Declining passenger volume led to a negative rating outlook for New Manchester-Boston Regional Airport.
Moody's Investors Service revised the outlook on the airport enterprise's Baa1 revenue bond rating to negative from stable Friday.
“The revision of the outlook to negative is driven by the renewed loss of enplanement levels at the airport, despite a local economy that is performing well and should be supporting additional service for air carriers,” Moody’s analyst Earl Heffintrayer wrote. “The declining enplanement trend is again forcing the airport to reduce expenses and rely on increased non-commercial aviation related revenue to maintain current financial metrics.”
The airport, Moody's said, is suffering from a weakened market position in the Boston metropolitan area that has resulted in losing business to Boston’s Logan International Airport 55 miles south of New Hampshire's largest city.
Heffintrayer noted that a drop in passenger volume has resulted in higher costs for airlines, with cost per enplanement at $13.13 in the 2018 fiscal year, which was more than double its amount from 2008. The continued loss of airline passengers would also lead to a further increase in costs per enplanement, which Heffintrayer said would hurt the airport’s ability to attract or maintain air service.
Heffintrayer noted that Manchester Airport has benefited from lower debt service requirements thanks a refunding of existing bonds held earlier this year.
Manchester Airport could face a downgrade if it experiences a weakened competitive position that results in airlines reducing service or the loss of a large airline, according to Moody’s. The airport could also be downgraded if it suffers deteriorating liquidity that results in days cash on hand below 300.
Manchester, which is classified as a small-hub airport by the Federal Aviation Administration, has a 330,000-square-foot terminal building with 15 aircraft parking positions on 14 gates equipped with jet loading bridges and two runways. The airport, which is also the third largest cargo facility in all of New England’s six states, has roughly 11,000 public parking spaces available and around 800 spots for rental car services.
