Fitch Improves Burlington International Airport Outlook to Positive

Tracks similar to Moody’s Outlook Improvement in March 2017; Affirms Airport’s “BBB-” Credit Rating; Highlights Strength of New Airline Agreement, Manageable Cost per Enplanement, and Strengthening Fiscal Profile

Burlington Vermont AirportBurlington, VT – On Friday, August 18, Fitch Ratings revised the Burlington International Airport’s outlook to positive and affirmed the Airport’s BBB- credit rating (please see the complete ratings table below). In their report, Fitch states that “Positive Outlook reflects an improving fiscal profile demonstrated in recent years which should continue under a recently implemented airline agreement with strong cost recovery mechanisms…” The report also notes the strengthening liquidity position of the Airport, the stable debt coverage, manageable four year $85.9 million infrastructure plan, and conservative debt structure.


“Fitch has now joined Moody’s and the country’s major airlines in expressing confidence that the airport is heading in the right direction,” said Mayor Miro Weinberger. “After a number of important and hard-earned management achievements, the airport is strong and well-positioned to continue to drive the region’s economic growth.”


“The extraordinary team effort to accomplish unprecedented financial and infrastructure improvements has been reflected in the positive rating outlook by both Moody’s Investors Service and Fitch Ratings,” said Gene Richards, Burlington International Airport’s Director of Aviation. “With the guidance of the City of Burlington, I am extremely satisfied with the progress that the Airport has made and I am pleased to see this well-deserved improved outlook.”


The Fitch report focuses on the new Airline Agreement, which began in Fiscal Year 2017 and will extend for five years. The Airline Agreement is intended to maintain a debt-service coverage ratio (DSCR) of 1.5x into the future, with excess net revenues shared among air carriers. This arrangement, along with a well-received four-year capital improvement plan and a conservative debt structure, provide the basis for the revision of the outlook to positive. The full report is included below.


Earlier this year, Moody’s Investors Service Credit Report from March 2017 noted that the Airport achieved its strongest financial position of the last five years in Fiscal Year 2016, ending with 230 days’ cash on hand and 1.59x DSCR, the ratio of net revenues available (which is operating net revenues less operating expenses) to pay for debt principal and interest.  The Fitch report calculates days cash on hand (DCOH) while excluding car rental customer facility charge (CFC) revenue account funds and puts DCOH in August at 191 days.  Fitch also notes the modest growth in airline revenues (5.2 percent) in 2016 and enplanements (up 1 percent) over the first 11 months YTD of the City’s FY17 (which covered July 1, 2016 – June 30, 2017).


Fitch also noted the resolution of a long-standing tax settlement discussion between Burlington and South Burlington, which will save the Airport roughly $800,000 annually going forward, and summarized their action stating:


“The rating is further supported by BTV’s implementation of an airline agreement with strengthened cost recovery terms which reduces the effects of traffic volatility, limited airport capital needs without borrowings for funding, an increased liquidity position, and stabilizing debt service coverage ratios (DSCR) and leverage.”


Fitch’s BTV Ratings History
Date Action Rating Action Outlook
8/18/2017 Affirmed BBB- Revised Positive
7/29/2016 Affirmed BBB- Affirmed Stable
7/22/2015 Affirmed BBB- Affirmed Stable
11/13/2014 Affirmed BBB- Affirmed Stable
5/30/2014 Affirmed BBB- Revised Stable
11/15/2012 Downgraded BBB- Affirmed Negative
3/23/2012 Affirmed BBB Affirmed Negative
3/23/2011 Downgraded BBB Revised Negative
1/12/2009 Affirmed BBB+ Affirmed Stable
11/1/2005 Affirmed BBB+ Affirmed Stable

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