India’s air cargo volumes are projected to grow by 9-11% in FY25, reaching approximately 3.6-3.7 million tonnes, according to a report by credit rating agency ICRA. This increase will be driven by an 11-13% rise in international cargo and a 4-6% growth in domestic shipments. Revenues in the sector are also expected to see robust growth of 12-14% year-on-year, supported by rising passenger traffic, tariff hikes at key airports, and growth in non-aeronautical revenue streams.

The second half of FY24 saw an 18% expansion in international cargo volumes, partly fueled by the Red Sea crisis, which disrupted seaborne trade and shifted more cargo to air routes. As a result, international air cargo benefitted from this unexpected demand surge.

Vinay Kumar G, Vice President and Sector Head of Corporate Ratings at ICRA, noted that air cargo volumes were less impacted by the Covid-19 pandemic compared to passenger traffic, with cargo volumes recovering to 95% of pre-pandemic levels by FY22. This was due in part to strong demand for vaccine exports and other merchandise. While the pace of growth slowed in the first half of FY24, cargo volumes have bounced back significantly over the past year.

For FY25, international cargo volumes are expected to rise by 11-13% year-on-year, marking new highs for the industry. The credit outlook for airport operators remains strong, bolstered by healthy earnings and liquidity.

This optimistic forecast underscores the resilience and growing importance of air cargo in India’s logistics landscape, with both domestic and international markets contributing to this upward trend.