There is a post-pandemic travel boom in India. For the global aviation industry it has meant extra focus on this burgeoning market which became the world’s most populous country in April 2023 with just over 1.4 billion people, overtaking China.

India’s aviation market has prospered since COVID like few others. According to consultancy CAPA India, passenger traffic will reach more than 500 million annually by 2030 driven by demographic changes (more on this below) and a richer, more widely spread middle class. By then, the country will have about 350 airports, more than double the 144 operating in 2019.

The ongoing privatization of the subcontinent’s airports has, therefore, remained high on the priority list of infrastructure investors—and also existing large shareholders such as Adani Group and GMR Airports. During the pandemic, the Modi government was resolute that a shift to public-private partnerships (PPPs) would continue via the Airports Authority of India (AAI).

Right now, at least 25 regional and local airports are pipelined for PPPs as the Ministry of Civil Aviation looks to attract more investment into aviation. The process has proved very successful among the ‘big three’ airports of Delhi (DEL), Mumbai (BOM), and Bengaluru (BLR) where substantial private funds have poured in.

Those flagships are also seeing some shifts in ownership. In September, Fraport announced it would sell its 10% stake in DEL’s operator, Delhi International Airport Limited (DIAL), to the majority owner GMR for US$126 million. DEL was privatized in 2006. In December last year, Fairfax India took its stake in BLR to 64% after acquiring an extra 7% from Siemens Project Ventures for US$175 million.

However, it is new airport PPPs that are exciting investors the most as second- and third-tier Indian cities grow and the appetite to travel in the regions rises. In this respect, the Indian market is mimicking China a decade or so ago. Below, AirportIR examines why the Indian market holds such promise for PPP investors and which deals are coming to market.

Investor Insights