The credit profile of the Hawaii (State of) – Airports System Customer Facility Charge (A2 stable) revenue bonds reflects a substantial revenue base with uniquely strong demand compared to other rental car facilities we rate; strong debt service coverage and liquidity; and sound financial flexibility owing to unlimited Customer Facility Charge (CFC) rate setting and the ability to charge rental car companies for collection shortfalls.

The system has the largest revenue base of any of our rated consolidated rental car (ConRAC) facilities, supported by Hawaii's popularity as a tourist destination along with the expansive and dispersed nature of demand generators in the service area. This manifests in one of the highest measures of demand for rental cars of any market, with a ratio of 1.05x transaction days per origination and destination (O&D) enplanement in FY 2022. Activity has recovered rapidly as constraints related to health and rental car supply have largely been resolved, and as of FY 2023 both transaction days and CFC revenues were at 91% of FY 2019 levels. Revenues at these levels provide strong projected debt service coverage ratios (DSCRs) – generally above 3.0x – assuming travel continues to return toward historical levels. This and healthy cash balances provide solid cushion to absorb volatility in activity. The facility experienced stable demand throughout ridesharing's entry before Covid, highlighting the unique demand characteristics on the islands. The bonds also benefit from a healthy level of available cash, unlimited rate setting of the CFC and a relatively strong rate covenant (1.15x by actual collections).