DALLAS — Citing three years of declining passenger counts, Moody’s Investors Service downgraded Albuquerque International Sunport’s senior debt to A1 from Aa3 and returned the outlook to stable from negative.

“The rating downgrade primarily reflects a long-term stagnation of enplanement growth, particularly three years of declines in enplanements which have followed the impact of the recession on the Sunport’s service area,” Moody’s analyst Michael O’Connor noted in the report issued last week.

Subordinate bonds issued for the airport were downgraded to A2 from A1.

Standard & Poor’s affirmed its A-plus rating on the senior debt Aug. 25 and rated the subordinate bonds one notch lower at A. The outlook remained stable.

The city of Albuquerque owns and operates the Sunport through its aviation department. The airport is the largest in New Mexico.

Albuquerque has about $102 million of senior-lien and $45 million of subordinate-lien airport revenue bonds outstanding, all of which are fixed rate.

A lien on airport net revenues secures the bonds, along with money from the debt service reserve.

In sparsely populated New Mexico, the Sunport handles most of the state’s air travel, with 2.9 million passengers enplaned in fiscal 2011.

That makes the airport a medium-sized hub, according to the Federal Aviation Administration.

Southwest Airlines carried nearly 56% of the airport’s passengers in the last fiscal year, followed by American Airlines with 12.5% and then United Airlines with 12.2%.

The nearest competing airport is in El Paso, Texas, and is 260 miles away.

“In Moody’s view, despite the lack of meaningful competition with other airports and the airport’s consistently solid financial metrics, the fundamental credit strength of the airport is better reflected at the A1 senior and A2 subordinated debt rating level,” O’Connor said.

American Airlines, whose home hub is Dallas-Fort Worth International Airport, is reorganizing under federal bankruptcy protection and is considered a possible merger partner with Delta Airlines or U.S. Airways.

A merger with either of those two carriers could have a significant impact on medium-sized hubs where those carriers are dominant, according to a special report from Moody’s on Monday. But Albuquerque might see little impact because Southwest is its dominant carrier.

One factor that could reduce connecting flights for Southwest at Albuquerque is the forthcoming lifting of restrictions on the airline’s flights out of Dallas Love Field Airport in 2014.

Currently, Southwest can fly only to nearby states out of Love Field, meaning passengers bound for other destinations have to connect.

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