Fitch Refines its COVID-19 Transportation Recovery Projections

The ongoing effects of the COVID-19 pandemic is affecting the “recovery trajectory” of U.S. airports, toll roads, and ports – prompting Fitch Ratings to refine its recovery assumptions, which the rating agency is detailing in a new report.

[Above photo by the Port of Baltimore.]

The rating agency said it is implementing “more severe downside parameters” to reflect transportation segments that are on very different recovery trajectories compared to its last analysis issued in July.

Photo by the Colorado DOT

“The slowest recovery lies ahead for airports with 2019 volume levels not likely to return until at least 2024,” explained Jeffrey Lack, one of Fitch’s directors. He added that the rating agency’s revised outlook projects a recovery for airports to 55 percent of 2019 traffic levels by the first quarter of 2021, reaching 75 percent of 2019 traffic levels by the fourth quarter of 2021 – with total enplanements for 2021 reaching 65 percent of 2019 traffic levels.

Lack noted that Fitch’s projections assume an effective vaccine/treatment for the COVID-19 virus will not be widely available until late 2021.
Toll roads, by comparison, should now rebound more strongly according to Fitch’s outlook after a rough spring of revenue declines.

Photo by the Pennsylvania Turnpike

“Toll roads have already recovered more than half of peak losses and are well-poised to rebound by 2022 as the pandemic wanes,” noted Scott Monroe, another Fitch director.

He added that Fitch’s assumptions for toll road recovery have not changed since the spring, though new downside cases reflect the possibility of a second set of strict lockdowns. Fitch projects passenger vehicle traffic on toll roads will recover to 80 percent of 2019 traffic levels by the end of the fourth quarter of 2020 and 93 percent of 2019 levels in 2021. Full traffic volume recovery is then likely by 2022, the firm noted.

However, the recovery for ports is more uneven, according to Fitch’s Senior Director Emma Griffith, with COVID-19 scenarios considering cargo and cruise activity separately.

“Cargo ports should return to 2019 levels by 2022 while cruise operations may not fully recover until 2024 and possible even later,” she noted.

Conversely, Fitch assumes no revenues from cruise ports for the balance of 2020 with minimal activity to resume by the second quarter of 2021.

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