Airport Experience® News - Customer Service Issue 2023

LAX

SFO

MSP

DFW

Detroit

Atlanta

Denver

MWAA

Portland

Houston

Charlotte

San Diego

DATA CHECK

Philadelphia

Chicago O'Hare

Chicago Midway

Source: Fitch Ratings, Fitch Solutions, airports

Airport Debt Balances: 2019 Versus 2027 Projections

Airport Cost per Enplanement Projections: 2023 Versus 2027

2019

2027

2023

2027

($ mil.)

10 20 30 40 50 ($)

12 16 20

0 4 8

0

LAX

SFO

MSP

DFW

Detroit

Atlanta

Midway

Portland

Houston

LAX

SFO

Charlotte

MSP

DFW

San Diego

Detroit

Atlanta

Philadelphia

MWAA

Midway

Portland

Houston

Charlotte

San Diego

Reagan National

Philadelphia

Dulles International

Source: Fitch Ratings, Fitch Solutions, airports

Source: Fitch Ratings, Fitch Solutions, airports

Uneven Recovery The Bureau of Transportation Statistics’ year-to-date data through June 2023 shows U.S. passenger levels at 98.6% of the same period in 2019. When comparing a sample of about half of the 30 largest Fitch-rated U.S. airports, the median traffic level for 2022 was about 84% of the 2019 passenger levels, and the latest forecasts provided by the airports indicate a 94% and 100% recovery by year end 2023 and year end 2024, respectively. Miami International (MIA), Denver International (DEN) and Dallas/Fort Worth International (DFW) are among the airports in the Fitch sample that have led the recovery and now stand well ahead of 2019 passenger levels. In contrast, Portland International PDX), LAX and Philadelphia International (PHL) still are well off their 2019 traffic levels. “In certain markets, particularly for the West Coast airports, Asia-linked operations and passenger traffic through early 2023, still drove weaker than average recovery levels,” Fitch noted. While growth rates are expected to vary significantly, that sample of 15 airports is expected to turn in growth of 5.3% collectively in 2024, and a further 3% increase in 2025. CAPEX On The Rise Airports, and particularly large hub airports, will spend tens of billions of dollars on capital projects over the next five to seven years, the Fitch report noted. Most of the projects continue to employ the traditional approaches for financing and project delivery, where the airport authorities are leading the steps to finance and procure design-build (or design-bid-build) contracts. Some of the high-profile exceptions are the multiple terminal redevelopment projects at JFK Terminals 1, 4 and 6/7). The terminals are privatized under separate long-term concessions with leaders in transportation infrastructure development covering equity sponsorship, construction and operations. LAX, ORD, SFO and ATL each plan to spend in excess of $10 billion updating and expanding their airports, the Fitch report said, with many of the capital programs spanning at least the next five years. Other airports are spending multiple billions of dollars as well.

Projected Traffic Growth – Select Large-Hub Airports Airport 2024 (% growth)

2025 (% growth)

Ronald Reagan Washington National

0.8

0.8

Dulles International

2.9

2.8

Dallas/Fort Worth International

2.6

2.7

Hartsfield-Jackson Atlanta International

6.0

1.9

George Bush Intercontinental (Houston)

4.5

2.2

Minneapolis-Saint Paul International

5.6

5.3

Charlotte International

1.8

1.8

Portland International

13.5

7.4

San Diego International

5.3

3.2

Detroit Metropolitan Wayne County

6.0

4.4

Philadelphia International

10.3

7.7

San Francisco International

15.7

8.2

Los Angeles International

16.9

8.6

Chicago Midway International

1.5

1.0

Denver International

3.0

3.0

Median

5.3

3.0

Source: Fitch Ratings, citing Airports, feasibility reports

CPE Impact The impact on airport costs per enplanement will be significant, Fitch predicts. LAX, for example, is expected to see its cost per enplanement rise to nearly $50 in 2027, versus under $30 this year. Among the airports in the Fitch sample, SFO, PDX, SAN, Midway (MDW) and Dulles International Airport (IAD) are all expected to have CEP in excess of $20 by 2027. In addition, Fitch said that while the privatized aspect of many New York airport terminals means the debt load is lower, the costs are at the higher end give the major redevelopments underway.

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AX NEWS CUSTOMER SERVICE ISSUE 2023