Air cargo volumes have been showing promising signs of growth, with ICRA projecting an increase of 9-11% year-on-year (YoY) in FY2025. This positive outlook comes despite global challenges such as the Red Sea crisis and economic slowdowns. Let’s explore the key factors driving this growth and the impact on both international and domestic cargo volumes.
International Air Cargo Volumes Show Strong Growth
Air cargo volumes on the international front have seen significant expansion, especially in the second half of FY2024. While the first half of the fiscal year showed only a modest 1% YoY increase due to global economic and geopolitical issues, the second half recorded an impressive 18% growth. This was largely due to the Red Sea crisis, which disrupted seaborne cargo traffic and shifted demand towards air cargo services.
Domestic Air Cargo Volumes to See Steady Rise
In addition to international growth, domestic air cargo volumes are expected to grow by 4-6% in FY2025. This increase is driven by sustained demand across the country, boosting overall air cargo volumes. The combined international and domestic growth is forecast to bring total air cargo volumes to around 3.6-3.7 million tonnes in FY2025.
Stable Outlook for Airport Infrastructure and Revenues
The rise in air cargo volumes is also expected to contribute to the growth of airport revenues. ICRA predicts that key airports, including those in Delhi, Hyderabad, Bengaluru, and Cochin, will see their revenues increase by 12-14% in FY2025. This growth is supported by a rise in passenger traffic, higher tariffs at major airports, and an increase in non-aeronautical revenues.
Conclusion
The outlook for air cargo volumes is bright, with both international and domestic sectors contributing to the projected growth of 9-11% in FY2025. As the global logistics landscape continues to evolve, air cargo will play a crucial role in ensuring the smooth flow of goods across borders, supporting both economic recovery and expansion.
