Fitch Ratings announced last week that it has downgraded the R.I. Economic Development Corporation’s approximately $243 million in outstanding R.I. Airport Corporation senior-lien general airport revenue bonds to “BBB+” from “A-.” Fitch revised the rating outlook to stable.
According to Fitch, the downgrade reflects the airport’s plans for additional senior-lien-parity debt borrowings, which come at time where the airport struggles to reverse prolonged traffic declines. Higher planned debt will lead to some elevation in overall leverage levels, and could have a modest impact to airline costs and coverage ratios at the current traffic base, Fitch said. Additionally, Boston’s Logan Airport continues to dominant the region, expanding service levels in the Greater New England air-trade service.
Fitch said T.F. Green Airport serves a primary origination and destination base of 1.91 million enplanements, but it’s also influenced by a more competitive New England airport environment that has contributed to seven consecutive years of enplanements declines. Above-average concentration risk exists with Southwest Airlines representing 50 percent of T.F. Green’s enplanements in fiscal 2012.
A continuation of enplanement losses could further stress the airport’s financial flexibility, negatively impacting credit quality, the ratings company said. •