Fitch Affirms Rhode Island Airport Corp.'s Airport Revs at 'A'; Outlook Stable
Fitch Ratings affirms the underlying 'A' rating on the Rhode Island Economic Development Corporation's approximately $308 million outstanding airport revenue bonds. The Rating Outlook is Stable. The bonds are special obligations of the Rhode Island Airports Corporation (RIAC) payable principally from net revenues and pledged funds generated principally from T.F. Green Airport (T.F. Green or the airport). RIAC was created in 1992 by the Rhode Island Economic Development Corporation to operate T.F. Green, as well as five smaller airports throughout the state.

The 'A' rating reflects RIAC's strong financial performance and operating structure and the established base of passenger demand at T.F. Green. Credit concerns center on the airport's proximity to several airports that provide competing or more expansive service, and on the increasing reliance on Southwest Airlines (Southwest) for growth. The Stable Outlook, despite significant recent setbacks in the airport's marketplace, is supported by RIAC's strong financial profile and the maturity of the Rhode Island economy.

The airport recorded strong average annual enplaned passenger growth rates throughout the late 1990s, but passenger demand has flattened in the last two years due to the weakening national and regional economy and changes in the airline marketplace at T.F. Green and at other regional airports. Traffic for fiscal year 2007 (June 30 fiscal year-end) fell 9% from fiscal 2006, to reach 3 million enplanements, and has shown zero year to year growth for July 2007, the first month of fiscal year 2008.

Business Wire (press release)