Fitch affirms RIAC’s BBB+ bond rating and holds positive outlook

FITCH RATINGS has affirmed a BBB+ rating for the R.I. Airport Corp.'s outstanding revenue bonds and maintained a positive outlook on those bonds despite a decline in T.F. Green Airport enplanements in fiscal 2019. / COURTESY R.I. AIRPORT CORP.
FITCH RATINGS has affirmed a BBB+ rating for the R.I. Airport Corp.'s outstanding revenue bonds and maintained a positive outlook on those bonds despite a decline in T.F. Green Airport enplanements in fiscal 2019. / COURTESY R.I. AIRPORT CORP.

WARWICK – Fitch Ratings has affirmed the R.I. Airport Corp.’s BBB+ rating on $97 million outstanding revenue bonds as of June 30, the ratings agency reported this week.

Fitch also maintained a positive outlook for RIAC’s bond rating, citing an expanding enplanement base over recent years, growing cash flow and declining leverage.

The report noted that due to high competition in the New England market and weakening performance that led to “route rationalization,” enplanements at the airport declined from 2006 through 2015, prior to growth from 2016 through 2018.

Fitch did note that RIAC’s financial and operational performance had been slightly weaker in fiscal 2019, noting a recent decline in enplanements year over year driven by cuts to nonstop routes at T.F. Green Airport. The report specifically cited a decline in flights from Frontier Airlines, Southwest Airlines and the exit of Norwegian Airlines from T.F. Green operations. It also noted the impact of Sun Country Airlines ending its seasonal flights early as a factor in weakening enplanements.

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Read PBN’s most recent coverage of T.F. Green traffic figures here.

The report noted optimism about the potential introduction of Moxy Airlines to Rhode Island. Moxy is a proposed airline by JetBlue Founder David Neeleman.

Fitch said it expects enplanements to remain steady in fiscal 2020 and then increase at a 1.5% rate annually.

The revenue loss from a decline in enplanements was offset by a decline in operational costs, the report said, “reflecting prudent cost management.”

The report said T.F. Green’s comparable peers were Long Beach Airport in Los Angeles and Dayton International Airport in Ohio.

Fitch also noted that RIAC has roughly $123 million outstanding in parity private placement loans and bonds, which are not rated by Fitch.

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.

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