Moody's said in a report released on Tuesday that the Australian airport sector's economic outlook remains stable and added that stiff price competition among airlines and strong business activities should encourage further passenger load growth.

The rating agency said that the stable outlook "would not materially impact growth in the Australian economy," as it added that the ratings were handed out with considerations on the economic development in Europe and North America.

It also said that other factors considered were the diminishing impact of the rising rates, the dwindling fiscal stimulus and the possibility that jet fuel would skyrocket over time.

Moody's vice president Paul Ovnerud-Potter, who wrote the report, cited the double-digit growth in international passenger numbers seen in the past few months in Melbourne, Sydney, Perth and Adelaide airports.

He said that "Moody's outlook and ratings factor in a return to lower single digit levels, partly due to the weaker Australian dollar, and partly because the strong growth is being measured against weak monthly performance at the same time in 2009."

Mr Ovnerud-Potter is upbeat that average passenger numbers would grow by four percent coming from the past 12 months leading to end of June, in spite of impending weaker leisure markets and the perceived unstable consumer confidence.

He added that better price offerings and more business activities should spur more demand growths for the airport business while he pointed out that stable earnings growth "would remain supported by the strong market positions of the major capital city airports rated by Moody's."

Mr Ovnerud-Potter warned though that capital expenditure programs and corresponding debt would negatively affect financial metrics should expectations on passenger growth failed to materialise after all.

He noted though that airports can actually defer capital projects without doing much damage should this possibility become a reality as he added that refinancing risk through and until the latter part of next year should be generally manageable.

Mr Ovnerud-Potter observed that the airport sector has been traditionally vulnerable to credit market volatility, which could potentially influence future debt issuance and pricing schemes.