The overall air cargo volumes in India is projected to witness healthy growth of around 9-11 per cent (year-on-year) to around 3.6-3.7 million tonnes in FY25, according to a report on Thursday.

This growth will be supported by 11-13 per cent expansion in international and 4-6 per cent growth in domestic cargo, according to credit rating agency ICRA.

The outlook on airport infrastructure is “stable” with revenues likely to grow by around 12-14 per cent YoY in FY25, supported by the sustained improvement in both domestic and international passenger traffic, increase in tariffs at some of the major airports and ramp-up in non-aeronautical revenues.

The international cargo volumes have seen a healthy expansion of 18 per cent in the second half of last fiscal (FY24), amid the Red Sea crisis, which started in October 2023.

Consequently, the seaborne cargo traffic was impacted, which in turn benefitted international air cargo traffic.

Vinay Kumar G, Vice President and Sector Head-Corporate Ratings, ICRA said that the cargo volumes were relatively less impacted due to Covid in FY21, compared to passenger traffic.

“Moreover, the recovery was relatively swifter with cargo volumes recovering to 95 per cent of pre-Covid levels in FY22 compared to 55 per cent in passenger traffic,” he mentioned.

This was supported by higher growth in international cargo on account of the export of Covid-related vaccines and higher merchandise exports in FY22.

While the growth in cargo volumes has slowed down during the FY2023-H1 FY2024 period, it has bounced back handsomely in the last 12 months, since the start of the Red Sea crisis.

According to the report, the international cargo volumes have increased by 18 per cent YoY and 20 per cent YoY during the first five month of FY25, and are expected to increase by a further 11-13 per cent YoY to touch new highs in FY25.

“The credit profile of airport operators is projected to remain strong, supported by healthy accruals and comfortable liquidity,” said Kumar.