Moody’s downgrades credit ratings of UK’s largest airports
Three of the UK’s largest airports have had their credit ratings downgraded by Moody’s as the pandemic continues to hammer global air travel.
Heathrow Finance, which owns the UK’s biggest airport, has had its corporate family rating reduced from Ba1 to Ba2.
Obligations rated at Ba2 are judged to have speculative elements and are subject to substantial credit risk.
Meanwhile, Gatwick Airport has seen its bond rating fall from Baa1 to Baa2, while Birmingham Airport’s have slipped from Baa2 to Baa3.
For all three, Moody’s cited the same reasons behind the downgrade.
The new ratings “reflect a persistently difficult operating environment for [the airports] as evidenced by the weaker than anticipated pace of passenger demand recovery due to travel restrictions and quarantine measures in 2020, and Moody’s expectation that the breadth and severity of the coronavirus outbreak will lead to slower than previously anticipated traffic recovery.”
The downgrading comes after Heathrow Airport said that passenger numbers fell for the eighth consecutive month in October.
Just 1.2m people passed through the airport last month, down over 80 per cent year on year.
The UK’s airports have been among the businesses worst hit by the coronavirus, which has decimated the demand for air travel.
Last week the industry association wrote to the government to warn that English airports would close unless the sector received additional support.
Unlike their counterparts in Scotland and Northern Ireland, English and Welsh airports have not received business rates relief during the pandemic.
It also asked ministers to reverse their decision to remove tax-free shopping from airports, as well for airport testing to be ready to reduce the need for quarantine when breaks in restrictions allow travel.