BY TED JACKOVICS
The Tampa Tribune
TAMPA Moody's Investors Service has downgraded from Aa3 to A1 the underlying ratings on $692.4 million of the Hillsborough County Aviation Authority's revenue bonds, with a stable outlook.
Moody's attributed the downgrade to below-average passenger ridership at Tampa International Airport from fiscal 2009 through 2011 and expectations Tampa's economy will struggle to achieve significant near-term growth in line with the rest of the nation.
"Debt service coverage has remained substantially lower than historical averages at the airport and is well below the level of similar airports," the report stated.
Moody's believes the airport has "some potential to increase international traffic," however, "the rating impact will likely be limited given the competitive air service market in Florida."
Moody's credited the airport's "good financial liquidity" and diverse carrier group, but it said the latter is being eroded with the growth of Southwest, whose market share will jump to 39.9 percent when merger partner AirTran's enplanements are added.
"Moody's has said the downgrade is the result of the past three years' poor performance," Tampa International Airport chief executive Joe Lopano said Friday.
"This is exactly why we must be more aggressive in marketing, in growing our revenues and improving the bottom line of our business. This will not have any effect on our current debt service or interest rates but may affect future borrowings."
The airport's enplanements peaked in fiscal 2007 at 9.6 million passengers but dropped with the ensuing recession to 8.3 million in fiscal 2010. Projected enplanements in fiscal 2011 are expected to increase to 8.45 million, and 8.6 million, or about 17.2 million passengers overall, are expected in fiscal 2012.
In June, Standard & Poor's reaffirmed the A+ rating for the Hillsborough County Aviation Authority's $692 million in outstanding revenue bonds with a "stable" outlook. The aviation authority also holds a AA rating from Fitch.
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