New York, December 06, 2018 —
– Moody’s 2019 sector outlook for airports is positive, underpinned by continued strong aggregate enplanement growth
– While GDP growth and seating capacity growth are expected to slow in 2019, both still support an enplanement growth rate above Moody’s threshold for a positive outlook
Moody’s Investors Service is maintaining its positive outlook for the US airport sector for 2019, reflecting strong enplanement growth driven by continued economic expansion and additional seat capacity added by US airlines. Growth in enplanements – the number of passengers using an airport to depart on a flight – generally translates into higher parking and terminal concession revenue.
“We expect aggregate enplanement growth of 3.2% in 2019,” said Earl Heffintrayer, a vice president at Moody’s and the lead author of the report. “This represents a slowdown from the 5.4% growth seen so far in 2018, but is still above our threshold for maintaining a positive outlook on the sector.”
Enplanement growth has historically demonstrated a high positive correlation with the average of GDP growth, which Moody’s projects to be 2.3% in 2019, and seating capacity growth, which Moody’s projects to be between 3.5% and 4.7%. Smaller airlines, such as Spirit and Frontier, will continue a multi-year trend of increasing capacity by at least 10%, according to the report.
Airports in the Southern and Western regions of the US will continue to experience stronger enplanement growth than the rest of the country, mirroring demographic trends. Growing, younger populations support growth in demand for travel, and airports like the Austin (City of) TX Airport Enterprise (A1 stable) and the Boise (City of) ID Airport Enterprise (A1 stable) are well positioned due to their young urban bases.
Increased use of ridesharing services like Uber and Lyft has had a negative impact on parking and ground transportation revenue at airports across the US, but airports have adapted by collecting pickup or dropoff fees to keep overall collections stable. Looking ahead, Moody’s believes that emerging technologies will allow for more effective fee collection and provide increased revenue generation.
Moody’s outlook on the US airport sector has been positive since December 2014.
Moody’s outlooks represent forward-looking views on credit conditions in various sectors over the next 12-18 months. They do not, however, imply the likelihood or direction of rating actions for individual issuers.
Subscribers can access the report, “Airports – US: 2019 outlook remains positive but enplanement growth will slow,” at:
