MIA ends 2022 with three bond rating upgrades
KBRA, S&P and Moody’s reward airport for strong pandemic rebound
In recognition of Miami International Airport’s “exceptionally strong recovery,” Kroll Bond Rating Agency, LLC (KBRA) recently upgraded its long-term rating of Miami-Dade County’s Aviation Revenue Bonds from A+ to AA-. KBRA’s upgrade follows the same action by Standard & Poor’s Global Ratings (S&P) in August and Moody’s Investor Service in July, when they raised their ratings of MDAD’s revenue bonds from A- to A and A2 to A1, respectively.
Congratulations to the MIA team on earning these three significant upgrades in 2022. I’m thrilled to see that the bond rating agencies are taking notice of the spectacular recovery that MIA has made since the pandemic. This robust growth at our community’s leading economic engine is having an extensive ripple effect across our local tourism industry and job market as well.
According to KBRA, the upgrade was a result of MIA’s passenger volume reaching 108.5% of its pre-pandemic level in fiscal year 2022, its advantageous location as an international gateway to Latin America and the Caribbean, and its “effectively managed capital program.”
“MIA’s recent, significant expansion of domestic service, including low-cost carriers and ultra-low-cost carriers, as well as the Miami-Dade Aviation Department (MDAD) leadership’s track record of managing multi-phase, large, and complex capital programs, provide support for the current rating level,” KBRA noted in its MDAD bond rating surveillance report. “While Southwest, JetBlue, Frontier, and Spirit now compete with American Airlines in certain markets from MIA, American’s commitment to its hub operation is demonstrated by continued, robust service levels and investment in infrastructure to support operations.”
S&P wrote in its ratings summary that “MIA is emerging from the height of the pandemic in a position of strength relative to its large hub peers with enplanements that exceed 2019 activity. As a result, we revised the market position to very strong from strong, which returns the enterprise risk profile to the pre-pandemic assessment of very strong.”
According to Moody’s rating report, “The upgrade to A1 reflects the airport's solid competitive position as a major gateway to Latin America and the airport with the largest amount of cargo transshipment by weight in the lower-48 states. MIA's domestic and international enplanement recovery has outperformed Moody's expectations, benefiting also from airlines Southwest, JetBlue, and Spirit that have started service from MIA.”
Through October, MIA has served 42 million passengers in 2022, which is an increase of 10.5% over the same period in 2019 and puts the airport on pace to surpass 50 million annual passengers for the first time in its history. MIA has also been the fastest-growing large U.S. airport in airline seat capacity in 2022 versus 2019, according to Airports Council International-North America (Fall 2022 Industry Metrics, page 24). Since November 2020, Southwest Airlines, JetBlue, and Spirit Airlines have launched service at MIA for the first time ever. Combined with Frontier Airlines, the four low-cost carriers now handle 12.6% of the seat capacity at MIA and are among MIA’s 10 busiest airlines. Hub carrier American Airlines currently handles 58.9% of MIA’s capacity.
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