S&P lowers ratings on six European airport operators

S&P Global Ratings today lowered the ratings on four European airports/associated companies (and a further two CreditWatch revisions) as the rating agency anticipates a slower recovery in passenger traffic than first anticipated.

The four downgrades are:

• Royal Schiphol Group NV (Schiphol). Ratings to ‘A’ from ‘A+’
• Flughafen Zurich AG. Ratings to ‘A’ from ‘AA’
• daa PLC. Ratings to ‘A-/A-2’ from ‘A/A-1’
• Avinor AS. Ratings to ‘A/A-1’ from ‘A+/A-1’

The rating agency also placed the debt issued by Gatwick Funding Ltd on CreditWatch negative. Aeroporti di Roma’s ratings remain on CreditWatch Negative – reflecting that of its parent company Atlantia.

S&P Global Ratings director, Tania Tsoneva, says: “European airports face a steeper and more protracted recovery in air passenger traffic due to harsher COVID-19 restrictions than we previously expected.

“We 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.”

S&P notes: “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.”