Press Release|Public Finance
KBRA Affirms A+ Rating With Stable Outlook for Memphis-Shelby County Airport Authority Airport Revenue Bonds
7 Mar 2025 | New York
KBRA affirms the long-term rating of A+ with a Stable Outlook for the Memphis-Shelby County Airport Authority's (the "Authority") Airport Revenue Bonds. The Authority owns and operates Memphis International Airport (MEM) and two general aviation airports.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Enplanements are solidly growing the past five years (1.8% CAGR through FY24) and in excess of the pre-COVID pandemic level, supporting MEM’s full transition to an O&D airport.
- Airport revenues are diverse and supported by sizeable cargo operations, as MEM is one of the busiest cargo airports in North America given its critical position in the FedEx network and it is the site of the shipper’s corporate world headquarters.
- Future capital needs appear manageable given considerable terminal and airfield capacity and largely state and federally funded projects.
Credit Challenges
- Socioeconomic indices are relatively low, which may adversely affect discretionary air travel during economic downturns.
- Debt and debt per enplanement are high but on an improving trend the last four years.
- Recent reduction to FedEx cargo operations and landed weight fees.
Rating Sensitivities
For Upgrade
- Strong enplanement growth, accompanied by material service additions to new markets.
For Downgrade
- While not expected, significant changes in FedEx business plan that substantially reduces cargo activity at MEM.
- A material decline in cargo operations and/or a secular decline in enplaned passenger activity that result in significantly higher MEM airport rates and charges.
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