Airport Authority HK revised down to 'bbb' on protracted traffic recovery

November 22, 2021

HONG KONG -- The negative impact of the COVID-19 pandemic on passenger travel will likely weigh on Airport Authority Hong Kong's (AAHK) revenue and leverage over the next 12-24 months, according to ratings agency Standarfd and Poors.  It says AAHK's passenger traffic recovery will lag behind global peers due to the HKSAR's sustained stringent quarantine measures and the absence of domestic flight operations.

S&P says ongoing capital expenditure of about HK$30 billion per year over fiscal years 2022-2024 (years ending March 31, 2022-2024), mostly for the three-runway system (3RS) project, will continue to drive up the airport's debt.

"As a result, we have revised down AAHK's stand-alone credit profile (SACP) by one notch to 'bbb' from 'bbb+'. We still see an almost certain likelihood that the Hong Kong Government will provide timely extraordinary support to AAHK, if needed," the agency says.

"On Nov. 22, 2021, we affirmed our 'AA+' long-term issuer and issue ratings on AAHK given that we continue to equalise our rating on AAHK with that on the Hong Kong Government. The stable outlook reflects our same view on the Government." (ATI).