With the dip in air traffic growth largely behind, Crisil expects congestion at the top four airports in Delhi, Mumbai, Bengaluru and Hyderabad, which handle more than half of the air-passenger traffic in India, to continue over the medium term.

Currently, these airports on an aggregate operate at over 130 per cent and with healthy traffic growth ahead, this operating rate is expected to rise further in next 12 months. Operationalising of capacities in the following two fiscals would bring down utilisation levels to around 90 per cent, which is still high, by fiscal 2023.

An unprecedented ₹38,000-crore capex is being undertaken by operators over five fiscals — 2020-2024. The capex, the highest to be incurred in any continuous five-year period, is largely debt-funded.

Despite the massive capex, the performance and ratings of these airports are likely to be stable given the strong cash flows expected from healthy traffic growth, low project risks associated with the capex, and improving regulatory environment.

Manish Gupta, Senior Director, Crisil Ratings, says: “Capacity at these four airports will increase a cumulative 65 per cent to 228 million annually (from 138 million now) by fiscal 2023. However, traffic is expected to grow at up to 10 per cent per annum over the same period. Because the additional capacities will become operational in phases only by around fiscal 2023, high passenger growth will add to congestion till then.”

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