Colorado Springs, Colo. – Fitch Affirms Colorado Springs (CO)'s Airport Revs at 'BBB+'; Outlook Revised from Negative to Stable.
Fitch Rating’s outlook revision from negative to stable is based on a number of improving factors at the Colorado Springs Airport (COS) including traffic stabilization, an expected defeasement of the 2007 series bonds in December 2016 and a newly executed five-year firm commitment from the airlines under a new hybrid airline use and lease agreement (AULA).
Fitch reports a 5% increase in passenger enplanements over 2015 levels. This positive trend is in part due to the return of Frontier Airlines to the market with new nonstop daily service to 3 major U.S. destinations. Increases in service and capacity from other airlines as well as the Airport’s new air service incentive program have also attributed to this passenger growth.
A strength noted in this rating includes the Airport’s modest capital program which has no plans to issue additional debt and is fully funded with grants and a structured PFC plan of finance. Also noted is the Airport’s declining debt service which is “expected to reduce to $1.4 million through maturity, as the airport is expected to utilize its cash reserves to defease the 2007 series bonds.”
The Airport is anticipating the continued reduction of airline cost per enplanement (CPE) “due to the addition of a residual revenue sharing component in the new five-year AULA, the diversification of non-airline airfield revenues with ground leases on newly built hangars, and continuance of management's progressive deleveraging strategy.”
COS also saw an increase of 8% in operating revenues in fiscal 2015 which is credited to the “adjustment in airline rates and charges and an increase in rate structure for non-airline tenants.”
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