S&P lowers ratings on European airport operators

S&P Global Ratings has lowered its ratings on four European airports and associated companies “due to a slower expected recovery in passenger traffic” than it previously anticipated.

“We have lowered by one notch our ratings on European airports Flughafen Zurich AG, daa PLC, Royal Schiphol Group N.V., and Avinor AS and are affirming the ratings on NATS (En Route) PLC, maintaining the CreditWatch negative on Aeroporti di Roma, and placing the debt issued by Gatwick Funding Ltd. on CreditWatch negative …” said S&P Global Ratings.

“European airports face a steeper and more protracted recovery in air passenger traffic due to harsher COVID-19 restrictions than we previously expected, leading us to anticipate a 55%-70% decline in 2020 versus 2019 levels — depending on individual government policies and airport characteristics — and a more gradual recovery to pre-COVID-19 levels in 2024 …

“Despite our estimate of about a €10 billion reduction in capital expenditure (capex) for rated European airports over 2020-2023, credit metrics will sharply weaken and in some cases decline to levels that are not commensurate with our current ratings …

“We question airports’ ability to increase charges due to airlines’ weaker finances, and also do not currently expect state aid packages for most airports given their sufficient liquidity to absorb losses in the near term …”

The four downgrade actions take Royal Schiphol Group NV to A/Negative/A-1 from A+/Watch Neg/A-1, move Flughafen Zurich AG ratings to A+/Negative/– from AA-/Watch Neg/–, take daa PLC ratings to A-/Negative/A-2 from A/Watch Neg/A-1 and move Avinor AS ratings to A/Negative/A-1 from A+/Negative/A-1.

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