Billion Dollar Airport Projects Face Inflation Cost Boosts, Report Says
The post Billion Dollar Airport Projects Face Inflation Cost Boosts, Report Says appeared on BitcoinEthereumNews.com. A construction worker climbs a ladder during a topping out ceremony for the LAX midfield terminal … More concourse expansion in January 2024. (Photo by Patrick T. Fallon) AFP via Getty Images The 2020s have been a growth period for the nation’s airports. Now, projects are continuing, but a leading credit rating agency says their costs will rise due to more rapid inflation, which comes at a time when air travel is slowing. “The outlook for the U.S. airport sector has changed to negative from stable,” Moody’s Ratings said in a report released this week. However, “Airport’s financial strength remains near an all-time high, providing a buffer to withstand a difficult 2025,” Moody’s analyst Ursula Cassinerio said in an interview. Expansion projects are underway or planned at major airports including Atlanta, Charlotte, Chicago, Denver, Los Angeles, Tampa, San Diego, and Washington Dulles. “We have seen many of the airports, especially the largest ones, in the middle of projects that have been developing in the last few years,” Cassinerio said. Moody’s now expects 2025 inflation to be 3.2%, up from its February expectation of 2.5%. “Increased inflation levels will affect the cost of capital plans,” Cassinerio said. “Airports will have to pay higher costs” and to issue more debt, she said. Airport revenue typically derives from charges to airlines and vendors, and to parking revenue, so that eventually costs are paid by airline passengers. According to Moody’s report, “Trade tensions that strain supply chains will drive up the costs of materials for constructions. Construction budgets will also increase if tighter immigration policies result in labor shortages. With many airports in the middle of capital projects that cannot be suddenly interrupted or canceled, the increase in costs will likely lead to additional costs.” In the worst cases, Moody’s said, since many airports…
The post Billion Dollar Airport Projects Face Inflation Cost Boosts, Report Says appeared on BitcoinEthereumNews.com.
A construction worker climbs a ladder during a topping out ceremony for the LAX midfield terminal … More concourse expansion in January 2024. (Photo by Patrick T. Fallon) AFP via Getty Images The 2020s have been a growth period for the nation’s airports. Now, projects are continuing, but a leading credit rating agency says their costs will rise due to more rapid inflation, which comes at a time when air travel is slowing. “The outlook for the U.S. airport sector has changed to negative from stable,” Moody’s Ratings said in a report released this week. However, “Airport’s financial strength remains near an all-time high, providing a buffer to withstand a difficult 2025,” Moody’s analyst Ursula Cassinerio said in an interview. Expansion projects are underway or planned at major airports including Atlanta, Charlotte, Chicago, Denver, Los Angeles, Tampa, San Diego, and Washington Dulles. “We have seen many of the airports, especially the largest ones, in the middle of projects that have been developing in the last few years,” Cassinerio said. Moody’s now expects 2025 inflation to be 3.2%, up from its February expectation of 2.5%. “Increased inflation levels will affect the cost of capital plans,” Cassinerio said. “Airports will have to pay higher costs” and to issue more debt, she said. Airport revenue typically derives from charges to airlines and vendors, and to parking revenue, so that eventually costs are paid by airline passengers. According to Moody’s report, “Trade tensions that strain supply chains will drive up the costs of materials for constructions. Construction budgets will also increase if tighter immigration policies result in labor shortages. With many airports in the middle of capital projects that cannot be suddenly interrupted or canceled, the increase in costs will likely lead to additional costs.” In the worst cases, Moody’s said, since many airports…
What's Your Reaction?
