Surging Capex at Small Airports Amid Terminal Utilization Spike

Capital expenditure at small private airports in India is forecasted to rise 50-60%, driven by a hike in terminal utilization levels. Conversely, large airport capex is declining as projects near completion. Overall market capex is expected to slow down slightly, balancing the dynamics of both segments.

Capital expenditure (capex) for small private airports in India is set to surge by 50-60% over the next three years, largely due to increased terminal utilization levels, according to Crisil. This stands in contrast to large private airports, where capex will decline as many capacity-increasing projects conclude.

Despite the rise in smaller airport investments, the overall capex across private airports is projected to decrease by 10-15%, settling at approximately Rs 40,000 crore. The analysis by Crisil encompasses 11 operational and two upcoming airports, which handle over 95% of private air traffic in India.

The burgeoning demand has catapulted passenger traffic growth at smaller airports, necessitating expansions to accommodate the rising numbers. While there are project risks associated with such expansions, Crisil highlights the mitigative advantage of sponsors' expertise and financial robustness.

(With inputs from agencies.)