KINAIR Set to Benefit from Traffic Volumes at NMIA in 2025

  • The Kingston Airport Revenue Finance LLC (KINAIR) project is expected to continue to withstand a hypothetical sovereign stress scenario attributable to its financial structure, which includes an offshore cash-funded reserve account and relatively steady air passenger volumes, given the airport's importance for Jamaica.
  • In 2024, Norman Manley International Airport's traffic performance (1.76 million passengers) was in line with S&P Global Ratings' expectation of 1.75 million arrivals. Aeronautical charges were adjusted higher by 3.36% effective January 1, 2025.
  • Importantly, total passengers at the airport rose 1.6% in 2024, with less than 1% of passengers being domestic passengers. International passengers were mainly traveling from the U.S. (primarily Fort Lauderdale, New York, and Miami), Canada, and the U.K.
  • The three airlines that contributed most to the airport’s revenue in 2024 were JetBlue Airways Corporation, American Airlines Inc., and Caribbean Airlines Ltd. Together, they accounted for roughly 45% of the airport's airline-related revenue.
  • For these reasons, S&P believes passenger traffic at the NMIA will grow 4%-6% in 2025 and 3%-5% in 2026. This will enable KINAIR, which benefits from 53.22% of the airport’s revenue and is intrinsically correlated to traffic volumes, to post the minimum and median DSCRs (debt service coverage ratios) during the first phase of the transaction of roughly 1.28x and roughly 1.3x, respectively, until an expected refinancing in 2036. For the second phase, S&P continues to expect minimum and median DSCRs of 1.3x.
  • Kingston’s NMIA is owned by the Airports Authority of Jamaica. The authority operated the NMIA for about 45 years, but in 2019, it granted a 25-year concession to Grupo Aeroportuario del Pacifico S.A.B. de C.V. (GAP), a private airport operator. As part of the agreement, GAP committed to the monthly transfer of 53.22% of the airport's aggregate revenue (consisting of aeronautical and commercial revenue) as the concession fee to the Airports Authority of Jamaica. The remaining 46.78% of revenue must cover NMIA's operations, maintenance costs, and capital expenditures. The concession fee is, therefore, senior to any of the airport's expenses.

(Source: S&P Global Ratings)