aircraft licenses.


International freight traffic growth at airports to soar in fiscal 2018


CRISIL Research expects the freight traffic at airports to grow by 11-13% in fiscal 2018, owing to an expected revival in the global economy, domestic growth, increasingconnectivity on account of air service agreements, and a booming e-commerce industry. During the first half of fiscal 2018, international freight traffic increased 19%, dueto movement of aircraft components, uncertainties due to implementation of Goods and Services Tax (GST), and movement of transit cargo, among other factors. During thesecond half of the fiscal, international freight traffic growth is expected to decline to 14-16%.