Equity Analysis /
Mexico

AIRPORTS: Greater passenger dynamism surprises

  • In July, the total number of passengers at the 3 airport groups operated in Mexico advanced 20.0%, better than expected

  • Gap total passengers upsurge 23.3% y/y, Asur’s rose 20.5%, and OMA’s increase 16.3%

  • July figures confirm our long-run positive outlook for demand, although we will be attentive to current challenges

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

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Banorte
9 August 2022
Published byBanorte
  • Passengers at the airports operated in Mexico by Asur, Gap, and Oma, showed a solid performance, which even reflected a higher annual growth rate vs. the previous month

  • Regarding total operations (including those outsides of Mexico), Asur registered a 20.5% hike in passenger growth, Gap a 23.3% advance, and Oma a 22.2% increase

  • July figures point to continued traffic growth in the coming months, so we reiterate our favorable view for the sector, although we remain attentive to economic challenges

In July, the total number of passengers at the 3 airport groups recorded an annual advance of 20.0% (airports operated in Mexico). A demand that remains solid and even was better-than-expected, resulted in a higher annual growth rate, compared to the previous month. Thus, total passengers at the airports operated in Mexico increased by 20.0% y/y (vs. 18.6% advance in June), exceeding our 16.0% estimate. Domestic passengers (representing 63.1% of the total) increased 20.1% y/y, while the international passengers grew 19.9% y/y.

Individually, Asur showed a 20.5% y/y growth, including a 21.5% y/y increase in Mexico’s passengers. In San Juan, Puerto Rico, traffic again continued with weakness by falling 10.0% annually, while Colombia maintained a remarkable performance by rising 51.3% y/y. In turn, Gap recorded a total passenger advance during July of 23.3% y/y. Passenger traffic from the airports it operates in Mexico, excluding Montego Bay Airport in Jamaica (+36.9% y/y) and Kingston Airport (+35.4% m/m), had an annual increase of 20.8%. Finally, Oma presented a growth of 16.3% y/y in passengers.

Total passenger variations of Asur, Gap, and Oma of the LTM were placed at 67.8%, 48.8%, and 46.6% (August 2021 – July 2022), compared to the LTM of June of 85.1%, 58.0%, and 59.0% (July 2021 – June 2022), respectively.

Corporate News

·      Gap mentioned that during the month six new routes were opened and the volume of seats offered increased 27.4% y/y, while the load factor was placed at 82.8% vs. 77.9% in July 2021.

·      Oma announced that Fintech informed that some of its affiliates entered into a share purchase agreement with VINCI Airports SAS subsidiary, to indirectly sell 29.9% of Oma’s shares. The total transaction amount reflects a ~15% premium on Oma’s current market value, which we consider to be favorable; however, it could generate some short-term uncertainty, given the Series BB shares change of hands, which are the controlling shares and have special rights, such as appointing certain directors.

Conclusion... Passengers at airports operated by private groups in Mexico performed better-than-expected, underpinning our strong demand expectation in the coming months. Considering all operations, including those outside of Mexico, Gap was positioned this month with the highest increase on annual basis, followed by Asur, where the international division continues to stand out, and finally, Oma, in which the international traffic growth has already returned. The solid growth outlook for the year and attractive valuations following by the positive results of 2Q22, reaffirms our favorable sector opinion, although we will be monitoring the economic challenges, which so far seem to have a limited impact on the groups. 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. On the other hand, for Gap our PT is MXN 300.00 per share, with a Hold recommendation.

July 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 July 2022