Fitch Ratings Inc. has affirmed the Susquehanna Area Regional Airport Authority’s $148 million in senior airport revenue bonds and $8 million in subordinate airport revenue bonds at BB .
SARAA operates Harrisburg International Airport in Middletown, Capital City Airport in Fairview Township, Franklin County Regional Airport outside Chambersburg, and Gettysburg Regional Airport.
The ratings firm gave the authority’s bond outlook a stable rating, noting in a Wednesday news release that the BB grade reflects the airport’s “small market, high cost per enplanement, high leverage and constrained liquidity and revenue generating capability.”
Fitch said the number of passengers flying out of SARAA’s airports has been relatively stable at around 650,000 per year. It noted, however, that “strong competition from regional airports” and service changes by United Airlines and US Airways – including dropping non-stop service from HIA to Denver and Orlando – have resulted in a 5.5 percent decrease in enplanements so far this year.Low-cost Frontier Airlines’ departure from HIA in April has also affected the total, they said.
Fitch said HIA’s strongest competition comes from Baltimore-Washington, Philadelphia and Dulles international airports.
It said SARAA’s forecasted all-in debt service coverage ratios are extremely low and below comparable investment grade peers.