Los Angeles World Airports (LAWA) officials said they are pleased that Fitch Ratings has revised its outlook for Los Angeles International Airport (LAX) and affirmed its “AA” rating on LAX’s outstanding revenue bonds. Fitch Ratings is a global rating agency that provides the world’s credit markets with independent credit opinions.
“In upgrading our rating outlook to stable and reaffirming our “AA” bond rating, Fitch recognizes the prudent fiscal policies of Mayor Antonio R. Villaraigosa and the Board of Airport Commissioners,” Los Angeles World Airports (LAWA) executive director Lydia H. Kennard, said. LAWA is the city agency that owns and operates LAX and three other Southern California airports.
“We agree with Fitch that we are well-positioned to fund an array of capital improvement projects to increase safety, security and customer satisfaction at Los Angeles International Airport,” Kennard said. “We are committed to working closely with our airline partners and other stakeholders to maintain our strong financial condition.”
LAX’s airport bonds are secured solely by revenues derived from LAX’s operations.
In a report issued Monday, July 24th, Fitch said, “Since Fitch’s 2003 surveillance review, total enplanements grew at an average annual rate of five percent, reaching 30.5 million in 2005.”
International passenger growth outpaced domestic passenger growth, growing at over seven percent annually and reaching 7.8 million in 2005, airport officials noted.
Another positive credit factor that occurred since Fitch’s last review is the more moderate approach to the capital improvement program, officials said.
An $11 billion Master Plan that had been approved by the Federal Aviation Administration (FAA) was reconsidered by management and a new vision for the airport was defined. Management is now focused on implementing what is economically and practically feasible, given the capital-intensive nature of airports.
Currently, the capital improvement plan (CIP) from 2006-2008 totals $1.2 billion and will relocate a runway, modernize the international terminal and install in-line baggage systems at all nine passenger terminals.