Ratings outlook downgraded for airline bankruptcy-affected hubs
SYDNEY (Centre for Asia Pacific Aviation) - Fitch Ratings has warned that bankruptcy filings by Northwest Airlines and Delta Air Lines raise the risks for their respective hub airports, with the spectre of service reductions. Northwest’s hubs at Minneapolis-St Paul, Detroit and Memphis, all share a negative outlook. Fitch also stated that Delta's hub airports (Atlanta, Cincinnati and Salt Lake City) are “particularly vulnerable”, as they rely on the scheduling decisions of the airline to generate significant levels of transfer traffic to complement local origin and destination traffic.
The high fuel cost environment also means competing carriers may be slower to fill any voids than in previous bankruptcy filings. Overall, however, the filings only pose minor immediate risks to most general airport revenue bonds in the US, according to Fitch. Meanwhile, the SkyTeam Alliance has stated the filings would have no impact on the alliance's operations.
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