Airport Response to Fitch Ratings
12/16/2011
Fresno Yosemite International Airport received a „BBB‟ rating from Fitch for approximately $57 million in outstanding City of Fresno General Airport Revenue Bonds. The firm said the rating reflects the Airport‟s overall financial condition, particularly its conservative debt structure with manageable debt and fully funded debt service reserves. In the same report, Fitch reaffirmed the Rating Outlook at Stable.
Aviation Director Russell C. Widmar expressed confidence in the Airport‟s current and future financial outlook. “While the report affirms a „BBB‟ rating and Stable outlook, we believe the Airport‟s financial condition to be more improved than indicated in Fitch‟s analysis,” stated Mr. Widmar. “With increasing enplanements and a strong financial position, we hope to achieve a rating upgrade in the near future.”
Fitch acknowledges the Airports' healthy infrastructure and modest five-year capital improvement plan. With funding primarily derived through Airport Improvement Project grants and Measure C sources, most of the Airport‟s projects only require minimal support from airline rates and charges.
Furthermore, the report specifies an increase in passenger enplanements despite the loss of international air service from August 2010 through April 2011. The Airport confirms healthy passenger traffic levels. Continued passenger growth will reposition the Airport to 2007 levels when traffic was at its peak before the economic downturn and loss of daily service to Mexico. The major factor contributing to higher passenger levels is the reinstatement of international air service to Guadalajara, Mexico
In prior years rating analyses, Fitch predicted Fresno Yosemite could be facing costs reaching $8.00 - $9.00 per enplaned passenger by Fiscal Year 2011. Conversely, Fresno Yosemite has maintained costs in the low to mid $7.00 range by implementing a series of cost containment and revenue enhancing strategies.
Today, Fresno Yosemite continues to benefit from a change in its business strategy implemented nearly seven years ago. Previously, the Airport relied heavily on the scheduled airlines as the prime source of airport revenues. Currently, less than 24% of operating revenues are generated from airline sources – well under the national benchmark for similar airports. This new business strategy has allowed the Airport to improve a significant portion of its total revenue package, thereby lessening long-term dependence on airline growth as a major source of increased revenue.
Widmar stated that he looks forward to personally meeting with Fitch to discuss the Airport‟s business strategy and financial health. Meanwhile, Airport management believes it will continue to improve its financial position.
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