In the Eleventh Five Year Plan, investment in the airport infrastructure stood at about Rs 425 billion with private sector contributing almost Rs 300 billion. The planning commission has envisaged an investment of about Rs 877 billion during the Twelfth Five Year Plan but actual realisation remains an arduous task.

About 64 airport projects worth investment of about Rs 1,515 billion are under implementation, announced stage. CARE Research expects about 35% of the total outstanding investment to materialise in the airport infrastructure up to FY17.

The total air passenger handling capacity at all airports grew at CAGR of 20% during the period FY06-13, while the total air passenger traffic grew at a CAGR of 12% during the same period.

CARE Research expects the total air passenger traffic to grow at a healthy rate during the period FY14-17. The growth will be led by favourable policy initiatives by the government, competitive air fares offered by low cost carriers, fleet expansion by airlines, growing trend of transit passengers, increasing affordability coupled with rising share of middle class and strong demographics.

Inordinate delays experienced by airport projects in the past, procedural hassles, requirement of large land and capital coupled with high leverage position of airport infrastructure companies, remain key challenges for the capacity expansion in the airport sector.

CARE Research expects the overall air passenger handling capacity to grow by moderate rate during the period FY14-17. The growth in air passenger handling capacity is expected to lag the overall air passenger traffic growth till FY17.