Alternate airports to add nearly 40 million passenger capacity in FY26; timely ramp-up key: Crisil Ratings

India’s operational and upcoming alternate airports are expected to add nearly 40 million passengers of annual handling capacity by the end of the current fiscal, Crisil Ratings said on Tuesday.

The agency said airport traffic in India is projected to rise from about 415 million passengers this fiscal to nearly 580 million by FY30, clocking a compound annual growth rate of 8–9% on the back of strong economic activity, untapped demand and easing capacity constraints at select metro hubs.

However, traffic growth is expected to remain muted at 0–1% this fiscal due to weak demand following the Air India crash, airbase closures during Operation Sindoor, and IndiGo’s operational disruptions in the latter part of the year.

With easing of disruptions witnessed in December 2025, passenger growth is likely to rebound to 6–7% next fiscal, the report said.

Crisil Ratings noted that multiple airports in a region become necessary when existing facilities reach capacity and have limited scope for expansion, a trend already visible in the Delhi NCR, the Mumbai Metropolitan Region and Goa.

“The older airports in the MMR and the NCR are operating close to their design capacity, with combined utilisation at 87% last fiscal. Also, they have limited options for large expansionary capex due to space constraints,” said Ankit Hakhu, Director, Crisil Ratings.

Hakhu said that alternate airports in metros are expected to handle 20–25% of regional traffic by FY30, supporting their viability as air travel demand grows and connectivity improves.

“However, timely ramp-up will be crucial for scaling up aeronautical and non-aeronautical revenues of these airports within their first control periods,” Hakhu said.

The report pointed out that Mumbai’s older airport saw a slowdown after FY17 due to capacity constraints, while Delhi continued to grow.

“This meant the Mumbai airport could not offer additional slots for airlines during peak hours. The same scenario would have played out in Delhi over the medium term given there wasn’t another airport nearby,” it said.

“That was the reason why the alternate airports came up,” the report added.

Gauri Gupta, Team Leader, Crisil Ratings, cautioned that alternate airports are not without risks.

“Traffic could fall short of expectations if supporting connectivity infrastructure progresses slower than anticipated, limiting accessibility and catchment expansion. Competitive intensity could also rise where incumbent and new operators differ, while any delay in aircraft deliveries may affect airline capacity deployment,” she said.

Crisil Ratings expects the credit profiles of older metro airports to remain stable, supported by steady traffic growth, regulatory safeguards such as tariff true-ups during under-recovery periods, and strong sponsor backing.

The agency, however, flagged higher risks for dual-airport systems in non-metro cities, where volatile or weak traffic growth, lower tariffs at older airports, and proximity to city centres could slow ramp-up at new facilities.

Any sharp deterioration in aircraft availability or pandemic-like disruptions would also remain monitorable risks, the report added.