The start of REAL ID enforcement in early May went without major hassle at Northern Virginia’s two airports.
“The rollout was smooth and uneventful,” Metropolitan Washington Airports Authority (MWAA) Executive Vice President and Chief Operations Officer Thomas Beatty said at the authority’s May 21 board of directors meeting.
Only about 2% of travelers in the first days of enforcement arrived without a form of identification deemed acceptable under the REAL ID initiative, which was passed by Congress two decades ago but only went into effect earlier this month.
Those without proper ID are subjected to enhanced security procedures before they’re allowed to advance to their flight gate. Anyone whose identity can’t be verified, or who declines to participate in enhanced screening, can be denied boarding.
Beatty said the relatively smooth rollout of REAL ID at Dulles International and Reagan National airports was due to “a concerted communications effort” between MWAA, the Transportation Security Administration and other partners.
MWAA’s credit rating unchanged
Despite “outsized exposure” to repercussions of federal government cutbacks, MWAA has retained its existing credit ratings as it prepares to sell millions in new debt.
That’s good news both for the authority, its airlines and passengers, who would be forced to cover the increased cost of borrowing that would result from lower bond ratings.
And it also is, at least for now, a vote of confidence by the bond-rating houses in the relative economic strength of the region.
Fitch, Moody’s and S&P Global in recent weeks have affirmed existing bond ratings for the authority’s aviation operations. The ratings were AA-, Aa3 and AA-, respectively, with a stable outlook.
The re-evaluation of the authority’s creditworthiness came as it prepares to sell approximately $730 million in bonds. Funds will be used for capital improvements, including at Dulles and National airports, and refinancing past debt.
At the May 21 board of directors meeting, MWAA President and CEO Jack Potter said retaining existing ratings is important, because bond-rating houses have been taking a harder look at the aviation sector, given the nation’s currently unsettled economic conditions.
An MWAA team traveled to New York City to meet with analysts in advance of the ratings decisions.
The ratings from Moody’s and S&P place MWAA’s creditworthiness well within investment-grade category.
In its May 16 rating, Moody’s analysts said the two airports operated by MWAA serve a robust area that acts against the “anticipated slowdown in U.S. economic growth and subdued consumer confidence.”
“While the region has an outsized exposure to the current federal workforce cuts, IAD will continue to benefit from a predominant market position in the international segment and a growing role as a connecting hub for United Airlines,” Moody’s analysts said, referring to Dulles.
MWAA plans to issue approximately $5.5 billion in cumulative new debt over the next three years. As a result, one key metric — debt per annual passenger enplanements — is slated to rise from $223 in 2024 to around $400 in 2028, Moody’s analysts said.
The debt level exceeding $400 per annual enplanements could result in a downgrade in credit ratings in the future, they said.
Helping to offset concerns is “management’s proven track record of prudently executing the capital plan and maintaining a healthy capital structure and debt-service coverage,” according to the analysts.
