India’s aviation sector faces massive investment needs

India’s aviation sector will need over US $ 170 billion by 2030 to support growing air traffic, record aircraft orders, and airport expansion. Airlines are expected to invest US $ 150 billion for 1,700 aircraft, with US $ 24 billion needed for airport development. Domestic and international passenger traffic is projected to more than double, positioning India as a global aviation hub.

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India’s aviation sector will require over US $ 170 billion by 2030 to fund record aircraft orders and expand airport capacity amid booming air traffic, according to a report by S&P Global Ratings.

Based on government data, India ranks among the fastest-growing aviation markets globally, with domestic passenger traffic projected to double to 300 million by 2030. Estimates from CAPA India suggest that international flight traffic could more than double within the same period.

Airlines in the country have placed unprecedented orders with Airbus and Boeing, while authorities aim to double the number of airports to position India as a global aviation hub alongside Singapore, Dubai, and Doha.

S&P Global Ratings anticipates Indian carriers will invest US $ 150 billion to fulfill orders for 1,700 aircraft, while US $ 24 billion will be required to develop new airports and upgrade existing ones.

“The timing is right to support higher borrowing. Rising passenger air traffic, relatively cheaper domestic financing rates, and conducive government policies on foreign ownership should boost funding prospects for the sector,” analysts at S&P Global stated.

While borrowing levels for airlines and airports are set to increase, greater reliance on aircraft lessors and domestic banks could help ease the financial load, the report added.