Equity Analysis /
Mexico

AIRPORTS: Gap stands out due to diversified portfolio

  • Passenger traffic in Asur rose 16.8%, in Gap 22.3%, and in Oma 20.2%. Figures foresee a good year-end in traffic growth

  • Considering total and only-Mexico operations, Gap achieved the highest y/y growth, given its diversified portfolio

  • We reaffirm the sector’s positive outlook, although we remain alert to economic challenges

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

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Banorte
8 December 2022
Published byBanorte

Gap stands out due to diversified portfolio

  • Passengers at the airports operated by Asur, Gap, and Oma, registered a solid demand dynamism, although in the aggregate, a moderate growth rate was amounted

  • In terms of total operations (including those outside of Mexico), Asur recorded a 16.8% increase in passengers, Gap a 22.3% rise, and Oma a 20.2% hike

  • November's figures foresee a good year-end in traffic growth, reiterating our favorable view for the sector, although we remain alert to economic challenges

In November, total passengers of the 3 airport groups registed an increase of 19.4% y/y (airports operated in Mexico). Although there was a slight slowdown in passenger growth y/y, demand continues to be solid. Thus, total passenger traffic at Mexico-operated airports rose 19.4% y/y (vs. 21.0% advance in October), similar to our estimate of ~21%. Domestic passengers (64.1% of the total) grew 20.5% y/y and international passengers 17.5% y/y.

Individually, Asur recorded a 16.8% y/y surge, including 18.0% y/y growth in Mexico’s passengers. In San Juan Puerto Rico, traffic increased 4.0% y/y, while Colombia continued to perform well, rising 23.0% y/y. In turn, Gap achieved a total advance in November passengers of 22.3% y/y. Passenger traffic at the airports it operates in Mexico, that is, excluding Montego Bay Airport in Jamaica (+38.7% y/y) and Kingston Airport (+68.8% y/y), was up 20.2% y/y. Finally, Oma had a 20.2% y/y hike in passengers.

Asur, Gap, and Oma's LTM total passenger variations stood at 39.4%, 34.5%, and 31.7% (December 2021 - November 2022), compared to LTM as of October of 45.0%, 37.0%, and 35.1% (November 2021 - October 2022), respectively.

Corporate news

·      Gap mentioned that during the month 8 new routes were opened and the volume of seats offered rose 23.9% y/y, while the y/y rise in occupancy factor was 7.9pp to 80.3%.

·      Oma noted that during the month American Airlines began operating the Monterrey - New York route.

Conclusion... Passenger figures of Mexico's private airport groups reflected constant strong demand, albeit at a slower rate of growth. We believe that by year-end traffic will continue to show a favorable dynamism supported by holiday season. Considering only-Mexico operations, Gap was the group that showed the highest y/y growth, which we believe is due to having the best diversified portfolio by passenger mix and type of destination, followed by Oma, with a good momentum on the domestic side, but also surprising on the international segment, and finally, Asur, where foreign tourists continue to drive traffic. It is worth mentioning that, considering airports operated outside Mexico, Gap was also positioned as the one with the highest growth. We reiterate our positive outlook for the sector, which, given the challenging backdrop, stands out for its interesting growth prospects and high profitability, although we remain alert to economic challenges. In our institutional portfolio we have exposure to Asur with a PT of MXN 483.50 per share and Oma with a PT of MXN 158.00 per share, both with Buy recommendation. On the other hand, for Gap our PT is $300.00 and our recommendation is to Hold.

November passenger traffic

The following graphs show the evolution of the airport groups' total passengers over the last 12 months (percentage variation y/y) and the performance shares vs. S&P/BMV IPC.

Sector comparison – Figures at November 2022