Fitch Affirms Massport's PFC Bonds 'A'.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 17, 2003

Today, Fitch Ratings affirmed the 'A' rating on $231,290,000 outstanding Massachusetts Port Authority passenger facility charge revenue bonds, series 1999. The passenger facility charge (PFC) bonds are secured solely by PFC revenues paid by airlines to Massport, for each PFC-eligible passenger that deplanes at Boston Logan International Airport (BOS). Massport collects and pledges to its series 1999 bonds the $3.00 PFC level, which is authorized the Federal Aviation Administration.

In fiscal year 2002, BOS had 11.073 million enplaned passengers, 90% of which were PFC-eligible passengers. This resulted in net PFC collections, minus the airline collection fee of $.08 per passenger, of $29,447,000. PFC investment income, $2,652,000 in 2002, is also pledged to PFC debt service, which resulted in debt service coverage of 2.27x. It is important to note that fiscal year 2002 accounted for the events of 9/11/01, and the resulting weak aviation environment. While BOS continues to experience lower than national average passenger counts since 2001, the relatively low amount of leverage for this pledged revenue stream has sufficient over-collateralization for these bonds at the 'A' rating level.

It is important to note that BOS has a strong mix of air carrier service, as Delta Air Lines accounted for 19% of passengers in fiscal 2002, American with 17%, US Airways 15%, and United accounting for 10%. United and US Airways are current on all post-petition payments to the Massport. As of June 30, 2002, 52 airlines serve BOS, including 17 foreign flag carriers. Debt service is level at $21.5 million through maturity in 2017, but is offset annually by certain interest earnings, $7.4 million of which was offset in 2002. The debt service reserve fund has been fully funded at $24.9 million since the bonds were sold.