The Metropolitan Washington Airports Authority (MWAA) is preparing to issue $829.4 million of airport system revenue and refunding bonds. This issuance includes both refunding opportunities totaling around $400 million and new money issues amounting to about $429 million. The new money will be utilized to fund the ongoing capital construction program of the authority. BofA Securities, Inc. is the senior manager for the deal, with Frasca & Associates serving as the municipal advisor and Squire Patton Briggs acting as the bond counsel.
Financial Performance and Airport Revenues
MWAA has experienced a significant rebound in total operating revenues post-pandemic. In 2019, operating revenues stood at $766 million, and by 2023, they had increased to $853 million. This growth has been primarily driven by non-airline revenues and concessions, which have seen a 20.5% net increase over 2022. Furthermore, parking revenues have surged by 17.5%, while food and beverage sales have spiked by 28.7% during the same period. Enplaned passengers have also shown an increase from 24.3 million in 2019 to 25.1 million in 2023 across both airports.
Impact of Infrastructure Investment and Jobs Act
MWAA has benefited from the Infrastructure Investment and Jobs Act through various grants and funding programs. Reagan National and Dulles International airports have received Airport Infrastructure Grants, totaling $66.7 million and $67.7 million, respectively. Additionally, the airports have secured funds through the Airport Terminal Program grants, further assisting in their development and improvement projects.
MWAA has ambitious capital construction projects lined up, including the construction of a new East Concourse at Dulles with an estimated cost of $749 million. Terminal Two at Reagan is scheduled for a $63.9 million makeover, while runway work at Reagan will require $370.4 million, partly covered by $125.3 million in federal grant money. These developments aim to enhance the infrastructure and passenger experience at both airports.
In anticipation of the bond sale, MWAA has received strong affirmations from credit rating agencies, with Moody’s Investors Service rating the revenue bonds Aa3, S&P Global Ratings AA-minus, and Fitch Ratings AA-minus, each with stable outlooks. Moody’s emphasizes the importance of maintaining an adequate debt service coverage ratio, with MWAA reporting DSCRs of 2.77 for 2023 and a forecast of 2.54 in 2024. The authority is expected to issue new debt between 2024 and 2027 to partially fund its capital plan.
Sustainability and Environmental Initiatives
MWAA is committed to sustainability measures, with plans to achieve a LEED Silver rating for the East Concourse at Dulles. Initiatives such as electrification and efficiency improvements, along with the implementation of EV charging infrastructure and all-electric buses, aim to reduce the environmental impact of airport operations. Additionally, a 100-megawatt solar farm near Dulles, in partnership with Dominion Energy, is being developed to further promote renewable energy practices.
The extension of the Metrorail system to Dulles has played a crucial role in the airport’s recovery post-pandemic. MWAA funded the construction of the rail line with support from toll road revenue and surrounding counties. The Dulles Metrorail station has seen a substantial increase in ridership, benefiting both passengers and airlines alike. This infrastructure development showcases MWAA’s commitment to enhancing connectivity and accessibility for travelers.