Research Update: Melbourne Airport Outlook Revised to Stable On Progressive Traffic Recovery; 'BBB+' Rating Affirmed

We believe the recovery in domestic passenger traffic at Melbourne Airport, the major asset of Australia Pacific Airports Corp. Ltd. (APAC), will remain strong. International traffic should also pick up rapidly over the next several months. Rising passengers should increase the earnings and cash flow of the Australian airport operator, supporting the recovery in its credit metrics. On July 28, 2022, S&P Global Ratings revised the outlook on the rating to stable from negative. At the same time, we affirmed our 'BBB+' long-term issuer credit rating on APAC and the issue ratings on the airport's rated debt. The stable outlook reflects our expectations of a strong recovery in passenger traffic at Melbourne Airport over the next 12 months, such that

...- We believe the recovery in domestic passenger traffic at Melbourne Airport, the major asset of Australia Pacific Airports Corp. Ltd. (APAC), will remain strong. International traffic should also pick up rapidly over the next several months. - Rising passengers should increase the earnings and cash flow of the Australian airport operator, supporting the recovery in its credit metrics. - On July 28, 2022, S&P Global Ratings revised the outlook on the rating to stable from negative. At the same time, we affirmed our '###+' long-term issuer credit rating on APAC and the issue ratings on the airport's rated debt. - The stable outlook reflects our expectations of a strong recovery in passenger traffic at Melbourne Airport over the next 12 months, such that APAC's ratio of funds from operations (FFO) to debt rises to about 8.5%-8.9% in fiscal 2023 (ending June) and above 9% thereafter....

Research Update