Equity Analysis /
Mexico

AIRPORTS: Growth in passengers’ moderates

  • Passengers at the airports operated in Mexico continued to growth, although at a more moderate pace than expected

  • As of total operations (including those outside Mexico), Asur recorded a 38.6% increase, Gap +23.2% and Oma +28.4%

  • Despite lower dynamism, our sector’s opinion remains positive due to attractive valuations and solid estimated results

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

Banorte
8 June 2022
Published by
  • Passengers at the airports operated in Mexico by Asur, Gap, and Oma, continued to reflect a solid demand performance, although with more moderate advances

  • Regarding total operations (including those outside of Mexico), Asur presented a 38.6% hike in passenger growth, Gap a 23.2% rise, and Oma a 28.4% increase

  • Although traffic in Mexico was slightly lower-than-expected, we remain optimistic about demand performance going forward, which should translate into solid results in the year

In May, total number of passengers of the 3 airport groups recorded an annual increase of 24.8% (airports operated in Mexico). Even though demand continued to drive monthly y/y figures, there was some slowdown, partly due to a more normalized basis. Thus, total passengers at the airports operated in Mexico represented 110.1% of May 2019 (vs. 110.8% in April), slightly below our ~114.0% estimate. Domestic passengers (representing 64.5% of the total) increased 23.6% y/y, while the international passengers grew 27.0% y/y.

Individually, Asur showed a 38.6% y/y growth, including a 30.5% y/y increase in Mexico’s passengers. In San Juan Puerto Rico, traffic was 121.6% in 2019, while Colombia’s continued with solid figures representing 141.1% of the same month of 2019. In turn, Gap recorded a total passenger advance in May of 23.2% y/y. Passenger traffic from the airports it operates in Mexico, that is, excluding Montego Bay Airport in Jamaica (which practically reached pre-pandemic levels, being 99.9% of May 2019) and Kingston Airport (down 0.6% m/m), had an annual increase of 19.2%. Finally, Oma presented a growth of 28.4% y/y in passengers.

Total passenger variations of Asur, Gap, and Oma of the LTM were placed at 107.8%, 71.6%, and 73.2% (June 2021 – May 2022), compared to the LTM of April of 133.5%, 90.7%, and 92.4% (May 2021 – April 2022), respectively.

Corporate News

·      Gap mentioned that during the month, four new routes were opened, and the volume of seats offered increased 24.3% y/y, while the load factor was placed at 81.9% vs. 77.1% in May 2021.

·      Oma reported that three new routes began to operate.

 Conclusion... Although May passengers from airports operated in Mexico by private groups showed a lower-than-expected dynamism, in our opinion the demand outlook remains favorable for the rest of the year. Considering all operations, including those outside Mexico, once again Asur stood out with the highest annual growth and vs. pre-pandemic levels, followed by Gap. Meanwhile, Oma’s recovery slowed down, slightly below 2019 levels. We remain positive about the sector’s solid growth expectations and the companies’ attractive valuations. In our institutional portfolio, we have exposure to Asur with a PT of MXN 483.50 per share with a Buy recommendation, and 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.

May 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.

Sector comparison – Figures at May 2022