The Hawaii Department of Transportation (“HDOT”) Airports Division is pleased to announce the airport system revenue bond rating is now upgraded to an A+ rating from A. All three major rating agencies are now on par with equal ratings for the Airports Division.
“This ratings upgrade extends our buying power as we move forward with improvements at our airports,” said Governor David Ige. “Achieving this upgrade is another accomplishment HDOT can be proud of as it pursues greater efficiency and maximizes infrastructure investments.”
“The upgraded rating will translate into millions of dollars in savings through lower interest rates for future bond issuances,” said Kurt Yamasaki, HDOT Airports Division Fiscal Management Officer. “We thank Fitch Ratings for working with us and acknowledging our efforts to be fiscally responsible.”
Fitch Ratings stated the rating is a reflection of the continued strong operational and financial performance with credit metrics remaining above previously forecast levels.
“Total system enplanements and carriers service continue to trend positively and have achieved pre-recession levels. Enplanements rose to 17.2 million in fiscal year 2016, a 3.2% rise over the year prior, and building on a five-year CAGR (compound annual growth rate) of 2.4%. Overseas enplanement activity continues to outpace interisland travel, as carriers add direct overseas service to additional island airports. Overseas flights grew 4.1% in fiscal year 2016, accounting for 59% of total enplanements. Interisland flights, which account for the remainder, grew 2% in fiscal year 2016. The first six months of fiscal year 2017saw a further 3% increase in total enplanements over the same period in fiscal year 2016, driven primarily by increased overseas traffic. Fitch views this diversification of traffic across the system positively, as it reduces the exposure to a single airport,” stated the Fitch Ratings news release.
A link to the full news release can be found by clicking here.
The HDOT Airports Division is working on and planning exciting maintenance and capital improvement projects at our facilities statewide including new consolidated rental car facilities in Honolulu and Kahului, a terminal modernization project in Kona, airfield improvements in Hilo and runway and taxiway repaving in Lihue and Molokai. In addition, HDOT has extended the energy savings performance contract with Johnson Controls Inc. statewide to replace existing lighting, reduce energy consumption and save electricity costs.
HDOT is self-sustaining and does not receive State general funds to operate, meaning HDOT does not receive funding from sources like income tax. Instead HDOT generates its own revenue through user fees. In the case of the airports, project costs, operating expenses and salaries comes from concessions and airline revenue. Primary sources of funding includes landing fees, terminal rentals, parking revenue, rental car customer facility charges and passenger facility charges.