Fitch Ratings last week revised the Memphis-Shelby County Airport Authority’s outlook to negative ahead of a planned refunding.

Fitch affirmed its A-plus rating on the authority’s $443.5 million of outstanding bonds secured by net revenues from operations at Memphis International Airport.

“The negative outlook is based on elevated traffic-activity uncertainties over the next one to three years, taking into consideration that Delta Airlines, which comprises 87% of enplanements, has already announced service reductions at Memphis International Airport,” said analyst Scott Zuchorski.

 Delta announced a net reduction of 26 flights, about 13% of its flights at Memphis, beginning this fall.

“Fitch believes that fuel prices and route profitability are key drivers to this and future Delta service actions with the possibility that Memphis faces more vulnerability to reductions as compared to other larger Delta hubs,” Zuchorski said.

The authority’s forecasts indicate the airport can adequately withstand the current level of announced Delta flight reductions while maintaining its current financial metrics, he said.

Fitch rates the Airport Authority’s upcoming $80 million refunding A-plus. The bonds could sell as early as next week with Morgan Keegan & Co. as book-runner and Public Financial Management Inc. as financial adviser.

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