“The outlook revision reflects our view that DAY’s enplanement levels are stabilizing after year-over-year declines since 2013,” S&P Global Ratings credit analyst Kevin Archer said in S&P’s statement. “In addition, we expect the airport to maintain debt service coverage … at levels we would consider at least adequate.”
The airport has invested in infrastructure, worked with area business leaders and has proven to be a good home to PSA Airlines, a regional air carrier, which continues to hire and invest in its Dayton headquarters, said Chris Kershner, Dayton Area Chamber of Commerce executive vice president.
“Plain and simple, it’s a show of confidence,” Kershner said of the new rating. “It’s confidence that the Dayton airport is strong today and will be in the future.”
Terry Slaybaugh, Dayton’s aviation director, said S&P saw that airport management brought its budget in line with passenger traffic, especially after Southwest Airlines left the airport in June 2017.
The airport’s annual revenue approached $36 million just a few years ago, Slaybaugh said Wednesday. Today, it’s closer to $32 million. Expenses were cut accordingly, he said.
“We streamlined our operations and became more efficient,” he said.
S&P may also have noticed the airport’s remodeling of its terminal and other infrastructure investments, he agreed.
“It’s always going to impress an investment house when we are able to cut our budget, bring our operating budget down in line with our revenue, and at the same time, make huge capital investments in our facility,” Slaybaugh said.
And commercial development around the airport supports air service and the airport ultimately, he believes.
More than $92 million in investment near the airport in recent years has resulted in five commercial distribution centers so far totaling more than 2.7 million square feet, employing (or soon to employ) more than 2270 people in that part of Dayton and Union.
“They see the robust economy in the Dayton area, too,” Slaybaugh said. “That didn’t hurt.”
Kershner heads a committee of business leaders who regularly meet with Slaybaugh about business needs and expectations.
“The airport has been a great partner,” he said. “They are responsive, and they’re also a leader. They bring to us opportunities they need help on. We bring the needs and demands of the business community.”
S&P’s assessment “reflects DAY’s very strong service area economic fundamentals, low industry risk, vulnerable market position and strong management and governance,” Dayton city government said in a statement.
S&P said the airport remains challenged. Last year, Fitch Ratings downgraded the rating of DAY’s revenue bonds, to BBB from BBB+.
“We consider DAY’s overall market position vulnerable,” S&P said in its release. “The airport faces significant competition from nearby CMH (John Glenn International Airport) and CVG (Cincinnati/Northern Kentucky International Airport) which are roughly 55 and 70 miles away, respectively.”
Both CMH and CVG offer more service and historically have enplaned more passengers, SP&P said.
Total enplanements at DAY last year declined to 899,000, from a year-end 950,620 in 2017 and 1,035,263 in 2016. But the city expects those numbers to stabilize and slowly rise.
Kershner said Slaybaugh needs to continue meeting with air carriers and catering to business travelers.
“They’re doing the right things they can do,” he said.
“This really speaks to the power we have here as a community,” Slaybaugh said in the city’s statement. “Not only do we have a phenomenal terminal that’s easy to navigate, but Dayton’s excellent economy and people have given the future of our airport new light.”
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