SAN FRANCISCO - Moody's Investors Service downgraded Spokane, Wash.'s airport to A2 from A1, based on a weakening financial profile.
The outlook is stable.
"The rating downgrade reflects significantly tighter financial margins from a combination of the downward trend of enplanements since 2007 and the increase in operating expenses in 2013," analysts said Oct. 30. "These trends have resulted in a measurable decline in net revenue and metrics such as debt service coverage."
In addition, consolidation within the airline industry has the potential to result in route cuts which will further suppress enplanement growth.
The A2 rating reflects the airport's strong market position with little competition, the diverse carrier mix, and the airport's low debt levels, Moody's said.
The downgrade affects $9.8 million of outstanding enterprise revenue bonds.
"Continued enplanement declines that narrow financial margins below 1.3 times based on Moody's net revenue coverage calculation or liquidity declining to below one year of cash on hand could put downward pressure on the rating," Moody's said.
The airport is located about five miles west of downtown Spokane, with limited competition from other airports located at least 280 miles away.
Credit strengths include no borrowing required to fund the airport's capital improvement plan and low debt levels and cash balances that exceed outstanding debt.
