India's airport sector to attract Rs 4.2 lakh crore investment by 2029, Mumbai set to emerge as key aviation hub

MUMBAI: India's airport infrastructure sector is poised to attract investments of nearly Rs 4.2 lakh crore by 2029, as operators race to expand capacity amid sustained growth in domestic air travel and the rollout of new greenfield airports, according to a report by Brickwork Ratings.The report estimates that projects announced and under implementation account for investments of about Rs 3.7 lakh crore, while another Rs 50,000 crore worth of airport projects are expected to be commissioned by 2029.More than 65 airport projects have been announced till FY26, with the sector expected to add capacity for 500-600 million passengers over the next few years.The outlook assumes particular significance for the Mumbai Metropolitan Region, where the upcoming Navi Mumbai International Airport is expected to ease congestion at Mumbai's existing airport and emerge as one of the country's largest aviation hubs.Along with the Jewar airport near Delhi, the project is expected to anchor the next phase of India's aviation growth.Brickwork Ratings expects domestic passenger traffic to grow 8-10%, driven by rising disposable incomes, improved regional connectivity under the UDAN scheme and expanding air travel demand from Tier-II and Tier-III cities.The agency, however, cautioned that international traffic is likely to remain subdued in the near term because of geopolitical tensions in West Asia, route restrictions and elevated fuel prices.

Since the Middle East accounts for nearly 38-40% of India's international passenger traffic, disruptions in the region continue to weigh heavily on overseas travel.According to Niraj Rathi, Senior Director-Ratings at Brickwork Ratings, the first half of FY27 is likely to remain muted, but demand is expected to recover sharply during the second half as airlines add winter schedules and newly commissioned airports ramp up operations.The ratings agency has maintained a stable credit outlook for the airport infrastructure sector despite heavy capital expenditure.It estimates operating margins to improve to 53.8% in FY26 from 44.4% in FY25, and further to 54.5% in FY27, aided by the commissioning of new terminals that generate higher-margin non-aeronautical revenues such as retail concessions, food courts and commercial leasing.The report also points to improving financial health among airport operators.

Sector debt-equity ratios are projected to decline from 3.8 in FY25 to 2.7 by FY27, reflecting repayment of construction loans as airports begin generating stronger cash flows.However, the expansion story is not without risks. Despite healthy operating margins, the sector continues to report consolidated net losses because of high depreciation, interest costs and large capital investments. Volatile aviation turbine fuel (ATF) prices remain another concern.Since fuel accounts for roughly 40% of airline operating costs, sustained increases can hurt airline profitability, delay fleet expansion and ultimately slow passenger growth, affecting airport revenues.Long regulatory timelines for tariff approvals and high maintenance costs also remain structural challenges.

Why it matters for Mumbai

For Mumbai, the findings reinforce the strategic importance of the Navi Mumbai International Airport, which is expected to decongest the saturated Chhatrapati Shivaji Maharaj International Airport and support long-term passenger growth.Airport operators are increasingly relying on commercial revenues, from retail, hospitality, advertising and real estate, rather than just passenger charges, making modern terminal development a key driver of profitability.The report also suggests that while India's airport sector remains one of the country's strongest infrastructure growth stories, investors and lenders will closely watch the pace of project execution by the Airports Authority of India and private operators, including Adani Airports, besides the trajectory of fuel prices and geopolitical developments that influence international traffic.