Over 60-70 per cent of domestic passengers and 80-90 per cent of international passengers do not spend on food & beverage, duty free or retail at major Indian airports due to limited product options and high prices, aviation consultancy CAPA India said in its research briefing on Thursday.

Moreover, most of the spending at major airports happens only during peak hours providing airports an opportunity to align products and pricing to grow overall sales, it said.

Domestic and international passenger traffic grew by 13.5 per cent and 22 per cent in FY 2024. Non aeronautical revenue at airports too is growing with Delhi and Hyderabad airports reporting 19 per cent and 24 per cent year on year increase in the last fiscal. Adani airports is leveraging its mobile app for sales and is targeting significant growth from non aeronautical business in 2-3 years.

However non-aeronautical revenue per passenger earned by Indian airports is much lower compared to their peers in Asia and Europe.

According to the consultancy, Indian passengers spend significantly more on duty free purchases at Dubai compared with airports within the country. Fashion and electronic items are major purchases for Indian travellers overseas but they barely feature in Indian airports.

"In India duty free sales are dominated by the liquor category and occur mostly on arrival. Only two per cent of the passengers contribute to 50 per cent of duty free spend," CAPA India said.

The consultancy has suggested airports could take several initiatives like reducing infrastructure costs for food & beverage operators by having cloud kitchens outside airports, enhancing passenger experience and providing more affordable options including vending machines at boarding gates.