During the past year, India’s aviation sector has witnessed the commissioning and operationalisation of several key airport projects, marking the beginning of a pivotal phase for the sector. The operationalisation of the Navi Mumbai International Airport in December 2025 and Noida International Airport in June 2026 has created additional capacity in Mumbai and the National Capital Region (NCR), respectively, two of the busiest hubs for air travel in India. Most recently, the new Bhogapuram International Airport has been inaugurated in Andhra Pradesh.
These developments align with the sustained growth in passenger traffic, robust aircraft orders and expanding international connectivity. India currently has more than 165 airports, heliports and water aerodromes, while the passenger handling capacity has exceeded 580 million passengers per annum (mppa). In 2025-26, Indian airports handled 420.09 million passengers and 3.96 million tonnes of airfreight, and recorded more than 2.9 million aircraft movements.
The focus is increasingly shifting towards strengthening connectivity, financing, maintenance and repair capabilities, supply chains and regulatory systems to support a larger and more resilient aviation ecosystem. That said, the sector continues to face structural pressures, including high fuel costs, aircraft and engine delivery delays, along with geopolitical disruptions.
Trends shaping the Indian aviation sector
Towards a multi-airport ecosystem
A key trend is the strategic move towards building a multi-airport ecosystem within key cities. The twin-airport model is gaining relevance as India’s largest cities face constraints at existing airports. Rather than relying on a single airport to meet the rapidly rising demand, metropolitan regions are beginning to develop multiple aviation gateways connected through road, rail and other modes of transport.
For instance, Navi Mumbai International Airport has not only contributed to India’s airport capacity, but has significantly transformed connectivity in the Mumbai Metropolitan Region. The airport was inaugurated in October 2025 and commenced commercial operations in December 2025. Its first phase is designed for 20 mppa, with expansion planned to eventually handle 90 mppa. Similarly, the Noida International Airport at Jewar was developed to complement Delhi airport in the NCR. It was inaugurated in March 2026 and has recently commenced commercial operations. Its first phase is designed to handle 12 mppa, with eventual capacity rising to 70 mppa.
Airports as economic nodes
Traditionally, airport infrastructure was largely viewed in terms of runways, terminals, parking stands and passenger processing. But airports are now being developed as economic nodes that combine passenger movement with cargo, logistics, commercial development and urban infrastructure. For example, the Noida International Airport includes a multimodal cargo hub designed to initially handle more than 0.25 million metric tonnes per annum (mmtpa), expandable to around 1.8 mmtpa.
Multimodal integration is becoming increasingly important as manufacturing, e-commerce, pharmaceuticals, electronics and other high-value export sectors expand. Air cargo infrastructure is becoming more closely linked to industrial policy and supply chains, with airports influencing where warehouses and logistics parks are located and how industrial clusters connect to domestic and international markets.
In fact, the development model has extended beyond the airside. Airports are now placing greater emphasis on “cityside” development, including commercial development, retail, hospitality, real estate and logistics, as they seek to diversify non-aeronautical revenues. Over the longer term, this could lead to the emergence of airport-led economic districts.
Regional connectivity becomes a key focus area
The original Ude Desh ka Aam Nagrik (UDAN) scheme, launched in 2016, was designed to make air travel affordable and connect underserved cities. Over the years, the scheme has evolved to enable the creation of a sustainable regional aviation network. As of July 2026, the UDAN programme has operationalised 679 routes, connecting 95 airports, heliports and water aerodromes.
In March 2026, the union cabinet approved the Modified UDAN scheme with a total outlay of Rs 288.4 billion for the period 2026-27 to 2035-36. The programme includes the development of 100 airports from existing unserved airstrips, operations and maintenance support for approximately 441 aerodromes and 200 modern helipads, and Rs 100.43 billion in viability gap funding for airline operators over 10 years. This programme targets 120 new destinations and 40 million passengers. This marks an important change in the role of regional aviation policy – the requirement is no longer simply to establish an airport, but to create favourable conditions for regular flights, maintenance, connectivity to nearby towns, and an economic base capable of sustaining operations.
Strengthening the aviation ecosystem
The effort to build capabilities around aircraft is important for India’s long-term aviation competitiveness. India’s airlines have placed aircraft orders, creating demand for aircraft leasing, financing, maintenance, training and components. The aim is to capture more of this value chain domestically. Gujarat International Finance Tec-City (GIFT City) is central to the financing side of this effort. In July 2026, the tax deducted at source on aircraft lease rentals paid to International Financial Services Centre lessors was removed in order to improve cash flows for airlines. Moreover, given that aircraft are among the most capital-intensive assets in aviation, the ability to finance and lease them efficiently can directly affect the competitiveness of Indian carriers.
Maintenance, repair and overhaul (MRO) is another major piece of the ecosystem. Engines account for around 45 per cent of global MRO expenditure, making engine maintenance a particularly important opportunity. In November 2025, Safran’s Aircraft Engine Services India facility was inaugurated at Hyderabad’s GMR Aerospace and Industrial Park, as part of the efforts to establish India as a major MRO hub.
The scale of the opportunity is significant. The number of MRO facilities has risen from 96 in 2014 to 164 as of March 2026, and the government is targeting a $4 billion domestic MRO industry by 2031. India is seeking to move from being primarily an aviation market to being a larger player in the aviation value chain.
Towards a smart and sustainable sector
A larger aviation network requires airports and airlines to handle more passengers and aircraft without a proportionate increase in time, manpower and operating costs. Technology is, therefore, becoming an increasingly important part of capacity creation. Automated check-in and baggage systems, biometric processing, digital security processes, artificial intelligence-based operational tools and integrated airport management platforms help airports manage higher passenger volumes while improving efficiency.
The same principle applies to sustainability. As aviation expands, sustainability is no longer a long-term ambition, it is an operational priority. Sustainable aviation fuel (SAF) has emerged as a major focus area, with the Ministry of Civil Aviation drafting an SAF policy. The government has laid out indicative blending targets of 1 per cent by 2027, 2 per cent by 2028 and 5 per cent by 2030. Airlines and fuel companies have started developing partnerships around SAF production and supply, while airlines are investing in newer, more fuel-efficient aircraft and digital tools to optimise operations and reduce fuel burn.
At airports, sustainability extends beyond renewable power to the way infrastructure is designed and operated. Energy-efficient buildings, electrification of ground operations, electric ground support equipment and greater use of renewable energy can reduce energy consumption and carbon intensity.
Financing the next phase of expansion
Private participation and asset monetisation are also being prioritised to attract private investment, improve airport infrastructure and enhance operational efficiency. The government has set an indicative monetisation target of Rs 275 billion for the civil aviation sector under the National Monetisation Pipeline 2.0 (2026-27 to 2029-30). The plan focuses primarily on monetising existing airport assets through mechanisms such as long-term public-private partnership concessions and leases, rather than the outright sale of airports.
Challenges remain
The past year exposed some of the structural vulnerabilities in the Indian aviation sector. The most prominent was IndiGo’s operational crisis that unfolded during December 2025, when millions of passengers were left stranded after cancellations and delays of more than 2,000 flights, with limited alternatives available. This highlighted the systemic risks associated with a highly concentrated market. India is almost a duopolistic market, with IndiGo and the Air India Group together accounting for more than 90 per cent share in the domestic sector.
Further, in several instances, safety standards were compromised and poor technical reliability was reported in aircraft operations and maintenance. As per the Directorate General of Civil Aviation, technical glitches in flights increased from 692 in 2024 to 889 in 2025. A technical failure in Delhi’s air traffic control messaging system in November 2025 delayed more than 200 flights and led the government to call for additional backup systems.
Outlook
Over the next few years, India’s aviation sector is likely to enter a more demanding phase, with stronger capabilities needed to match the rapid expansion taking place. The induction of new aircraft, launch of new airports and expansion of international networks will create significant opportunities. Rationalising the market competition will remain important. Air India’s expansion could challenge IndiGo’s dominance, while Akasa Air and other carriers could add further capacity and competition.
Infrastructure development will increasingly focus on integrating airports with urban transport, logistics and industrial networks. Digitalisation and automation will help address capacity and manpower constraints, while MRO, leasing, aviation finance and cargo offer opportunities to deepen the aviation ecosystem. Sustainability will become a growing commercial priority. Beyond conventional aviation, electric vertical take-off and landing technology could eventually extend regional connectivity by linking airports, cities, industrial clusters and smaller destinations through vertiports, creating a more integrated and diversified aviation network.
Vaishnavi
