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US airports to see strong aggregate enplanement growth in 2019

Publication Date: 14 Dec 2018 - By ReachX Team By ReachX T.

Environmental, Social & Governance Equity Fundamental Macro Multi Asset USA Transport


The US airport sector is poised for strong growth in 2019 on the back of expansion in enplanements – i.e. the number of passengers using an airport to depart on a flight – driven by continued economic expansion and additional seat capacity added by airlines, according to a leading rating agency. 

In a recent report for its clients, rating agency Moody's said it was maintaining its ‘positive’ outlook for the sector as strong enplanements generally translates into higher parking and terminal concession revenue.

"We expect aggregate enplanement growth of 3.2% in 2019," said Earl Heffintrayer, a vice president at Moody's and the lead author of the report. "This represents a slowdown from the 5.4% growth seen so far in 2018, but is still above our threshold for maintaining a positive outlook on the sector."

Enplanement growth has historically demonstrated a high positive correlation with the average of GDP growth, which Moody's projects to be 2.3% in 2019, and seating capacity growth, which the agency projects to be between 3.5% and 4.7%. Smaller airlines, such as Spirit and Frontier, will continue a multi-year trend of increasing capacity by at least 10%, according to the report.

Airports in the Southern and Western regions of the US will continue to experience stronger enplanement growth than the rest of the country, mirroring demographic trends.

Growing, younger populations support growth in demand for travel, and airports like the Austin (City of) TX Airport Enterprise (rated ‘A1 stable’ by Moody’s) and the Boise (City of) ID Airport Enterprise (A1 stable) are well positioned due to their young urban bases.

Increased use of ridesharing services like Uber and Lyft has had a negative impact on parking and ground transportation revenue at airports across the US, but airports have adapted by collecting pickup or dropoff fees to keep overall collections stable. 

Looking ahead, Moody's believes that emerging technologies will allow for more effective fee collection and provide increased revenue generation. The agency’s outlook on the US airport sector has been positive since December 2014.


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