India's air travel passenger traffic is likely to grow by nearly 50 per cent, from 412 million in FY25 to 600 million in FY30, said a report published on Saturday.
"This will create an exponential growth in aeronautical revenue, underpinned by both higher numbers of passengers and enhanced per-passenger expenditure," the report by Knight Frank added.
The report stressed the pivotal position of airports run on the public-private partnership (PPP) model, which account for 64 per cent of overall traffic and yield 87 per cent of the country's non-aeronautical income. This reflects the effectiveness and strategic value of PPP-operated airports.
The report also pointed out that PPP airports consistently achieve higher performance compared to government-operated airports, supporting the necessity of robust commercial strategies.
India's key airports, Mumbai and Delhi, post per capita non-aeronautical revenues of $20.1 and $18.1, respectively, despite closely tracking comparable global leaders such as London Heathrow ($21.6) and Tokyo Haneda ($19.9).
Non-aeronautical revenue sources such as retail, food and beverages, duty-free sales, parking, advertising, and leasing of real estate are becoming increasingly crucial to airport financial viability. Diversifying revenue sources will be critical for sustainability as passenger volumes increase.
India's airports are at a stage of inflexion. The sustained high performance of PPP airports in generating non-aero revenues bears testimony to the importance of these streams in sustaining long-term viability," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
With traffic anticipated to reach close to 600 million by 2030, airports will have to think beyond runways and adopt integrated commercial ecosystems like aerocities. These projects can enhance the profitability of airports while creating new centers of urban development, he further added.
The report observed that although capacity growth will be important, monetizing increasing passengers through non-aero revenue streams is just as essential for fiscal stability.
"The fact that Mumbai and Delhi airports are already yielding per-passenger non-aero revenues on par with Heathrow and Haneda shows the potential of India's aviation industry," said Rajeev Vijay, Executive Director, Government and Infrastructure Advisory, Knight Frank India.
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