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CANADIAN AIRPORT AUTHORITIES CAUTIOUS OPTIMISM BUT FURTHER

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CANADIAN AIRPORT AUTHORITIES CAUTIOUS OPTIMISM BUT FURTHER Powered By Docstoc
					   Volume 2, Issue 32, September 29, 2010



Huston Loke
President                     CANADIAN AIRPORT AUTHORITIES: CAUTIOUS OPTIMISM BUT
+1 416 597 7533               FURTHER HEADWINDS POSSIBLE
hloke@dbrs.com
                              During the current year, traffic levels at the Canadian airport authorities rated by DBRS have bounced
Kent Wideman, CFA
Chief Credit Officer
                              back from the sluggish levels experienced during the recession. With some exceptions, growth has
+1 416 597 7535               been sound, although it will be some time before traffic levels match those seen prior to the downturn.
kwideman@dbrs.com
                              While the trend is encouraging, the fragility of the economic recovery raises the possibility of slowing
Eric Beauchemin, CFA          growth and weaker traffic levels during the remainder of 2010 and possibly well into 2011.
Managing Director,
Public Finance
+1 416 597 3619
ebeauchemin@dbrs.com            Enplaned Passenger Traffic Changes at DBRS-Rated Airport Authorities
Michael Caranci
                                DBRS-Rated Airport Authorities                                                    DBRS Rating           2009        2010 1H
Managing Director,
Energy                          Aéroports de Montréal                                                               A (high)           -4.7%          4.6%
+1 416 597 7304
mcaranci@dbrs.com               Ottawa Macdonald-Cartier International Airport Authority                            A (high)           -2.5%          5.9%
                                Greater Toronto Airports Authority                                                      A              -6.1%          3.7%
Kam Hon
Managing Director,              Edmonton Regional Airport Authority                                               A (high) Neg         -5.4%          0.1%
Corporate
                                Vancouver International Airport Authority                                           AA (low)           -9.4%          3.6%
+1 416 597 7543
khon@dbrs.com

Brenda Lum
                              Following several years of robust growth, traffic levels at all of the major Canadian airports declined in
Managing Director,            2009, reflective of the global economic downturn. Traffic losses ranged between -2.5% for Ottawa to
Canadian Financial
Institutions                   -9.4% for Vancouver, more modest than had been seen in past recessions when cumulative traffic
+1 416 597 7569               declines generally ranged between 10% and 12% at Canada’s major airports. Since January 2010,
blum@dbrs.com
                              passenger traffic has grown at all of the DBRS-rated airport authorities across Canada. In general, the
Larry J. White
Managing Director,
                              pace of the rebound is sound, indicative of the renewed demand for business and leisure travel, and for
Business Development          some airports, new routes and new carriers. For the first six months of 2010, the Ottawa Macdonald-
and Originations
+1 416 597 7457
                              Cartier International Airport experienced the sharpest rebound in traffic (5.9%) of any of the
lwhite@dbrs.com               authorities rated by DBRS and with the exception of Edmonton International Airport, traffic is ahead
                              of Transport Canada’s prediction for a 2.3% growth in the sector in 2010. Following a period of
Toronto                       extraordinary growth of 9.5% compounded annually between 2004 and 2008, passenger traffic at
DBRS Tower                    Edmonton International Airport has lagged its peers and is only up marginally year to date. Domestic
181 University Avenue
Suite 700                     traffic has been essentially flat at Edmonton, while the 4.3% growth in transborder traffic has not been
Toronto, ON M5H 3M7           sufficient to offset an 11.8% decline in international traffic during the period. Taken as a group,
+1 416 593 5577
                              however, the DBRS-rated airport authorities generally responded well to the downturn.
Caroline Creighton
Coordinator,                  DBRS cautions that the reinvigorated momentum in traffic may be tested by the headwinds that appear
Senior Vice President,
Communications and Media
                              to be gathering. Forecasters generally expect global economic conditions to moderate, and while a
+1 416 597 7317               double-dip recession is not considered highly probable, the hesitant pace of the global economic
ccreighton@dbrs.com
                              recovery could translate into choppy passenger traffic conditions for the next several months.
                              Fortunately, the high origination and destination component at most Canadian airports backstops
                              demand to a degree, while the unregulated fee-setting autonomy possessed by the authorities affords
                              them significant flexibility to weather an uncertain economic climate.

                              For more information, please contact Grant Headrick at gheadrick@dbrs.com or Eric Beauchemin at
                              ebeauchemin@dbrs.com.

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