DC Edit | Rising air travel to boost India
Four years after the Covid-19 pandemic turned businesses upside down, the airport sector is expected to see a 30 per cent growth in the current financial year ending on March 31, 2025, suggesting a robust economic growth in the country. The growth rate was calculated based on a study of 10 top private airports conducted by Crisil Ratings. The study forecast a 10 per cent increase in passenger traffic in the country over the previous financial year.
About two-thirds of the increase in the revenue of airports is expected to come from aeronautical sources such as fees collected from passengers, airlines and cargo operators for use of infrastructure. A strong growth in this segment indicates that people — both for personal and professional reasons — would travel more by air. As air travel correlates with economic growth, the growth in the income of the airport sector would show up the macroeconomic indicators of the country.
The Crisil Ratings study also forecasts a 15 per cent growth in non-aeronautical sources, which include income from advertising, retail, lounge and duty-free shops. It means people have more surplus income to spend on non-essential items, which are generally available in the airports. These have been increasing steadily, driven by rising passenger spends on retail and food and beverage, as well as real estate leasing and advertising.
As air travel is still not an affordable option for all classes in the country, any growth in the sector would suggest that the income of the upper middle class and rich is on an upswing. It would further mean that the premium market, which attracts more investment from foreign players, is on a healthy upward trajectory. Therefore, India could attract more foreign exchange and more premium global products, and the country will continue to remain a bright spot in a volatile global economy.