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Fitch: Extreme Winter Weather May Challenge Airports' Finances

January 29, 2014

NEW YORK --(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Severe Winter Conditions May Challenge U.S. Airports (Flight Losses Could Affect Revenue and Cost Budgets) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732537 Flights cancelled due to the severe winter weather could result in financial risk to airports to varying degrees, according to a Fitch Ratings report. 'Passenger traffic is the lifeblood of airport revenue. Passenger generated revenue from terminal concessions, on-airport parking, and car rental are most at risk to changing conditions. All together, these revenues can contribute 40% - 60% of total airport operating revenues and quickly impact total non-aeronautical revenue generation. From the expense side, higher costs for snow and ice removal can impact net cashflow as well,' said Seth Lehman , Senior Director at Fitch Ratings. Flight disruptions have been widespread, with over 40,000 flights cancelled and 180,000 delayed during the 2013 - 2014 winter so far according to some estimates. Much of the disruption has occurred in the Midwest and Northeast, resulting in a ripple effect affecting every major airport across the U.S. Airlines have limited flexibility when trying to reestablish flight patterns due to post-recession efforts to control seating capacity. With passenger loads consistently exceeding 80% over the last three years, accommodating passengers on delayed or cancelled flights is a significant challenge. Most U.S. airports have strong cost recovery mechanisms and robust liquidity that provide ample flexibility to weather the conditions seen so far this winter. Credit implications are expected to be limited. For more information, the special report: 'Severe Winter Conditions May Challenge Airports' is available on the Fitch Ratings web site at www.fitchratings.com . Additional information is available at ' www.fitchratings.com '. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS . IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE ' WWW.FITCHRATINGS.COM '. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Ratings Seth Lehman , +1-212-908-0755 Senior Director Fitch Ratings, Inc. One State Street Plaza New York, NY 10004 or Jeffrey Lack , +1-312-606-3171 Associate Director or Media Relations Elizabeth Fogerty , New York , +1-212-908-0526 elizabeth.fogerty@fitchratings.com Source: Fitch Ratings


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