KBRA Affirms A+ Rating, Stable Outlook on Greater Asheville Regional Airport Authority, NC GARBs
2 Apr 2025 | New York
KBRA affirms the long-term A+ rating, with a Stable Outlook assigned to outstanding Airport System Revenue Bonds (GARBs) previously issued by the Greater Asheville Regional Airport Authority (GARAA or the "Authority"). The Authority, an independent, fully autonomous entity, manages, operates and maintains Asheville Regional Airport (AVL or the "Airport").
Airport System Revenue Bonds are secured by a pledge of net revenues generated by AVL, which is managed by the Authority, an independent, fully autonomous entity. AVL serves the City of Asheville, the State of North Carolina, and the Asheville, NC Metropolitan Statistical Area, which includes Buncombe County. AVL provides only domestic service, nearly all of which is origin and destination (O&D) in nature.
A Surveillance Report will follow.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Growing air trade area, anchored by established leisure destinations, supports strong air travel demand.
- Primary carrier, Allegiant, enjoys very favorable yield and has a maintenance base at the Airport.
- Solid liquidity and, even after debt service ramps up starting in FY 2026, sufficient DSC.
Credit Challenges
- Pro-forma debt metrics that are elevated relative to AVL’s size and operating scope.
- Limited formal policies and procedures for financial and debt management, offset by experience of leadership.
The temporary operational and financial effects of Hurricane Helene, which impacted AVL in early FY 2025 (Sept.2024), were also considered.
Rating Sensitivities
For Upgrade
- Improved debt metrics through amortization and growth in enplanements, operations, and liquidity.
For Downgrade
- An unexpected, material and sustained decline in passenger traffic at AVL created by the loss of an air carrier serving the Airport and/or an exogenous event (e.g., health emergency).
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