UK airports downgraded amidst volumes collapse

27 March 2020 - 12:00 am UTC

The sheer scale of the impact of COVID-19 on Europe’s infrastructure fund-backed airports sector is beginning to show, with rating downgrades across otherwise financially healthy airports and almost 100% declines in traffic volumes. 

Standard & Poor’s on Friday (27 March) lowered Heathrow’s rating by one notch to BBB+ from A- with a negative outlook due to the ongoing uncertainty about the spread of COVID-19 and the associated travel restrictions.

Despite the downgrade, Heathrow retains investment grade rating and a robust financial position with GBP 3.2bn of cash and committed facilities, the rating agency said. Heathrow is owned by Ferrovial, Qatar Investment Authority, CDPQ, GIC, Alinda Capital Partners, CIC and USS.

Its CFO, Javier Echave, said that the company has “taken steps to reduce its cost base and reorganise its operation” and will “continue working to restore its strong rating as soon as possible”.  

S&P also downgraded on 26 March Vinci’s majority-owned Gatwick Airport to BBB from BBB+, also with a negative outlook. It follows Wednesday’s downgrade of Aeroports de Paris’ (ADP) rating to A from A+.

The agency’s raft of rating actions – also including downgrading Norway’s airport operator Avinor and putting on negative watch Amsterdam Airport Schiphol – reflects the impact of the COVID-19 pandemic on the industry.

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