Moody’s Investors Service this week downgraded to Baa2 from A3 $16.1 million of revenue bonds issued by the Capital Region Airport Authority, which serves the state capital of Lansing.

Moody’s revised the outlook to negative from stable even after the two-notch downgrade. The credit action reflects the airport’s deteriorating operations and weak economy, analysts said. A decline in passenger levels — which fell nearly 24% from 2009 to 2010 — has forced it to rely more heavily on property tax revenue to cover its operating expenses.

The decline is due to airline consolidation as well as the weakening of the U.S. automotive industry, Moody’s said. The airport authority’s relatively low debt burden and its ability to levy a property tax on Ingham County and parts of Lansing are credit positives, analysts said.

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