"The rating reflects the airport's historically strong origination and destination market, dominant market position, very low aviation costs, above-average passenger recovery levels and stable financial position," according to S&P credit analyst Reid Tomlin.
The $124.4 million bond issue will refund about $121 million of series 1994B bonds and further the airport's goal of reducing the amount of bonds issued under the closed 1977 senior lien ordinance. After the bonds are sold, the airport will have reduced its 1997 ordinance debt to about $166 million, the S&P report states. Hartsfield has about $1.5 billion of debt under the modernized 2000 ordinance.
"The airport continues to perform well in relation to its peers," says Tomlin. As an example, for the first nine months of this year, traffic was up 2.71% versus a 3.21% decline for the industry.
Additionally, locally based Delta Air Lines has strengthened its hub operation. This move "has driven solid recovery in the airport's connecting traffic segments, while origination and destination traffic has shown some recent improvement," the analyst says.
Hartsfield's developments have attracted new local industrial real estate projects in and around the airport over the past two years, area brokers tell GlobeSt.com. With long-term leases of at least 15 years, Delta houses its corporate headquarters, various cargo facilities, its largest aircraft maintenance center and a major training center on the airport's grounds, as GlobeSt.com has previously reported.
Also expanding its presence at Hartsfield is AirTran, the airport's second-largest carrier next to Delta. S&P notes AirTran's passenger market share increased more than 13% in the first six months of 2003. Delta holds a 78% passenger market share.
S&P's Tomlin says the airport's $6.8 billion capital expansion program is "costly and operationally challenging" but "will position the airport to handle long-term growth." At the same time, the development costs "will place upward pressure on airline rates and charges until a more consistent (economic) recovery trends is evident," the analyst says.
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