American Airports That Binged on Debt See Travel Slowly Revive

(Bloomberg) — Americans are slowly starting to fly again, which signals a positive turnaround for owners of the more than $120 billion of municipal debt sold by the nation’s airports.

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Some 5.7 million travelers passed through checkpoints in the week ended Oct. 10, the most since the coronavirus pandemic scuttled air travel and halted tourism, according to the Transportation Security Administration. On Sunday alone, the agency counted more than 980,000 travelers, the most since March 16.

Related: U.S. Airline Traffic Rises 11% From Prior Week, Down 65% YoY

The activity is still significantly lower than before the pandemic reached the U.S. and major carriers are idling thousands of employees as a resurgence in the virus threatens to keep travel depressed this year.

But it marks a welcome turn for airports that borrowed tens of billions of dollars in recent years to build new facilities before the coronavirus sent the economy hurtling into the worst recession in modern history. Airport bonds are typically backed by reserves and a combination of fees from passengers, airlines and rental cars or parking.



graphical user interface, chart: Slow Takeoff


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Slow Takeoff

Jason Appleson, a portfolio manager at PT Asset Management in Chicago, said muni-bond investors anticipate that air travel will eventually return to normal once coronavirus vaccines are developed and widely distributed. Such optimism has allowed airports to continue to borrow easily despite the financial hit dealt to the industry and the deadlock in Washington over further measures to stoke the economy.

Chicago’s O’Hare International sold more than $1 billion worth of securities in late September and Hawaii’s airport system told $582 million last week. Denver International Airport and Kansas City International Airport are slated to sell a combined $1.5 billion of bonds this week.

“People still need to travel city to city, state to state — I don’t think that will be going away,” Appleson said. “It may not happen in the next six months, but in a year, or two years, things should come back.”

Even so, airport bonds have lagged other municipal securities during the pandemic, with investors anticipating a risk of widespread rating downgrades. They have returned about 1.9% this year, according to Bloomberg Barclays index, less than the 2.9% gain for the broader market.

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Airlines and Airports Say EU’s New Travel Plan Won’t Revive Flights

(Bloomberg) — Airlines and airports said European Union moves to help restart flights in the region through a more coordinated approach to coronavirus-related travel curbs are wholly inadequate.



a close up of an airplane: A traveler at Charles de Gaulle airport in Roissy, France.


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A traveler at Charles de Gaulle airport in Roissy, France.

The measures, adopted Tuesday, fail to propose the replacement of quarantine requirements with coronavirus tests and won’t stop states refusing entry from other EU countries, the International Air Transport Association said in a joint statement with Airports Council International and lobby group Airlines4Europe .

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The proposals backed by European Affairs Ministers seek to set a common threshold for entry restrictions, with unfettered travel allowed between areas with fewer than 25 new cases of Covid-19 per 100,000 people for the previous 14 days, and under 4% of tests showing positive results. None of the 27 EU states is below that threshold. Neither are the rules binding on governments.

“We are pretty disappointed,” IATA Director General Alexandre de Juniac said in a webcast briefing. “We were expecting the European Council at least to be open to replacing quarantines by testing.”

IATA also backs the reopening of borders between countries with similar infection rates and longer delays between the announcement of new measures and their introduction.

Countries across Europe have been sharpening restrictions after a resurgence in the pandemic, with 700,000 new cases recorded last week, the most since the start of the outbreak. That grinds against pleas by airlines to remove curbs they say are stopping people from traveling despite pent up demand.

De Juniac reiterated calls for further financial support for airlines and said he expects that some carriers won’t survive the winter at current occupancy levels. Companies in Latin America and Africa are especially exposed given a lack of state support there, he said.

ACI head Luis Felipe de Oliveira said he doesn’t expect government-owned airports to go bust but that privately controlled hubs in Canada, Europe, Asia and Latin America may be vulnerable.

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Covid Travel: Airlines and Airports Say EU’s Plan Won’t Revive Flights

A traveler at Charles de Gaulle airport in Roissy, France.

Photographer: Nathan Laine/Bloomberg

Airlines and airports said European Union moves to help restart flights in the region through a more coordinated approach to coronavirus-related travel curbs are wholly inadequate.

The measures, adopted Tuesday, fail to propose the replacement of quarantine requirements with coronavirus tests and won’t stop states refusing entry from other EU countries, the International Air Transport Association said in a joint statement with Airports Council International and lobby group Airlines4Europe .

The proposals backed by European Affairs Ministers seek to set a common threshold for entry restrictions, with unfettered travel allowed between areas with fewer than 25 new cases of Covid-19 per 100,000 people for the previous 14 days, and under 4% of tests showing positive results. None of the 27 EU states is below that threshold. Neither are the rules binding on governments.

“We are pretty disappointed,” IATA Director General Alexandre de Juniac said in a webcast briefing. “We were expecting the European Council at least to be open to replacing quarantines by testing.”

IATA also backs the reopening of borders between countries with similar infection rates and longer delays between the announcement of new measures and their introduction.

Countries across Europe have been sharpening restrictions after a resurgence in the pandemic, with 700,000 new cases recorded last week, the most since the start of the outbreak. That grinds against pleas by airlines to remove curbs they say are stopping people from traveling despite pent up demand.

De Juniac reiterated calls for further financial support for airlines and said he expects that some carriers won’t survive the winter at current occupancy levels. Companies in Latin America and Africa are especially exposed given a lack of state support there, he said.

ACI head Luis Felipe de Oliveira said he doesn’t expect government-owned airports to go bust but that privately controlled hubs in Canada, Europe, Asia and Latin America may be vulnerable.

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