Cleveland's Hopkins airport lands an upgrade
Cleveland Hopkins International Airport now has three single-A ratings to boost its credit appeal as it looks to refinance debt and bonds under a new master plan.
The airport was upgraded one notch to A-minus by Fitch Ratings on Friday. The outlook is stable.
“The upgrade reflects CLE's airport traffic and revenue growth, particularly in the years since United Airlines vacated its hubbing operations," Fitch said. “This positive operational performance has resulted in an improving cost profile.”
It's the third upgrade in about a year for the Cleveland airport. In August 2018, both S&P Global Ratings and Moody’s Investors Service upgraded the airport to A and A3, respectively. The airport has roughly $635 million of outstanding debt.
The upgrade from Fitch marks the first time in nine years that the airport has posted ratings within the “A category” from all three leading agencies, Airport Director Robert Kennedy said.
That could help the airport save millions of dollars in an upcoming bond refunding, Kennedy said, and as it puts together its new master plan.
“As we embark on the Master Plan process, our financial strength will be of the utmost importance and we are honored to have the confidence of the leading credit rating agencies,” Kennedy said in a statement.
Funding for the master plan will be included with a bond issuance that includes various capital projects. An airport spokesperson said the objective is to complete the master plan before Dec. 31, 2020.
Cleveland Hopkins' current master plan was completed in 2008 and updated in 2012. It outlined $1.6 billion in recommendations but was drawn before United Airlines stopped using the airport as a hub.
Fitch said that the airport's 2019-2023 capital program totals $125.2 million, of which $37.5 million is expected to be funded with proceeds from previously issued debt. The remainder will be financed from airport discretionary funds and federal grants.
Cleveland Airport has experienced continual passenger traffic growth and expanded air carrier service since United de-hubbed it in 2014. The total number of passengers for 2018 was 9,642,729, a 5.5% increase over 2017. Through the first six months of 2019, the airport accommodated almost 5 million customers, which was up 209,785 passengers or 4.5% over the same period in 2018.
The airport system consists of the Hopkins airport and Burke Lakefront Airport. Hopkins is the primary commercial service airport for northeastern Ohio, and is approximately 10 miles southwest of Cleveland's downtown.