Research Update: Perth Airport Rating Affirmed At 'BBB'; Outlook Negative Due To Uncertain Timing Of Traffic Recovery

Travel restrictions across the globe, weak global economic conditions, and social distancing measures in the aftermath of the COVID-19 pandemic will continue to affect air travel in 2021 and result in a long recovery phase to pre-COVID-19 levels. Despite continuing intrastate mining-related traffic, we expect Perth Airport Pty Ltd.'s traffic to decline over the next 12 months for fiscal 2021. We expect recovery to pre-COVID-19 levels could occur around 2024, following increased confidence and greater visibility on international and interstate travel. We expect cash flows to significantly reduce for the airport over fiscal years 2020 and 2021, before rebounding thereafter. As such, we expect FFO to debt to be weak over the next couple of years and could rise above

...- Travel restrictions across the globe, weak global economic conditions, and social distancing measures in the aftermath of the COVID-19 pandemic will continue to affect air travel in 2021 and result in a long recovery phase to pre-COVID-19 levels. - Despite continuing intrastate mining-related traffic, we expect Perth Airport Pty Ltd.'s traffic to decline over the next 12 months for fiscal 2021. We expect recovery to pre-COVID-19 levels could occur around 2024, following increased confidence and greater visibility on international and interstate travel. - We expect cash flows to significantly reduce for the airport over fiscal years 2020 and 2021, before rebounding thereafter. As such, we expect FFO to debt to be weak over the next couple of years and could rise above 9% by 2022. - On June 16, 2020, S&P Global Ratings affirmed the '###' long-term issuer credit rating on Perth Airport and issue credit ratings on the airport's debt. At the same time, we removed the ratings from CreditWatch,...

Research Update