INFRASTRUCTURE AND PROJECT FINANCESECTOR IN-DEPTH 12 NOVEMBER 2015TABLE OF CONTENTSMEDIANS HIGHLIGHT POSITIVE TRENDS AS MODERATE ENPLANEMENT GROWTH RETURNS2CARRIER CONCENTRATION CONTINUES TO DIVERGE3LEVERAGE CONTINUES THREE-YEAR DOWNTREND 3 COVERAGE HOLDS STEADY 4CASH LEVELS ARE AT THEIR HIGHEST IN YEARS 5 APPENDICES 6MOODY'S RELATED RESEARCH 18ANALYST CONTACTSEarl Heffintrayer 212-553-1770AVP-Analyst earl.heffintrayer@moodys.comKurt Krummenacker 212-553-7207 VP-Sr Credit Officer/Manager kurt.krummenacker@moodys.comChee Mee Hu 212-553-3665MD-Project Finance cheemee.hu@moodys.comUS Airport Medians Fiscal 2014Enplanement Growth Supports Improved Metrics Key median credit metrics for the US airport industry improved in 2014. Among our chief findings, median enplanements rose at the fastest pace since 2008 and cash levels are at their highest point in recent years.¯ Enplanements rose at the fastest pace since 2008. Median enplanement growth increased 1.8%, the fastest rate of growth since 2008, when the median increased 2.3%. Similar to fiscal 2013, the strongest growth occurred at large hub airports. However, median enplanement growth for both medium and small hubs finally turned positive after posting declines in each of the previous four years. Higher enplanements are credit positive because passenger numbers are a key determinant of operating revenue.¯ Carrier concentration continues to diverge by airport type. Origin and destination (O&D) airports have seen air carrier concentration increase as major airlines consolidate and optimize their operations. Meanwhile, connecting hubs have experienced the opposite effect as start-up airlines gain market share at airports that have traditionally been fortress hubs.¯ Leverage continues its three-year downtrend. Leverage for airports has decreased for the third consecutive year, as measured by debt per O&D passenger.¯ Coverage holds steady at the median but improves for most of the portfolio. Median net revenue debt-service coverage hardly budged at 1.53 times, according to our calculations, compared with 1.52 times last year. However, 70% of the portfolio saw an increase in debt service coverage.¯ Cash levels are at a recent high. Liquidity, as measured by days cash on hand, improved to 560 days from 551 days in fiscal 2013. This represents the fourth consecutive year of increasing cash relative to operating expense growth for the airport sector.MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCEThis publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.2 12 NOVEMBER 2015 US AIRPORT MEDIANS FISCAL 2014: ENPLANEMENT GROWTH SUPPORTS IMPROVED METRICSMedians Highlight Positive Trends as Moderate Enplanement Growth Returns Medians for fiscal 2014 have finally bucked the ...
