Moody’s cuts Malaysia Airports to negative

Moody's Investors Service said it affirmed the A3 issuer rating of Malaysia Airports Holdings Bhd. and changed its outlook to negative from stable.

The change in outlook to negative principally reflects heightened operating challenges for Malaysia Airports’ wholly owned subsidiary, Sabiha Gokcen International Airport (SGIA, unrated), which owns and operates the second largest airport in Istanbul, Turkey.

"We expect SGIA to experience a material decline in passenger traffic growth in the next 12-18 months, following the coup attempt that ended on 16 July, as well as the terrorist attacks that occurred earlier this year," Moody's vice president and senior analyst Ray Tay said in a news release.

"As such, growth in passenger traffic at SGIA could decline to low single-digits for 2016 and potentially 2017, and international travel, in particular, will likely be hit."

"Passenger service fees for international passengers are much higher than those for domestic passengers," Tay added in the release.

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