Aerocities to unlock $29.5 bn opportunity by 2030, drive non-aero revenues from retail, hospitality, real estate leasing

With passenger traffic hitting 600 million by 2030, airports will evolve into integrated economic zones, with aero cities driving non-aero revenues

With air passenger traffic projected to reach 600 million by 2030, Indian airports are evolving beyond transit hubs into high-potential commercial ecosystems. aerocities around major airports are expected to generate $29.5 billion in annual non-aero revenues, a 26% jump from current levels, through retail, hospitality, and real estate leasing, while creating new business districts and boosting profitability, a report by Knight Frank India and National Real Estate Development Council (NAREDCO) titled Beyond the Runway- Scope of Non-Aero Revenue and Aerocities in India has said.

By 2030, airports will evolve into economic zones, with aerocities boosting non-aero revenues via retail, hospitality, and commercial leasing. (Knight Frank )

With Indian air passenger traffic projected to increase by nearly 50% from 412 million in FY 2025 to 600 million by FY 2030, non-aeronautical revenue is poised to see an exponential rise, benefiting from both increased passenger numbers and improved per-passenger spending. Even a modest increase of $1 ( ₹87) per passenger across the projected traffic base could translate into $29.5 bn in annual non-aero revenues for Indian airports in 2030, a 26% increase from the existing value, the report said.

With Indian air passenger traffic projected to increase by nearly 50% from 412 million in FY 2025 to 600 million by FY 2030, non-aeronautical revenue is poised to see an exponential rise, benefiting from both increased passenger numbers and improved per-passenger spending. Even a modest increase of $1 ( ₹87) per passenger across the projected traffic base could translate into $29.5 bn in annual non-aero revenues for Indian airports in 2030, a 26% increase from the existing value, the report said.

This creates a strong incentive for operators to invest in premium retail zones, food courts, entertainment facilities, and destination experiences that attract both travellers and non-travelling visitors, as per the report launched at the 17th NAREDCO National Convention being held in the Capital.

The report highlighted the growing importance of non-aero revenues in shaping the future of India’s airports and urban growth. The analysis showed that airports managed under the public-private partnership (PPP) model generate 87% of the country’s total non-aero revenue while handling 64% of total traffic. This reflects the operational efficiency of the PPP model and its critical role in diversifying airport income streams beyond traditional aeronautical revenues, it said.

Aerocities' large-scale urban ecosystems planned around airports can integrate office spaces, hospitality, retail, entertainment, logistics, and convention centres. Such developments allow airports to transform from transit points into vibrant economic hubs, supporting job creation, tourism, and global connectivity. For airlines and operators, aerocities mean steady non-aero income, while for governments, they become engines of urban development. By integrating real estate development with aviation, India’s airports can position themselves as growth accelerators in the global economy, the report said.

“The future of aviation growth in India is deeply linked with real estate and infrastructure development. With passenger traffic projected to touch 600 million by 2030, airports are no longer just transit hubs; they are becoming integrated economic zones. The development of aerocities around major airports can unlock massive non-aero revenues, create new business districts, and stimulate allied infrastructure such as hotels, retail, and commercial spaces. This is an opportunity for the real estate sector to partner in building world-class urban ecosystems that will drive India’s next phase of growth,” said G Hari Babu, president, NAREDCO.

Knight Frank chairman and managing director, Shishir Baijal, noted that India is at an “inflection point” where aviation growth directly feeds into real estate development. “Delhi and Mumbai airports are already demonstrating how integrated planning can create business districts on par with global hubs,” he said.

Aerocities: A real estate opportunity

The report noted that India’s largest hubs, Mumbai and Delhi airports, generate per capita non-aero revenues of $20.1 and $18.1, respectively, nearly matching leading global benchmarks such as London Heathrow at $21.6 and Tokyo Haneda at $19.9.

It said the per capita non-aero spending at Delhi ($18.1) and Mumbai ($20.1) airports already matches London Heathrow ($21.6), proving India’s potential to attract global retail and hospitality brands.

Rajeev Vijay, Executive Director, Knight Frank India, said, “The fact that Mumbai and Delhi airports are already generating per passenger non-aero revenues at par with Heathrow and Haneda demonstrates the potential of India’s aviation sector. With private equity and institutional investors eyeing growth opportunities, the next phase will be defined by aerocity-led development. These urban ecosystems can transform airports into economic powerhouses, while unlocking new revenue streams that are less vulnerable to cyclical passenger traffic.”

The report said that with PPP airports already leading non-aero revenue generation, passenger growth on the rise, and aerocity development on the horizon, the future of India’s airports lies in embracing a holistic growth model that combines aviation, commerce, and urban development.