...June 3, 2026 This report does not constitute a rating action. Earnings strain. Airline capacity cuts, together with high inflation, interest rates and airfares, could lower passenger volumes at Australia Pacific Airports in fiscal 2027, from our estimate of 36.9 million in fiscal 2026. This could weigh on earnings in fiscal 2027. We expect passenger growth to normalize from fiscal 2028, as fuel markets stabilize and capacity constraints ease. Tariff increases key. The company is currently negotiating on tariff agreements that expired end- June 2025, which should recover the past period's aeronautical capital expenditure (capex). It will also cover an agreed-upon capex pipeline, including that related to the third runway, which may exceed our current base case. The new higher tariffs will support higher revenues as well. Prudent capital management. The company hasn't paid any dividends in fiscal 2026, and we don't anticipate any in fiscal 2027 as well. This should help keep its ratio of...
