The number of airport lounges in India is expected to increase to 70-90 by calendar year 2025, to 150-160 by 2030 and to 193 by 2040, as per estimates based on FICCI data, a statement by MoCA and Frost & Sullivan research.
The number of cities with more than two airports in India is expected to be 8, 16 and 31 by the same timelines, respectively. Passenger numbers are expected to rise to 29.3 crore, 56.7 crore and 111.4 crore, respectively.
Industry revenues are also expected to grow to $16.9 billion, $20.8 billion and $28.6 billion by these years, respectively. The total number of operational airports is expected to reach 295 by 2040. Airport services have registered high growth from ₹1,304.97 crore in FY17 to ₹1,842.5 crore in FY19 as per a study by Frost & Sullivan.
The increase in FY20 was marginal at ₹1,887.74 crore due to the early effects of the pandemic. Buoyed by this growth, airport lounge services providers such as DreamFolks Services are raising funds through IPO. DreamFolks is banking on the fact that the non-aeronautical earnings per passenger which was at ₹75.94 in FY17 has risen by more than threefold to ₹250.56 in the pre-pandemic year of FY20. The share of non-aeronautical revenues for private airports such as Delhi, Mumbai and Bengaluru varied between 50% and 70% of their overall revenue in FY19. However, the non-aeronautical revenues from AAI-managed airports were about 10%-15% for FY19. This is an indicator of how passengers are willing to spend more if provided with better services, and will benefit the lounge market among other retail categories of passenger spending, according to reports.
“The Indian airport lounge market is at the cusp of multifold growth in terms of value and volume,” said Liberatha Kallat, chairperson and MD, DreamFolks Services Ltd. “The average number of lounges per airport is also expected to grow as domestic and international passenger volume grows due to pent-up, post-pandemic demand.”
“India will also witness high growth in airport services as lounges, airlines, tour operators and banks create enhanced customer awareness of personalised, customised and value-added services for air travellers,” she said.
As of 2018, there were seven airports that handled more than 10 million passengers; this is expected to grow to 47 airports by 2040, offering a key opportunity with the possibilities of multiple lounge options at these airports.
As of 2020, there were about 125 operational airports in India, and this is expected to increase to 295 by 2040. The Government of India plans to spend around ₹1 lakh crore to set up new airports. ‘Economic engines’
Every ₹ 100 invested in aviation is expected to generate an economic output of ₹325. Similarly, every 100 jobs created in aviation is expected to create 610 indirect job opportunities.
The aviation sector has been contributing roughly 3.5% to the India’s GDP, with about 10% of the population accounting for air travel.
The number of lounges in an airport is proportional to the number of passengers it handles. The top 24 global airports average at about 7 lounges per airport. Indian airports average 2 lounges per airport, as per regulatory filings.
Only 8% of travellers eligible to access a lounge use the facility, and the penetration is very low.
Guangzhou International in China has the largest number of airport lounges, at 19, followed by Xian Xianyang International (12). On an average, the top 25 international airports have 7 lounges per airport. India’s Indira Gandhi International Airport in New Delhi has 7 lounges, followed by Chatrapati Shivaji Maharaj International in Mumbai, which has 6 lounges. On an average, the top 25 airport in India have only 2 lounges per airport. The number of lounges in Indian airports is expected to grow at an annual average of 10% between 2021 and 2040.
As of 2021, the number of airport lounges in India is recorded to be 50. In Mumbai, Goa, Visakhapatnam and Pune, second airports are being planned. The construction of Navi Mumbai and Mopa airports (in Goa) is underway.
The airport at Bhogapuram in Andhra Pradesh is currently in the bidding phase. Credit and debit cards with lounge access in India were estimated at about 57.20 million at the end of calendar 2021. The percentage of passengers using credit and debit card for lounge access is about 8% which is expected to increase.
The total domestic and international lounge access is estimated at about 7.5 million passengers per annum (pre-COVID) FY20, using all methods of access, as per available data.
