Equity Analysis /
Mexico

AIRPORTS: Easter supports strong demand

  • Passenger traffic in Asur rise 61.4%, in Gap 43.1% and in Oma 39.5% given a strong demand and an easy comparative base

  • Asur stood out for presenting the greatest annual advances, also comparing vs. pre-pandemic levels, followed by Gap

  • Finally, all groups have reached pre-pandemic figures which reaffirms the sector’s positive outlook

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

Banorte
9 May 2022
Published by

Easter supports strong demand

  • Passengers at the airports operated in Mexico by Asur, Gap, and Oma, reflected a solid demand performance, with consolidated traffic slightly higher than expected

  • Regarding total operations (including those outside of Mexico), Asur presented a 61.4% passenger growth, Gap a 43.1% increase, and Oma a 39.5% rise

  • Mexico’s traffic continued with an accelerated recovery, and finally all groups have reached pre-pandemic figures, reaffirming the favorable outlook for the sector

In April, total number of passengers of the 3 airport groups recorded an annual increase of 43.4% (airports operated in Mexico).  The good dynamism in demand was supported by Easter, as well as by lower mobility restrictions. In this way, total passengers of the airports operated in Mexico represented 110. 8% of April 2019 (vs.107.5% in March), being slightly better than our estimate of ⁓109.0%. Domestic passengers (representing 61.7% of the total) showed an increase of 31.3% y/y, while the international passengers had a higher growth of 68.3% y/y.

Individually, Asur showed a 61.4% y/y growth, including a 56.8% y/y increase in Mexico’s passengers. In San Juan Puerto Rico, traffic was 117.9% of 2019, while Colombia surprised favorably, representing 148.9% of the same month of 2019. In turn, Gap recorded a total passenger advance in April of 43.1% y/y. Passenger traffic from the airports it operates in Mexico, that is, excluding Montego Bay Airport in Jamaica (with traffic equivalent to 94.5% of the 2019 figure) and Kingston Airport (with a rise of 17.7% m/m), had an annual growth of 35.8%. Finally, Oma showed a 39.5% y/y increase in passengers.

Total passenger variations of Asur, Gap, and Oma of the LTM were placed at 133.5%, 90.7%, and 92.4% (May 2021 – April 2022), compared to the LTM of March of 159.4%, 109.1%, and 112. 5% (April 2021 – March 2022), respectively.

Corporate News

·      Gap mentioned that during the month a new route was opened and that the volume of seats offered increased 33.3% y/y, while the load factor was placed at 81.4% vs. 71.6% in April 2021.

·      Oma reported that four new routes began operating during the month.

Conclusion... Passengers at the airports operated by private groups in Mexico performed well in April, benefitted from a demand that continues to grow, and a simple, although more normalized, comparative base.  Considering all operations, including those outside Mexico, Asur stood out for presenting the greatest annual advances, and also comparing vs. pre-pandemic levels, followed by Gap. While Oma’s recovery accelerated, finally reaching 2019 levels.  This, alongside the attractive companies’ valuation given 1Q22 positive results, reaffirms our favorable opinion for the sector.  In our institutional portfolio we have exposure to Asur with a PT of MXN 483.50 per share with a Buy recommendation, as well as in Gap with a PT of MXN 300.00 with a Hold recommendation. On the other hand, for Oma our PT is MXN 158.00 per share and we have a Buy recommendation.

April passenger traffic

In the following graphs below, we can observe the evolution of the total passengers of the airport groups as a percentage of the 2019 figures in the last 12 months, and the performance of their shares vs. S&P/BMV IPC.