Financial Ratings Agencies Give ACAA Straight As, Again

Three national financial ratings agencies issued strong assessments this week of the Allegheny County Airport Authority’s financial position as it prepares for a final bond sale for the new terminal program. 

All three of the ratings agencies – Fitch, Moody’s and KBRA – expressed confidence in the airport’s leadership, cost control focus and strong revenue in reaffirming ratings they issued in 2021 and 2023. The positive, investment grade ratings mean ACAA will have access to lower interest rates and save money in the long-term in paying off the new terminal.  

• KBRA rated the authority A+ stable, citing a “proactive leadership team… focused on maintaining competitive airline costs by maximizing non-airline revenue sources, attaining operating efficiencies and maintaining expense controls.” 

• Moody’s rated the Authority A2 stable, citing the progress made on new terminal construction and the fact that 94 percent of contracts for the project have been awarded, minimizing future risk. 

• Fitch rated the Authority A stable, citing Pittsburgh International Airport’s “well-anchored origination-and-destination traffic base, well-diversified airline market share and solid financial metrics benefitting from diverse sources of airline and non-aeronautical revenue source.” 

No local taxpayer money is included in the budget for the new terminal. ACAA finances the cost of the terminal primarily through bond sales, which are repaid in annual debt payments from airport revenue backed by the airlines. 

The airlines again confirmed their support and trust in the airport’s long-term success by recently unanimously approving a revised $1.7 billion budget to account for additional capital projects incorporated into the terminal project, inflation and other costs. All three bond rating agencies noted the airlines’ support as an important factor in their assessments. 

Industry experts applauded the positive ratings amid an uncertain economy.   

“Those good bond ratings are not easy to achieve in a volatile environment like we are in today and are a testament to the senior team at PIT executing plans that ensure a cost outcome that will cause the airline partners to breathe a sigh of relief,” said Bill Swelbar, Chief Industry Analyst at Swelbar Zhong Consultancy.  

 “The fact that PIT has been able to manage overall costs in an inflationary environment generally and building materials specifically shows commitment to mitigate fiscal costs that might not be the fault of the airport at all.” 

 ACAA leadership said the ratings and upcoming bond sale later this month mark a significant milestone in the new terminal financing.  

 “The excellent ratings are another validation of the strong financial position of the Airport Authority, the strength of our market and the support of our airline partners,” said ACAA CEO Christina Cassotis. “A significant portion of the budget increase is the acceleration of future capital projects that can be completed more efficiently with less cost concurrently with the new terminal program. ACAA has been able to keep cost increases to a minimum despite worldwide inflation, supply challenges and rising labor costs.” 

Some of the capital project work executed concurrently with the new terminal program include electrical switchgear replacement, fuel pit rehabilitation, and existing road and parking lot rehabilitation.  

 All three ratings agencies noted ACAA’s consistent financial performance based on multiple sources of revenue. 

 “The long-term rating on Airport Revenue Bonds of the Allegheny County Airport Authority reflects the steady, post-pandemic recovery in passenger traffic, revenue and destinations served at Pittsburgh International Airport and the broad mix of aeronautical, non-aeronautical and nonoperating revenues that contribute to stable operating performance and airline affordability,” KBRA wrote.