Norwegian to Trim Staffing at T.F. Green, Airport Gets Strong Bond Rating
Thursday, January 17, 2019
RI Airport Corporation spokesman Bill Fischer said, “We have seen the news from Norwegian Air on the changes to their base crews. Norwegian has reported that they will continue service to PVD and we expect no changes in their current winter or summer schedules. We hope to have more specifics in the coming days allowing us to relay accurate information to Rhode Island travelers.”
Norwegian has been battling debt issues as the fast-growing discount airline tries to get its financial footing.
Forbes reported in late December, “Norwegian Air, a popular discount carrier that offers budget airfare to a handful of destinations in the United States, is reportedly facing similar pressure. According to several Norwegian news sources, the carrier faces a mountain of debt payments that are due by the end of the month – and with weakened revenue, those bills may be hard to pay. On Thursday, Newsinenglish.no said that "Analyst Martin Stenshall at Danske Bank thinks Norwegian will violate the terms of its loans by New Year." That news was later picked up by the popular frequent flyer blog View From the Wing and other American outlets.
Norwegian followed up with a statement of its own, saying "This is pure speculation. As previously announced, our liquidity is satisfactory, we attract hundreds of thousands of new passengers every month and we are currently working on selling parts of our fleet, which will further strengthen our financial situation."
Green has transformed in the past couple of years and is rated as one of the fastest growing airlines in America. Last week, the airport announced that Sun Country would begin service with direct flights to Minneapolis and Nashville.
The airport did get a boost from Standard & Poor’s Global Ratings (S&P) which announced this week that the agency had raised the Rhode Island Airport Corporation’s revenue bond rating to 'A' from 'BBB+’. This change reflects a two-notch jump in their rating system.
“These changes are happening because of a steadfast commitment to change the direction of the airport, which endured a decline in enplanements, routes and airlines over a 10-year period up until 2015. Since that time, the board, the management team and the employees of RIAC have worked to resurrect the airport in a meaningful way that is truly paying dividends for the State of Rhode Island,” said Iftikhar Ahmad, president and CEO of the Rhode Island Airport Corporation.
“Over the last four years, our economy has grown by leaps and bounds and we’ve transformed T.F. Green into one of the most convenient airports in the country,” said Governor Gina Raimondo. “This is yet another sign of how far we’ve come, and I look forward to building on our progress in the years ahead.”
“This rating upgrade is welcome news and it affirms the fiscal health and growth of the airport. This is good news for the airport, but more importantly, it is great news for the State of Rhode Island as T.F. Green is an integral driver and contributor to Rhode Island’s economy,” said Jonathan Savage, chair of RIAC’s Board of Directors.
S&P reported stated:
· Very strong management and governance, with a good track record of operating the major lines of business and managing risk, as evidenced by improving financial performance, conservative budgeting, and meeting financial targets;
· Debt service coverage at approximately 1.5x that we expect will remain at levels that we consider strong through the capital plan; and,
· Very strong debt and liabilities capacity signified by total debt-to-net revenues of under 10x that we expect will continue.
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