Standard & Poor’s has revised the outlook on Lambert St. Louis International Airport’s A-minus rating to negative from stable due to weak debt-service coverage levels.
“The outlook revision reflects what we consider to be weak coverage of debt obligations, weak enplanement trends, although we note recent stabilization and high debt levels,” said analyst Jeffrey Panger.
The airport’s origination and destination traffic has stabilized after a decline attributed to the weak economy and American Airlines’ decision in 2003 to drop its hub at Lambert.
The facility benefits from a lack of nearby competition, substantial liquidity afforded by unrestricted cash and money in the city’s airport development fund, a debt-service stabilization fund, and management’s actions to control expenses.
Lambert recorded 6.3 million passengers in 2010. At its peak in 2000, it saw 15.2 million enplaned passengers.
“Despite the recent stabilization in enplanements, we could lower the rating within the next two years if this trend does not continue or the Standard & Poor’s-calculated debt service coverage ratio declines further,” the report read.
A stable outlook could be restored if passenger levels continue to stabilize or coverage ratios improve. according to Standard & Poor’s.
