Moody’s Investors Service Upgrades Burlington International Airport Credit Rating to “Baa2”

May 29, 2018
Contact: Gene Richards, Director of Aviation, 802.343.9909
                 Katie Vane, Mayor’s Office, 802.734.0617

Moody’s Investors Service Upgrades Burlington International Airport Credit Rating to “Baa2”
Represents Highest Rating Since Prior to 2010 Financial Troubles; Moody’s Cites Airport’s Continued Improved Liquidity, Stability in Debt Service Coverage Ratios, and Airline Agreement

Burlington, VT – Mayor Miro Weinberger and Aviation Director Gene Richards today announced that Moody’s Investors Service has upgraded the Burlington International Airport credit rating to Baa2 from Baa3 (please see the complete Airport ratings table below), and revised the Airport’s credit outlook from positive to stable. This is the second credit rating upgrade the Airport has earned since 2014 and represents its highest rating since prior to the multiple downgrades of the Airport in 2010 due to revelations of serious financial mismanagement.

In its Credit Report, released on Tuesday, May 22, 2018, Moody’s stated that “the upgrade reflects continued improvement in liquidity and stability in debt service coverage, combined with a strengthened cost recovery framework following the adoption of a five-year airline agreement that is residual in nature and provides for a 1.5x DSCR and 200 days cash on hand.” DSCR is the ratio of net revenues available (operating net revenues less operating expenses) to pay for debt principal and interest. 

“This upgrade is great news for the Airport and another sign that the public’s support of our efforts to strengthen the City’s finances is continuing to yield results,” said Mayor Miro Weinberger. “Thank you to the Airport team and CAO’s office for the years of focused, hard work that have made this upgrade possible.”

“This upgrade reflects Moody’s confidence in our team’s ability to react to industry and regional changes, and to continue providing exceptional service to our traveling public,” said Aviation Director Gene Richards. “Moody’s recognizes the continuous growth in the Airport’s liquidity in the form of cash reserves, sustained efforts to improve financial stability, manageable cost per enplanement, signed five year agreements with the airlines, and our ability to achieve the Debt Coverage Score of 1.5x year after year. The credit for this significant accomplishment goes to the entire Burlington International Airport team, as well as the City of Burlington team of Rich Goodwin, Beth Anderson, and Mayor Miro Weinberger, for his personal involvement and commitment to strong airport finances. We are also very fortunate to have built strong relationships with our airline partners, who serve the region so well.”

The Airport has seen numerous positive trends in recent months, including:

  • The strongest first quarter (Jan-Mar 2018) number of passengers since 2008. 
  • A 19 percent increase in passengers in April 2018, which represents the single largest percentage growth of any month since 2005. 
  • Delta Air Lines has added new routes flying to New York (JFK) and American Airlines is starting new service to Chicago (ORD) in early June. The Airport is able to accommodate this increase in both larger and additional planes (capacity in airside) and customers within the Terminal (landside facilities).  
  • Level debt payments for the Airport’s debt service. The Airport it is not looking to take on any additional borrowings at this time.

Additional highlights from the Moody's Report include:
The May 22, 2018 Moody’s Rating Report noted that Burlington International Airport’s status as a regional economic center will sustain a solid level of air travel demand, which the Airport is well positioned to serve. Enplanements have stabilized and are now beginning to grow with the introduction of significant new air service in Fiscal Year 2018. The expectation of stable enplanements is made manageable by the Airport’s stable cost profile, level debt service, capacity in airside and landside facilities, and manageable planned capital investment.

Moody’s report notes that the Airport’s active management is committed to fiscal responsibility and maintaining the Airport’s strong finances. This contributes directly to the overall financial health and success of the Airport.

The Report attributed the credit outlook revision to the Airport’s core financial metrics, namely DSCRs and liquidity, and enplanements. According to the Report, “The airport is well positioned to sustain its credit profile over the next 12-18 months due to the cost recovery framework provided by the new airline agreement, growing air service, economic stability in the service area, and manageable cost per enplanement (CPE) and no new borrowing.”

Future actions that could lead to another cred rating upgrade include:

  • Sustained enplanement and air service growth
  • Net revenue DSCRs above 2.0x times on a sustained basis
  • Liquidity sustained above 600 days cash on hand
Moody's Ratings
Date Action Rating Action Outlook
5/22/2018 Upgraded Baa2 Revised Stable
3/17/2017 Affirmed Baa3 Revised Positive
12/11/2015 Affirmed Baa3 Affirmed Stable
11/12/2014 Upgraded Baa3 Affirmed Stable
1/15/2014 Affirmed Ba1 Revised Stable
11/19/2012 Affirmed Ba1 Affirmed Negative
1/6/2012 Affirmed Ba1 Affirmed Negative
10/13/2010 Downgraded Ba1 Affirmed Negative
5/13/2010 Downgraded Baa3 Revised Negative
11/28/2005 Affirmed Baa1 Affirmed Stable


*Please see the Moody’s Rating Report

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Press Release Date: 
City Department: 
Mayor's Office