The rating reflects the airport's monopolistic position in northern
KEY RATING DRIVERS
SMALL HUB WITH VOLATILITY AND SOME CONCENTRATION:
Revenue Risk - Volume: Weaker
LOW HISTORICAL COST PROFILE AND STABLE FRAMEWORK: The airport's cost per enplaned passenger (CPE) remains low relative to peers at
Revenue Risk - Price: Midrange
MODERATE INFRASTRUCTURE PLAN WITH NEW DEBT: The five-year capital improvement plan (CIP) is modest at
Infrastructure Renewal & Development: Midrange
STABLE DEBT STRUCTURE: All of RTIA's senior debt is fixed rate with debt service payments flat at approximately
Debt Structure: Stronger
LOW LEVERAGE AND STRONG LIQUIDITY: RTAA's senior net debt-to-cash flow available for debt service (CFADS) is negative and well below peers. In FY 2013, the airport's senior lien DSCR decreased to 3.77x from 4.06x in FY 2012 while subordinate DSCR decreased to 3.05x from 3.27x in FY 2012. The airport maintains healthy liquidity with
Factors that could lead to a negative rating action include:
--TRAFFIC DECLINES: Continued volatility in enplanement levels leading to meaningful dilution of existing debt service coverage levels or resulting in CPE rising to above
--FINANCIAL METRICS: Additional leverage that would measurably increase debt metrics closer to 4.0x net debt/CFADS or sustainably dilute senior coverage much below 2.0x DSCR;
--LIQUIDITY AND COSTS: Inability to control costs, maintain revenues, or retain balance sheet liquidity to preserve historical levels of financial flexibility.
The bonds are secured by the net revenues of RTIA.
RTIA has a monopoly position in northern
RTIA's CPE in FY 2013 was
As a result of Southwest's reduction in service across its smaller hub operations, RTIA has experienced a decline in enplanements which is expected to continue through FY 2014. Management has been working aggressively with a marketing incentive program to attract new carrier services. Along with several new services to begin this year, Fitch believes the airport is able to sufficiently mitigate the effects of further Southwest reductions if they occur. RTAA's financial position remains relatively strong given high unrestricted cash balance and low net debt.
The authority had borrowed
The RTAA operates two airports, RTIA and
Additional information is available at 'www.fitchratings.com'.
--'Rating Criteria for Infrastructure and Project Finance'(
--'Rating Criteria for Airports'(
Rating Criteria for Infrastructure and Project Finance
Rating Criteria for Airports
Source: Fitch Ratings
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