DENVER AIRPORT: OPERATING RESULTS AND FINANCIAL RISKS
The General Accounting Office (GAO) was requested to examine the financial viability of the Denver International Airport (DIA), which opened for operations on February 28, 1995. Briefly, GAO found the following: At the time of this review, DIA had only been operating for 6 months, so the actual financial data available on operations were of limited predictive value. Also, DIA's future financial performance could be threatened if (1) United Airlines, its major tenant, or the airline industry in general underwent financial stress or upheaval, (2) DIA experienced significant declines in passenger volumes, or (3) unknown construction defects resulted in major unexpected costs. The City of Denver has acknowledged that the Securities and Exchange Commission (SEC) is conducting a formal investigation regarding the adequacy of the city's disclosure of information in bond offering documents with respect to the automated baggage system and related delays in opening the airport. Current estimates of whether the city will be able to repay investors would not appear to be within the scope of the SEC's investigation. Generally, when the SEC finds a violation of federal securities law, it can pursue various enforcement mechanisms, including a "cease-and-desist" order, or it can ask a court to impose monetary penalties. In addition, DIA bondholders have filed several class action lawsuits seeking damages related to inadequate disclosures. Any SEC determination that disclosures were not fair or complete could affect the results of these lawsuits. Based on GAO's review of the data available as described in this report, GAO found no issues that would lead to the belief that DIA would be unable to meet its financial obligations, including payments to bondholders under current financing arrangements. However, the risk factors GAO identified could result in limiting DIA's future ability to meet its obligations.
- Record URL:
- Record URL:
- Report to the Honorable Hank Brown, U.S. Senate.
U.S. General Accounting Office441 G Street, NW
Washington, DC United States 20548
- Publication Date: 1996-2
- Features: Appendices; Tables;
- Pagination: 21 p.
- TRT Terms: Cash flow; Data analysis; Financial analysis; Mathematical analysis; Risk assessment
- Identifier Terms: Denver International Airport
- Old TRIS Terms: Bondholder repayment
- Subject Areas: Aviation; Finance; Safety and Human Factors;
- Accession Number: 00720230
- Record Type: Publication
- Report/Paper Numbers: GAO/AIMD-96-27
- Files: NTL, TRIS
- Created Date: Apr 19 1996 12:00AM