Fitch: The Rise of Low-Cost Carriers and Their Effect on U.S. Airports.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The majority of U.S. airports report that passenger volumes are returning to the level achieved during the industry boom of the late 1990s and early 2000. While at least a portion of this recent growth is the result of improved economic conditions, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. believes the unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. growth of low-cost carriers (LCCs), and the competitive environment they engender en·gen·der v. en·gen·dered, en·gen·der·ing, en·gen·ders v.tr. 1. To bring into existence; give rise to: "Every cloud engenders not a storm" , may be creating artificial volume spikes within many markets. Consequently, as airport operators reactivate re·ac·ti·vate v. 1. To make active again. 2. To restore the ability to function or the effectiveness of. re·ac capital improvement programs in response to this surging demand, they should proceed with caution. "Airports experiencing such potentially transient shifts in demand, marked by unsustainable low ticket prices and a rapid increase in service by several carriers without support from underlying economic fundamentals, should approach any costly improvements cautiously, lest they invest in unnecessary and financial burdensome facilities," commented Douglas J. Kilcommons, Director of Fitch's U.S. Public Finance sector. "The ultimate principal driver of capital needs at a given facility should result from strengthening market fundamentals rather than airline specific activity or competition between carriers," Kilcommons noted. LCCs are having a profound, almost revolutionary impact on the airport landscape, in many cases stimulating significant additional demand, especially in markets where airfares were exorbitant and competition was historically constrained. Fitch believes these effects, however, are more the result of the LCC's evolving and maturing business model, which was developed in the early days of airline industry deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. , and accelerated in recent years by a financially conscious public clamoring clam·or n. 1. A loud outcry; a hubbub. 2. A vehement expression of discontent or protest: a clamor in the press for pollution control. 3. A loud sustained noise. for more affordable air travel. To be sure, not unlike legacy airlines, LCCs will remain in a market over the longer term only to the extent they can generate adequate yields. Fitch Ratings will hold a teleconference on Tuesday, Sept. 27, 2005 at 2 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the new report "Evolution or Revolution? The Rise of Low Cost Carriers & Their Impact on U.S. Airports." Participants should call 888-266-4139 five minutes prior to the 2 p.m. start-time and reference conference ID #9338135. To ensure there are sufficient telephone lines available, use internal conferencing capabilities, if possible, for multiple listeners at a single location. If you would like to participate, e-mail pfconference.calls@fitchratings.com. A replay of the teleconference will be available on Tuesday, Sept. 27, two hours after the call ends, until Wednesday, Oct. 5 at the close of the business day at 800-642-1687. The conference ID number for the replay is 9338135. Additionally, a replay of the teleconference will be archived on the Fitch web site. Soon after the teleconference, interested parties can find the appropriate link under Teleconference & Online Events, which is located under Resource Library on www.fitchratings.com. The full report can be found at www.fitchratings.com under the U.S. Public Finance tab and Special Reports. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the Code of Conduct section of this site. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion