Praxis Global Alliance
Investments worth INR 2.3T expected for new greenfield airports in India by 2030: Praxis Report
25 Feb 2022

National, 25 February 2022: Greenfield airports to witness significant growth in the Indian airport infrastructure market through 2030 with the investment opportunity of INR 2.3T between FY2023- 30, according to a recent report by Praxis Global Alliance, a global management consulting and advisory services firm.

With the growing demand for airports, India needs an average additional 34 airports by 2025, and about 125 airports by 2030 to meet the 350-400M additional passengers demand forecasted by 2030.

The report on ‘Airport Infrastructure’ suggests the Indian airport infrastructure sector is expected to grow at a steady CAGR as COVID-19 clouds clear and demand increases. The report has evaluated the future growth potential of the sector with a focus on public-private partnerships (PPP). 

Further, the report also provides data and insights on market size, analyzes emerging trends and essential drivers, challenges, and opportunities in the Indian infrastructure market.

Some key highlights from the report include:

  1. India’s air travel demand had grown at an 11 percent CAGR over FY16-20, primarily driven by growth in domestic air travel. However, COVID-19 impacted airport business resulting in an 85 percent decline in international travel and more than 60 percent decline in domestic travel in FY21
  2. Connectivity and transportation are the fulcra for economic development, and developing the right infrastructure is of paramount importance. Understanding the need for building airport infrastructure, the Government has laid out over INR 600B investments in the next 2-3 years and significant push from schemes like RCS-UDAN
  3. Praxis hypothesis highlights a total of projected passenger traffic likely to reach 690M by 2030, and freight traffic is expected to reach 5.8MMT by 2030.
  4. This translates to a requirement of 34 greenfield airports needed by 2025 and about 125 greenfield airports required by 2030 to meet this projected traffic demand
  5. The greenfield opportunity size for airports in India by 2030 translates to about INR 2.3T, resulting in a massive opportunity in the current decade; The Government has identified and given in-principle approval for 16 greenfield projects with an investment worth INR 500B
  6. Further, 34 destinations have been shortlisted for the development of new airports with a significant focus on Northern and Southern parts of the country
  7. Given the demand for 125 airports by 2030 and the Government expediting the development of 50 airports, this results in an unmet demand of 75 airports and net new investments to the tune of INR 1.1T
  8. Out of the estimated 75 new airports across all regions, North India is projected to witness the maximum number of new airports to cater to the unmet demand in the future

Aryaman Tandon, Managing Partner and Practice Leader, Infrastructure, Praxis Global Alliance, said, “Civil aviation sector is on the cusp for a significant growth cycle, with connectivity improving and prices becoming more affordable, we expect passenger movement to increase considerably over the next few years.”

Suman Jagdev, Partner, Infrastructure Practice, Praxis Global Alliance, said, “As air travel rebounds and economic growth provides further expansion opportunities, there is a need to strengthen the airports' infrastructure. An enabling investment environment will lead to higher private sector participation.”

Savio Monteiro, Senior Vice President, Infrastructure Practice, Praxis Global Alliance, said, “Government policies and schemes along with private sector participation will boost the growth of the aviation sector. Further, India will remain attractive for greenfield investments in the aviation sector and will see a substantial rise in private participation in this decade.”

The civil aviation industry in India has emerged as one of the fastest-growing industries over the past decade. India has become the third-largest domestic aviation market in the world.

In 2020, the COVID-19 pandemic dented the Indian aviation sector. With the dramatic drop in demand for passenger air transport, major companies faced record losses. However, with recovery in business activities and the desire to travel after being confined in homes for months, the domestic air traffic has been showing green shoots of recovery since the beginning of the second quarter of 2021 compared to the 2020 levels, as per our analysis.

Additionally, airport infrastructure in India is witnessing improvisation and expansion on a massive scale, with the Government supporting private participants and increasing investment. Moreover, factors such as growing demand for airports, a rise in disposable income, and the propensity to travel, growing digital adoption are further anticipated to fuel growth in the Indian airport infrastructure market in the current decade.

Some of the other trends to monitor in this sector are passenger-centric solutions, focus on blockchain, using cloud & big data, digital air traffic management, and building environment-friendly Green airports.

About Praxis: Praxis Global Alliance is the next-gen management consulting and business research services firm revolutionizing how consulting projects are delivered. It delivers practical solutions to the toughest business problems by uniquely combining domain practitioner expertise, AI-led research approaches, and digital technologies. The company operates four business units including Praxis Global Alliance Financial Investor Group (FIG) offering pre-deal support, commercial due diligence, post-acquisition value creation, Praxis Global Alliance Business Enablement and Transformation (BET) for practitioner-led business advisory and consulting, PGA Labs focused on technology-led business and market research and tools, and PraxDigital™ delivering data engineering and analytics, AI, OpenData and visualization solutions to clients across verticals. Present in 4 locations in India and Singapore, Praxis Global Alliance works with C-suite to the front-line executives across business streams helping them with end-to-end business enablement, organizational transformation, and revenue maximization support in an agile environment.

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