Agencies Assign A-Rating to Philadelphia Airport Bonds; Moody's, Fitch, S&P Cite Strong Growth, Local Travel Market.

PHILADELPHIA -- The world's leading financial rating agencies - Moody's, Standard & Poor's and Fitch - have affirmed their "A" bond ratings for Philadelphia International Airport (PHL). Each agency also assigned a stable outlook for the Airport, citing the continued growth in passenger levels, decreasing airfares, an experienced management team and the region's solid origin and destination (O&D) base.

"These rating affirmations demonstrate the strength and viability of our Airport," said Mayor John F. Street. "The Airport is experiencing historic passenger and economic growth, which the City has worked diligently to achieve. The ratings affirm that we are headed in the right direction."

The rating agencies' favorable determinations occur at a time when the City-owned and operated Airport plans to issue $190 million in refunding bonds and approximately $165 million in new bonds to fund several projects, including an expansion and modernization of Terminals D and E.

"With the unprecedented numbers of travelers coming to PHL to take advantage of affordable, convenient flights, it is essential that we maintain a facility that can accommodate our growing passenger base," said Charles J. Isdell, the City's Director of Aviation. "The new money bonds will enable us to add 3 gates, expand 5 security checkpoints and upgrade our terminal infrastructure."

In issuing their ratings, the three agencies cited the Airport's:

--Solid origin & destination (O&D) base, estimated to account for 61% of total enplaned passengers in FY 2005.

--Declining airfares resulting in surging enplanement levels, leading to a projected 16% increase in enplaned passengers in FY 2005

--Moderate cost and debt levels for a large hub airport, at an estimated $8.00 and $83.00 per enplaned passenger, respectively

In its evaluation, S&P noted PHL's "sound historic traffic growth...with the estimated fiscal 2005 traffic level at 120.7% of the fiscal 2001 level." In the fiscal year ending June 30, the Airport estimates passenger traffic will increase 16.9%, climbing to a record 15.3 million enplaned passengers. In the first six months of FY 2005, PHL enplaned 17.6% more passengers over the same period in FY 2004. US Airways and Southwest Airlines, the number one and two carriers at PHL, offered 45 and 28 more daily flights in October 2004, respectively, compared with October 2003.

In its "A3" rating affirmation, Moody's cited the Airport's "large and economically stable service area", enplanement growth and decreased airfares. Moody's further noted that "Airport management has successfully managed the risk posed by US Airways to date", with contingency planning and improved gate control. Currently, 60% of the 120 gates at the Airport are non-exclusive, up from 20% in 2000.

Fitch, which revised its outlook from negative to stable, noted the Airport's "critical role in providing air service to an expanding, increasingly affluent service area and consistently strong origin & destination traffic levels." Fitch also cited the Airport's "healthy financial profile characterized by competitive airline costs and solid debt service coverage." Listed among the Airport's strengths was an "experienced management team with proven ability of responding to the Chapter 7 filing of a major air carrier."

The Philadelphia Airport System is owned and operated by the City of Philadelphia and is composed of Philadelphia International Airport and Northeast Philadelphia Airport. The Airport System is a self-sustaining entity that operates without the use of local tax dollars. It is one of the largest economic engines in Pennsylvania, generating an estimated $8 billion in spending to the regional economy and employing a workforce of nearly 22,000.

Visit the official Philadelphia International Airport website at http://www.phl.org