How long high fuel prices persist will be key for U.S. transportation infrastructure

How high fuel costs will affect U.S. travelers and transportation infrastructure issuer credit quality depends on how long elevated prices persist, S&P Global Ratings said in a report published May 12, 2022.

Volatile fuel prices historically have not affected the credit quality of transportation infrastructure issuers and we expect the current higher prices will be credit neutral if they last for a limited time.

"Because of the significant pent-up demand for travel within the airport and toll road sectors due to pandemic-related lockdowns, we believe consumers are willing to absorb higher fuel prices for leisure travel for a limited duration, mitigating the effects of elevated costs and airfare increases in the near term," said S&P Global Ratings credit analyst Scott Shad.

However, in the longer term, we expect U.S. consumers could temper their travel behavior if elevated fuel prices and inflationary pressures persist or increase due to market conditions or factors such as carbon taxes.