Moody's revises 2013 airport outlook to stable
Moody's Investors Service on Wednesday said it revised its 2013 outlook for the U.S. airport sector to stable from negative as the rating agency said it expects the airports to maintain the financial performance achieved last year.
Moody's said the outlook on the airports sector has been negative since August 2008. However the agency said that the uncertainty of federal funding remains a negative for airport credit quality.
"Although the long-term FAA reauthorization bill passed in 2012 provides for stable funding levels, these levels are currently exposed to across-the-board cuts from sequestration, debt ceiling, or budget negotiations," Moody's said.
"The outlook for the U.S. airport sector is stable due to projected modest economic growth in the U.S. and global economies that should support enplanement and subsequent revenue increases," the rating agency said in a statement.
The stable outlook also reflects strengthened airport finances, and better than expected operating results in 2011 and 2012, Moody's said.
Airline financial strength has increased, reducing the risk of sudden declines at the airports and supporting a stable outlook, Moody's said.
Fewer seats and higher fares as airlines continue to consolidate will make enplanement growth difficult, Moodys said.
Moody's expects enplanement growth to be about the same rate as gross domestic product growth, or roughly 2 percent.
(Reporting by Caryn Trokie; Editing by Chizu Nomiyama)