Fitch Ratings has affirmed the ‘AA-‘ rating on Greater Orlando Aviation Authority (GOAA), Florida’s $1.8 billion of outstanding senior lien airport facilities revenue bonds and the ‘A+’ rating on approximately $867 million in outstanding subordinate lien airport facilities revenue bonds. The Rating Outlook has been revised to Positive from Stable, according to Fitch.
The Positive Outlook reflects the Orlando airport’s ongoing positive trends in passenger traffic and financial performance, with traffic well above pre-pandemic levels and in excess of Fitch’s prior base case expectations. Forward-looking leverage remains strongly positioned for the ‘AA’ rating category for both liens including anticipated capital-related debt borrowings through 2026; however, GOAA has a history of capital plan scope increases to accommodate the above-average volume growth in the Orlando market.
Fitch noted that further clarity on future borrowing needs within the next one-to-two years leading to stabilized leverage below 7x could lead to an upgrade. A successor rate agreement with potentially more favorable cost recovery terms may also support positive rating migration.
The ratings reflect the Orlando airport’s leading origination and destination (O&D) market position and diverse carrier mix. GOAA benefits from a rate-by-resolution airline agreement, which provides competitive airline costs and strong cost recovery supplemented by passenger facility charges (PFCs) and robust non-airline revenue streams. Fitch also views positively the airport authority’s proactive capital management and maintenance of its strong liquidity position. They stated leverage will trend upward in conjunction with the sizable $5.1 billion capital improvement program (CIP) and associated borrowings, but is expected to stabilize at a level consistent with the ‘AA’ rating category. The subordinate lien’s lower rating reflects its junior claim to airport revenues coupled with lower covenant levels.
According to Fitch, the key ratings drivers were stable traffic and diverse carriers offering travel to Central Florida. The airport serves large and growing O&D enplanement base anchored by encompassing Florida’s premier leisure market. The airport has a relatively balanced traffic profile despite visitors comprising around two-thirds of O&D traffic, with a third of traffic supported by residents in the greater Orlando metropolitan area.
Passenger traffic trends have been favorable in recent years, with enplanement growth underpinned by strong market fundamentals and robust tourism performance. Well-diversified market share exists with Southwest Airlines consistently holding the largest share of enplanements over the past decade at less than one-quarter market share. Orlando has historically maintained a low cost and competitive cost per enplanement (CPE), which is projected to remain competitive for a large-hub airport despite pressures from additional borrowings as capital improvements move forward.
