Cargo Volumes Expected To Surge 9-11% To 3.7 MT In FY25: ICRA

The overall cargo volumes are expected to see a healthy year-on-year growth of 9-11% to 3.6-3.7 million tonne this fiscal year on the back of estimated higher domestic and international cargo volumes while the outlook on airport infrastructure is stable, ICRA said on Monday.

Ratings agency ICRA expects international cargo volumes to expand 11-13% while the domestic cargo growth is estimated at 4-6%.

The international cargo volumes saw a muted year-on-year rise of 1% in the April-September period of fiscal 2023-24, owing to the slowdown in global economy and geo-political conflicts.

However, the international cargo volumes surged 18% in the second half of the previous fiscal year, amid the Red Sea crisis, which started in October 2023, ICRA said.

Consequently, the seaborne cargo traffic was impacted, which in turn benefitted international air cargo traffic, it stated.

The overall cargo volumes are expected to see a year-on-year growth of 9-11% to 3.6-3.7 million tonnes this fiscal year, the ratings agency said.

"The cargo volumes were relatively less impacted due to Covid in FY21, compared to passenger traffic. Moreover, the recovery was relatively swift with cargo volumes recovering to 95% of pre-Covid levels in FY22 compared to 55% in passenger traffic," said Vinay Kumar G, Vice President and Sector Head for corporate ratings at ICRA.

This was supported by higher growth in international cargo on account of the export of Covid-related vaccines and higher merchandise exports in fiscal 2021-22, he said.

While the growth in cargo volumes slowed down during the fiscal 2022-23 to H1 fiscal 2023-24 period, it has bounced back handsomely in the last 12 months, since the start of the Red Sea crisis, he said.

"The international cargo volumes have increased 18% year-on-year and 20% during the first five months (April-August) of the ongoing fiscal and are expected to increase by a further 11-13% year-on-year to touch new highs in fiscal 2024-25," Kumar said.

"ICRA's outlook on airport infrastructure is stable with revenues of Icra's sample set, which includes Delhi, Hyderabad, Bengaluru, and Cochin airports, likely to grow around 12-14% year-on-year in fiscal 2024-25 supported by the sustained improvement in both domestic and international passenger traffic, increase in tariffs at some of the major airports and ramp-up in non-aeronautical revenues," he added.