Ratings agency affirms strength of airport despite some worries

Fitch Ratings says it has some worries about clouds on the horizon for the Reno-Tahoe Airport Authority, but the worries aren't enough to trigger a downgrade of the airport authority's debt.

The Chicago-based ratings agency noted that passenger traffic at the airport was up 0.8 percent in the fiscal year ended June 30 after a decline of nearly 27 percent in the previous four years.

Then, too, Fitch noted that the airport is heavily dependent on Southwest Airlines, which accounts for 54.7 percent of its passenger traffic.

But those concerns are offset, Fitch analysts said, by the airport's low operating costs and its stable financial operation

Fitch maintains an "A" rating on $26.3 million of airport system revenue bonds.

The airport's operating revenues of $41.4 million in the fiscal year that ended last June 30 was down from $44.5 million the previous year,

The decline, Fitch analysts wrote, was largely as the result of the expiration of a rental-car concession agreement that guaranteed minimum annual payments from car rentals at levels set before the onset of the recession.

Auto rentals generate about 22 percent of the airport's revenues. Parking generates another 22 percent. Fees charged to airlines amount to 27 percent.

Operating expenses in the last fiscal year totaled $33.4 million, Fitch analysts said. That's an increase of 7 percent from $31.1 million a year earlier, and the increase stemmed largely from salary increases after a year in which wages of airport employees were frozen.