Profits of Indian airports are expected to grow by 35% due to strong demand, according to aviation advisory and research firm CAPA.

Passengers stand at the ticket counter of Indigo Airlines at the airport on the outskirts of Agartala, capital of India’s northeastern state of Tripura,(REUTERS)

The airport industry’s pre-tax profit will rise to Rs.10,370 crore, up about 35% from Rs.7,680 crore a year ago, said CAPA India’s Vice President Paramprit Singh Bakshi at the CAPA India aviation summit in Delhi.

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However, the same is not true for Indian airlines, which CAPA expects to post a bigger industry-wide loss in 2025 as higher costs outweigh rising demand and costlier tickets. CAPA expects overall airline costs to rise by 3.8% in the financial year 2024-25, citing a capacity crunch.

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CAPA estimated between 400 to 600 million USD (Rs.3,336 to 5,004 crore) in losses, with the industry reporting a loss of 300 to 400 million USD (Rs.2,502 to 3,336 crore) the previous year, helped by market leader IndiGo’s record profit, according to another Reuters report.

Low-cost carrier IndiGo dominates Indian skies with a 60% market share. The Air India group, with two budget carriers and two full-service carriers in Air India and Vistara, have roughly a 30% share.

The capacity crunch would be eased with an addition of 84 aircraft in the current year, taking airlines’ overall fleet including grounded jets to 812 from 728 as of March, CAPA India CEO Kapil Kaul said at the summit.

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Most airports are run by the government-owned Airports Authority of India (AAI), but GMR Airports, the Adani Group, and Fairfax India are key private players, according to a Reuters report.

Indian airport operators have benefited, as the government has driven investments to develop new terminals and refurbish existing ones, according to the report. Operator revenue is forecast to grow 14.8% in the current year, helped by steady domestic passenger growth and a quick-paced rebound in international travel.

India expects to have 350 airports by 2030, more than double from the 144 in 2019, according to an earlier CAPA India estimate and government data, the report read.

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