Icra Projects Cargo Volumes to Increase by 9-11% to Reach 3.7 Million Tonnes in FY25

The cargo sector is projected to experience a robust growth of 9-11% this fiscal year, reaching 3.6-3.7 million tonnes, driven by increased domestic and international volumes, according to Icra. The agency anticipates international cargo to grow by 11-13%, while domestic cargo is expected to rise by 4-6%. The outlook for airport infrastructure remains stable.

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International cargo volumes showed a modest 1% increase from April to September in FY24 due to global economic slowdowns and geopolitical tensions. However, there was an 18% surge in the latter half of the previous fiscal year, influenced by the Red Sea crisis that began in October 2023. This crisis affected seaborne traffic, benefiting air cargo.

Impact of Covid and Recovery

Cargo volumes were less affected by Covid in FY21 compared to passenger traffic. Recovery was swift, with cargo reaching 95% of pre-Covid levels in FY22, while passenger traffic was at 55%. Vinay Kumar G from Icra noted that international cargo growth was bolstered by vaccine exports and increased merchandise exports during FY22.

Although growth slowed in FY23 and the first half of FY24, it rebounded significantly over the past year since the Red Sea crisis began. International cargo saw an 18% increase year-on-year and a 20% rise from April to August this fiscal year. It is expected to grow another 11-13% in FY2025.

Airport Infrastructure Outlook

Icra's outlook for airport infrastructure is stable, with revenues from airports like Delhi, Hyderabad, Bengaluru, and Cochin projected to grow by 12-14% in FY25. This growth is supported by improved passenger traffic, tariff hikes at major airports, and increased non-aeronautical revenues.

The recovery in cargo volumes post-Covid has been notable, especially compared to passenger traffic. The ongoing geopolitical issues have further influenced air cargo positively. As international cargo continues to rise, the sector is poised for continued growth in the coming years.