Fitch Rates Jackson, Mississippi, Airport Rev Bonds 'A-'; Outlook Stable.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 -- Fitch assigns an 'A-' rating to Jackson Municipal Airport Authority's (the authority) $15 million Series 2007 airport revenue bonds airport revenue bond Tax-exempt debt issued by a city, county, state, or airport authority with debt service guaranteed either by general revenues generated by the airport or by lease payments for facilities used by a particular airline. . The bonds rank on parity with approximately $49 million of outstanding airport revenue bonds, which are affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. at 'A-' by Fitch. The Series 2007 bonds will refund portions of outstanding authority debt and are expected to be insured by a monoline insurer whose financial strength is rated 'AAA' by Fitch. The bonds will be priced via negotiation on or about March 21, 2007 by Morgan Keegan & Company, Inc. The Rating Outlook on all authority bonds is Stable. The 'A-' rating reflects the stability of the Jackson Municipal Airport's (the airport) air service area, which includes the City of Jackson, the state's capital; the lack of material airport competition in the service area; and the authority's consistently healthy financial performance characterized by stable operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , low debt levels, and minimal near-term capital needs. Credit concerns include moderate airline concentration, with the top two carriers, Delta Air Lines and Southwest Airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. (rated with an Issuer Default Rating of 'A' by Fitch), enplaning approximately 60% of the market during fiscal 2006. Also important is the airport's potentially significant longer term capital needs, given that the airport's existing terminal building is currently 43 years old. Fitch notes, however, that commencement of a terminal project would begin only if enough demand exists and funding is available. Passenger traffic at the airport increased 10% in fiscal 2006 to reach 752,496 enplanements. The growth was in large part due to the airport's proximity to the Mississippi and Louisiana gulf coasts as rebuilding efforts increased in that region following Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. in 2005. Airport traffic will likely show an 8%-10% decline for the
fiscal year ending Sept. 30, 2007, as some of that post-hurricane
rebuilding work trails off. However, this expected decline in traffic
for fiscal 2007 would still place the passenger volume at the airport
in-line with the 685,631 enplanements for fiscal 2005.
Authority finances are healthy, characterized by stable financial margins and strong generation of non-aeronautical revenues. Fiscal 2006 non-airline revenues accounted for approximately 69% of operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. , which helped to keep costs manageable for the tenant airlines. Further, the airport-airline relationship is bolstered by a revenue-sharing component included in the airport's rate-setting methodology. Net revenues available for debt service totaled approximately $8.2 million during fiscal 2006, covering parity bond Parity Bond Two or more bond issues with equal rights to bond payments. Notes: Also referred to as "part passu" or "pari passu" bonds, these types of fixed-income securities are commonly issued by municipalities as a way to gather finance capital. debt service by a strong 3.1 times (x). Future debt service is level, having reached its maximum of $3.4 million in fiscal 2007, up from $2.7 million in fiscal 2006, with coverage of pro-forma maximum annual debt service expected to be at or above 2.00x. The authority has no plans for new debt in the next five years, thus Fitch expects a level profile in the authority's debt service coverage based on mild to moderate enplanement growth of 1%-2% annually. The airport's cost per enplanement was $6.02 in fiscal 2006 and is forecasted by the airport's consultant to remain moderate at under $8.00 through fiscal 2014. The City of Jackson is the state capital and the anchor of the airport's primary service area. The airport's service area is considered a regional economic center with a significant presence in the government and health care employment sectors, and is home to several higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. institutions. These characteristics support the airport's high overall origination and destination traffic profile (98%) and provide a level of stability and predictability to airline operations at the airport. Additionally, with the presence of low-cost carriers A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier / airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. and no material competition within three hours of the facility, the airport experiences very little in the way of traffic diversion. 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. |
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