Miami airport boss preps for renewed debt debate

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Miami airport boss preps for renewed debt debate

MIAMI (Reuters) =97 Pressures facing the woman leading Miami's International=
=20
Airport are just heating up. Angela Gittens, director of the nation's=20
leading gateway to Latin America, faces a revived debate this week over the=
=20
fate of a hefty $4.8 billion capital improvement plan to the regional hub.=
=20
The program has inspired heated criticism as it aims to overhaul the=20
nation's busiest international freight and third-busiest international=20
passenger airport at a time when travelers are sticking to their cars.
Gittens campaigns loudly to pursue the improvements despite stubborn=20
weakness in aviation, and even though large bond offerings to fund the=20
project may further threaten the airport's credit rating. She concedes that=
=20
the program is the biggest issue weighing on the airport, not new security=
=20
requirements or war worries hurting travel. "Were it not for the capital=20
program, getting through 9/11 and dealing with the federal government=20
taking over your airport would really relatively not be that big an issue=20
for Miami because the fundamentals are still there," Gittens told Reuters=20
in an interview. As Gittens starts her third year as aviation department=20
director this month, she will meet with county officials this week and then=
=20
Wall Street agencies on the program. At this point last year, she scaled=20
the plan back by $1.2 billion, and credit analysts say she may have to=
 again.

ADDING UP THE DEBT
Under Gittens, Miami International will take on roughly $4 billion in debt=
=20
to pay for the multiyear improvement plan. Already, the airport has $2.3=20
billion in outstanding debt, according to credit analysts. Miami is not=20
alone in having billions in debt, given loans taken by airports in Denver,=
=20
Seattle, Houston and Chicago. But Miami International's debt carries a=20
"negative" outlook, meaning the airport's credit rating could be=20
downgraded, making it more expensive to borrow. The questionable outlook,=20
according to Fitch Ratings, relates to the improvement plan and the risk=20
that persistent weakness in air travel may force an increase in the cost of=
=20
that program. Fitch analyst James Gilliland said if air traffic continues=20
to flag, Miami International will be expected to pull back. "They told us=20
last year this was their long-term plan," Gilliland said. "We're holding=20
them to this. If passengers dry up and they don't decrease the amount of=20
bonds they're going to sell, that is when downgrades occur." While some=20
county officials have urged a pullback for months, business leaders,=20
especially in the international trade sector, are pushing for its=20
continuation despite debt levels. Miami now has a solid grip on the key=20
Latin America market, with leading positions in passenger traffic and=20
cargo. But the business community has continually questioned whether Miami=
=20
would maintain that position without airport enhancements. "For easily over=
=20
a decade, other airports have been slathering over the prospect of getting=
=20
that trade," said Charles Jainarain, president of Miami-based trade=20
consulting firm Greenheart International. "There are wolves out there=20
waiting to get MIA's business. There's no doubt whatsoever about that," he=
=20
said.

AMERICAN'S ABSENCE?
Other officials argue that the crisis among commercial carriers, especially=
=20
AMR Corp.'s American Airlines, which has the biggest presence in Miami,=20
should give airport officials pause and prompt them to hold off on the=20
improvement program until the industry outlook is clearer. Gittens=20
disagrees. In fact, she said if American Airlines is forced to file=20
bankruptcy, or even leave Miami altogether, another carrier will move in=20
and replace it to serve the broad Latin American and Caribbean market.
"We still have the market," Gittens said. "Miami is still here and Miami=20
has a destination. The geographic position of Miami is the real strength."


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